Document:

<PAGE>

                                                                    EXHIBIT 10.R

               AMENDMENT NO. 10 TO THE LOAN AND SECURITY AGREEMENT

         AMENDMENT NO. 10 to the Loan and Security Agreement dated as of March
__, 2003 ("Amendment No. 10") by and between NAPCO SECURITY SYSTEMS, INC., a New
York corporation having a place of business at 333 Bayview Avenue, Amityville,
New York 11701 (the "Debtor") and HSBC BANK USA f/k/a MARINE MIDLAND BANK,
having a place of business at 534 Broad Hollow Road, Melville, New York 11747
(the "Secured Party").

                              W I T N E S S E T H :
                              - - - - - - - - - -

         WHEREAS, as of May 12, 1997, Debtor and Secured Party had entered into
a certain loan and security agreement, as amended by amendment no. 1 to the loan
and security agreement dated as of May 28, 1998, as amended by amendment no. 2
to the loan and security agreement dated as of June 30, 1999, as amended by
amendment no. 3 to the loan and security agreement dated as of February 9, 2000,
as amended by amendment no.4 to the loan and security agreement dated as of July
27, 2000, as amended by amendment no. 5 to the loan and security agreement dated
as of September 22, 2000, as amended by amendment no. 6 to the loan and security
agreement dated as of November 22, 2000, as amended by amendment no. 7 to the
loan and security agreement dated as of February 14, 2001, as amended by
amendment no. 8 to the loan and security agreement dated as of May 15, 2001, as
mended by amendment no. 9 to the loan and security agreement dated as of
September 30, 2001, as may be amended from time to time (the "Agreement");

         WHEREAS, the Debtor has requested that (i) the Secured Party modify
certain financial covenants and the Secured Party has agreed to do so, in the
manner set forth below, and (ii) the Secured Party extend a $1,250,000 term loan
to Borrower ("2003 Term Loan") provided however, that, among other things,
Debtor execute this Amendment No. 10.

         NOW, THEREFORE, in consideration of the mutual promises and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:

         1. The definition of "Transaction Documents" contained in Section 1.1.
of the Agreement is hereby amended to read in its entirety as follows:

                                      E-11

<PAGE>

                  TRANSACTION DOCUMENTS means, individually, jointly, severally
                  and collectively, the Agreement (including all amendments to
                  date, including this Amendment No. 10), the term loan note
                  dated as of even date hereof by Debtor in favor of Secured
                  Party evidencing the 2003 Term Loan, as the same may be
                  extended, re-executed, modified or otherwise amended from time
                  to time, and all documents, instruments, notes and agreements
                  by Debtor, Continental Systems or any other Third Party or any
                  Responsible Party in favor of Secured Party, whether in
                  existence now or hereinafter created, executed and delivered
                  to Secured Party, as the same may be extended, re-executed,
                  modified or otherwise amended from time to time, including,
                  without limitation, the Term Loan Note, the Continental Term
                  Loan Note, the Note, collateral documents, letter of credit
                  agreements, notes, acceptance credit agreements, security
                  agreements, pledges, guaranties, mortgages, title insurance,
                  assignments, and subordination agreements required to be
                  executed by Debtor, Continental Systems any other Third Party,
                  or any Responsible Party pursuant hereto or in connection
                  herewith, or in connection with a letter of credit application
                  and reimbursement agreement, each dated as of May 12, 1997, as
                  may be reaffirmed or restated from time to time, a certain
                  uncommitted trade line established by Secured Party in favor
                  of Debtor to provide for commercial and standby letters of
                  credit, evidenced by, among other documents, a continuing
                  letter of credit agreement, and a continuing indemnity
                  agreement, each dated as of May 12, 1997, as may be
                  re-executed, amended, extended or otherwise modified from time
                  to time, the Term Loan Note in the principal sum of
                  $2,500,000.00, as may be extended or otherwise modified from
                  time to time, the Note, the Continental Term Loan Note in the
                  principal sum of $8,250,000, that certain ISDA master
                  agreement dated as of July 27, 2000 by and between Continental
                  Systems and Secured Party, inclusive of all schedules thereto,
                  as the same may be modified from time to time (the "Master
                  Agreement") and all such other mortgages, security agreements,
                  guaranties and other documents as may be executed and
                  delivered to Secured Party to evidence, guaranty and secure
                  the Continental Term Loan Note, and the obligations
                  thereunder, as may be extended or otherwise modified from time
                  to time, and uncommitted line of credit facility to be used by
                  Debtor to finance certain acquisitions, as may be executed and
                  delivered to Secured Party from time to time to evidence and
                  secure the obligations under such facilities pursuant to the
                  terms that the Secured Party shall request, and all other
                  documents, agreements, reaffirmations, certificates and
                  resolutions related thereto, and amendments or supplements
                  thereto, all such other agreements,

                                      E-12

<PAGE>

                  resolutions, certificates, resolutions and opinion letters
                  executed and/or issued as a condition precedent to or in
                  connection with the Agreement, the Term Loan Note, Note, the
                  Continental Term Loan Note, and all such other documents,
                  agreements, and instruments delivered hereunder or as a
                  supplement or amendment thereto or as Secured Party may
                  reasonably require from time to time in order to evidence,
                  guaranty and/or secure any and all indebtedness of Debtor
                  and/or Continental Systems, as the case may be, to Secured
                  Party or to create, perfect, continue the perfection or
                  protect the Secured Party's security interest in the
                  Collateral or any of the other collateral specified in the
                  other Transaction Documents.

         2. Section 9.26. (b) and Section 9.26. (g) of the Agreement are hereby
amended in their entirety to read as follows:

                           (b) The Debtor and its Consolidated Subsidiaries
                  shall maintain, on a consolidated basis, a minimum Tangible
                  Net Worth (to be tested quarterly based upon the financial
                  statements required to be presented to Secured Party pursuant
                  to Section 9.1. hereof) of not less than:

                           (i) during the period commencing on October 1, 2002
                           through December 31, 2002, $21,000,000, and

                           (ii) during the period commencing on January 1, 2003
                           through March 31, 2003, $21,470,000, and

                           (iii) during the period commencing on April 1, 2003
                           through June 30, 2003, and thereafter while any
                           Indebtedness remains outstanding, $23,040,000.

                           (iv) during the period commencing on July 1, 2003
                           through September 30, 2003, not less than the actual
                           Tangible Net Worth at 6/30/2003 minus $630,000, and

                           (v) during the period commencing on October 1, 2003
                           through December 31, 2003, not less than the actual
                           Tangible Net Worth at 6/30/2003 minus $865,000, and

                           (vi) during the period commencing on January 1, 2004
                           through March 31, 2004, not less than the actual
                           Tangible Net Worth at 6/30/2003 minus $390,000, and

                           (vii) during the period commencing on April 1, 2004
                           through June 30, 2004, not less than the actual
                           Tangible

                                      E-13

<PAGE>

                           Net Worth at 6/30/2003 plus $880,000.

                           (g) The Debtor and its Consolidated Subsidiaries
                  shall maintain, on a consolidated basis, a ratio of Funded
                  Debt to EBIDTA (to be tested quarterly, on a rolling four
                  quarter basis, based upon the financial statements required to
                  be presented to Secured Party pursuant to Section 9.1 hereof):

                           (i) of not greater than 5.51 to 1 from October 1,
                           2002 through the period ending March 31, 2003, and

                           (ii) of not greater than 5.00 to 1 from April 1, 2003
                           through the period ending June 30, 2003, and

                           (iii) of not greater than 4.45 to 1 from July 1, 2003
                           and thereafter while any Indebtedness remains
                           outstanding.

         3. As an inducement to the Bank modifying some of the provisions of
Section 9.26. of the Agreement pursuant to the terms hereof, Debtor represents
and warrants to Secured Party that, as of the date of execution of this
Amendment No. 10, (i) the representations and warranties set forth in Article 4
of the Agreement and the representations and warranties of Debtor and any Third
Party set forth in the other Transaction Documents to which any is a party are
true and correct in all respects, (ii) no event has occurred and is continuing
which constitutes an "Event of Default" under any of the Transaction Documents
(as "Event of Default" is defined in each of those Transaction Documents"),
(iii) Debtor is in compliance with the covenants set forth in Articles 9 and 10
of the Agreement, as modified herein; and(iv) Debtor will pay Secured Party's
reasonable legal fees and disbursements thereof.

         4. Debtor represents and warrants to Secured Party that there are no
offsets, defenses or counterclaims to the payment of the Indebtedness owing
Secured Party, including the Advances, and to the continuing general security
interest in the Collateral granted to Secured Party by Debtor as security for
payment of the Indebtedness, as fully described in the Agreement.

         5. Except as modified herein, all other provisions of the Agreement and
the other Transaction Documents remain unmodified and are in full force and
effect.

         6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Agreement.

         7. This Amendment No. 10 shall be governed by the laws of the State of
New York.

                                      E-14

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Amendment No. 10 to
the Loan and Security Agreement as of the day and year first above written.

                                    HSBC BANK USA f/k/a MARINE MIDLAND BANK

                                    By: /s/ Roger Coleman
                                        ----------------------------------------
                                            Roger Coleman
                                            Vice President

                                    NAPCO SECURITY SYSTEMS, INC.

                                    By: /s/ Kevin S. Buchel
                                        ----------------------------------------
                                            Kevin Buchel
                                        Senior Vice President

                                      E-15

<PAGE>

STATE OF NEW YORK )
                  ) SS:
COUNTY OF SUFFOLK )

On this 13th day of March, 2003, before me, the undersigned, a Notary Public in
and for said State, personally came ROGER COLEMAN, personally known to me or
proved to me on the basis of satisfactory evidence to be the person, whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his capacity and that by his signature on the instrument, the person
or entity upon behalf of which the person acted executed the instrument.

                                    /S/ Michelle Lin
                                    --------------------------------------------
                                    Notary Public

STATE OF NEW YORK )
                  ) SS:
COUNTY OF SUFFOLK )

On this 17th day of March, 2003, before me, the undersigned, a Notary Public in
and for said State, personally came KEVIN BUCHEL personally known to me or
proved to me on the basis of satisfactory evidence to be the person, whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his capacity and that by his signature on the instrument, the person
or entity upon behalf of which the person acted executed the instrument.

                                    /s/ Linda Patsakos
                                    --------------------------------------------
                                    Notary Public

                                      E-16AMENDED AND RESTATED CREDIT AGREEMENT

 

$80,000,000 REVOLVING CREDIT FACILITY

$100,000,000 364-DAY REVOLVING CREDIT FACILITY

AMENDED AND RESTATED CREDIT AGREEMENT

by and among

NEW JERSEY RESOURCES CORPORATION

and

THE BANKS PARTY HERETO

and

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent

and

FLEET NATIONAL BANK and

SUNTRUST BANK,

as Syndication Agents

and

BANK OF TOKYO-MITSUBISHI TRUST COMPANY and

JPMORGAN CHASE BANK,

as Documentation Agents

and

BANK ONE, NA,

CITIZENS BANK OF MASSACHUSETTS and

THE BANK OF NEW YORK,

as Co-Agents

Dated as of December 23, 2002,

as amended and restated as of December 19, 2003

 

 

	 	 	 	 	 	 	 	 	 	 	 
	1.	 	CERTAIN DEFINITIONS	 	 	2	 
	 	 	1.1	 	Certain Definitions	 	 	2	 
	 	 	1.2	 	Construction	 	 	27	 
	 	 	 	 	1.2.1.
	 	Number; Inclusion
	 	 	27	 
	 	 	 	 	1.2.2.
	 	Determination
	 	 	27	 
	 	 	 	 	1.2.3.
	 	Agent’s Discretion and Consent
	 	 	27	 
	 	 	 	 	1.2.4.
	 	Documents Taken as a Whole
	 	 	27	 
	 	 	 	 	1.2.5.
	 	Headings
	 	 	27	 
	 	 	 	 	1.2.6.
	 	Implied References to this Agreement
	 	 	27	 
	 	 	 	 	1.2.7.
	 	Persons
	 	 	27	 
	 	 	 	 	1.2.8.
	 	Modifications to Documents
	 	 	28	 
	 	 	 	 	1.2.9.
	 	From, To and Through
	 	 	28	 
	 	 	 	 	1.2.10.
	 	Shall; Will
	 	 	28	 
	 	 	1.3	 	Accounting Principles	 	 	28	 
	2.	 	REVOLVING CREDIT, 364-DAY REVOLVING CREDIT AND SWING LOAN FACILITIES	 	 	29	 
	 	 	2.1	 	Commitments	 	 	29	 
	 	 	 	 	2.1.1.
	 	Revolving Credit Loans
	 	 	29	 
	 	 	 	 	2.1.2.
	 	364-Day Revolving Credit Loans
	 	 	29	 
	 	 	 	 	2.1.3.
	 	Swing Loan Commitment
	 	 	29	 
	 	 	 	 	2.1.4.
	 	Swing Loan (364-Day) Commitment
	 	 	30	 
	 	 	2.2	 	Nature of Banks’ Obligations with Respect to Revolving
Credit Loans and 364-Day Revolving Credit Loans	 	 	30	 
	 	 	2.3	 	[Intentionally Omitted]	 	 	30	 
	 	 	2.4	 	Certain Fees	 	 	30	 
	 	 	 	 	2.4.1.
	 	Facility Fees
	 	 	30	 
	 	 	 	 	2.4.2.
	 	364-Day Facility Fees
	 	 	31	 
	 	 	 	 	2.4.3.
	 	Facility Usage Fees
	 	 	31	 
	 	 	 	 	2.4.4.
	 	364-Day Revolving Credit Usage Fees
	 	 	31	 
	 	 	2.5	 	Revolving Credit Loan Requests; 364-Day Revolving
Credit Loan Requests; Swing Loan Requests	 	 	32	 
	 	 	 	 	2.5.1.
	 	Revolving Credit Loan and 364-Day Revolving
Credit Loan Requests
	 	 	32	 
	 	 	 	 	2.5.2.
	 	Swing Loan Requests
	 	 	32	 
	 	 	 	 	2.5.3.
	 	Swing Loan (364-Day) Requests
	 	 	33	 
	 	 	2.6	 	Making Revolving Credit Loans, 364-Day Revolving
Credit Loans, Swing Loans and Swing Loans (364-Day)	 	 	33	 
	 	 	 	 	2.6.1.
	 	Making Revolving Credit Loans
	 	 	33	 
	 	 	 	 	2.6.2.
	 	Making 364-Day Revolving Credit Loans
	 	 	33	 
	 	 	 	 	2.6.3.
	 	Making Swing Loans
	 	 	34	 
	 	 	 	 	2.6.4.
	 	Making Swing Loans (364-Day)
	 	 	34	 
	 	 	2.7	 	Swing Loan Note, Swing Loan (364-Day) Note	 	 	34	 

- i -

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.7.1.
	 	Swing Loan Note
	 	 	34	 
	 	 	 	 	2.7.2.
	 	Swing Loan (364-Day) Note
	 	 	34	 
	 	 	2.8	 	Use of Proceeds	 	 	35	 
	 	 	2.9	 	Letter of Credit Subfacility	 	 	35	 
	 	 	 	 	2.9.1.
	 	Issuance of Letters of Credit
	 	 	35	 
	 	 	 	 	2.9.2.
	 	Letter of Credit Fees
	 	 	35	 
	 	 	 	 	2.9.3.
	 	Disbursements, Reimbursement
	 	 	35	 
	 	 	 	 	2.9.4.
	 	Repayment of Participation Advances
	 	 	37	 
	 	 	 	 	2.9.5.
	 	Documentation
	 	 	37	 
	 	 	 	 	2.9.6.
	 	Determinations to Honor Drawing Requests
	 	 	37	 
	 	 	 	 	2.9.7.
	 	Nature of Participation and Reimbursement Obligations
	 	 	37	 
	 	 	 	 	2.9.8.
	 	Indemnity
	 	 	39	 
	 	 	 	 	2.9.9.
	 	Liability for Acts and Omissions
	 	 	40	 
	 	 	2.10	 	Extension by Banks of the 364-Day Loan Expiration Date	 	 	41	 
	 	 	 	 	2.10.1.
	 	Requests; Approval by All Banks
	 	 	41	 
	 	 	 	 	2.10.2.
	 	Approval by 364-Day Required Banks
	 	 	41	 
	 	 	2.11	 	Borrowings to Repay Swing Loans and Swing Loans (364-Day)	 	 	42	 
	 	 	 	 	2.11.1.
	 	Borrowings to Repay Swing Loans
	 	 	42	 
	 	 	 	 	2.11.2.
	 	Borrowings to Repay Swing Loans (364-Day)
	 	 	42	 
	 	 	2.12	 	Right to Increase Commitments	 	 	43	 
	3.	 	[INTENTIONALLY OMITTED]	 	 	44	 
	4.	 	INTEREST RATES	 	 	44	 
	 	 	4.1	 	Interest Rate Options	 	 	44	 
	 	 	 	 	4.1.1.
	 	Revolving Credit Interest Rate Options
	 	 	44	 
	 	 	 	 	4.1.2.
	 	364-Day Revolving Credit Interest Rate Options
	 	 	44	 
	 	 	 	 	4.1.3.
	 	Rate Quotations
	 	 	45	 
	 	 	 	 	4.1.4.
	 	Change in Fees or Interest Rates
	 	 	45	 
	 	 	4.2	 	Interest Periods	 	 	46	 
	 	 	 	 	4.2.1.
	 	Amount of Borrowing Tranche
	 	 	46	 
	 	 	 	 	4.2.2.
	 	Renewals
	 	 	46	 
	 	 	4.3	 	Interest After Default	 	 	46	 
	 	 	 	 	4.3.1.
	 	Letter of Credit Fees, Interest Rate
	 	 	46	 
	 	 	 	 	4.3.2.
	 	Other Obligations
	 	 	46	 
	 	 	 	 	4.3.3.
	 	Acknowledgment
	 	 	46	 
	 	 	4.4	 	Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available	 	 	47	 
	 	 	 	 	4.4.1.
	 	Unascertainable
	 	 	47	 
	 	 	 	 	4.4.2.
	 	Illegality; Increased Costs; Deposits Not Available
	 	 	47	 
	 	 	 	 	4.4.3.
	 	Agent’s and Bank’s Rights
	 	 	47	 
	 	 	4.5	 	Selection of Interest Rate Options	 	 	48	 

- ii -

 

	 	 	 	 	 	 	 	 	 	 	 
	5.	 	PAYMENTS	 	 	48	 
	 	 	5.1	 	Payments	 	 	48	 
	 	 	5.2	 	Pro Rata Treatment of Banks	 	 	49	 
	 	 	5.3	 	Interest Payment Dates	 	 	49	 
	 	 	5.4	 	Prepayments	 	 	49	 
	 	 	 	 	5.4.1.
	 	Voluntary Prepayments
	 	 	49	 
	 	 	 	 	5.4.2.
	 	Replacement of a Bank
	 	 	50	 
	 	 	 	 	5.4.3.
	 	Change of Lending Office
	 	 	51	 
	 	 	 	 	5.4.4.
	 	Mandatory Prepayment and Mandatory Commitment
Reduction Upon Issuance of Certain Debt
	 	 	51	 
	 	 	5.5	 	Voluntary Commitment Reductions	 	 	53	 
	 	 	5.6	 	Additional Compensation in Certain Circumstances	 	 	53	 
	 	 	 	 	5.6.1.
	 	Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc.
	 	 	53	 
	 	 	 	 	5.6.2.
	 	Indemnity
	 	 	54	 
	 	 	5.7	 	Interbank Market Presumption	 	 	55	 
	 	 	5.8	 	Taxes	 	 	55	 
	 	 	 	 	5.8.1.
	 	No Deductions
	 	 	55	 
	 	 	 	 	5.8.2.
	 	Stamp Taxes
	 	 	55	 
	 	 	 	 	5.8.3.
	 	Indemnification for Taxes Paid by a Bank
	 	 	56	 
	 	 	 	 	5.8.4.
	 	Certificate
	 	 	56	 
	 	 	 	 	5.8.5.
	 	Survival
	 	 	56	 
	 	 	5.9	 	Notes	 	 	56	 
	 	 	5.10	 	Settlement Date Procedures; 364-Day Settlement Date Procedures	 	 	56	 
	 	 	 	 	5.10.1.
	 	Settlement Date Procedures
	 	 	56	 
	 	 	 	 	5.10.2.
	 	364-Day Settlement Date Procedures
	 	 	57	 
	6.	 	REPRESENTATIONS AND WARRANTIES	 	 	57	 
	 	 	6.1	 	Representations and Warranties	 	 	57	 
	 	 	 	 	6.1.1.
	 	Organization and Qualification
	 	 	58	 
	 	 	 	 	6.1.2.
	 	Subsidiaries
	 	 	58	 
	 	 	 	 	6.1.3.
	 	Power and Authority
	 	 	58	 
	 	 	 	 	6.1.4.
	 	Validity and Binding Effect
	 	 	58	 
	 	 	 	 	6.1.5.
	 	No Conflict
	 	 	59	 
	 	 	 	 	6.1.6.
	 	Litigation
	 	 	59	 
	 	 	 	 	6.1.7.
	 	Title to Properties
	 	 	59	 
	 	 	 	 	6.1.8.
	 	Financial Statements
	 	 	59	 
	 	 	 	 	6.1.9.
	 	Use of Proceeds; Margin Stock; Section 20 Subsidiaries
	 	 	60	 
	 	 	 	 	6.1.10.
	 	Full Disclosure
	 	 	60	 
	 	 	 	 	6.1.11.
	 	Taxes
	 	 	61	 
	 	 	 	 	6.1.12.
	 	Consents and Approvals
	 	 	61	 
	 	 	 	 	6.1.13.
	 	No Event of Default; Compliance With Instruments
	 	 	61	 
	 	 	 	 	6.1.14.
	 	Patents, Trademarks, Copyrights, Licenses, Etc.
	 	 	62	 
	 	 	 	 	6.1.15.
	 	Insurance
	 	 	62	 

- iii -

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	6.1.16.
	 	Compliance With Laws
	 	 	62	 
	 	 	 	 	6.1.17.
	 	Material Contracts; Burdensome Restrictions
	 	 	62	 
	 	 	 	 	6.1.18.
	 	Investment Companies; Regulated Entities
	 	 	62	 
	 	 	 	 	6.1.19.
	 	Plans and Benefit Arrangements
	 	 	63	 
	 	 	 	 	6.1.20.
	 	Employment Matters
	 	 	63	 
	 	 	 	 	6.1.21.
	 	Environmental Matters
	 	 	64	 
	 	 	 	 	6.1.22.
	 	Senior Debt Status
	 	 	64	 
	 	 	 	 	6.1.23.
	 	Hedging Contract Policies
	 	 	64	 
	 	 	 	 	6.1.24.
	 	Permitted Business Opportunities
	 	 	64	 
	 	 	 	 	6.1.25.
	 	Anti-Terrorism Laws; Executive Order No. 13224.
	 	 	65	 
	 	 	6.2	 	Continuation of Representations	 	 	65	 
	7.	 	CONDITIONS TO AMENDMENT AND RESTATEMENT OF ORIGINAL
CREDIT AGREEMENT; CONDITIONS OF LENDING AND ISSUANCE
OF LETTERS OF CREDIT	 	 	65	 
	 	 	7.1	 	Conditions to Amendment and Restatement of Original Credit Agreement	 	 	66	 
	 	 	 	 	7.1.1.
	 	Officer’s Certificate
	 	 	66	 
	 	 	 	 	7.1.2.
	 	Secretary’s Certificate
	 	 	66	 
	 	 	 	 	7.1.3.
	 	Opinion of Counsel
	 	 	67	 
	 	 	 	 	7.1.4.
	 	Legal Details
	 	 	67	 
	 	 	 	 	7.1.5.
	 	Payment of Fees
	 	 	67	 
	 	 	 	 	7.1.6.
	 	Consents
	 	 	67	 
	 	 	 	 	7.1.7.
	 	Officer’s Certificate Regarding MACs
	 	 	67	 
	 	 	 	 	7.1.8.
	 	No Violation of Laws
	 	 	68	 
	 	 	 	 	7.1.9.
	 	No Actions or Proceedings
	 	 	68	 
	 	 	 	 	7.1.10.
	 	Certain New Exhibits and Amended and Restated Schedules
	 	 	68	 
	 	 	 	 	7.1.11.
	 	Other Related Matters
	 	 	68	 
	 	 	7.2	 	Each Additional Loan or Letter of Credit	 	 	68	 
	8.	 	COVENANTS	 	 	69	 
	 	 	8.1	 	Affirmative Covenants	 	 	69	 
	 	 	 	 	8.1.1.
	 	Preservation of Existence, Etc.
	 	 	69	 
	 	 	 	 	8.1.2.
	 	Payment of Liabilities, Including Taxes, Etc.
	 	 	69	 
	 	 	 	 	8.1.3.
	 	Maintenance of Insurance
	 	 	69	 
	 	 	 	 	8.1.4.
	 	Maintenance of Properties and Leases
	 	 	70	 
	 	 	 	 	8.1.5.
	 	Maintenance of Patents, Trademarks, Etc.
	 	 	70	 
	 	 	 	 	8.1.6.
	 	Visitation Rights
	 	 	70	 
	 	 	 	 	8.1.7.
	 	Keeping of Records and Books of Account
	 	 	70	 
	 	 	 	 	8.1.8.
	 	Plans and Benefit Arrangements
	 	 	71	 
	 	 	 	 	8.1.9.
	 	Compliance With Laws
	 	 	71	 
	 	 	 	 	8.1.10.
	 	Use of Proceeds
	 	 	71	 
	 	 	 	 	8.1.11.
	 	Hedging Contract Policies
	 	 	71	 
	 	 	 	 	8.1.12.
	 	Tax Shelter Regulations
	 	 	72	 
	 	 	8.2	 	Negative Covenants	 	 	72	 

- iv -

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	8.2.1.
	 	Indebtedness
	 	 	72	 
	 	 	 	 	8.2.2.
	 	Liens
	 	 	74	 
	 	 	 	 	8.2.3.
	 	Guaranties
	 	 	74	 
	 	 	 	 	8.2.4.
	 	Loans and Investments
	 	 	75	 
	 	 	 	 	8.2.5.
	 	Liquidations, Mergers, Consolidations, Acquisitions
	 	 	75	 
	 	 	 	 	8.2.6.
	 	Dispositions of Assets or Subsidiaries
	 	 	76	 
	 	 	 	 	8.2.7.
	 	Affiliate Transactions
	 	 	77	 
	 	 	 	 	8.2.8.
	 	Subsidiaries, Partnerships and Joint Ventures
	 	 	77	 
	 	 	 	 	8.2.9.
	 	Continuation of or Change in Business
	 	 	78	 
	 	 	 	 	8.2.10.
	 	Plans and Benefit Arrangements
	 	 	78	 
	 	 	 	 	8.2.11.
	 	Fiscal Year
	 	 	78	 
	 	 	 	 	8.2.12.
	 	Maximum Leverage Ratio
	 	 	78	 
	 	 	 	 	8.2.13.
	 	Minimum Interest Coverage Ratio
	 	 	78	 
	 	 	 	 	8.2.14.
	 	No Limitation on Dividends and Distributions by Subsidiaries
	 	 	79	 
	 	 	 	 	8.2.15.
	 	Payment of Dividends; Redemptions
	 	 	79	 
	 	 	 	 	8.2.16.
	 	No Modification of Hedging Contract Policies
	 	 	79	 
	 	 	 	 	8.2.17.
	 	Off-Balance Sheet Financing
	 	 	79	 
	 	 	 	 	8.2.18.
	 	Amendments to Permitted Additional Indebtedness
Documents and Permitted Additional NJNG Documents
	 	 	80	 
	 	 	 	 	8.2.19.
	 	No Violation of Anti-Terrorism Laws
	 	 	80	 
	 	 	8.3	 	Reporting Requirements	 	 	81	 
	 	 	 	 	8.3.1.
	 	Quarterly Financial Statements
	 	 	81	 
	 	 	 	 	8.3.2.
	 	Annual Financial Statements
	 	 	81	 
	 	 	 	 	8.3.3.
	 	Certificate of the Borrower
	 	 	82	 
	 	 	 	 	8.3.4.
	 	Notice of Default
	 	 	82	 
	 	 	 	 	8.3.5.
	 	Notice of Litigation
	 	 	82	 
	 	 	 	 	8.3.6.
	 	Notice of Change in Debt Rating
	 	 	82	 
	 	 	 	 	8.3.7.
	 	Sale of Assets
	 	 	83	 
	 	 	 	 	8.3.8.
	 	Budgets, Forecasts, Other Reports and Information
	 	 	83	 
	 	 	 	 	8.3.9.
	 	Notices Regarding Plans and Benefit Arrangements
	 	 	83	 
	 	 	 	 	8.3.10.
	 	Tax Shelter Provisions
	 	 	85	 
	9.	 	DEFAULT	 	 	85	 
	 	 	9.1	 	Events of Default	 	 	85	 
	 	 	 	 	9.1.1.
	 	Payments Under Loan Documents
	 	 	85	 
	 	 	 	 	9.1.2.
	 	Breach of Warranty
	 	 	85	 
	 	 	 	 	9.1.3.
	 	Breach of Negative Covenants or Visitation Rights
	 	 	85	 
	 	 	 	 	9.1.4.
	 	Breach of Other Covenants
	 	 	85	 
	 	 	 	 	9.1.5.
	 	Defaults in Other Agreements or Indebtedness
	 	 	86	 
	 	 	 	 	9.1.6.
	 	Final Judgments or Orders
	 	 	86	 
	 	 	 	 	9.1.7.
	 	Loan Document Unenforceable
	 	 	86	 
	 	 	 	 	9.1.8.
	 	Uninsured Losses; Proceedings Against Assets
	 	 	87	 
	 	 	 	 	9.1.9.
	 	Notice of Lien or Assessment
	 	 	87	 
	 	 	 	 	9.1.10.
	 	Insolvency
	 	 	87	 

- v -

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	9.1.11.
	 	Events Relating to Plans and Benefit Arrangements
	 	 	87	 
	 	 	 	 	9.1.12.
	 	Cessation of Business
	 	 	88	 
	 	 	 	 	9.1.13.
	 	Change of Control
	 	 	88	 
	 	 	 	 	9.1.14.
	 	Involuntary Proceedings
	 	 	88	 
	 	 	 	 	9.1.15.
	 	Voluntary Proceedings
	 	 	89	 
	 	 	9.2	 	Consequences of Event of Default	 	 	89	 
	 	 	 	 	9.2.1.
	 	Events of Default Other Than Bankruptcy, Insolvency
or Reorganization Proceedings
	 	 	89	 
	 	 	 	 	9.2.2.
	 	Bankruptcy, Insolvency or Reorganization Proceedings
	 	 	89	 
	 	 	 	 	9.2.3.
	 	Set-off
	 	 	90	 
	 	 	 	 	9.2.4.
	 	Suits, Actions, Proceedings
	 	 	90	 
	 	 	 	 	9.2.5.
	 	Application of Proceeds; Collateral Sharing
	 	 	90	 
	 	 	 	 	9.2.6.
	 	Other Rights and Remedies
	 	 	91	 
	10.	 	THE CO-AGENTS	 	 	91	 
	 	 	10.1	 	Appointment	 	 	91	 
	 	 	10.2	 	Delegation of Duties	 	 	91	 
	 	 	10.3	 	Nature of Duties; Independent Credit Investigation	 	 	92	 
	 	 	10.4	 	Actions in Discretion of Agent; Instructions From the Banks	 	 	93	 
	 	 	10.5	 	Reimbursement and Indemnification of Agent by the Borrower	 	 	93	 
	 	 	10.6	 	Exculpatory Provisions; Limitation of Liability	 	 	94	 
	 	 	10.7	 	Reimbursement and Indemnification of Agent by Banks	 	 	94	 
	 	 	10.8	 	Reliance by Agent	 	 	95	 
	 	 	10.9	 	Notice of Default	 	 	95	 
	 	 	10.10	 	Notices	 	 	95	 
	 	 	10.11	 	Banks in Their Individual Capacities; Agents in Its Individual Capacity	 	 	95	 
	 	 	10.12	 	Holders of Notes	 	 	96	 
	 	 	10.13	 	Equalization of Banks	 	 	96	 
	 	 	10.14	 	Successor Agent	 	 	97	 
	 	 	10.15	 	Agent’s Fee	 	 	97	 
	 	 	10.16	 	Availability of Funds	 	 	97	 
	 	 	10.17	 	Calculations	 	 	98	 
	 	 	10.18	 	Beneficiaries	 	 	98	 
	 	 	10.19	 	No Reliance on Agent’s Customer Identification Program	 	 	98	 
	11.	 	MISCELLANEOUS	 	 	98	 
	 	 	11.1	 	Modifications, Amendments or Waivers	 	 	98	 
	 	 	 	 	11.1.1.
	 	Increase of Revolving Credit Commitments; Extension
of Expiration Date
	 	 	99	 
	 	 	 	 	11.1.2.
	 	Increase of 364-Day Revolving Credit Commitments;
Extension of 364-Day Loan Expiration Date
	 	 	99	 
	 	 	 	 	11.1.3.
	 	Release of Collateral or Guarantor
	 	 	100	 
	 	 	 	 	11.1.4.
	 	Miscellaneous
	 	 	100	 
	 	 	11.2	 	No Implied Waivers; Cumulative Remedies; Writing Required	 	 	100	 

- vi -

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	11.3	 	Reimbursement and Indemnification of Banks by the Borrower; Taxes	 	 	101	 
	 	 	11.4	 	Holidays	 	 	102	 
	 	 	11.5	 	Funding by Branch, Subsidiary or Affiliate	 	 	102	 
	 	 	 	 	11.5.1.
	 	Notional Funding
	 	 	102	 
	 	 	 	 	11.5.2.
	 	Actual Funding
	 	 	102	 
	 	 	11.6	 	Notices; Lending Offices	 	 	103	 
	 	 	11.7	 	Severability	 	 	104	 
	 	 	11.8	 	Governing Law	 	 	104	 
	 	 	11.9	 	Prior Understanding	 	 	104	 
	 	 	11.10	 	Duration; Survival	 	 	104	 
	 	 	11.11	 	Successors and Assigns; Joinder of a Bank	 	 	105	 
	 	 	11.12	 	Confidentiality	 	 	106	 
	 	 	 	 	11.12.1.
	 	General
	 	 	106	 
	 	 	 	 	11.12.2.
	 	Sharing Information With Affiliates of the Banks
	 	 	107	 
	 	 	11.13	 	Counterparts	 	 	107	 
	 	 	11.14	 	Agent’s or Bank’s Consent	 	 	107	 
	 	 	11.15	 	Exceptions	 	 	108	 
	 	 	11.16	 	WAIVER OF JURY TRIAL.	 	 	108	 
	 	 	11.17	 	JURISDICTION & VENUE	 	 	108	 
	 	 	11.18	 	Certifications From Banks and Participants	 	 	109	 
	 	 	 	 	11.18.1.
	 	Tax Withholding
	 	 	109	 
	 	 	 	 	11.18.2.
	 	USA Patriot Act
	 	 	110	 
	 	 	11.19	 	Joinder of Guarantors	 	 	110	 
	 	 	11.20	 	Amendment and Restatement; No Novation	 	 	110	 

- vii -

 

LIST OF SCHEDULES AND EXHIBITS

	 	 	 	 	 
	SCHEDULES	 	 	 	 
	 
	SCHEDULE 1.1(A)	 	
-
	 	PRICING GRID
	SCHEDULE 1.1(B)	 	
-
	 	COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
	SCHEDULE 1.1(P)	 	
-
	 	PERMITTED LIENS
	SCHEDULE 6.1.2	 	
-
	 	SUBSIDIARIES
	SCHEDULE 6.1.12	 	
-
	 	CONSENTS AND APPROVALS
	SCHEDULE 6.1.23	 	
-
	 	HEDGING CONTRACT POLICIES
	SCHEDULE 6.1.24	 	
-
	 	PERMITTED BUSINESS OPPORTUNITIES
	SCHEDULE 8.2.1	 	
-
	 	PERMITTED INDEBTEDNESS
	 
	EXHIBITS	 	 	 	 
	 
	EXHIBIT 1.1(A)	 	
-
	 	ASSIGNMENT AND ASSUMPTION AGREEMENT
	EXHIBIT 1.1(B)	 	
-
	 	BANK JOINDER
	EXHIBIT 1.1(G)(1)	 	
-
	 	GUARANTOR JOINDER
	EXHIBIT 1.1(G)(2)	 	
-
	 	GUARANTY AGREEMENT
	EXHIBIT 1.1(P)(1)	 	
-
	 	PERMITTED ADDITIONAL
INDEBTEDNESS SUMMARY OF PROPOSED TERMS
	EXHIBIT 1.1(P)(2)	 	
-
	 	PERMITTED ADDITIONAL
NJNG INDEBTEDNESS SUMMARY OF PROPOSED TERMS
	EXHIBIT 1.1(R)	 	
-
	 	REVOLVING CREDIT NOTE
	EXHIBIT 1.1(S)	 	
-
	 	SWING LOAN NOTE
	EXHIBIT 1.1(T)	 	
-
	 	364-DAY REVOLVING CREDIT NOTE
	EXHIBIT 1.1(U)	 	
-
	 	SWING LOAN (364-DAY) NOTE
	EXHIBIT 2.5.1	 	
-
	 	LOAN REQUEST
	EXHIBIT 2.5.2	 	
-
	 	SWING LOAN REQUEST
	EXHIBIT 2.5.3	 	
-
	 	SWING LOAN (364-DAY) REQUEST
	EXHIBIT 5.5	 	
-
	 	COMMITMENT REDUCTION NOTICE
	EXHIBIT 7.1.3(A)	 	
-
	 	OPINION OF COUNSEL
(AMENDED AND RESTATED CREDIT AGREEMENT)
	EXHIBIT 7.1.3(B)	 	
-
	 	OPINION OF IN-HOUSE
COUNSEL (AMENDED AND RESTATED CREDIT AGREEMENT)
	EXHIBIT 7.1.4(A)	 	
-
	 	OPINION OF COUNSEL (ORIGINAL CREDIT AGREEMENT)
	EXHIBIT 7.1.4(B)	 	
-
	 	OPINION OF IN-HOUSE
COUNSEL (ORIGINAL CREDIT AGREEMENT)
	EXHIBIT 8.2.5	 	
-
	 	ACQUISITION COMPLIANCE CERTIFICATE
	EXHIBIT 8.3.3	 	
-
	 	COMPLIANCE CERTIFICATE

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of December 19,
2003 and is made by and among NEW JERSEY RESOURCES CORPORATION, a New Jersey
corporation (the “Borrower”), EACH OF THE GUARANTORS (as hereinafter defined),
the BANKS (as hereinafter defined), FLEET NATIONAL BANK and SUNTRUST BANK, each
in its capacity as a syndication agent, BANK OF TOKYO-MITSUBISHI TRUST COMPANY
and JPMORGAN CHASE BANK, each in its capacity as a documentation agent, BANK
ONE, NA, CITIZENS BANK OF MASSACHUSETTS and THE BANK OF NEW YORK, each in its
capacity as a co-agent, and PNC BANK, NATIONAL ASSOCIATION, in its capacity as
administrative agent for the Banks under this Agreement (hereinafter referred
to in such capacity as the “Agent”).

WITNESSETH:

     WHEREAS, the Borrower, the Guarantors, Fleet National Bank and SunTrust,
each as a syndication agent, Bank of Tokyo-Mitsubishi Trust Company and JP
Morgan Chase Bank, each as a documentation agent, Bank One, NA, Citizens Bank
of Massachusetts and The Bank of New York, each as a co-agent, PNC Bank,
National Association, as administrative agent, and certain banks are parties to
that Credit Agreement dated as of December 23, 2002, as amended or modified by
that certain First Amendment to Credit Agreement, dated as of August 13, 2003
(the “Original Credit Agreement”), providing for (i) a revolving credit
facility to the Borrower in an aggregate principal amount not to exceed a
$80,000,000 and (ii) a 364-day revolving credit facility in an aggregate
principal amount not to exceed $100,000,000 to the Borrower; and

     WHEREAS, the Borrower has requested certain amendments to the Original
Credit Agreement and, subject to the terms and conditions hereof, the parties
hereto agree that, effective as of the Restatement Effective Date, the Original
Credit Agreement shall hereby be amended and restated for the convenience of
such parties in its entirety as set forth below, to provide that the revolving
credit facility under the Original Credit Agreement shall be continued hereby;
and

     WHEREAS, the guaranties for the revolving credit facility and the 364-day
revolving credit facility under the Original Credit Agreement shall continue to
guaranty the revolving credit loans and the 364-day revolving credit loans and
all other obligations hereunder.

     NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally
bound hereby, covenant and agree as follows:

 

 

1. CERTAIN DEFINITIONS

          1.1 Certain Definitions.

          In addition to words and terms defined elsewhere in this Agreement, the
following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:

               Acquisition Compliance Certificate shall have the meaning assigned to that
term in Section 8.2.5.

               Additional Bank shall have the meaning assigned to that term in Section
11.11(iv).

               Affiliate as to any Person shall mean any other Person (i) which directly
or indirectly controls, is controlled by, or is under common control with such
Person, (ii) which beneficially owns or holds 10% or more of any class of the
voting or other equity interests of such Person, or (iii) 10% or more of any
class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person. Control, as used in
this definition, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be.

               Agent shall mean PNC Bank, National Association, and its successors and
assigns.

               Agent’s Fee shall have the meaning assigned to that term in Section 10.15.

               Agent’s Letter shall have the meaning assigned to that term in Section
10.15.

               Agreement shall mean the Original Credit Agreement (including all
schedules and exhibits) as hereby amended and restated as of the Restatement
Effective Date by this Amended and Restated Credit Agreement (including all
schedules and exhibits), as the same may be supplemented or amended from time
to time in accordance herewith.

               Anti-Terrorism Laws shall mean any Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws
comprising or implementing the Bank Secrecy Act, and the Laws administered by
the United States Treasury Department’s Office of Foreign Asset Control (as any
of the foregoing Laws may from time to time be amended, renewed, extended, or
replaced).

               Applicable Facility Fee Rate shall mean the percentage rate per annum at
the indicated level of Debt Rating in the pricing grid on Schedule 1.1(A) below
the heading “Facility Fee.” The Applicable Facility Fee Rate shall be computed
in accordance with the parameters set forth on Schedule 1.1(A).

2

 

               Applicable Letter of Credit Fee Rate shall mean the percentage rate per
annum at the indicated level of Debt Rating in the pricing grid on Schedule
1.1(A) below the heading “Letter of Credit Fee.” The Applicable Letter of
Credit Fee Rate shall be computed in accordance with the parameters set forth
on Schedule 1.1(A).

               Applicable Margin shall mean, as applicable:

               (A) the percentage spread to be added to Base Rate under the Revolving
Credit Base Rate Option at the indicated level of Debt Rating in the pricing
grid on Schedule 1.1(A) below the heading “Revolving Credit Base Rate Spread,”

               (B) the percentage spread to be added to Base Rate under the 364-Day
Revolving Credit Base Rate Option at the indicated level of Debt Rating in the
pricing grid on Schedule 1.1(A) below the heading “364-Day Revolving Credit
Base Rate Spread,”

               (C) the percentage spread to be added to Euro-Rate under the Revolving
Credit Euro-Rate Option at the indicated level of Debt Rating in the pricing
grid on Schedule 1.1(A) below the heading “Revolving Credit Euro-Rate Spread,”
or

               (F) the percentage spread to be added to Euro-Rate under the 364-Day
Revolving Credit Euro-Rate Option at the indicated level of Debt Rating in the
pricing grid on Schedule 1.1(A) below the heading “364-Day Revolving Credit
Euro-Rate Spread.”

               The Applicable Margin shall be computed in accordance with the parameters
set forth on Schedule 1.1(A).

               Applicable 364-Day Facility Fee Rate shall mean the percentage rate per
annum at the indicated level of Debt Rating in the pricing grid on Schedule
1.1(A) below the heading “364-Day Facility Fee.” The Applicable 364-Day
Facility Fee Rate shall be computed in accordance with the parameters set forth
on Schedule 1.1(A).

               Approved Fund shall mean, with respect to any Bank, any Person (other than
a natural person) that is engaged in making, purchasing, holding or investing
in bank loans and similar extensions of credit in the ordinary course of its
business and that is administered by such Bank, an Affiliate of such Bank or an
entity or an Affiliate of an entity that administers or manages such Bank.

               Assignee Bank shall have the meaning assigned to such term in Section
2.10.2.

               Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and the
Agent, as Agent and on behalf of the remaining Banks, substantially in the form
of Exhibit 1.1(A).

               Authorized Officer shall mean those individuals, designated by written
notice to the Agent from the Borrower, authorized to execute notices, reports
and other

3

 

documents on behalf of the Loan Parties required hereunder. The Borrower
may amend such list of individuals from time to time by giving written notice
of such amendment to the Agent.

               Bank Joinder shall mean a Bank Joinder substantially in the form of
Exhibit 1.1(B).

               Bank to be Terminated shall have the meaning assigned to such term in
Section 2.10.2.

               Bank Provided Interest Rate Hedge shall mean an Interest Rate Hedge which
is provided by any Bank and that meets the following requirements: such
Interest Rate Hedge (i) is documented in a standard International Swap Dealer
Association Agreement, (ii) provides for the method of calculating the
reimbursable amount of the provider’s credit exposure in a reasonable and
customary manner, and (iii) is entered into for hedging (rather than
speculative) purposes. The liabilities of the Loan Parties to the provider of
any Bank-Provided Interest Rate Hedge shall be “Obligations” hereunder,
guaranteed obligations under the Guaranty Agreement and otherwise treated as
Obligations for purposes of each of the other Loan Documents.

               Banks shall mean the financial institutions named on Schedule 1.1(B) and
their respective successors and assigns as permitted hereunder, each of which
is referred to herein as a Bank.

               Base Rate shall mean the greater of (i) the interest rate per annum
announced from time to time by the Agent at its Principal Office as its then
prime rate, which rate may not be the lowest rate then being charged commercial
borrowers by the Agent, or (ii) the Federal Funds Open Rate plus 1/2% per
annum.

               Base Rate Option shall mean either the Revolving Credit Base Rate Option
or the 364-Day Revolving Credit Base Rate Option.

               Benefit Arrangement shall mean at any time an “employee benefit plan”
within the meaning of Section 3(3) of ERISA, which is neither a Plan nor a
Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.

               Blocked Person shall have the meaning assigned to such term in Subsection
6.1.25.

               Borrower shall mean New Jersey Resources Corporation, a corporation
organized and existing under the laws of the State of New Jersey.

               Borrowing Date shall mean, with respect to any Loan, the date for the
making thereof or the renewal or conversion thereof at or to the same or a
different Interest Rate Option, which shall be a Business Day.

4

 

               Borrowing Tranche shall mean specified portions of Loans outstanding as
follows: (i) any Loans to which a Euro-Rate Option applies which become
subject to the same Interest Rate Option under the same Loan Request by the
Borrower and which have the same Interest Period shall constitute one Borrowing
Tranche, and (ii) all Loans to which a Base Rate Option applies shall
constitute one Borrowing Tranche.

               Business Day shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required to be closed for
business in Pittsburgh, Pennsylvania and if the applicable Business Day relates
to any Loan to which the Euro-Rate Option applies, such day must also be a day
on which dealings are carried on in the London interbank market.

               Closing Date shall mean the Business Day on which the first Loan shall be
made, which shall be December 23, 2002. The closing shall take place on the
Closing Date at such time and place as the parties agree.

               Co-Agents shall mean collectively, the Agent, Fleet National Bank and
SunTrust Bank, each in its capacity as a syndication agent, Bank of
Tokyo-Mitsubishi Trust Company and JPMorgan Chase Bank, each in its capacity as
a documentation agent, Bank One, NA, Citizens Bank of Massachusetts and The
Bank of New York, each in its capacity as a co-agent, and Co-Agent shall mean
any one of the Co-Agents, individually.

               Commercial Letter of Credit shall mean any letter of credit which is
issued in respect of the purchase of goods or services by one or more of the
Loan Parties in the ordinary course of their business.

               Commitment shall mean, as to any Bank, the aggregate of its Revolving
Credit Commitment, 364-Day Revolving Credit Commitment and, in the case of the
Agent, its Swing Loan Commitment and Swing Loan (364-Day) Commitment, and
Commitments shall mean the aggregate of the Revolving Credit Commitments,
364-Day Revolving Credit Commitments, Swing Loan Commitment and Swing Loan
(364-Day) Commitment of all of the Banks.

               Compliance Certificate shall have the meaning assigned to such term in
Section 8.3.3.

               Consent shall mean that certain Consent, by and among the Borrower, the
Guarantors, the Agent and the requisite 364-Day Banks, which shall be executed
subsequent to this Agreement and that is dated December 19, 2003, pursuant to
which: (i) the expiration date of the 364-Day Revolving Credit Facility is
extended, (ii) the 364-Day Revolving Credit Commitment is increased in an
aggregate amount of $20,000,000 and (iii) Schedule 1.1(B) to this Agreement is
updated to give effect to the increase in the 364-Day Revolving Credit
Commitment.

               Consideration shall mean with respect to any Permitted Acquisition, the
aggregate of (i) the cash paid by any of the Loan Parties, directly or
indirectly, to the seller in

5

 

connection therewith, (ii) the Indebtedness incurred or assumed by any of
the Loan Parties, whether in favor of the seller or otherwise and whether fixed
or contingent, (iii) any Guaranty given or incurred by any Loan Party in
connection therewith, and (iv) any other consideration given or obligation
incurred by any of the Loan Parties in connection therewith.

               Consolidated Income from Operations for any period of determination shall
mean (i) the sum of net income (provided that there shall be excluded from net
income: (a) any extraordinary items of gain or loss (including, without
limitation, those items created by mandated changes in accounting treatment),
and (b) any gain or loss of any Person accounted for on the equity method
except to the extent of cash distributions received by the Borrower or any
Subsidiary of the Borrower during the period of determination with respect to
any gain of any Person accounted for on the equity method), depreciation,
amortization, other non-cash charges to net income, interest expense and income
tax expense minus (ii) non-cash credits to net income, in each case of the
Borrower and its Subsidiaries for such period determined and consolidated in
accordance with GAAP.

               Consolidated Interest Expense for any period of determination shall mean
interest expense for such period of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

               Consolidated Shareholders’ Equity shall mean as of any date of
determination the sum of the amounts under the headings “Common Shareholders’
Equity” and “Preferred Shareholders’ Equity” on the balance sheet, prepared in
accordance with GAAP, for the Borrower and its Subsidiaries on a consolidated
basis as of such date of determination.

               Consolidated Total Capitalization shall mean as of any date of
determination the sum of (i) Consolidated Total Indebtedness, plus (ii)
Consolidated Shareholders’ Equity.

               Consolidated Total Indebtedness shall mean as of any date of determination
total Indebtedness, without duplication, of the Borrower and its Subsidiaries.

               Contamination shall mean the presence or release or threat of release of
Regulated Substances in, on, under or emanating to or from the Property, which
pursuant to Environmental Laws requires notification or reporting to an
Official Body, or which pursuant to Environmental Laws requires the performance
of a Remedial Action or which otherwise constitutes a violation of
Environmental Laws.

               Debt Rating shall mean the rating of New Jersey Natural Gas’s senior
secured long-term debt by each of Standard & Poor’s and Moody’s.

               Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money of
the United States of America.

               Drawing Date shall have the meaning assigned to that term in Section
2.9.3.2.

6

 

               Environmental Complaint shall mean any (i) notice of non-compliance or
violation, citation or order relating in any way to any Environmental Law,
Environmental Permit, Contamination or Regulated Substance; (ii) civil,
criminal, administrative or regulatory investigation instituted by an Official
Body relating in any way to any Environmental Law, Environmental Permit,
Contamination or Regulated Substance; (iii) administrative, regulatory or
judicial action, suit, claim or proceeding instituted by any Person or Official
Body or any other written notice of liability or potential liability from any
Person or Official Body, in either instance, relating to or setting forth
allegations or a cause of action for personal injury (including but not limited
to death), property damage, natural resource damage, contribution or indemnity
for the costs associated with the performance of Remedial Actions, direct
recovery for the costs associated with the performance of Remedial Actions,
liens or encumbrances attached to or recorded or levied against property for
the costs associated with the performance of Remedial Actions, civil or
administrative penalties, criminal fines or penalties or declaratory or
equitable relief arising under any Environmental Laws; or (iv) subpoena,
request for information or other written notice or demand of any type issued by
an Official Body pursuant to any Environmental Laws.

               Environmental Laws shall mean all federal, state, local and foreign Laws
(including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq., the Federal Water Pollution Control Act,
33 U.S.C. §§ 1251 et seq., the Federal Safe Drinking Water Act, 42 U.S.C. §§
300f-300j, the Federal Air Pollution Control Act, 42 U.S.C. § 7401 et seq., the
Oil Pollution Act, 33 U.S.C. § 2701 et seq., the Federal Insecticide, Fungicide
and Rodenticide Act, 7 U.S.C. §§ 136 to 136y, the Occupational Safety and
Health Act, 29 U.S.C. § 651 et seq., each as amended, and any regulations
promulgated or any equivalent state or local Law, and any amendments thereto)
and any consent decrees, consent orders, consent agreements, settlement
agreements, judgments, orders, directives, policies or programs issued by or
entered into with an Official Body pertaining or relating to: (i) pollution or
pollution control; (ii) protection of human health from exposure to Regulated
Substances; (iii) protection of the environment and/or natural resources; (iv)
protection of employee safety in the workplace and protection of employees from
exposure to Regulated Substances in the workplace (but excluding workers
compensation and wage and hour Laws); (v) the presence, use, management,
generation, manufacture, processing, extraction, treatment, recycling,
refining, reclamation, labeling, sale, transport, storage, collection,
distribution, disposal or release or threat of release of Regulated Substances;
(vi) the presence of Contamination; (vii) the protection of endangered or
threatened species; and (viii) the protection of Environmentally Sensitive
Areas.

               Environmental Permits shall mean all permits, licenses, bonds or other
forms of financial assurances, consents, registrations, identification numbers,
approvals or authorizations required under Environmental Laws (i) to own,
occupy or maintain the Property; (ii) for the operations and business
activities of any Loan Party; or (iii) for the performance of a Remedial
Action.

7

 

               Environmental Records shall mean all notices, reports, records, plans,
applications, forms or other filings relating or pertaining to the Property,
Contamination, the performance of a Remedial Action and the operations and
business activities of any Loan Party which pursuant to Environmental Laws,
Environmental Permits or at the request or direction of an Official Body either
must be submitted to an Official Body or which otherwise must be maintained.

               Environmentally Sensitive Area shall mean (i) any wetland as defined by
applicable Environmental Laws; (ii) any area designated as a coastal zone
pursuant to applicable Laws, including Environmental Laws; (iii) any area of
historic or archeological significance or scenic area as defined or designated
by applicable Laws, including Environmental Laws; (iv) habitats of endangered
species or threatened species as designated by applicable Laws, including
Environmental Laws; or (v) a floodplain or other flood hazard area as defined
pursuant to any applicable Laws.

               ERISA shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.

               ERISA Group shall mean, at any time, the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
the Borrower, are treated as a single employer under Section 414 of the
Internal Revenue Code.

               Euro-Rate shall mean, with respect to the Loans comprising any Borrowing
Tranche to which the Euro-Rate Option applies for any Interest Period, the
interest rate per annum determined by the Agent by dividing (the resulting
quotient rounded upwards, if necessary to the nearest 1/100th of 1% per annum)
(i) the rate of interest determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive, absent manifest error) to
be the average of the London interbank offered rates for U.S. Dollars quoted by
the British Bankers’ Association as set forth on Moneyline Telerate (or
appropriate successor or, if the British Bankers’ Association or its successor
ceases to provide such quotes, a comparable replacement determined by the
Agent) display page 3750 (or such other display page on the Moneyline Telerate
service as may replace display page 3750), two (2) Business Days prior to the
first day of such Interest Period for an amount comparable to such Borrowing
Tranche and having a Borrowing Date and a maturity comparable to such Interest
Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.
The Euro-Rate may also be expressed by the following formula:

	 	 	 
	 	 	
Average of London interbank offered rates quoted
	 	 	
by BBA or appropriate successor as shown on
	Euro-Rate =	 	
Moneyline Telerate Service display page 3750
	 	 	

	 	 	
1.00 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate
Option applies that is outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of

8

 

such effective date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.

               Euro-Rate Option shall mean either a Revolving Credit Loan Euro-Rate
Option or a 364-Day Revolving Credit Loan Euro-Rate Option.

               Euro-Rate Reserve Percentage shall mean as of any day the maximum
percentage in effect on such day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities”).

               Event of Default shall mean any of the events described in Section 9.1 and
referred to therein as an “Event of Default.

               Executive Order No. 13224 shall mean the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.

               Expiration Date shall mean, with respect to the Revolving Credit
Commitments, January 4, 2006.

               Facility Fees collectively and Facility Fee separately shall have
the meaning given to such terms in Section 2.4.1.

               Facility Usage Fees collectively and Facility Usage Fee separately
shall have the meaning given to such terms in Section 2.4.3.

               Federal Funds Open Rate for any day shall mean the rate per annum (based
on a year of 360 days and actual days elapsed) determined by the Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the “Open” rate for federal funds transactions as
of the opening of business for federal funds transactions among members of the
Federal Reserve System arranged by federal funds brokers on such day, as quoted
by Garvin Guybutler, any successor entity thereto, or any other broker selected
by the Agent, as set forth on the applicable Telerate display page; provided,
however, that if such day is not a Business Day, the Federal Funds Open Rate
for such day shall be the “Open” rate on the immediately preceding Business
Day, or if no such rate shall be quoted by a federal funds broker at such time,
such other rate as determined by the Agent in accordance with its usual
procedures.

               GAAP shall mean generally accepted accounting principles as are in effect
in the United States from time to time, subject to the provisions of Section
1.3, and applied on a consistent basis both as to classification of items and
amounts.

               Governmental Acts shall have the meaning assigned to that term in Section
2.9.8.

9

 

               Guarantor shall mean each of the parties to this Agreement which is
designated as a “Guarantor” on the signature page hereof and each other Person
which joins this Agreement as a Guarantor after the date hereof pursuant to
Section 11.19.

               Guarantor Joinder shall mean a joinder by a Person as a Guarantor under
this Agreement, the Guaranty Agreement and the other Loan Documents in the form
of Exhibit 1.1(G)(1).

               Guaranty of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement
to indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.

               Guaranty Agreement shall mean the Guaranty and Suretyship Agreement in
substantially the form of Exhibit 1.1(G)(2) executed and delivered by each of
the Guarantors to the Agent for the benefit of the Banks.

               Hedging Contract Policies shall mean the written internal policies and
procedures with respect to hedging or trading of gas contracts or other
commodity, hedging contracts of any kind, or any derivatives or other similar
financial instruments of the Borrower and its Subsidiaries, as in effect on the
date of this Agreement and as hereafter amended in accordance with Section
8.2.16, a copy of which has been delivered to the Agent and each Bank.

               Hedging Transaction shall mean any transaction entered into by a Loan
Party or any of its Subsidiaries in accordance with the Hedging Contract
Policies.

               Historical Statements shall have the meaning assigned to that term in
Section 6.1.8(i).

               Hybrid Security shall mean any of the following: (i) beneficial interests
issued by a trust which constitutes a Subsidiary of any Loan Party,
substantially all of the assets of which trust are unsecured Indebtedness of
any Loan Party or any Subsidiary of any Loan Party or proceeds thereof, and all
payments of which Indebtedness are required to be, and are, distributed to the
holders of beneficial interests in such trust promptly after receipt by such
trust, or (ii) any shares of capital stock or other equity interest that, other
than solely at the option of the issuer thereof, by their terms (or by the
terms of any security into which they are convertible or exchangeable) are, or
upon the happening of an event or the passage of time would be, required to be
redeemed or repurchased, in whole or in part, or have, or upon the happening of
an event or the passage of time would have, a redemption or similar payment.

               Inactive Subsidiary shall mean, at any time, any Subsidiary of any Person,
which Subsidiary (i) does not conduct any business or have operations, and (ii)
does not have total assets with a net book value, as of any date of
determination, in excess of $100,000.

10

 

               Indebtedness shall mean, as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or
joint or several) of such Person for or in respect of: (i) borrowed money,
(ii) amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate or currency
exchange rate management device, (iv) any other transaction (including forward
sale or purchase agreements, capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into
by such Person to finance its operations or capital requirements (but not
including trade payables and accrued expenses incurred in the ordinary course
of business which are not represented by a promissory note or other evidence of
indebtedness and which are not more than thirty (30) days past due), (v) any
Hedging Transaction, to the extent that any indebtedness, obligations or
liabilities of such Person in respect thereof constitutes “indebtedness” as
determined in accordance with GAAP, (vi) any Guaranty of any Hedging
Transaction described in the immediately preceding clause (v), (vii) any
Guaranty of Indebtedness for borrowed money, (viii) any Hybrid Security
described in clause (i) of the definition of Hybrid Security, or (ix) the
mandatory repayment obligation of the issuer of any Hybrid Security described
in clause (ii) of the definition of Hybrid Security.

               Ineligible Security shall mean any security which may not be underwritten
or dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

               Insolvency Proceeding shall mean, with respect to any Person, (a) a case,
action or proceeding with respect to such Person (i) before any court or any
other Official Body under any bankruptcy, insolvency, reorganization or other
similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of such Person or otherwise relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general assignment
for the benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of such Person’s creditors generally
or any substantial portion of its creditors; undertaken under any Law.

               Interest Period shall mean the period of time selected by the Borrower in
connection with (and to apply to) any election permitted hereunder by the
Borrower to have Revolving Credit Loans or 364-Day Revolving Credit Loans bear
interest under the Euro-Rate Option. Subject to the last sentence of this
definition, such period shall be one, two, three or six Months, and solely with
approval of the Agent a shorter period. Such Interest Period shall commence on
the effective date of such Interest Rate Option, which shall be (i) the
Borrowing Date if the Borrower is requesting new Loans, or (ii) the date of
renewal of or conversion to the Euro-Rate Option if the Borrower is renewing or
converting to the Euro-Rate Option applicable to outstanding Loans.
Notwithstanding the second sentence hereof: (A) any Interest Period which would
otherwise end on a date which is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, and (B) the Borrower

11

 

shall not select, convert to or renew an Interest Period for any portion
of the Loans that would end after the Expiration Date.

               IRH Provider shall have the meaning assigned to such term in Section
9.2.5.2 [Collateral Sharing].

               Interest Rate Hedge shall mean an interest rate exchange, collar, cap,
swap, adjustable strike cap, adjustable strike corridor or similar agreements
entered into by the Loan Parties or their Subsidiaries in order to provide
protection to, or minimize the impact upon, the Borrower, any other Loan Party
and/or their Subsidiaries of increasing floating rates of interest applicable
to Indebtedness.

               Interest Rate Option shall mean any Euro-Rate Option or Base Rate Option.

               Internal Revenue Code shall mean the Internal Revenue Code of 1986, as the
same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.

               Investment shall have the meaning assigned to that term in Section 8.2.4.

               Labor Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees.

               Law shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree, bond, judgment, authorization or approval, lien or
award of or settlement agreement with any Official Body.

               Letter of Credit shall have the meaning assigned to that term in Section
2.9.1.

               Letter of Credit Borrowing shall have the meaning assigned to such term in
Section 2.9.3.4.

               Letter of Credit Fee shall have the meaning assigned to that term in
Section 2.9.2.

               Letters of Credit Outstanding shall mean at any time the sum of (i) the
aggregate undrawn face amount of outstanding Letters of Credit and (ii) the
aggregate amount of all unpaid and outstanding Reimbursement Obligations and
Letter of Credit Borrowings.

               Lien shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security

12

 

and any filed financing statement or other notice of any of the foregoing
(whether or not a lien or other encumbrance is created or exists at the time of
the filing).

               LLC Interests shall have the meaning given to such term in Section 6.1.2.

               Loan Documents shall mean this Agreement, the Agent’s Letter, the Guaranty
Agreement, the Notes (if any) and any other instruments, certificates or
documents delivered or contemplated to be delivered hereunder or thereunder or
in connection herewith or therewith, as the same may be supplemented or amended
from time to time in accordance herewith or therewith, and Loan Document shall
mean any of the Loan Documents.

               Loan Parties shall mean the Borrower and the Guarantors.

               Loan Request shall mean a request for a Revolving Credit Loan, a 364-Day
Revolving Credit Loan, a Swing Loan or a Swing Loan (364-Day) or a request to
select, convert to or renew a Base Rate Option or Euro-Rate Option with respect
to an outstanding Revolving Credit Loan or 364-Day Revolving Credit Loan in
accordance with Sections 2.5, 4.1 and 4.2.

               Loans shall mean collectively and Loan shall mean separately all Revolving
Credit Loans, 364-Day Revolving Credit Loans, Swing Loans, Swing Loans
(364-Day) or any Revolving Credit Loan, 364-Day Revolving Credit Loan, Swing
Loan or Swing Loan (364-Day).

               Material Adverse Change shall mean any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of this Agreement or any
other Loan Document, (b) is or could reasonably be expected to be material and
adverse to the business, properties, assets, financial condition, results of
operations or prospects of the Loan Parties taken as a whole, (c) impairs
materially or could reasonably be expected to impair materially the ability of
the Loan Parties taken as a whole to duly and punctually pay the Indebtedness
or otherwise perform the obligations in accordance with the Loan Documents, or
(d) impairs materially or could reasonably be expected to impair materially the
ability of the Agent or any of the Banks, to the extent permitted, to enforce
their legal remedies pursuant to this Agreement or any other Loan Document.

               Month, with respect to an Interest Period under the Euro-Rate Option,
shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any
Euro-Rate Interest Period begins on a day of a calendar month for which there
is no numerically corresponding day in the month in which such Interest Period
is to end, the final month of such Interest Period shall be deemed to end on
the last Business Day of such final month.

               Moody’s shall mean Moody’s Investors Service, Inc. and its successors.

               Mortgage Indenture shall mean that certain Indenture of Mortgage and Deed
of Trust dated April 1, 1952 from New Jersey Natural Gas Company to BNY Midwest

13

 

Trust Company, as successor to Harris Trust and Savings Bank, Trustee, as
heretofore and hereafter amended, modified and supplemented.

               Multiemployer Plan shall mean any employee benefit plan which is a
“multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.

               Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.

               Net Cash Proceeds shall mean, with respect to any issuance of debt or a
Hybrid Security, an amount equal to the cash proceeds received by the Borrower
or any of its Subsidiaries from or in respect of such transaction (including,
when received: (i) any cash proceeds received as income or other deferred cash
proceeds, or (ii) cash proceeds of any non-cash proceeds of such transaction),
less all investment banking fees, discounts and commissions, legal fees,
consulting fees, accountants’ fees, underwriting discounts and commissions and
other customary and reasonable fees and expenses actually incurred in
connection therewith.

               New Jersey Natural Gas shall mean New Jersey Natural Gas Company, a
corporation organized and existing under the laws of the State of New Jersey,
which corporation is a Subsidiary of the Borrower.

               NJNG Credit Agreement shall mean that certain Credit Agreement dated as of
December 23, 2002, among New Jersey Natural Gas, as the borrower, Bank of
Tokyo-Mitsubishi Trust Company and JPMorgan Chase Bank, each as syndication
agent, Fleet National Bank and SunTrust Bank, each as documentation agent, Bank
One NA, Citizens Bank of Massachusetts and The Bank of New York, each as
co-agent, PNC Bank, National Association, as the administrative agent, and the
Banks party thereto, as the same may be restated, amended, modified or
supplemented from time to time.

               Notes shall mean the Revolving Credit Notes, 364-Day Revolving Credit
Notes, Swing Note and Swing Note (364-Day), if any.

               Notices shall have the meaning assigned to that term in Section 11.6.

               Obligations shall mean any obligation or liability of any of the Loan
Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
any Notes, the Letters of Credit, the Agent’s Letter or any other Loan
Document. Obligations shall include the liabilities to any Bank under any
Bank-Provided Interest Rate Hedge but shall not include the liabilities to
other Persons under any other Interest Rate Hedge.

14

 

               Official Body shall mean any national, federal, state, local or other
government or political subdivision or any agency, authority, board, bureau,
central bank, commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.

               Original Credit Agreement shall have the meaning assigned to such term in
the preamble hereof.

               Participation Advance shall mean, with respect to any Bank, such Bank’s
payment in respect of its participation in a Letter of Credit Borrowing
according to its Revolving Credit Ratable Share pursuant to Section 2.9.3.4.

               Partnership Interests shall have the meaning given to such term in Section
6.1.2.

               PBGC shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.

               Permitted Acquisitions shall have the meaning assigned to such term in
Section 8.2.5 [Liquidations, Mergers, Consolidations, Acquisitions].

               Permitted Additional Indebtedness shall mean Indebtedness issued by the
Borrower which Indebtedness meets all of the following requirements:

               (i) the material terms of such Indebtedness shall be substantially as set
forth in that certain Summary of Proposed Terms, dated November 17, 2003, in
the form of Exhibit 1.1(P)(1) hereof;

               (ii) after giving effect to the issuance of such Indebtedness (the amount
of which shall be included as Consolidated Total Indebtedness for purposes of
the ratio set forth in Section 8.2.12 [Maximum Leverage Ratio]) the Loan
Parties shall be in pro-forma compliance with the covenants set forth in
Section 8.2.12 [Maximum Leverage Ratio] and Section 8.2.13 [Minimum Interest
Coverage Ratio] of this Agreement and no Event of Default or Potential Default
shall exist or be continuing;

               (iii) the events of default and covenants applicable to such Indebtedness
shall not be more restrictive, in any material respect, than the events of
default and covenants governing those matters or similar matters that are the
subject of Section 8.2 [Negative Covenants] of this Agreement; and

               (vi) such Indebtedness will be guaranteed by no Person which is a Loan
Party or a Subsidiary of a Loan Party, other than a guaranty of such
Indebtedness by a Guarantor.

               The Loan Parties shall promptly after issuance of Permitted Additional
Indebtedness deliver to the Agent and the Banks a copy of the material
documents with respect to the issuance of such Indebtedness.

15

 

               Permitted Additional Indebtedness Documents shall mean the note and other
material agreements evidencing the Permitted Additional Indebtedness as in
effect on the date of the issuance thereof, as the same may be supplemented,
amended, or modified from time to time as permitted by Section 8.2.18
[Amendments to Permitted Additional Indebtedness Documents and Permitted
Additional NJNG Documents] hereof.

               Permitted Additional NJNG Indebtedness shall mean Indebtedness issued by
New Jersey Natural Gas which Indebtedness meets all of the following
requirements:

               (i) the material terms of such Indebtedness shall be substantially as set
forth in that certain Summary of Proposed Terms, dated November 18, 2003, in
the form of Exhibit 1.1(P)(2) hereof;

               (ii) after giving effect to the issuance of such Indebtedness (the amount
of which shall be included as Consolidated Total Indebtedness for purposes of
the ratio set forth in Section 8.2.12 [Maximum Leverage Ratio]) the Loan
Parties shall be in pro-forma compliance with the covenants set forth in
Section 8.2.12 [Maximum Leverage Ratio] and Section 8.2.13 [Minimum Interest
Coverage Ratio] of this Agreement and no Event of Default or Potential Default
shall exist or be continuing;

               (iii) the events of default and covenants applicable to such Indebtedness
shall not be more restrictive, in any material respect, than the events of
default and covenants governing those matters or similar matters that are the
subject of Section 8.2 [Negative Covenants] of the NJNG Credit Agreement; and

               (iv) such Indebtedness will be guaranteed by no Person which is a Loan
Party or a Subsidiary of a Loan Party, other than a guaranty of such
Indebtedness by a Guarantor.

               The Loan Parties shall promptly after issuance of Permitted Additional
NJNG Indebtedness deliver to the Agent and the Banks a copy of the material
documents with respect to the issuance of such Indebtedness.

               Permitted Additional NJNG Indebtedness Documents shall mean the note and
other material agreements evidencing the Permitted Additional NJNG Indebtedness
as in effect on the date of the issuance thereof, as the same may be
supplemented, amended, or modified from time to time as permitted by Section
8.2.18 [Amendments to Permitted Additional Indebtedness Documents and Permitted
Additional NJNG Indebtedness Documents] hereof.

               Permitted Construction Project shall mean the proposed construction of an
office building on certain real property adjacent to the Borrower’s
headquarters in Wall, New Jersey by Commercial Realty and Resources Corp., a
Subsidiary of the Borrower.

               Permitted Investments shall mean:

               (i) direct obligations of the United States of America or any agency or
instrumentality thereof or obligations backed by the full faith and credit of
the United States of America maturing in twelve (12) months or less from the
date of acquisition;

16

 

               (ii) repurchase agreements having a duration of not more than sixty (60)
days that are collateralized by full faith and credit obligations of the United
States Government or obligations guaranteed by the United States Government and
its agencies;

               (iii) interests in investment companies registered under the Investment
Company Act of 1940, as amended (or in a separate portfolio of such an
investment company), that invest primarily in full faith and credit obligations
of the United States Government or obligations guaranteed by the United States
Government and its agencies and repurchase agreements collateralized by such
obligations;

               (iv) time deposits with any office located in the United States of the
Lenders or any other bank or trust company which is organized under the laws of
the United States and has combined capital, surplus and undivided profits of
not less than $500,000,000 or with any bank which is organized other than under
the laws of the United States (y) the commercial paper of which is rated at
least A-1 by Standard & Poor’s and P-1 by Moody’s (or, if such commercial paper
is rated only by Standard & Poor’s, at least A-1 by Standard & Poor’s, or if
such commercial paper is rated only by Moody’s, at least P-1 by Moody’s) or (z)
the long term senior debt of which is rated at least AA by Standard & Poor’s
and Aa2 by Moody’s (or, if such debt is rated only by Standard & Poor’s, at
least AA by Standard & Poor’s, or if such debt is rated only by Moody’s, at
least Aa2 by Moody’s);

               (v) commercial paper having a maturity of not more than one year from the
date of such investment and rated at least A-1 by Standard & Poor’s and P-1 by
Moody’s (or, if such commercial paper is rated only by Standard & Poor’s, at
least A-1 by Standard & Poor’s or, if such commercial paper is rated only by
Moody’s, at least P-1 by Moody’s);

               (vi) instruments held for collection in the ordinary course of business;

               (vii) any equity or debt securities or other form of debt instrument
obtained in settlement of debts previously contracted;

               (viii) any Investment arising out of a Permitted Related Business
Opportunity; and

               (ix) any other form of Investment by the Borrower or any of its
Subsidiaries (other than New Jersey Natural Gas which is expressly prohibited
from making any Investments described in this clause (ix)) in any Person so
long as the consideration paid or exchanged by the Borrower, or any of its
Subsidiaries, for such investment (whether in cash or the value of
payment-in-kind, with the value of payment-in-kind as reasonably determined by
the Borrower) does not exceed $20,000,000 in the aggregate for all Investments
permitted by this clause (ix).

               Permitted Liens shall mean:

               (i) Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business and which are not yet due and payable;

17

 

               (ii) Pledges or deposits made in the ordinary course of business to secure
payment of workmen’s compensation, or to participate in any fund in connection
with workmen’s compensation, unemployment insurance, old-age pensions or other
social security programs;

               (iii) Liens of mechanics, materialmen, warehousemen, carriers, or other
like Liens, securing obligations incurred in the ordinary course of business
that are not yet due and payable and Liens of landlords securing obligations to
pay lease payments that are not yet due and payable or in default;

               (iv) Any Lien arising out of judgments or awards but only to the extent
that the creation of any such Lien shall not be an event or condition which,
with or without notice or lapse of time or both, would cause Borrower to be in
violation of Section 9.1.6;

               (v) Security interests in favor of lessors of personal property, which
property is the subject of a true lease;

               (vi) Good-faith pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases, not in excess of the aggregate amount
due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course
of business;

               (vii) Encumbrances consisting of zoning restrictions, easements,
rights-of-way or other restrictions on the use of real property and minor
defects to title to real property, none of which materially impairs the use of
such property or the value thereof;

               (viii) Liens on property leased by any Loan Party or Subsidiary of a Loan
Party securing obligations of such Loan Party or Subsidiary to the lessor under
such leases, so long as to the extent the payments or other amounts due and
owing under any such lease constitute Indebtedness, such Indebtedness is
permitted under Section 8.2.1;

               (ix) Any Lien existing on the date of this Agreement and described on
Schedule 1.1(P), provided, that, to the extent any such Lien secures
Indebtedness permitted by Section 8.2.1(ii), such Lien may continue to secure
any renewals or extensions of such Indebtedness permitted by Section 8.2.1(ii)
so long as (i) the principal amount of the Indebtedness secured by any such
Lien is not hereafter increased and (ii) no additional assets become subject to
such Lien;

               (x) Liens on assets of New Jersey Natural Gas existing on the Closing Date
(other than on any “Excepted Property” of New Jersey Natural Gas, as “Excepted
Property” is defined in the Mortgage Indenture on the Closing Date), which
Liens secure outstanding Indebtedness as of the Closing Date under the Mortgage
Indenture and thereafter Liens on assets of New Jersey Natural Gas (other than
on any “Excepted Property”) which additional Liens secure outstanding
Indebtedness as of the Closing Date under the Mortgage Indenture and any

18

 

additional Indebtedness which is issued in accordance with Article Two of
the Mortgage Indenture and is otherwise permitted by Section 8.2.1(iv);

               (xi) Purchase Money Security Interests, provided, that the aggregate
amount of loans and deferred payments secured by such Purchase Money Security
Interests shall not exceed $5,000,000 (excluding for the purpose of this
computation any loans or deferred payments secured by Liens described on
Schedule 1.1(P)); and

               (xii) The following, (A) if the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue
to be stayed or (B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and could not be reasonably
expected to result in a Material Adverse Change:

		
	 	     (1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the
applicable Loan Party maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of
proceedings to foreclose any such Lien;
	 
	 	     (2) Claims, Liens or encumbrances upon, and defects of title
to, real or personal property, including any attachment of personal
or real property or other legal process prior to adjudication of a
dispute on the merits; or
	 
	 	     (3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens.

Notwithstanding the foregoing definition of Permitted Lien or any other
provision of the Loan Documents to the contrary, each of the Loan Parties shall
not, and shall not permit any of its Subsidiaries to, at any time create,
incur, assume or suffer to exist any Lien on any of the capital stock of New
Jersey Natural Gas, or agree or become liable to do so.

               Permitted Related Business Opportunity shall mean any transaction with
another Person (other than any Inactive Subsidiary of the Borrower) involving
business activities or assets reasonably related or complementary to the
business of the Borrower and its Subsidiaries as conducted on the Closing Date
or as may be conducted pursuant to Section 8.2.9, including, without
limitation, the management and marketing of storage, capacity and
transportation of gas and other forms of energy, the generation, transmission
or storage of gas and other forms of energy, or the access to gas and energy
transmission lines, and business initiatives for the conservation and
efficiency of gas and energy.

               Permitted Transferee shall mean, as of any date of determination, any of
the following with respect to any then current officer or director of the
Borrower: (i) such Person’s spouse, lineal descendants or lineal descendant’s
of such Person’s spouse, (ii) any charitable corporation or trust established
by such officer or director or by any Person described in the immediately
preceding clause (i), (iii) any trust (or in the case of a minor, a custodial

19

 

account under a Uniform Gifts or Transfers to Minors Act) of which the
beneficiary or beneficiaries are one or more Persons described in the
immediately preceding clauses (i) or (ii), or (iv) any executor or
administrator upon the death of such officer or director or the death of any
Person described in the immediately preceding clauses (i) or (ii).

               Person shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.

               Plan shall mean at any time an employee pension benefit plan (including a
Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title
IV of ERISA or is subject to the minimum funding standards under Section 412 of
the Internal Revenue Code and either (i) is maintained by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained by any entity which was at
such time a member of the ERISA Group for employees of any entity which was at
such time a member of the ERISA Group.

               PNC Bank shall mean PNC Bank, National Association, its successors and
assigns.

               Potential Default shall mean any event or condition which with notice,
passage of time, or both, would constitute an Event of Default.

               Principal Office shall mean the main banking office of the Agent in
Pittsburgh, Pennsylvania.

               Prohibited Transaction shall mean any prohibited transaction as defined in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA for which
neither an individual nor a class exemption has been issued by the United
States Department of Labor.

               Property shall mean all real property, both owned and leased, of any Loan
Party or Subsidiary of a Loan Party.

               Purchase Money Security Interest shall mean Liens upon tangible personal
property securing loans to any Loan Party or Subsidiary of a Loan Party or
deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property.

               Purchasing Bank shall mean a Bank which becomes a party to this Agreement
by executing an Assignment and Assumption Agreement.

               Ratable Share shall mean the proportion that a Bank’s Commitment
(excluding its Swing Loan Commitment and its Swing Loan (364-Day) Commitment)
bears to the Commitments (excluding the Swing Loan Commitments and the Swing
Loan (364-Day) Commitments) of all of the Banks.

20

 

               Regulated Entity shall mean any Person which is subject under Law to any
of the laws, rules or regulations respecting the financial, organizational or
rate regulation of electric companies, public utilities, or public utility
holding companies.

               Regulated Substances shall mean, without limitation, any substance,
material or waste, regardless of its form or nature, defined under
Environmental Laws as a “hazardous substance,” “pollutant,” “pollution,”
“contaminant,” “hazardous or toxic substance,” “extremely hazardous substance,”
“toxic chemical,” “toxic substance,” “toxic waste,” “hazardous waste,” “special
handling waste,” “industrial waste,” “residual waste,” “solid waste,”
“municipal waste,” “mixed waste,” “infectious waste,” “chemotherapeutic waste,”
“medical waste,” or “regulated substance”, or any other substance, material or
waste, regardless of its form or nature, which is regulated, controlled or
governed by Environmental Laws due to its radioactive, ignitable, corrosive,
reactive, explosive, toxic, carcinogenic or infectious properties or nature or
any other material, substance or waste, regardless of its form or nature, which
otherwise is regulated, controlled or governed by Environmental Laws, including
without limitation, petroleum and petroleum products (including crude oil and
any fractions thereof), natural gas, synthetic gas and any mixtures thereof,
asbestos, urea formaldehyde, polychlorinated biphenlys, mercury, radon and
radioactive materials.

               Regulation U shall mean Regulation U, T, G or X as promulgated by the
Board of Governors of the Federal Reserve System, as amended from time to time.

               Reimbursement Obligation shall have the meaning assigned to such term in
Section 2.9.3.2.

               Remedial Action shall mean any investigation, identification,
characterization, delineation, cleanup, removal, remediation, containment,
control or abatement of or other response actions to Regulated Substances and
any closure or post-closure measures associated therewith.

               Reportable Event shall mean a reportable event described in Section 4043
of ERISA and regulations thereunder with respect to a Plan or Multiemployer
Plan.

               Required Banks shall mean

               (A) if there are no Loans, Reimbursement Obligations or Letter of Credit
Borrowings outstanding, Required Banks shall mean Banks whose Commitments
(excluding the Swing Loan Commitments) aggregate at least 51% of the
Commitments of all of the Banks, or

               (B) if there are Loans, Reimbursement Obligations, or Letter of Credit
Borrowings outstanding, Required Banks shall mean:

                     (i)     prior to a termination of the Commitments hereunder pursuant to
Section 9.2.1 or 9.2.2, any Bank or group of Banks if the sum of the Loans
(excluding the Swing Loans and the Swing Loans (364-Day)), Reimbursement
Obligations and Letter of Credit Borrowings of such Banks then outstanding
aggregates at least 51% of the total

21

 

principal amount of all of the Loans (excluding the Swing Loans and the
Swing Loans (364-Day)), Reimbursement Obligations and Letter of Credit
Borrowings then outstanding.

                     (ii)     after a termination of the Commitments hereunder pursuant to Section
9.2.1 or 9.2.2, any Bank or group of Banks if the sum of the Loans (excluding
the Swing Loans and the Swing Loans (364-Day)), Reimbursement Obligations and
Letter of Credit Borrowings of such Banks then outstanding aggregates at least
51% of the total principal amount of all of the Loans (excluding the Swing
Loans and the Swing Loans (364-Day)), Reimbursement Obligations and Letter of
Credit Borrowings then outstanding.

Reimbursement Obligations and Letter of Credit Borrowings shall be deemed, for
purposes of this definition, to be in favor of the Agent and not a
participating Bank if such Bank has not made its Participation Advance in
respect thereof and shall be deemed to be in favor of such Bank to the extent
of its Participation Advance if it has made its Participation Advance in
respect thereof.

               Required Share shall have the meaning assigned to such term in Section
5.10.1.

               Required Share (364-Day) shall have the meaning assigned to such term in
Section 5.10.2.

               Restatement Effective Date shall mean the date of satisfaction of each and
every condition set forth in Section 7.1 (such date being December 19, 2003).

               Revolving Credit Base Rate Option shall mean the option of the Borrower to
have Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.1.1(i).

               Revolving Credit Commitment shall mean, as to any Bank at any time, the
amount initially set forth opposite its name on Schedule 1.1(B) in the column
labeled “Amount of Commitment for Revolving Credit Loans,” and thereafter on
Schedule I to the most recent Assignment and Assumption Agreement or Bank
Joinder, as applicable, and Revolving Credit Commitments shall mean the
aggregate Revolving Credit Commitments of all of the Banks.

               Revolving Credit Euro-Rate Option shall mean the option of the Borrower to
have Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.1.1(ii).

               Revolving Credit Loans shall mean collectively and Revolving Credit Loan
shall mean separately all Revolving Credit Loans or any Revolving Credit Loan
made by the Banks or one of the Banks to the Borrower pursuant to Section 2.1
or 2.9.3.

               Revolving Credit Note shall mean any Revolving Credit Note of the Borrower
in the form of Exhibit 1.1(R) issued by the Borrower at the request of a Bank
pursuant to Section 5.9 evidencing the Revolving Credit Loans to such Bank,
together with all

22

 

amendments, extensions, renewals, replacements, refinancings or refundings
thereof in whole or in part.

               Revolving Credit Ratable Share shall mean the proportion that a Bank’s
Revolving Credit Commitment (excluding the Swing Loan Commitment) bears to the
Revolving Credit Commitments (excluding the Swing Loan Commitments) of all of
the Banks.

               Revolving Facility Usage shall mean at any time the sum of the Revolving
Credit Loans outstanding, the Swing Loans outstanding and the Letters of Credit
Outstanding.

               SEC shall mean the Securities and Exchange Commission or any governmental
agencies substituted therefor.

               SEC Filings shall mean the Borrower’s Form 10-K, filed with the SEC for
the fiscal year ended September 30, 2003 and Forms 10-Q, the first filed with
the SEC for the fiscal quarter ended December 31, 2002, the second filed with
SEC for the fiscal quarter ended March 31, 2003 and the third filed with the
SEC for the fiscal quarter ended June 30, 2003.

               Section 20 Subsidiary shall mean the Subsidiary of the bank holding
company controlling any Bank, which Subsidiary has been granted authority by
the Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.

               Settlement Date shall mean the 7th day of each week (if such day is a
Business Day and if not, the next succeeding Business Day) and any other
Business Day on which the Agent elects to effect settlement pursuant to Section
5.10.1.

               Significant Subsidiary shall mean, New Jersey Natural Gas, NJR Energy
Services Company, or any Subsidiary of the Borrower which at any time (i) has
gross revenues equal to or in excess of five percent (5%) of the gross revenues
of the Borrower and its Subsidiaries on a consolidated basis, or (ii) has total
assets equal to or in excess of five percent (5%) of the total assets of the
Borrower and its Subsidiaries on a consolidated basis, in either case, as
determined and consolidated in accordance with GAAP.

               Solvent shall mean, with respect to any Person on a particular date, that
on such date (i) such Person is able to realize upon its assets and pay its
debts and other liabilities as they mature in the normal course of business,
and (ii) such Person has not incurred debts or liabilities beyond such Person’s
ability to pay as such debts and liabilities mature.

               Standard & Poor’s shall mean Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc., and its successors.

               Standby Letter of Credit shall mean a Letter of Credit issued to support
obligations of one or more of the Loan Parties, contingent or otherwise, which
finance the working capital and business needs of the Loan Parties incurred in
the ordinary course of business, but excluding any Letter of Credit under which
the stated amount of such Letter of Credit increases automatically over time.

23

 

               Subsidiary of any Person at any time shall mean (i) any corporation or
trust of which 50% or more (by number of shares or number of votes) of the
outstanding capital stock or shares of beneficial interest normally entitled to
vote for the election of one or more directors or trustees (regardless of any
contingency which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such Person or one or more of such
Person’s Subsidiaries, (ii) any partnership of which such Person is a general
partner or of which 50% or more of the partnership interests is at the time
directly or indirectly owned by such Person or one or more of such Person’s
Subsidiaries, (iii) any limited liability company of which such Person is a
member or of which 50% or more of the limited liability company interests is at
the time directly or indirectly owned by such Person or one or more of such
Person’s Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled or capable of being
controlled by such Person or one or more of such Person’s Subsidiaries.

               Subsidiary Shares shall have the meaning assigned to that term in Section
6.1.2.

               Swing Loan Commitment shall mean PNC Bank’s commitment to make Swing Loans
to the Borrower pursuant to Section 2.1.3 hereof in an aggregate principal
amount up to $35,000,000.

               Swing Loan (364-Day) Commitment shall mean PNC Bank’s commitment to make
Swing Loans to the Borrower pursuant to Section 2.1.4 hereof in an aggregate
principal amount up to $20,000,000.

               Swing Loan Interest Rate shall mean as to each Swing Loan the rate of
interest quoted by the Agent applicable thereto and accepted by the Borrower
with respect to such Swing Loan.

               Swing Loan (364-Day) Interest Rate shall mean as to each Swing Loan
(364-Day) the rate of interest quoted by the Agent applicable thereto and
accepted by the Borrower with respect to such Swing Loan (364-Day).

               Swing Loan Note shall mean the Swing Loan Note of the Borrower in the form
of Exhibit 1.1(S) evidencing the Swing Loans, together with all amendments,
extensions, renewals, replacements, refinancings or refundings thereof in whole
or in part.

               Swing Loan (364-Day) Note shall mean the Swing Loan (364-Day) Note of the
Borrower in the form of Exhibit 1.1(U) evidencing the Swing Loan (364-Day),
together with all amendments, extensions, renewals, replacements, refinancings
or refundings thereof in whole or in part.

               Swing Loan Request shall mean a request for Swing Loans made in accordance
with Section 2.5.2 hereof.

               Swing Loan (364-Day) Request shall mean a request for Swing Loans
(364-Day) made in accordance with Section 2.5.3 hereof.

24

 

               Swing Loans shall mean collectively and Swing Loan shall mean separately
all Swing Loans or any Swing Loan made by PNC Bank to the Borrower pursuant to
Section 2.1.3 hereof.

               Swing Loans (364-Day) shall mean collectively and Swing Loan (364-Day)
shall mean separately all Swing Loans (364-Day) or any Swing Loan (364-Day)
made by PNC Bank to the Borrower pursuant to Section 2.1.4 hereof.

               364-Day Bank shall mean, at any time, a Bank who has a 364-Day Revolving
Credit Commitment and 364-Day Banks shall mean, at any time, all Banks who have
364-Day Revolving Credit Commitments.

               364-Day Facility Fees collectively and 364-Day Facility Fee
separately shall have the meaning given to such terms in Section 2.4.2.

               364-Day Loan Expiration Date shall mean, with respect to the 364-Day
Revolving Credit Commitments, under the Original Credit Agreement, December 19,
2003 and, thereafter as such 364-Day Revolving Credit Commitments are renewed
(such renewal pursuant to the Consent), until December 16, 2004 (as the 364-Day
Loan Expiration Date after giving effect to such renewal) or such later date as
may be agreed upon pursuant to the procedure for extending the 364-Day Loan
Expiration Date in accordance with Section 2.10 hereof.

               364-Day Required Banks shall mean

               (A) if there are no 364-Day Revolving Credit Loans outstanding 364-Day
Required Banks shall mean 364-Day Banks whose 364-Day Revolving Credit
Commitments aggregate at least 75% of the 364-Day Revolving Credit Commitments
of all of the 364-Day Banks, or

               (B) if there are 364-Day Revolving Credit Loans, outstanding, 364-Day
Required Banks shall mean:

                     (i)     prior to a termination of the 364-Day Revolving Credit Commitments
hereunder pursuant to Section 9.2.1 or 9.2.2, any 364-Day Bank or group of
364-Day Banks if the 364-Day Revolving Credit Loans of such 364-Day Banks then
outstanding aggregates at least 75% of the total principal amount of all of the
364-Day Revolving Credit Loans then outstanding; and

                    (ii) after a termination of the 364-Day Revolving Credit Commitments
hereunder pursuant to Section 9.2.1 or 9.2.2, any 364-Day Bank or group of
364-Day Banks if the 364-Day Revolving Credit Loans of such 364-Day Banks then
outstanding aggregates at least 75% of the total principal amount of all of the
364-Day Revolving Credit Loans then outstanding.

               364-Day Revolving Credit Base Rate Option shall mean the option of the
Borrower to have 364-Day Revolving Credit Loans bear interest at the rate and
under the terms and conditions set forth in Section 4.1.2(i).

25

 

               364-Day Revolving Credit Commitment shall mean, as to any Bank at any
time, the amount initially set forth opposite its name on Schedule 1.1(B) in
the column labeled “Amount of Commitment for 364-Day Revolving Credit Loans,”
and thereafter on Schedule I to the most recent Assignment and Assumption
Agreement or Bank Joinder, as applicable, and 364-Day Revolving Credit
Commitments shall mean the aggregate 364-Day Revolving Credit Commitments of
all of the Banks.

               364-Day Revolving Credit Euro-Rate Option shall mean the option of the
Borrower to have 364-Day Revolving Credit Loans bear interest at the rate and
under the terms and conditions set forth in Section 4.1.2(ii).

               364-Day Revolving Credit Loans shall mean collectively and 364-Day
Revolving Credit Loan shall mean separately all 364-Day Revolving Credit Loans
or any 364-Day Revolving Credit Loan made by the Banks or one of the Banks to
the Borrower pursuant to Section 2.1.

               364-Day Revolving Credit Note shall mean any 364-Day Revolving Credit Note
of the Borrower in the form of Exhibit 1.1(T) issued by the Borrower at the
request of a Bank pursuant to Section 5.9 evidencing the 364-Day Revolving
Credit Loans to such Bank, together with all amendments, extensions, renewals,
replacements, refinancings or refundings thereof in whole or in part.

               364-Day Revolving Credit Ratable Share shall mean the proportion that a
Bank’s 364-Day Revolving Credit Commitment (excluding the Swing Loan (364-Day)
Commitment) bears to the 364-Day Revolving Credit Commitments (excluding the
Swing Loan (364-Day) Commitments) of all of the Banks.

               364-Day Revolving Credit Usage Fees collectively and 364-Day
Revolving Credit Usage Fee separately shall have the meaning given to
such terms in Section 2.4.4.

               364-Day Revolving Facility Usage shall at any time the sum of the 364-Day
Revolving Credit Loans outstanding and the Swing Loans (364-Day) outstanding.

               364-Day Settlement Date shall mean the seventh (7th) day of each week (if
such day is a Business Day and, if not, the next succeeding Business Day) and
any other Business Day on which the Agent elects to effect settlement pursuant
to Section 5.10.2.

               Transferor Bank shall mean the selling Bank pursuant to an Assignment and
Assumption Agreement.

               USA Patriot Act shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

26

 

          1.2 Construction.

          Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of the
other Loan Documents:

               1.2.1. Number; Inclusion.

                    references to the plural include the singular, the plural, the part and
the whole; “or” has the inclusive meaning represented by the phrase “and/or,”
and “including” has the meaning represented by the phrase “including without
limitation”;

               1.2.2. Determination.

                    references to “determination” of or by the Agent or the Banks shall be
deemed to include good-faith estimates by the Agent or the Banks (in the case
of quantitative determinations) and good-faith beliefs by the Agent or the
Banks (in the case of qualitative determinations) and such determination shall
be conclusive absent manifest error;

               1.2.3. Agent’s Discretion and Consent.

                    whenever the Agent or the Banks are granted the right herein to act in its
or their sole discretion or to grant or withhold consent such right shall be
exercised in good faith;

               1.2.4. Documents Taken as a Whole.

                    the words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document as a whole and not to any particular provision of this Agreement
or such other Loan Document;

               1.2.5. Headings.

                    the section and other headings contained in this Agreement or such other
Loan Document and the Table of Contents (if any), preceding this Agreement or
such other Loan Document are for reference purposes only and shall not control
or affect the construction of this Agreement or such other Loan Document or the
interpretation thereof in any respect;

               1.2.6. Implied References to this Agreement.

                    article, section, subsection, clause, schedule and exhibit references are
to this Agreement or other Loan Document, as the case may be, unless otherwise
specified;

               1.2.7. Persons.

                    reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by this
Agreement or

27

 

such other Loan Document, as the case may be, and reference to a Person in
a particular capacity excludes such Person in any other capacity;

               1.2.8. Modifications to Documents.

                    reference to any agreement (including this Agreement and any other Loan
Document together with the schedules and exhibits hereto or thereto), document
or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;

               1.2.9. From, To and Through.

                    relative to the determination of any period of time, “from” means “from
and including,” “to” means “to but excluding,” and “through” means “through and
including”; and

               1.2.10. Shall; Will.

                    references to “shall” and “will” are intended to have the same meaning.

          1.3 Accounting Principles.

          Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and
prepared in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP; provided, however, that all accounting terms
used in Section 8.2 [Negative Covenants] (and all defined terms used in the
definition of any accounting term used in Section 8.2) shall have the meaning
given to such terms (and defined terms) under GAAP as in effect on the date
hereof applied on a basis consistent with those used in preparing the Annual
Statements referred to in Section 6.1.8(i) [Historical Statements]. In the
event of any change after the date hereof in GAAP, and if such change would
result in the inability to determine compliance with the financial covenants
set forth in Section 8.2 based upon the Borrower’s regularly prepared financial
statements by reason of the preceding sentence, then the parties hereto agree
to endeavor, in good faith, to agree upon an amendment to this Agreement that
would adjust such financial covenants in a manner that would not affect the
substance thereof, but would allow compliance therewith to be determined in
accordance with the Borrower’s financial statements at that time.

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2. REVOLVING CREDIT, 364-DAY REVOLVING CREDIT AND SWING LOAN FACILITIES

          2.1 Commitments.

               2.1.1. Revolving Credit Loans.

                    Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Revolving Credit Loans to the Borrower at any time or from time to time on
or after the date hereof to the Expiration Date, provided that, after giving
effect to each such Revolving Credit Loan the aggregate amount of Revolving
Credit Loans from such Bank shall not exceed such Bank’s Revolving Credit
Commitment minus such Bank’s Revolving Credit Ratable Share of the amount of
Letters of Credit Outstanding; and provided further that the Revolving Facility
Usage at any time shall not exceed the Revolving Credit Commitments of all the
Banks. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.1.1. The outstanding principal amount of all
Revolving Credit Loans, together with accrued interest thereon shall be due and
payable on the Expiration Date.

               2.1.2. 364-Day Revolving Credit Loans.

                    Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make 364-Day Revolving Credit Loans to the Borrower at any time or from time to
time on or after the date hereof to the 364-Day Loan Expiration Date provided
that, after giving effect to each such 364-Day Revolving Credit Loan the
aggregate amount of 364-Day Revolving Credit Loans from such Bank shall not
exceed such Bank’s 364-Day Revolving Credit Commitment; and provided further
that the 364-Day Revolving Facility Usage at any time shall not exceed the
364-Day Revolving Credit Commitments of all the Banks. Within such limits of
time and amount and subject to the other provisions of this Agreement, the
Borrower may borrow, repay and reborrow pursuant to this Section 2.1.2. The
outstanding principal amount of all 364-Day Revolving Credit Loans, together
with accrued interest thereon shall be due and payable on the 364-Day Loan
Expiration Date.

               2.1.3. Swing Loan Commitment.

                    Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, PNC Bank agrees to make Swing
Loans to the Borrower at any time or from time to time after the date hereof
to, but not including, the Expiration Date, in an aggregate principal amount of
up to but not in excess of the Swing Loan Commitment, provided that the
Revolving Facility Usage at any time, shall not exceed the Revolving Credit
Commitments of all the Banks. Within such limits of time and amount and
subject to the other provisions of this Agreement, the Borrower may borrow,
repay and reborrow pursuant to this Section 2.1.3. The outstanding principal
amount of all Swing Loans, together with accrued interest thereon shall be due
and payable on the Expiration Date.

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               2.1.4. Swing Loan (364-Day) Commitment.

                    Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, PNC Bank agrees to make Swing
Loans (364-Day) to the Borrower at any time or from time to time after the date
hereof to, but not including, the 364-Day Loan Expiration Date, in an aggregate
principal amount of up to but not in excess of the Swing Loan (364-Day)
Commitment, provided that the 364-Day Revolving Facility Usage at any time,
shall not exceed the 364-Day Revolving Credit Commitments of all the 364-Day
Banks. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.1.4. The outstanding principal amount of all Swing
Loans (364-Day), together with accrued interest thereon shall be due and
payable on the 364-Day Loan Expiration Date.

          2.2 Nature of Banks’ Obligations with Respect to Revolving Credit Loans
and 364-Day Revolving Credit Loans.

          Each Bank shall be obligated to participate in each request for Revolving
Credit Loans pursuant to Section 2.5 [Revolving Credit Loan Requests; 364-Day
Revolving Credit Loan Requests; Etc.] in accordance with its Revolving Credit
Ratable Share. The aggregate amount of each Bank’s Revolving Credit Loans
outstanding hereunder to the Borrower at any time shall never exceed its
Revolving Credit Commitment minus its Revolving Credit Ratable Share of the
amount of Letters of Credit Outstanding. The obligations of each Bank
hereunder are several. The failure of any Bank to perform its obligations
hereunder shall not affect the Obligations of the Borrower to any other party
nor shall any other party be liable for the failure of such Bank to perform its
obligations hereunder. The Banks shall have no obligation to make Revolving
Credit Loans hereunder on or after the Expiration Date.

               Each Bank shall be obligated to participate in each request for 364-Day
Revolving Credit Loans pursuant to Section 2.5 [Revolving Credit Loan Requests;
364-Day Revolving Credit Loan Requests; Etc.] in accordance with its 364-Day
Revolving Credit Ratable Share. The aggregate amount of each Bank’s 364-Day
Revolving Credit Loans outstanding hereunder to the Borrower at any time shall
never exceed its 364-Day Revolving Credit Commitment. The obligations of each
Bank hereunder are several. The failure of any Bank to perform its obligations
hereunder shall not affect the Obligations of the Borrower to any other party
nor shall any other party be liable for the failure of such Bank to perform its
obligations hereunder. The Banks shall have no obligation to make 364-Day
Revolving Credit Loans hereunder on or after the 364-Day Loan Expiration Date.

          2.3 [Intentionally Omitted]

          2.4 Certain Fees.

               2.4.1. Facility Fees.

                    Accruing from the date hereof until the Expiration Date, the Borrower
agrees to pay to the Agent for the account of each Bank, as consideration for
such Bank’s

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Revolving Credit Commitment hereunder, a nonrefundable facility fee (the
“Facility Fee”) equal to the Applicable Facility Fee Rate (computed on the
basis of a year of 360 days and actual days elapsed) on the average daily
amount of such Bank’s Revolving Credit Commitment as the same may be
constituted from time to time. All Facility Fees shall be payable quarterly in
arrears on the first Business Day of each January, April, July and October
after the date hereof and on the Expiration Date or upon acceleration of the
Loans.

               2.4.2. 364-Day Facility Fees.

               Accruing from the date hereof until the 364-Day Loan Expiration Date, the
Borrower agrees to pay to the Agent for the account of each Bank, as
consideration for such Bank’s 364-Day Revolving Credit Commitment hereunder, a
nonrefundable facility fee (the “364-Day Facility Fee”) equal to the Applicable
364-Day Facility Fee Rate (computed on the basis of a year of 360 days and
actual days elapsed) on the average daily amount of such Bank’s 364-Day
Revolving Credit Commitment as the same may be constituted from time to time.
All 364-Day Facility Fees shall be payable quarterly in arrears on the first
Business Day of each January, April, July and October after the date hereof and
on the 364-Day Loan Expiration Date or upon acceleration of the Loans.

               2.4.3. Facility Usage Fees.

               During the period commencing on the date hereof until the Expiration Date,
the Borrower agrees to pay to the Agent for the account of each Bank, a
nonrefundable fee (the “Facility Usage Fee”) for each day when Revolving
Facility Usage exceeds thirty-three and one-third percent (33-1/3%) of the
Revolving Credit Commitments in an amount equal to the sum of (i) 0.125% per
annum (computed on the basis of a year of 360 days and actual days elapsed)
computed on the amount of the Revolving Credit Loans outstanding on such day
plus (ii) 0.125% per annum (computed on the basis of a year of 360 days and
actual days elapsed) computed on the amount of the Letters of Credit
Outstanding on such day plus (iii) 0.125% per annum (computed on the basis of a
year of 360 days and actual days elapsed) computed on the amount of the Swing
Loans outstanding on such day. The Facility Usage Fee shall be payable
quarterly in arrears on the first Business Day of each January, April, July,
and October after the date hereof and on the Expiration Date or upon
acceleration of the Loans.

               2.4.4. 364-Day Revolving Credit Usage Fees.

               During the period commencing on the date hereof until the Expiration Date,
the Borrower agrees to pay to the Agent for the account of each Bank, a
nonrefundable fee (the “364-Day Revolving Credit Usage Fee”) for each day when
364-Day Revolving Facility Usage exceed thirty-three and one-third percent
(33-1/3%) of the 364-Day Revolving Credit Commitments in an amount equal to
0.125% per annum (computed on the basis of a year of 360 days and actual days
elapsed), which fees shall be computed on the amount of the 364-Day Revolving
Credit Loans outstanding. The 364-Day Revolving Credit Usage Fee shall be
payable quarterly in arrears on the first Business Day of each January, April,
July, and October after the date hereof and on the 364-Day Loan Expiration Date
or upon acceleration of the Loans.

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          2.5 Revolving Credit Loan Requests; 364-Day Revolving Credit Loan
Requests; Swing Loan Requests.

               2.5.1. Revolving Credit Loan and 364-Day Revolving Credit Loan Requests.

          Except as otherwise provided herein, the Borrower may from time to time
prior to the Expiration Date request the Banks to make Revolving Credit Loans
or prior to the 364-Day Loan Expiration Date request the Banks to make 364-Day
Revolving Credit Loans, or renew or convert the Interest Rate Option applicable
to existing Revolving Credit Loans or 364-Day Revolving Credit Loans pursuant
to Section 4.2 [Interest Periods], by delivering to the Agent, not later than
10:00 a.m., Pittsburgh time, (i) three (3) Business Days prior to the proposed
Borrowing Date with respect to the making of Revolving Credit Loans or 364-Day
Revolving Credit Loans to which the Euro-Rate Option applies or the date of
conversion to or the renewal of the Euro-Rate Option for any such Loans; and
(ii) one (1) Business Day prior to either the proposed Borrowing Date with
respect to the making of a Revolving Credit Loan or 364-Day Revolving Credit
Loan to which the Base Rate Option applies or the last day of the preceding
Interest Period with respect to the conversion to the Base Rate Option for any
Loan, of a duly completed Loan Request therefor substantially in the form of
Exhibit 2.5.1 or a Loan Request by telephone immediately confirmed in writing
by letter, facsimile or telex in the form of such Exhibit, it being understood
that the Agent may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date; (ii) the aggregate amount of the proposed Revolving
Credit Loans comprising each Borrowing Tranche, the amount of which shall be in
integral multiples of $1,000,000 and not less than $3,000,000 for each
Borrowing Tranche to which the Euro-Rate Option applies and not less than the
lesser of $1,000,000 and in integral multiples of $100,000 or the maximum
amount available for Borrowing Tranches to which the Base Rate Option applies;
(iii) the aggregate amount of the proposed 364-Day Revolving Credit Loans
comprising each Borrowing Tranche, the amount of which shall be in integral
multiples of $1,000,000 and not less than $3,000,000 for each Borrowing Tranche
to which the Euro-Rate Option applies and not less than the lesser of
$1,000,000 and in integral multiples of $100,000 or the maximum amount
available for Borrowing Tranches to which the Base Rate Option applies; (iv)
whether the Euro-Rate Option or Base Rate Option shall apply to the proposed
Loans comprising the applicable Borrowing Tranche; and (v) in the case of a
Borrowing Tranche to which the Euro-Rate Option applies, an appropriate
Interest Period for the Loans comprising such Borrowing Tranche.

               2.5.2. Swing Loan Requests.

                    Except as otherwise provided herein, the Borrower may from time to time
prior to the Expiration Date request PNC Bank to make a Swing Loan by delivery
to PNC Bank, not later than 12:00 noon Pittsburgh time, on the proposed
Borrowing Date of a duly completed request therefor substantially in the form
of Exhibit 2.5.2 hereto or a request by telephone immediately confirmed in
writing by letter, facsimile or telex, it being understood that PNC Bank may
rely on the authority of any individual making such a telephonic request
without the necessity of receipt of such written confirmation. Each Swing Loan
Request shall be

32

 

irrevocable and shall specify (i) the proposed Borrowing Date, (ii) the
term of the proposed Swing Loan, which shall be no less than one day and no
longer than seven (7) days, and (iii) the principal amount of such Swing Loan,
which shall not be less than $250,000 and shall be an integral multiple of
$100,000.

               2.5.3. Swing Loan (364-Day) Requests.

                    Except as otherwise provided herein, the Borrower may from time to time
prior to the 364-Day Loan Expiration Date request PNC Bank to make a Swing Loan
(364-Day) by delivery to PNC Bank, not later than 12:00 noon Pittsburgh time,
on the proposed Borrowing Date of a duly completed request therefor
substantially in the form of Exhibit 2.5.3 hereto or a request by telephone
immediately confirmed in writing by letter, facsimile or telex, it being
understood that PNC Bank may rely on the authority of any individual making
such a telephonic request without the necessity of receipt of such written
confirmation. Each Swing Loan (364-Day) Request shall be irrevocable and shall
specify (i) the proposed Borrowing Date, (ii) the term of the proposed Swing
Loan (364-Day), which shall be no less than one day and no longer than seven
(7) days, and (iii) the principal amount of such Swing Loan (364-Day), which
shall not be less than $250,000 and shall be an integral multiple of $100,000.

          2.6 Making Revolving Credit Loans, 364-Day Revolving Credit Loans, Swing
Loans and Swing Loans (364-Day).

               2.6.1. Making Revolving Credit Loans.

                    The Agent shall, promptly after receipt by it of a Loan Request for or
with respect to Revolving Credit Loans pursuant to Section 2.5 [Revolving
Credit Loan Requests; 364-Day Revolving Credit Loan Requests; Swing Loan
Requests], notify the Banks with Revolving Credit Commitments of its receipt of
such Loan Request specifying: (i) the proposed Borrowing Date and the time and
method of disbursement of the Revolving Credit Loans requested thereby; (ii)
the amount and type of each such Revolving Credit Loan and the applicable
Interest Period (if any); and (iii) the apportionment among the Banks of such
Revolving Credit Loans as determined by the Agent in accordance with Section
2.2 [Nature of Banks’ Obligations]. Each Bank shall remit the principal amount
of each Revolving Credit Loan to the Agent such that the Agent is able to, and
the Agent shall, to the extent the Banks have made funds available to it for
such purpose and subject to Section 7.2 [Each Additional Loan or Letter of
Credit], fund such Revolving Credit Loans to the Borrower in U.S. Dollars and
immediately available funds at the Principal Office prior to 2:00 p.m.,
Pittsburgh time, on the applicable Borrowing Date, provided that if any Bank
fails to remit such funds to the Agent in a timely manner, the Agent may elect
in its sole discretion to fund with its own funds the Revolving Credit Loans of
such Bank on such Borrowing Date, and such Bank shall be subject to the
repayment obligation in Section 10.16 [Availability of Funds].

               2.6.2. Making 364-Day Revolving Credit Loans.

                    The Agent shall, promptly after receipt by it of a Loan Request for or
with respect to 364-Day Revolving Credit Loans pursuant to Section 2.5
[Revolving Credit

33

 

Loan Requests; 364-Day Revolving Credit Loan Requests; Swing Loan
Requests], notify the Banks with 364-Day Revolving Credit Commitments of its
receipt of such Loan Request specifying: (i) the proposed Borrowing Date and
the time and method of disbursement of the 364-Day Revolving Credit Loans
requested thereby; (ii) the amount and type of each such 364-Day Revolving
Credit Loan and the applicable Interest Period (if any); and (iii) the
apportionment among the Banks of such 364-Day Revolving Credit Loans as
determined by the Agent in accordance with Section 2.2 [Nature of Banks’
Obligations]. Each Bank shall remit the principal amount of each 364-Day
Revolving Credit Loan to the Agent such that the Agent is able to, and the
Agent shall, to the extent the Banks have made funds available to it for such
purpose and subject to Section 7.2 [Each Additional Loan or Letter of Credit],
fund such 364-Day Revolving Credit Loans to the Borrower in U.S. Dollars and
immediately available funds at the Principal Office prior to 2:00 p.m.,
Pittsburgh time, on the applicable Borrowing Date, provided that if any Bank
fails to remit such funds to the Agent in a timely manner, the Agent may elect
in its sole discretion to fund with its own funds the 364-Day Revolving Credit
Loans of such Bank on such Borrowing Date, and such Bank shall be subject to
the repayment obligation in Section 10.16 [Availability of Funds].

               2.6.3. Making Swing Loans.

                    So long as PNC Bank elects to make Swing Loans, PNC Bank shall, after
receipt by it of a Swing Loan Request pursuant to Section 2.5.2 fund such Swing
Loan to the Borrower in U.S. Dollars and immediately available funds at the
Principal Office prior to 2:00 p.m. Pittsburgh time on the Borrowing Date.
Each Swing Loan shall bear interest at the Swing Loan Interest Rate applicable
thereto.

               2.6.4. Making Swing Loans (364-Day).

                    So long as PNC Bank elects to make Swing Loans (364-Day), PNC Bank shall,
after receipt by it of a Swing Loan (364-Day) Request pursuant to Section 2.5.3
fund such Swing Loan (364-Day) to the Borrower in U.S. Dollars and immediately
available funds at the Principal Office prior to 2:00 p.m. Pittsburgh time on
the Borrowing Date. Each Swing Loan (364-Day) shall bear interest at the Swing
Loan (364-Day) Interest Rate applicable thereto.

          2.7 Swing Loan Note, Swing Loan (364-Day) Note.

               2.7.1. Swing Loan Note.

                    The obligation of the Borrower to repay the unpaid principal amount of the
Swing Loans made to it by PNC Bank together with interest thereon shall be
evidenced by a demand promissory note of the Borrower dated the Closing Date in
substantially the form attached hereto as Exhibit 1.1(S) payable to the order
of PNC Bank in a face amount equal to the Swing Loan Commitment.

               2.7.2. Swing Loan (364-Day) Note.

                    The obligation of the Borrower to repay the unpaid principal amount of the
Swing Loans (364-Day) made to it by PNC Bank together with interest thereon

34

 

shall be evidenced by a demand promissory note of the Borrower dated the
Restatement Effective Date in substantially the form attached hereto as Exhibit
1.1(U) payable to the order of PNC Bank in a face amount equal to the Swing
Loan (364-Day) Commitment.

          2.8 Use of Proceeds.

          The proceeds of the Loans shall be used by the Borrower for general
corporate purposes of the Borrower and in accordance with Section 8.1.10 [Use
of Proceeds].

          2.9 Letter of Credit Subfacility.

               2.9.1. Issuance of Letters of Credit.

                    Borrower may request the issuance of a letter of credit (each a “Letter of
Credit”) on behalf of itself by delivering to the Agent a completed application
and agreement for letters of credit in such form as the Agent may specify from
time to time by no later than 10:00 a.m., Pittsburgh time, at least five (5)
Business Days, or such shorter period as may be agreed to by the Agent, in
advance of the proposed date of issuance. Each Letter of Credit shall be a
Standby Letter of Credit (and may not be a Commercial Letter of Credit).
Subject to the terms and conditions hereof and in reliance on the agreements of
the other Banks set forth in this Section 2.9, the Agent or any of the Agent’s
Affiliates will issue a Letter of Credit provided that each Letter of Credit
shall (A) have a maximum maturity of twelve (12) months from the date of
issuance, and (B) in no event expire later than ten (10) Business Days prior to
the Expiration Date and providing that in no event shall (i) the amount of
Letters of Credit Outstanding exceed, at any one time, $20,000,000 or (ii) the
Revolving Facility Usage exceed, at any one time, the Revolving Credit
Commitments.

               2.9.2. Letter of Credit Fees.

                    The Borrower shall pay (i) to the Agent for the ratable account of the
Banks a fee (the “Letter of Credit Fee”) equal to the Applicable Letter of
Credit Fee Rate then in effect (computed on the basis of a year of 360 days and
actual days elapsed) per annum, and (ii) to the Agent for its own account a
fronting fee equal to 0.125% per annum (computed on the basis of a year of 360
days and actual days elapsed), which fees shall be computed on the daily
average amount of Letters of Credit Outstanding and shall be payable quarterly
in arrears commencing with the first Business Day of each January, April, July
and October following issuance of each Letter of Credit and on the Expiration
Date. The Borrower shall also pay to the Agent for the Agent’s sole account
the Agent’s then in effect customary fees and administrative expenses payable
with respect to the Letters of Credit as the Agent may generally charge or
incur from time to time in connection with the issuance, maintenance,
modification (if any), assignment or transfer (if any), negotiation, and
administration of Letters of Credit.

               2.9.3. Disbursements, Reimbursement.

                     2.9.3.1 Immediately upon the issuance of each Letter of Credit, each Bank
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Agent a participation in such Letter of Credit and each
drawing thereunder in

35

 

an amount equal to such Bank’s Revolving Credit Ratable Share of the
maximum amount available to be drawn under such Letter of Credit and the amount
of such drawing, respectively.

                         2.9.3.2 In the event of any request for a drawing under a Letter of Credit
by the beneficiary or transferee thereof, the Agent will promptly notify the
Borrower. Provided that it shall have received such notice, the Borrower shall
reimburse (such obligation to reimburse the Agent shall sometimes be referred
to as a “Reimbursement Obligation”) the Agent prior to 12:00 noon, Pittsburgh
time on each date that an amount is paid by the Agent under any Letter of
Credit (each such date, an “Drawing Date”) in an amount equal to the amount so
paid by the Agent. In the event the Borrower fails to reimburse the Agent for
the full amount of any drawing under any Letter of Credit by 12:00 noon,
Pittsburgh time, on the Drawing Date, the Agent will promptly notify each Bank
thereof, and the Borrower shall be deemed to have requested that Revolving
Credit Loans be made by the Banks under the Base Rate Option to be disbursed on
the Drawing Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Credit Commitment and subject to the
conditions set forth in Section 7.2 [Each Additional Loan] other than any
notice requirements. Any notice given by the Agent pursuant to this Section
2.9.3.2 may be oral if immediately confirmed in writing; provided that the lack
of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.

                         2.9.3.3 Each Bank shall upon any notice pursuant to Section 2.9.3.2 make
available to the Agent an amount in immediately available funds equal to its
Revolving Credit Ratable Share of the amount of the drawing, whereupon the
participating Banks shall (subject to Section 2.9.3.4) each be deemed to have
made a Revolving Credit Loan under the Base Rate Option to the Borrower in that
amount. If any Bank so notified fails to make available to the Agent for the
account of the Agent the amount of such Bank’s Revolving Credit Ratable Share
of such amount by no later than 2:00 p.m., Pittsburgh time on the Drawing Date,
then interest shall accrue on such Bank’s obligation to make such payment, from
the Drawing Date to the date on which such Bank makes such payment (i) at a
rate per annum equal to the Federal Funds Open Rate during the first three (3)
days following the Drawing Date and (ii) at a rate per annum equal to the rate
applicable to Loans under the Revolving Credit Base Rate Option on and after
the fourth (4th) day following the Drawing Date. The Agent will promptly give
notice of the occurrence of the Drawing Date, but failure of the Agent to give
any such notice on the Drawing Date or in sufficient time to enable any Bank to
effect such payment on such date shall not relieve such Bank from its
obligation under this Section 2.9.3.3.

                         2.9.3.4 With respect to any unreimbursed drawing that is not converted into
Revolving Credit Loans under the Base Rate Option to the Borrower in whole or
in part as contemplated by Section 2.9.3.2, because of the Borrower’s failure
to satisfy the conditions set forth in Section 7.2 [Each Additional Loan] other
than any notice requirements or for any other reason, the Borrower shall be
deemed to have incurred from the Agent a borrowing (each a “Letter of Credit
Borrowing”) in the amount of such drawing. Such Letter of Credit Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the rate per annum applicable to the Revolving Credit Loans under
the Base Rate Option. Each Bank’s payment to the Agent pursuant to Section
2.9.3.3 shall be deemed to be a payment in

36

 

respect of its participation in such Letter of Credit Borrowing and shall
constitute a “Participation Advance” from such Bank in satisfaction of its
participation obligation under this Section 2.9.3.

               2.9.4. Repayment of Participation Advances.

                         2.9.4.1 Upon (and only upon) receipt by the Agent for its account of
immediately available funds from the Borrower (i) in reimbursement of any
payment made by the Agent under the Letter of Credit with respect to which any
Bank has made a Participation Advance to the Agent, or (ii) in payment of
interest on such a payment made by the Agent under such a Letter of Credit, the
Agent will pay to each Bank, in the same funds as those received by the Agent,
the amount of such Bank’s Revolving Credit Ratable Share of such funds, except
the Agent shall retain the amount of the Revolving Credit Ratable Share of such
funds of any Bank that did not make a Participation Advance in respect of such
payment by Agent.

                         2.9.4.2 If the Agent is required at any time to return to any Loan Party,
or to a trustee, receiver, liquidator, custodian, or any official in any
Insolvency Proceeding, any portion of the payments made by any Loan Party to
the Agent pursuant to Section 2.9.4.1 in reimbursement of a payment made under
the Letter of Credit or interest or fee thereon, each Bank shall, on demand of
the Agent, forthwith return to the Agent the amount of its Revolving Credit
Ratable Share of any amounts so returned by the Agent plus interest thereon
from the date such demand is made to the date such amounts are returned by such
Bank to the Agent, at a rate per annum equal to the Federal Funds Open Rate in
effect from time to time.

               2.9.5. Documentation.

                    Each Loan Party agrees to be bound by the terms of the Agent’s application
and agreement for letters of credit and the Agent’s written regulations and
customary practices relating to letters of credit, though such interpretation
may be different from such Loan Party’s own. In the event of a conflict
between such application or agreement and this Agreement, this Agreement shall
govern. It is understood and agreed that, except in the case of gross
negligence or willful misconduct, the Agent shall not be liable for any error
and/or mistakes, whether of omission or commission, in following any Loan
Party’s written instructions or those contained in the Letters of Credit or any
modifications, amendments or supplements thereto, provided that each Loan Party
agrees that all instructions provided to the Agent by a Loan Party with respect
to any Letter of Credit shall be provided in writing.

               2.9.6. Determinations to Honor Drawing Requests.

                    In determining whether to honor any request for drawing under any Letter
of Credit by the beneficiary thereof, the Agent shall be responsible only to
determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.

               2.9.7. Nature of Participation and Reimbursement Obligations.

                    Each Bank’s obligation in accordance with this Agreement to make the
Revolving Credit Loans or Participation Advances, as contemplated by Section
2.9.3, as a

37

 

result of a drawing under a Letter of Credit, and the Obligations of the
Borrower to reimburse the Agent upon a draw under a Letter of Credit, shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Section 2.9 under all circumstances,
including the following circumstances:

                         (i) any set-off, counterclaim, recoupment, defense or other right which
such Bank may have against the Agent or any of its Affiliates, the Borrower or
any other Person for any reason whatsoever;

                         (ii) the failure of any Loan Party or any other Person to comply, in
connection with a Letter of Credit Borrowing, with the conditions applicable to
Revolving Credit Loans set forth in Section 2.1.1 [Revolving Credit Loans], 2.5
[Revolving Credit Loan Requests; 364-Day Revolving Credit Loan Requests; Swing
Loan Requests], 2.6 [Making Revolving Credit Loans; 364-Day Revolving Credit
Loans, Swing Loans and Swing Loans (364-Day)] or 7.2 [Each Additional Loan] or
as otherwise set forth in this Agreement for the making of a Revolving Credit
Loan, it being acknowledged that such conditions are not required for the
making of a Letter of Credit Borrowing and the obligation of the Banks to make
Participation Advances under Section 2.9.3;

                         (iii) any lack of validity or enforceability of any Letter of Credit;

                         (iv) any claim of breach of warranty that might be made by any Loan Party
or any Bank against any beneficiary of a Letter of Credit, or the existence of
any claim, set-off, recoupment, counterclaim, crossclaim, defense or other
right which any Loan Party or any Bank may have at any time against a
beneficiary, successor beneficiary any transferee or assignee of any Letter of
Credit or the proceeds thereof (or any Persons for whom any such transferee may
be acting), the Agent or its Affiliates or any Bank or any other Person or,
whether in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction between any
Loan Party or Subsidiaries of a Loan Party and the beneficiary for which any
Letter of Credit was procured);

                         (v) the lack of power or authority of any signer of (or any defect in or
forgery of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand,
instrument, certificate or other document presented under or in connection with
any Letter of Credit, or any fraud or alleged fraud in connection with any
Letter of Credit, or the transport of any property or provisions of services
relating to a Letter of Credit, in each case even if the Agent or any of the
Agent’s Affiliates has been notified thereof;

                         (vi) payment by the Agent or any of its Affiliates under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;

                         (vii) the solvency of, or any acts of omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or

38

 

obligation relating to a Letter of Credit, or the existence, nature,
quality, quantity, condition, value or other characteristic of any property or
services relating to a Letter of Credit;

                         (viii) any failure by the Agent or any of Agent’s Affiliates to issue any
Letter of Credit in the form requested by any Loan Party, unless the Agent has
received written notice from such Loan Party of such failure within three
Business Days after the Agent shall have furnished such Loan Party a copy of
such Letter of Credit and such error is material and no drawing has been made
thereon prior to receipt of such notice;

                         (ix) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of any Loan Party or
Subsidiaries of a Loan Party;

                         (x) any breach of this Agreement or any other Loan Document by any party
thereto;

                         (xi) the occurrence or continuance of an Insolvency Proceeding with
respect to any Loan Party;

                         (xii) the fact that an Event of Default or a Potential Default shall have
occurred and be continuing;

                         (xiii) the fact that the Expiration Date shall have passed or this
Agreement or the Commitments hereunder shall have been terminated; and

                         (xiv) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.

               2.9.8. Indemnity.

                    In addition to amounts payable as provided in Section 10.5 [Reimbursement
and Indemnification of Agent by the Borrower.], the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Agent and any of Agent’s
Affiliates that has issued a Letter of Credit from and against any and all
claims, demands, liabilities, damages, taxes, penalties, interest, judgments,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which the
Agent or any of Agent’s Affiliates may incur or be subject to as a consequence
of the issuance of any Letter of Credit, other than as a result of (A) the
gross negligence or willful misconduct of the Agent as determined by a final
judgment of a court of competent jurisdiction or (B) the wrongful dishonor by
the Agent or any of Agent’s Affiliates of a proper demand for payment made
under any Letter of Credit, except if such dishonor resulted from any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions herein
called “Governmental Acts”).

39

 

               2.9.9. Liability for Acts and Omissions.

                    As between any Loan Party and the Agent, or the Agent’s Affiliates, such
Loan Party assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit.
In furtherance and not in limitation of the foregoing, the Agent shall not be
responsible for any of the following including any losses or damages to any
Loan Party or other Person or property relating therefrom: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for an issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged (even if the
Agent or the Agent’s Affiliates shall have been notified thereof); (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) the failure of the
beneficiary of any such Letter of Credit, or any other party to which such
Letter of Credit may be transferred, to comply fully with any conditions
required in order to draw upon such Letter of Credit or any other claim of any
Loan Party against any beneficiary of such Letter of Credit, or any such
transferee, or any dispute between or among any Loan Party and any beneficiary
of any Letter of Credit or any such transferee; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Agent or the Agent’s Affiliates, as
applicable, including any Governmental Acts, and none of the above shall affect
or impair, or prevent the vesting of, any of the Agent’s or the Agent’s
Affiliates rights or powers hereunder. Nothing in the preceding sentence shall
relieve the Agent from liability for the Agent’s gross negligence or willful
misconduct in connection with actions or omissions described in such clauses
(i) through (viii) of such sentence. In no event shall the Agent or the
Agent’s Affiliates be liable to any Loan Party for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including
without limitation attorneys’ fees), or for any damages resulting from any
change in the value of any property relating to a Letter of Credit.

                    Without limiting the generality of the foregoing, the Agent and each of
its Affiliates (i) may rely on any oral or other communication believed in good
faith by the Agent or such Affiliate to have been authorized or given by or on
behalf of the applicant for a Letter of Credit, (ii) may honor any presentation
if the documents presented appear on their face substantially to comply with
the terms and conditions of the relevant Letter of Credit; (iii) may honor a
previously dishonored presentation under a Letter of Credit, whether such
dishonor was pursuant to a court order, to settle or compromise any claim of
wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the
same extent as if such presentation had initially been honored, together with
any interest paid by the Agent or its Affiliate; (iv) may honor any drawing
that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that
a draft or other document is being delivered separately), and shall not be
liable for any failure of any such draft or other document

40

 

to arrive, or to conform in any way with the relevant Letter of Credit;
(v) may pay any paying or negotiating bank claiming that it rightfully honored
under the laws or practices of the place where such bank is located; and (vi)
may settle or adjust any claim or demand made on the Agent or its Affiliate in
any way related to any order issued at the applicant’s request to an air
carrier, a letter of guarantee or of indemnity issued to a carrier or any
similar document (each an “Order”) and honor any drawing in connection with any
Letter of Credit that is the subject to such Order, notwithstanding that any
drafts or other documents presented in connection with such Letter of Credit
fail to conform in any way with such Letter of Credit.

                    In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by the Agent or the
Agent’s Affiliates under or in connection with the Letters of Credit issued by
it or any documents and certificates delivered thereunder, if taken or omitted
in good faith, shall not put the Agent or the Agent’s Affiliates under any
resulting liability to the Borrower or any Bank.

          2.10 Extension by Banks of the 364-Day Loan Expiration Date.

               2.10.1. Requests; Approval by All Banks.

                    Upon or promptly after delivery by the Borrower of the annual financial
statements to be provided under Section 8.3.2 [Annual Financial Statements] for
the fiscal year ending September 30, 2003 or any subsequent fiscal year (but in
any case, no earlier than sixty (60) days prior to the 364-Day Loan Expiration
Date), the Borrower may request an extension of the 364-Day Loan Expiration
Date by written notice to the 364-Day Banks, and the 364-Day Banks agree to
respond to the Borrower’s request for an extension by the later of thirty (30)
days following receipt of the request or December 1st of such year; provided,
however, that the failure of any 364-Day Bank to respond within such time
period shall not in any manner constitute an agreement by such 364-Day Bank to
extend the 364-Day Loan Expiration Date. If all 364-Day Banks elect to extend
the 364-Day Loan Expiration Date shall be extended for an additional period of
364 days commencing on the 364-Day Loan Expiration Date with respect to which
the extension was granted. If one or more 364-Day Banks decline to extend or
do not respond to Borrower’s request, the provisions of Section 2.10.2 shall
apply.

               2.10.2. Approval by 364-Day Required Banks.

                    In the event that one or more 364-Day Banks do not agree to extend the
364-Day Loan Expiration Date or do not respond to Borrower’s request for an
extension within the time required under Section 2.10.1 (each, a “Bank to be
Terminated” and collectively, the “Banks to be Terminated”), but the 364-Day
Required Banks agree to such extension within such time then, on or before
December 1st of such year, the 364-Day Required Banks which have agreed to such
extension within the time required under Section 2.10.1 may, with the prior
written approval of the Borrower and the Agent arrange to have one or more
other banks (each an “Assignee Bank”) purchase all of the outstanding 364-Day
Revolving Credit Loans, if any, of each Bank to be Terminated and succeed to
and assume the 364-Day Revolving Credit Commitment and all other rights,
interests and obligations with respect to the 364-Day Revolving Credit Loans
and 364-Day Revolving Credit Commitment of each Bank to be

41

 

Terminated under this Agreement and the other Loan Documents. Any such
purchase and assumption shall be (1) pursuant to an Assignment and Assumption
Agreement, (2) subject to and in accordance with Section 11.11 [Successors and
Assigns], and (3) if any 364-Day Revolving Credit Loans are outstanding under
the Euro-Rate Option, then effective on the last day of the Interest Period
with respect to such Loans. The Borrower shall pay all amounts due and payable
to each Bank to be Terminated on the effective date of such Assignment and
Assumption Agreement. In the event that the Agent shall become a Bank to be
Terminated, the provisions of this Section 2.10 shall be subject to Section
10.14 [Successor Agent]. In the event that the 364-Day Revolving Credit Loans
and 364-Day Revolving Credit Commitment of any Bank to be Terminated are not
fully assigned and assumed pursuant to Section 2.10.2 on or before the then in
effect 364-Day Loan Expiration Date of such year, then, so long as the 364-Day
Required Banks agree to the extension of the 364-Day Loan Expiration Date,
concurrent with the execution and delivery by all parties necessary thereto of
documents evidencing such extension, the 364-Day Revolving Credit Commitment of
each such Bank to be Terminated shall automatically be terminated (and upon
such termination each such Bank to be Terminated shall cease to be a Bank
hereunder), all outstanding 364-Day Revolving Credit Loans payable to each such
Bank to be Terminated, together with interest and fees thereon and other
amounts due and owing to such Bank under the Loan Documents shall be paid in
full, and the aggregate 364-Day Revolving Credit Commitments shall be reduced
by the aggregate amount of the 364-Day Revolving Credit Commitments of all such
Banks to be Terminated that are not fully assigned and assumed pursuant to
Section 2.10.2.

          2.11 Borrowings to Repay Swing Loans and Swing Loans (364-Day).

               2.11.1. Borrowings to Repay Swing Loans.

          PNC Bank may, at its option, exercisable at any time for any reason
whatsoever, demand repayment of the Swing Loans, and each Bank shall make a
Revolving Credit Loan in an amount equal to such Bank’s Revolving Credit
Ratable Share of the aggregate principal amount of the outstanding Swing Loans,
plus, if PNC Bank so requests, accrued interest thereon, provided that no Bank
shall be obligated in any event to make Revolving Credit Loans in excess of its
Revolving Credit Commitment. Revolving Credit Loans made pursuant to the
preceding sentence shall bear interest at the Base Rate Option and shall be
deemed to have been properly requested in accordance with Section 2.5.1 without
regard to any of the requirements of that provision. PNC Bank shall provide
notice to the Banks (which may be telephonic or written notice by letter,
facsimile or telex) that such Revolving Credit Loans are to be made under this
Section 2.11.1 and of the apportionment among the Banks, and the Banks shall be
unconditionally obligated to fund such Revolving Credit Loans (whether or not
the conditions specified in Section 2.5.1 or Section 7.2 are then satisfied) by
the time PNC Bank so requests, which shall not be earlier than 3:00 p.m.
Pittsburgh time on the Business Day next after the date the Banks receive such
notice from PNC Bank.

               2.11.2. Borrowings to Repay Swing Loans (364-Day).

          PNC Bank may, at its option, exercisable at any time for any reason
whatsoever, demand repayment of the Swing Loans (364-Day), and each 364-Day
Bank shall make a 364-Day

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Revolving Credit Loan in an amount equal to such 364-Day Bank’s 364-Day
Revolving Credit Ratable Share of the aggregate principal amount of the
outstanding Swing Loans (364-Day), plus, if PNC Bank so requests, accrued
interest thereon, provided that no 364-Day Bank shall be obligated in any event
to make 364-Day Revolving Credit Loans in excess of its 364-Day Revolving
Credit Commitment. 364-Day Revolving Credit Loans made pursuant to the
preceding sentence shall bear interest at the Base Rate Option and shall be
deemed to have been properly requested in accordance with Section 2.5.1 without
regard to any of the requirements of that provision. PNC Bank shall provide
notice to the 364-Day Banks (which may be telephonic or written notice by
letter, facsimile or telex) that such 364-Day Revolving Credit Loans are to be
made under this Section 2.11.2 and of the apportionment among the 364-Day
Banks, and the 364-Day Banks shall be unconditionally obligated to fund such
364-Day Revolving Credit Loans (whether or not the conditions specified in
Section 2.5.1 or Section 7.2 are then satisfied) by the time PNC Bank so
requests, which shall not be earlier than 3:00 p.m. Pittsburgh time on the
Business Day next after the date the 364-Day Banks receive such notice from PNC
Bank.

          2.12 Right to Increase Commitments.

          Provided that there is no Event of Default or Potential Default, if the
Borrower wishes to increase the Revolving Credit Commitments or the 364-Day
Revolving Credit Commitments, the Borrower shall notify the Agent thereof,
provided that any such increase shall be in a minimum of $10,000,000 and the
aggregate of all such increases in the Commitments shall not exceed $20,000,000
from and after the Closing Date. Each Bank shall have the right at any time
within thirty (30) days following such notice to increase its respective
Commitment so as to provide such added commitment pro rata in accordance with
such Bank’s Revolving Credit Ratable Share in the case of increases in the
Revolving Credit Commitments and in accordance with such Bank’s 364-Day
Revolving Credit Ratable Share in the case of increases in the 364-Day
Revolving Credit Commitments, and any portion of such requested increase that
is not provided by any Bank shall: (i) first be available to the other Banks
pro rata in accordance with their Revolving Credit Ratable Share in the case of
increases in the Revolving Credit Commitments and in accordance with such
Bank’s 364-Day Revolving Credit Ratable Share in the case of increases in the
364-Day Revolving Credit Commitments, (ii) next be available to the other Banks
in such a manner as the Borrower, the Agent and those Banks shall agree, and
(iii) thereafter, to the extent not provided by the Banks, to any additional
bank proposed by the Borrower, which is approved by the Agent (which approval
shall not be unreasonably withheld) and that becomes a party to this Agreement
pursuant to Section 11.11 [Successors and Assigns]. In the event of any such
increase in the aggregate Commitments effected pursuant to the terms of this
subsection 2.12, new Notes shall, to the extent necessary, be executed and
delivered by the Borrower in exchange for the surrender of the existing Notes.
It is acknowledged and agreed that pursuant to the Consent (once such Consent
has been executed and is effective in accordance with the terms thereof), the
Borrower will have exercised its one-time right to increase the Commitments in
accordance with this subsection 2.12.

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3. [INTENTIONALLY OMITTED]

4. INTEREST RATES

          4.1 Interest Rate Options.

          The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Loans as selected by it from the Base Rate Option or
Euro-Rate Option set forth below applicable to the Loans, it being understood
that, subject to the provisions of this Agreement, the Borrower may select
different Interest Rate Options and different Interest Periods to apply
simultaneously to the Loans comprising different Borrowing Tranches and may
convert to or renew one or more Interest Rate Options with respect to all or
any portion of the comprising any Borrowing Tranche, provided that there shall
not be at any one time outstanding more than eleven (11) Borrowing Tranches in
the aggregate among all of the Loans, and provided further that (a) only the
Swing Loan Interest Rate shall apply to the Swing Loans and (b) only the Swing
Loan (364-Day) Interest Rate shall apply to the Swing Loans (364-Day). If at
any time the designated rate applicable to any Loan made by any Bank exceeds
such Bank’s highest lawful rate, the rate of interest on such Bank’s Loan shall
be limited to such Bank’s highest lawful rate.

               4.1.1. Revolving Credit Interest Rate Options.

                    The Borrower shall have the right to select from the following Interest
Rate Options applicable to the Revolving Credit Loans (subject to the provision
above regarding Swing Loans and Swing Loans (364-Day):

                         (i) Revolving Credit Base Rate Option: A fluctuating rate per annum
(computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed) equal to the Base Rate plus the Applicable Margin, such
interest rate to change automatically from time to time effective as of the
effective date of each change in the Base Rate; or

                         (ii) Revolving Credit Euro-Rate Option: A rate per annum (computed on the
basis of a year of 360 days and actual days elapsed) equal to the Euro-Rate
plus the Applicable Margin.

                    Notwithstanding the foregoing, if any Event of Default has occurred and is
continuing, no Loan may be made, converted to or renewed under any Euro-Rate
Option.

               4.1.2. 364-Day Revolving Credit Interest Rate Options.

                    The Borrower shall have the right to select from the following Interest
Rate Options applicable to the 364-Day Revolving Credit Loans:

                         (i) 364-Day Revolving Credit Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case may

44

 

be, and actual days elapsed) equal to the Base Rate plus the Applicable
Margin, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Base Rate; or

                         (ii) 364-Day Revolving Credit Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to
the Euro-Rate plus the Applicable Margin.

                    Notwithstanding the foregoing, if any Event of Default has occurred and is
continuing, no Loan may be made, converted to or renewed under any Euro-Rate
Option.

               4.1.3. Rate Quotations.

                    The Borrower may call the Agent on or before the date on which a Loan
Request is to be delivered to receive an indication of the interest rates then
in effect, but it is acknowledged that such projection shall not be binding on
the Agent or the Banks nor affect the rate of interest which thereafter is
actually in effect when the election is made.

               4.1.4. Change in Fees or Interest Rates.

                    If the Applicable Margin, Applicable Letter of Credit Fee Rate, Applicable
Facility Fee Rate or Applicable 364-Day Facility Fee Rate is increased or
reduced with respect to any period for which the Borrower has already paid
interest, the Facility Fee, the 364-Day Facility Fee, or the Letter of Credit
Fee, the Agent shall recalculate the additional interest, Facility Fee, 364-Day
Facility Fee or Letter of Credit Fee due from or to the Borrower and shall,
within fifteen (15) Business Days after the Borrower notifies the Agent of such
increase or decrease, give the Borrower and the Banks notice of such
recalculation.

                         4.1.4.1 Any additional interest, Facility Fee, 364-Day Facility Fee or
Letter of Credit Fee due from the Borrower shall be paid to the Agent for the
account of the Banks on the next date on which an interest or fee payment is
due; provided, however, that if there are no Loans outstanding or if the Loans
are due and payable, such additional interest, Facility Fee, 364-Day Facility
Fee or Letter of Credit Fee shall be paid promptly after receipt of written
request for payment from the Agent.

                         4.1.4.2 Any interest, Facility Fee, 364-Day Facility Fee or Letter of
Credit Fee refund due to the Borrower shall be credited against payments
otherwise due from the Borrower on the next interest or fee payment due date
or, if the Loans have been repaid and the Banks are no longer committed to lend
under this Agreement, the Banks shall pay the Agent for the account of the
Borrower such interest, Facility Fee, 364-Day Facility Fee or Letter of Credit
Fee refund not later than five Business Days after written notice from the
Agent to the Banks.

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          4.2 Interest Periods.

          At any time when the Borrower shall select, convert to or renew a
Euro-Rate Option, the Borrower shall notify the Agent thereof by delivering a
Loan Request at least three (3) Business Days prior to the effective date of
such Interest Rate Option. The notice shall specify an Interest Period during
which such Interest Rate Option shall apply. Notwithstanding the preceding
sentence, the following provisions shall apply to any selection of, renewal of,
or conversion to a Euro-Rate Option:

               4.2.1. Amount of Borrowing Tranche.

                    the amount of each Borrowing Tranche of Loans to which a Euro-Rate Option
applies shall be in integral multiples of $1,000,000 and not less than
$3,000,000;

               4.2.2. Renewals.

                    in the case of the renewal of a Euro-Rate Option at the end of an Interest
Period, the first day of the new Interest Period shall be the last day of the
preceding Interest Period, without duplication in payment of interest for such
day.

          4.3 Interest After Default.

          To the extent permitted by Law, upon the occurrence of an Event of Default
and until such time such Event of Default shall have been cured or waived:

               4.3.1. Letter of Credit Fees, Interest Rate.

                    the Letter of Credit Fee and the rate of interest for each Loan otherwise
applicable pursuant to Section 2.9.2 [Letter of Credit Fees] or Section 4.1
[Interest Rate Options], respectively, shall be increased by 2.0% per annum;
and

               4.3.2. Other Obligations.

                    each other Obligation hereunder if not paid when due shall bear interest
at a rate per annum equal to the sum of the rate of interest applicable under
the Revolving Credit Base Rate Option plus an additional 2% per annum from the
time such Obligation becomes due and payable and until it is paid in full.

               4.3.3. Acknowledgment.

                    The Borrower acknowledges that the increase in rates referred to in this
Section 4.3 reflects, among other things, the fact that such Loans or other
amounts have become a substantially greater risk given their default status and
that the Banks are entitled to additional compensation for such risk; and all
such interest shall be payable by Borrower upon demand by Agent.

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          4.4 Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits Not
Available.

               4.4.1. Unascertainable.

                    If on any date on which a Euro-Rate would otherwise be determined with
respect to Loans, the Agent shall have determined that:

                         (i) adequate and reasonable means do not exist for ascertaining such
Euro-Rate, or

                         (ii) a contingency has occurred which materially and adversely affects the
London interbank eurodollar market relating to the Euro-Rate, the Agent shall
have the rights specified in Section 4.4.3.

               4.4.2. Illegality; Increased Costs; Deposits Not Available.

                    If at any time any Bank shall have determined that:

                         (i) the making, maintenance or funding of any Loan to which a Euro-Rate
Option applies has been made unlawful or materially impracticable by compliance
by such Bank in good faith with any Law or any interpretation or application
thereof by any Official Body or with any request or directive of any such
Official Body (whether or not having the force of Law), or

                         (ii) such Euro-Rate Option will not adequately and fairly reflect the cost
to such Bank of the establishment or maintenance of any such Loan in a material
respect, or

                         (iii) after making all reasonable efforts, deposits of the relevant amount
in Dollars for the relevant Interest Period for a Loan, or to banks generally,
to which a Euro-Rate Option applies, respectively, are not available to such
Bank with respect to such Loan, or to banks generally, in the interbank
eurodollar market,

then the Agent shall have the rights specified in Section 4.4.3.

               4.4.3. Agent’s and Bank’s Rights.

                    In the case of any event specified in Section 4.4.1 above, the Agent shall
promptly so notify the Banks and the Borrower thereof, and in the case of an
event specified in Section 4.4.2 above, such Bank shall promptly so notify the
Agent and endorse a certificate to such notice as to the specific circumstances
of such notice, and the Agent shall promptly send copies of such notice and
certificate to the other Banks and the Borrower. Upon such date as shall be
specified in such notice (which shall not be earlier than the date such notice
is given), the obligation of (A) the Banks, in the case of such notice given by
the Agent, or (B) such Bank, in the case of such notice given by such Bank, to
allow the Borrower to select, convert to or renew a Euro-Rate Option shall be
suspended until the Agent shall have later notified the Borrower, or

47

 

such Bank shall have later notified the Agent, of the Agent’s or such
Bank’s, as the case may be, determination that the circumstances giving rise to
such previous determination no longer exist. If at any time the Agent makes a
determination under Section 4.4.1 and the Borrower has previously notified the
Agent of its selection of, conversion to or renewal of a Euro-Rate Option and
such Interest Rate Option has not yet gone into effect, such notification shall
be deemed to provide for the selection of, conversion to or renewal of the Base
Rate Option otherwise available with respect to such Loans if the Borrower has
requested the Euro-Rate Option. If any Bank notifies the Agent of a
determination under Section 4.4.2, the Borrower shall, subject to the
Borrower’s indemnification Obligations under Section 5.6.2 [Indemnity], as to
any Loan of the Bank to which a Euro-Rate Option applies, on the date specified
in such notice either (i) as applicable, convert such Loan to the Base Rate
Option otherwise available with respect to such Loan, or (ii) prepay such Loan
in accordance with Section 5.4.1 [Voluntary Prepayments]. Absent due notice
from the Borrower of conversion or prepayment, such Loan shall automatically be
converted to the Base Rate Option otherwise available with respect to such Loan
upon such specified date.

          4.5 Selection of Interest Rate Options.

          If the Borrower fails to select a new Interest Period to apply to any
Borrowing Tranche of Loans under the Euro-Rate Option at the expiration of an
existing Interest Period applicable to such Borrowing Tranche in accordance
with the provisions of Section 4.2 [Interest Periods], the Borrower shall be
deemed to have converted such Borrowing Tranche to the Base Rate Option,
commencing upon the last day of the existing Interest Period.

5. PAYMENTS

          5.1 Payments.

          All payments and prepayments to be made in respect of principal, interest,
Facility Fees, 364-Day Facility Fees, Letter of Credit Fees, Agent’s Fee or
other fees or amounts due from the Borrower hereunder shall be payable prior to
11:00 a.m., Pittsburgh time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrower, and without set-off, counterclaim or other deduction of any nature,
and an action therefor shall immediately accrue. Such payments shall be made
to the Agent at the Principal Office for the account of PNC Bank with respect
to the Swing Loans and the Swing Loans (364-Day) and for the ratable accounts
of the Banks with respect to the Revolving Credit Loans or 364-Day Revolving
Credit Loans, and in immediately available funds, and the Agent shall promptly
distribute such amounts to the Banks in immediately available funds, provided
that in the event payments are received by 11:00 a.m., Pittsburgh time, by the
Agent with respect to the Loans and such payments are not distributed to the
Banks on the same day received by the Agent, the Agent shall pay the Banks the
Federal Funds Open Rate, with respect to the amount of such payments for each
day held by the Agent and not distributed to the Banks. The Agent’s and each
Bank’s statement of account, ledger or other relevant record shall, in the
absence of manifest error, be conclusive as the statement of the amount of
principal of and interest on the Loans and other amounts owing under this
Agreement and shall be deemed an “account stated.”

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          5.2 Pro Rata Treatment of Banks.

          Each borrowing of Revolving Credit Loans shall be allocated to each Bank
according to its Revolving Credit Ratable Share, each borrowing of 364-Day
Revolving Credit Loans shall be allocated to each Bank according to its 364-Day
Revolving Credit Ratable Share and each selection of, conversion to or renewal
of any Interest Rate Option applicable to Revolving Credit Loans or 364-Day
Revolving Credit Loans and each payment or prepayment by the Borrower with
respect to principal or interest on the Revolving Credit Loans or 364-Day
Revolving Credit Loans or Facility Fees, 364-Day Facility Fees, Letter of
Credit Fees, or other fees (except for the Agent’s Fee) or amounts due from the
Borrower hereunder to the Banks with respect to the Revolving Credit Loans or
364-Day Revolving Credit Loans, shall (except as provided in Section 4.4.3
[Agent’s and Bank’s Rights] in the case of an event specified in Section 4.4
[Euro-Rate Unascertainable; Etc.], 5.4.2 [Replacement of a Bank] or 5.6
[Additional Compensation in Certain Circumstances]) be made in proportion to
the applicable Revolving Credit Loans or 364-Day Revolving Credit Loans
outstanding from each Bank and, if no such Loans are then outstanding, in
proportion to the Revolving Credit Ratable Share in the case of each Bank
having a Revolving Credit Commitment and in proportion to the 364-Day Revolving
Credit Ratable Share in the case of each Bank having a 364-Day Revolving Credit
Commitment. Notwithstanding any of the foregoing, each borrowing or payment or
prepayment by the Borrower of principal, interest, fees or other amounts from
the Borrower with respect to Swing Loans or Swing Loans (364-Day) shall be made
by or to PNC Bank according to Section 2.

          5.3 Interest Payment Dates.

          Interest on Swing Loans, Swing Loans (364-Day) and on Loans to which the
Base Rate Option applies shall be due and payable quarterly in arrears on the
first Business Day of each January, April, July and October after the date
hereof and on the Expiration Date, in the case of Revolving Credit Loans and
Swing Loans and on the 364-Day Loan Expiration Date, in the case of 364-Day
Revolving Credit Loans and Swing Loans (364-Day) or upon acceleration of the
Loans. Interest on Loans to which the Euro-Rate Option applies shall be due
and payable on the last day of each Interest Period for those Loans and, if
such Interest Period is longer than three (3) Months, also on the 90th day of
such Interest Period.

          5.4 Prepayments.

               5.4.1. Voluntary Prepayments.

                    The Borrower shall have the right at its option from time to time to
prepay the Loans in whole or part without premium or penalty (except as
provided in Section 5.4.2 below or in Section 5.6 [Additional Compensation in
Certain Circumstances]):

                         (i) at any time with respect to Swing Loans, Swing Loans (364-Day) or with
respect to any Loan to which the Base Rate Option applies,

                         (ii) on the last day of the applicable Interest Period with respect to
Loans to which a Euro-Rate Option applies, or

49

 

                         (iii) on the date specified in a notice by any Bank pursuant to Section
4.4 [Euro-Rate Unascertainable, Etc.] with respect to any Loan to which a
Euro-Rate Option applies.

               Whenever the Borrower desires to prepay any part of the Loans, it shall
provide a prepayment notice to the Agent by 1:00 p.m. at least one (1) Business
Day prior to the date of prepayment of the Revolving Credit Loans or the
364-Day Revolving Credit Loans or no later than 2:00 p.m., Pittsburgh time, on
the date of prepayment of Swing Loans or Swing Loans (364-Day), setting forth
the following information:

		
	 	     (w) the date, which shall be a Business Day, on which the
proposed prepayment is to be made;

		
	 	     (x) a statement indicating the application of the prepayment
among the Revolving Credit Loans, 364-Day Revolving Credit Loans,
Swing Loans and Swing Loans (364-Day);

		
	 	     (y) the total principal amount of such prepayment, which, with
respect to Loans to which the Base Rate Option applies, shall not
be less than $500,000 for any Revolving Credit Loan and $500,000
for any 364-Day Revolving Credit Loan and which, with respect to
Swing Loans and Swing Loans (364-Day) shall not be less than
$500,000, and

		
	 	     (z) the total principal amount of such prepayment, which, with
respect to Loans to which the Euro-Rate Option applies, shall not
be less than $1,000,000 for any Revolving Credit Loan, or
$1,000,000 for any 364-Day Revolving Credit Loan.

               All prepayment notices shall be irrevocable. The principal amount of the
Loans for which a prepayment notice is given, together with interest on such
principal amount except with respect to Loans to which the Base Rate Option
applies, shall be due and payable on the date specified in such prepayment
notice as the date on which the proposed prepayment is to be made. Except as
provided in Section 4.4.3 [Agent’s and Bank’s Rights], if the Borrower prepays
a Loan but fails to specify the applicable Borrowing Tranche which the Borrower
is prepaying, the prepayment shall be applied (i) first to Swing Loans, second
to Swing Loans (364-Day), third to Revolving Credit Loans and fourth to 364-Day
Revolving Credit Loans; and (ii) after giving effect to the allocations in
clause (i) above and in the preceding sentence, first to Loans to which the
Swing Loan Interest Rate applies, second to Loans to which the Swing Loan
(364-Day) Interest Rate applies, third to Loans to which the Base Rate Option
applies, and then to Loans to which the Euro-Rate Option applies. Any
prepayment hereunder shall be subject to the Borrower’s Obligation to indemnify
the Banks under Section 5.6.2 [Indemnity].

               5.4.2. Replacement of a Bank.

                    In the event any Bank (i) gives notice under Section 4.4 [Euro-Rate
Unascertainable, Etc.] or Section 5.6.1 [Increased Costs, Etc.], (ii) does not
fund Revolving

50

 

Credit Loans or 364-Day Revolving Credit Loans because the making of such
Loans would contravene any Law applicable to such Bank, (iii) becomes subject
to the control of an Official Body (other than normal and customary
supervision), or (iv) causes the Borrower to pay, withhold or indemnify any
Taxes or Other Taxes pursuant to Section 5.8, then the Borrower shall have the
right at its option, with the consent of the Agent, which shall not be
unreasonably withheld, to prepay the Loans of such Bank in whole, together with
all interest accrued thereon, and terminate such Bank’s Commitment within
ninety (90) days after (w) receipt of such Bank’s notice under Section 4.4
[Euro-Rate Unascertainable, Etc.] or 5.6.1 [Increased Costs, Etc.], (x) the
date such Bank has failed to fund Revolving Credit Loans or 364-Day Revolving
Credit Loans because the making of such Loans would contravene Law applicable
to such Bank, (y) the date such Bank became subject to the control of an
Official Body, as applicable, or (z) the date such payment of Taxes or Other
Taxes pursuant to Section 5.8 is due; provided that the Borrower shall also pay
to such Bank at the time of such prepayment any amounts required under Section
5.6 [Additional Compensation in Certain Circumstances] and Section 5.8 [Taxes]
and any accrued interest due on such amount and any related fees; provided,
however, that the Commitment of such Bank shall be provided by one or more of
the remaining Banks or a replacement bank reasonably acceptable to the Agent;
provided, further, the remaining Banks shall have no obligation hereunder to
increase their Commitments. Notwithstanding the foregoing, the Agent may only
be replaced subject to the requirements of Section 10.14 [Successor Agent] and
provided that all Letters of Credit have expired or been terminated or
replaced.

               5.4.3. Change of Lending Office.

                    Each Bank agrees that prior to giving notice to any claim for increased
costs, indemnification or other special payments under Section 4.4.2
[Illegality, Etc.], 5.6.1 [Increased Costs, Etc.] or Section 5.8 [Taxes] with
respect to such Bank, it will have initiated reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 5.4.3 shall affect or postpone any of the Obligations of the
Borrower or any other Loan Party or the rights of the Agent or any Bank
provided in this Agreement.

               5.4.4. Mandatory Prepayment and Mandatory Commitment Reduction Upon
Issuance of Certain Debt.

                    Within five (5) Business Days of the issuance by the Borrower or any
Subsidiary of the Borrower of any debt security or Hybrid Security for cash
proceeds or of the incurrence of any Indebtedness by the Borrower or any
Subsidiary of the Borrower, in the case of any of the foregoing as permitted by
Section 8.2.1(v) [Indebtedness], the Borrower shall make a mandatory prepayment
of principal on the Loans equal to 100% of the Net Cash Proceeds of any such
debt security, Hybrid Security or Indebtedness, together with accrued interest
on such principal amount; provided, however, that no mandatory prepayment shall
be required with respect to: (a) the issuance or incurrence of up to
$50,000,000 in the aggregate of such securities

51

 

or Indebtedness (including in such $50,000,000 amount any Indebtedness
incurred as a Loan made from the increase in the Commitments pursuant to
Section 2.12 [Right to Increase Commitments]), (b) the issuance of any such
securities or incurrence of any such Indebtedness permitted by Section 8.2.1(v)
if the Net Cash Proceeds thereof are used to refinance Indebtedness of the
Borrower or any Subsidiary of the Borrower otherwise permitted by clauses (ii),
(iv), (vi) (viii) or (ix) of Section 8.2.1 [Indebtedness], (c) the issuance or
incurrence of any such Indebtedness permitted by Section 8.2.1(xi), or (d) the
issuance or incurrence of any such Indebtedness permitted by Section
8.2.1(xii).

                    All prepayments pursuant to this Section 5.4.4 shall be applied to payment
in full of the principal amount of the Loans and the Commitments shall be
permanently and irrevocably reduced by an amount equal to the amount of such
prepayment, as follows: (i) prepayments shall first be applied to prepay the
Revolving Credit Loans and to permanently and irrevocably ratably reduce
(and/or terminate) the Revolving Credit Commitments, with such prepayments
applied first to Revolving Credit Loans subject to the Base Rate Option and
second to Revolving Credit Loans subject to the Euro-Rate Option, and (ii)
after payment in full of the Revolving Credit Loans and termination of all
Revolving Credit Commitments, prepayments shall then be applied to the 364-Day
Revolving Credit Loans and to permanently and irrevocably ratably reduce
(and/or terminate) the 364-Day Revolving Credit Commitments with such
prepayments applied first to 364-Day Revolving Credit Loans subject to the Base
Rate Option and second to 364-Day Revolving Credit Loans subject to the
Euro-Rate Option. After giving effect to each required prepayment of Revolving
Credit Loans and related reduction of Revolving Credit Commitments, at no time
shall Revolving Credit Facility Usage exceed Revolving Credit Commitments.

                    On and after such time as the Revolving Credit Commitments equal or are
less than $35,000,000: (i) simultaneous with each permanent and irrevocable
reduction of the Revolving Credit Commitments, the Swing Loan Commitment shall
be permanently and irrevocably reduced by an amount so that the Swing Loan
Commitment equals the Revolving Credit Commitments as so reduced, and after
giving effect to each such reduction of the Swing Loan Commitment, the Borrower
shall immediately, without notice or demand, prepay the Swing Loans so that at
no time shall outstanding Swing Loans exceed the Swing Loan Commitment after
giving effect to each required reduction, and (ii) at no time shall the Swing
Loan Commitment exceed the Revolving Credit Commitments, and the Borrower shall
immediately, without notice or demand, prepay the Swing Loans so that at no
time shall outstanding Swing Loans exceed the Swing Loan Commitment after
giving effect to each required reduction. Upon termination of the Revolving
Credit Commitments, the Swing Loan Commitment will terminate, and the Borrower
shall immediately prepay, without notice or demand, all outstanding Swing
Loans, together with accrued interest thereon. Each prepayment hereunder shall
be subject to the Borrower’s Obligation to indemnify the Banks under Section
5.6.2.

                    On and after such time as the 364-Day Revolving Credit Commitments equal
or are less than $20,000,000: (i) simultaneous with each permanent and
irrevocable reduction of the 364-Day Revolving Credit Commitments, the Swing
Loan (364-Day) Commitment shall be permanently and irrevocably reduced by an
amount so that the Swing Loan (364-Day) Commitment equals the 364-Day Revolving
Credit Commitments as so reduced,

52

 

and after giving effect to each such
reduction of the Swing Loan (364-Day) Commitment, the
Borrower shall immediately, without notice or demand, prepay the Swing
Loans (364-Day) so that at no time shall outstanding Swing Loans (364-Day)
exceed the Swing Loan (364-Day) Commitment after giving effect to each required
reduction, and (ii) at no time shall the Swing Loan (364-Day) Commitment exceed
the 364-Day Revolving Credit Commitments, and the Borrower shall immediately,
without notice or demand, prepay the Swing Loans (364-Day) so that at no time
shall outstanding Swing Loans (364-Day) exceed the Swing Loan (364-Day)
Commitment after giving effect to each required reduction. Upon termination of
the 364-Day Revolving Credit Commitments, the Swing Loan (364-Day) Commitment
will terminate, and the Borrower shall immediately prepay, without notice or
demand, all outstanding Swing Loans (364-Day), together with accrued interest
thereon. Each prepayment hereunder shall be subject to the Borrower’s
Obligation to indemnify the Banks under Section 5.6.2.

          5.5 Voluntary Commitment Reductions.

          The Borrower shall have the right, upon not less than five (5) Business
Days’ written irrevocable notice to the Agent, to terminate the Commitments or,
from time to time, to reduce the amount of the Commitments, which notice shall
specify the date and amount of any such reduction and otherwise be
substantially in the form of Exhibit 5.5 (a “Commitment Reduction Notice”).
Any such reduction shall be in a minimum amount equal to $5,000,000 or an
integral multiple thereof, provided, that (i) the Revolving Credit Commitments
may not be reduced below the aggregate principal amount of all Revolving
Facility Usage, and (ii) the 364-Day Revolving Credit Commitments may not be
reduced below the aggregate principal amount of all 364-Day Revolving Facility
Usage. Each reduction of Revolving Credit Commitments shall ratably reduce the
Revolving Credit Commitments of the Banks, and each reduction of 364-Day
Revolving Credit Commitments shall ratably reduce the 364-Day Revolving Credit
Commitments of the Banks.

          5.6 Additional Compensation in Certain Circumstances.

               5.6.1. Increased Costs or Reduced Return Resulting From Taxes, Reserves,
Capital Adequacy Requirements, Expenses, Etc.

                    If any Law, guideline or interpretation or any change in any Law,
guideline or interpretation or application thereof by any Official Body charged
with the interpretation or administration thereof or compliance with any
request or directive (whether or not having the force of Law) of any central
bank or other Official Body:

                         (i) subjects any Bank to any tax or changes the basis of taxation with
respect to this Agreement, the Loans or payments by the Borrower of principal,
interest, Facility Fees, 364-Day Facility Fees, Letter of Credit Fees or other
amounts due from the Borrower hereunder (except for taxes on the overall net
income of such Bank),

                         (ii) imposes, modifies or deems applicable any reserve, special deposit or
similar requirement against credits or commitments to extend credit extended

53

 

by, or assets (funded or contingent) of, deposits with or for the account of,
or other acquisitions of funds by, any Bank or any lending office of any Bank,
or

                         (iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of, or letters of
credit, other credits or commitments to extend credit extended by, any Bank, or
(B) otherwise applicable to the obligations of any Bank or any lending office
of any Bank under this Agreement,

and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank or its lending office with respect to this Agreement or the making,
maintenance or funding of any part of the Loans (or, in the case of any capital
adequacy or similar requirement, to have the effect of reducing the rate of
return on any Bank’s capital, taking into consideration such Bank’s customary
policies with respect to capital adequacy) by an amount which such Bank in its
reasonable discretion deems to be material, such Bank shall from time to time
notify the Borrower and the Agent of the amount determined in good faith (using
any averaging and attribution methods employed in good faith) by such Bank to
be necessary to compensate such Bank for such increase in cost, reduction of
income, additional expense or reduced rate of return. Such notice shall set
forth in reasonable detail the basis for such determination. Such amount shall
be due and payable by the Borrower to such Bank thirty (30) days after such
notice is given.

               5.6.2. Indemnity.

                    In addition to the compensation required by Section 5.6.1 [Increased
Costs, Etc.], the Borrower shall indemnify each Bank against all liabilities,
losses or expenses (including loss of margin, any loss or expense incurred in
liquidating or employing deposits from third parties and any loss or expense
incurred in connection with funds acquired by a Bank to fund or maintain Loans
subject to a Euro-Rate Option) which such Bank sustains or incurs as a
consequence of any

                         (i) payment, prepayment, conversion or renewal of any Loan to which a
Euro-Rate Option applies on a day other than the last day of the corresponding
Interest Period (whether or not such payment or prepayment is mandatory,
voluntary or automatic and whether or not such payment or prepayment is then
due),

                         (ii) attempt by the Borrower to revoke (expressly, by later inconsistent
notices or otherwise) in whole or part any Loan Requests under Section 2.5
[Revolving Credit Loan Requests; 364-Day Revolving Credit Loan Requests; Swing
Loan Requests] or Section 4.2 [Interest Periods] or notice relating to
voluntary prepayments under Section 5.4.1 [Voluntary Prepayments] or notice
relating to voluntary Commitment reductions under Section 5.5 [Voluntary
Commitment Reductions], or

                         (iii) default by the Borrower in the performance or observance of any
covenant or condition contained in this Agreement or any other Loan Document,
including any failure of the Borrower to pay when due (by acceleration or
otherwise)

54

 

any principal of or interest on the Loans, Letter of Credit Fees,
Facility Fees or 364-Day Facility Fees or any other amount due hereunder.

                    If any Bank sustains or incurs any such loss or expense, it shall from
time to time notify the Borrower of the amount determined in good faith by such
Bank (which determination may include such assumptions, allocations of costs
and expenses and averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify such Bank for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrower to such
Bank thirty (30) days after such notice is given.

          5.7 Interbank Market Presumption.

          For all purposes of this Agreement and each Note with respect to any
aspects of the Euro-Rate or any Loan under the Euro-Rate Option, each Bank and
Agent shall be presumed to have obtained rates, funding, currencies, deposits,
and the like in the London interbank market regardless whether it did so or
not; and, each Bank’s and Agent’s determination of amounts payable under, and
actions required or authorized by, Sections 4.4 and 5.6 shall be calculated, at
each Bank’s and Agent’s option, as though each Bank and Agent funded its pro
rata share of each Borrowing Tranche of Loans under the Euro-Rate Option
through the purchase of deposits of the types and maturities corresponding to
the deposits used as a reference in accordance with the terms hereof in
determining the Euro-Rate applicable to such Loans, whether in fact that is the
case.

          5.8 Taxes.

               5.8.1. No Deductions.

                    All payments made by Borrower hereunder and under each Note shall be made
free and clear of and without deduction for any present or future taxes,
levies, imposts, deductions, charges, or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on the net income of any Bank and all
income and franchise taxes applicable to any Bank of the United States (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings,
and liabilities being hereinafter referred to as “Taxes”). If Borrower shall
be required by Law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.8.1) each Bank
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall timely pay the full amount deducted to the relevant tax
authority or other authority in accordance with applicable Law.

               5.8.2. Stamp Taxes.

                    In addition, Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies which arise

55

 

from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with respect to, this Agreement or
any Note (hereinafter referred to as “Other Taxes”).

               5.8.3. Indemnification for Taxes Paid by a Bank.

                    Borrower shall indemnify each Bank for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 5.8.3) paid by any Bank and
any liability (including penalties, interest, and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30
days from the date a Bank makes written demand therefor.

               5.8.4. Certificate.

                    Within 30 days after the date of any payment of any Taxes by Borrower,
Borrower shall furnish to each Bank, at its address referred to herein, the
original or a certified copy of a receipt evidencing payment thereof. If no
Taxes are payable in respect of any payment by Borrower, such Borrower shall,
if so requested by a Bank, provide a certificate of an officer of Borrower to
that effect.

               5.8.5. Survival.

                    Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in Sections
5.8.1 through and including 5.8.4 shall survive the payment in full of
principal and interest hereunder and under any instrument delivered hereunder.

          5.9 Notes.

          Upon the request of any Bank, the Revolving Credit Loans or 364-Day
Revolving Credit Loans made by such Bank may be evidenced by a Revolving Credit
Note in the form of Exhibit 1.1(R) or a 364-Day Revolving Credit Note in the
form of Exhibit 1.1(T).

          5.10 Settlement Date Procedures; 364-Day Settlement Date Procedures .

               5.10.1. Settlement Date Procedures.

          In order to minimize the transfer of funds between the Banks and the
Agent, the Borrower may borrow, repay and reborrow Swing Loans and PNC Bank may
make Swing Loans as provided in Section 2.1.3 hereof during the period between
Settlement Dates. Not later than 11:00 a.m., Pittsburgh time, on each
Settlement Date, the Agent shall notify each Bank of its Revolving Credit
Ratable Share of the total of the Revolving Credit Loans and the Swing Loans
(each a “Required Share”). Prior to 2:00 p.m., Pittsburgh time, on such
Settlement Date, each Bank shall pay to the Agent the amount equal to the
difference between its Required Share and its Revolving Credit Loans, and the
Agent shall pay to each Bank its Revolving Credit Ratable Share of all payments
made by the Borrower to the Agent with respect to the Revolving Credit Loans.
The Agent shall also effect settlement in accordance with the foregoing
sentence on the

56

 

proposed Borrowing Dates for Revolving Credit Loans and may at
its option effect settlement on any other Business Day. These settlement
procedures are established solely as a matter of administrative convenience,
and nothing contained in this Section 5.10.1 shall relieve the Banks of their
obligations to fund Revolving Credit Loans on dates other than a
Settlement Date pursuant to Sections 2.1.1 and 2.2. The Agent may at any time
at its option for any reason whatsoever require each Bank to pay immediately to
the Agent such Bank’s Revolving Credit Ratable Share of the outstanding
Revolving Credit Loans and each Bank may at any time require the Agent to pay
immediately to such Bank its Revolving Credit Ratable Share of all payments
made by the Borrower to the Agent with respect to the Revolving Credit Loans.

               5.10.2. 364-Day Settlement Date Procedures.

          In order to minimize the transfer of funds between the Banks and the
Agent, the Borrower may borrow, repay and reborrow Swing Loans (364-Day) and
PNC Bank may make Swing Loans (364-Day) as provided in Section 2.1.4 hereof
during the period between 364-Day Settlement Dates. Not later than 11:00 a.m.,
Pittsburgh time, on each 364-Day Settlement Date, the Agent shall notify each
364-Day Bank of its 364-Day Revolving Credit Ratable Share of the total of the
364-Day Revolving Credit Loans and the Swing Loans (364-Day) (each a “Required
Share (364-Day)”). Prior to 2:00 p.m., Pittsburgh time, on such 364-Day
Settlement Date, each 364-Day Bank shall pay to the Agent the amount equal to
the difference between its Required Share (364-Day) and its 364-Day Revolving
Credit Loans, and the Agent shall pay to each 364-Day Bank its 364-Day
Revolving Credit Ratable Share of all payments made by the Borrower to the
Agent with respect to the 364-Day Revolving Credit Loans. The Agent shall also
effect settlement in accordance with the foregoing sentence on the proposed
Borrowing Dates for 364-Day Revolving Credit Loans and may at its option effect
settlement on any other Business Day. These settlement procedures are
established solely as a matter of administrative convenience, and nothing
contained in this Section 5.10.2 shall relieve the 364-Day Banks of their
obligations to fund 364-Day Revolving Credit Loans on dates other than a
Settlement Date (364-Day) pursuant to Sections 2.1.2 and 2.2. The Agent may at
any time at its option for any reason whatsoever require each Bank to pay
immediately to the Agent such 364-Day Bank’s 364-Day Revolving Credit Ratable
Share of the outstanding 364-Day Revolving Credit Loans and each 364-Day Bank
may at any time require the Agent to pay immediately to such 364-Day Bank its
364-Day Revolving Credit Ratable Share of all payments made by the Borrower to
the Agent with respect to the 364-Day Revolving Credit Loans.

6. REPRESENTATIONS AND WARRANTIES

          6.1 Representations and Warranties.

          The Loan Parties, jointly and severally, represent and warrant to the
Agent and each of the Banks as follows:

57

 

               6.1.1. Organization and Qualification.

                    Each Loan Party and each Subsidiary that is not an Inactive Subsidiary of
each Loan Party is a corporation, partnership or limited liability company duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each Loan Party and each Subsidiary that is not
an Inactive Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business
it presently conducts or proposes to conduct. Each Loan Party and each
Subsidiary that is not an Inactive Subsidiary of each Loan Party is duly
licensed or qualified and in good standing in each jurisdiction where the
failure to be so licensed or qualified could reasonably be expected to result
in a Material Adverse Change.

               6.1.2. Subsidiaries.

                    Schedule 6.1.2 states the name of each of the Borrower’s Subsidiaries, its
jurisdiction of incorporation, its authorized capital stock, the issued and
outstanding shares (referred to herein as the “Subsidiary Shares”) and the
owners thereof if it is a corporation, its outstanding partnership interests
(the “Partnership Interests”) if it is a partnership and its outstanding
limited liability company interests, interests assigned to managers thereof and
the voting rights associated therewith (the “LLC Interests”) if it is a limited
liability company and also indicates if such Subsidiary is an Inactive
Subsidiary. The Borrower and each Subsidiary of the Borrower has good and
marketable title to all of the Subsidiary Shares, Partnership Interests and LLC
Interests it purports to own, free and clear in each case of any Lien. All
Subsidiary Shares, Partnership Interests and LLC Interests have been validly
issued, and all Subsidiary Shares are fully paid and nonassessable. All
capital contributions and other consideration required to be made or paid in
connection with the issuance of the Partnership Interests and LLC Interests
have been made or paid, as the case may be. There are no options, warrants or
other rights outstanding to purchase any such Subsidiary Shares, Partnership
Interests or LLC Interests except as indicated on Schedule 6.1.2.

               6.1.3. Power and Authority.

                    Each Loan Party has full power to enter into, execute, deliver and carry
out this Agreement and the other Loan Documents to which it is a party, to
incur the Indebtedness contemplated by the Loan Documents and to perform its
Obligations under the Loan Documents to which it is a party, and all such
actions have been duly authorized by all necessary proceedings on its part.

               6.1.4. Validity and Binding Effect.

                    This Agreement has been duly and validly executed and delivered by each
Loan Party, and each other Loan Document which any Loan Party is required to
execute and deliver on or after the date hereof will have been duly executed
and delivered by such Loan Party on the required date of delivery of such Loan
Document. This Agreement and each other Loan Document constitutes, or will
constitute, legal, valid and binding obligations of each Loan Party which is or
will be a party thereto on and after its date of delivery thereof, enforceable

58

 

against such Loan Party in accordance with its terms, except to the extent that
enforceability of any of such Loan Document may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforceability of creditors’ rights generally or limiting the right of specific
performance.

               6.1.5. No Conflict.

                    Neither the execution and delivery of this Agreement or the other Loan
Documents by any Loan Party nor the consummation of the transactions herein or
therein contemplated or compliance with the terms and provisions hereof or
thereof by any of them will conflict with, constitute a default under or result
in any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents of any Loan Party or (ii) any Law or any
material agreement or instrument or order, writ, judgment, injunction or decree
to which any Loan Party or any of its Subsidiaries is a party or by which it or
any of its Subsidiaries is bound or to which it is subject, or result in the
creation or enforcement of any Lien, charge or encumbrance whatsoever upon any
property (now or hereafter acquired) of any Loan Party or any of its
Subsidiaries (other than Liens granted under the Loan Documents).

               6.1.6. Litigation.

                    Except as set forth in the SEC Filings, there are no actions, suits,
proceedings or investigations (other than Environmental Complaints which are
specifically addressed in Section 6.1.21 [Environmental Matters]) pending or,
to the knowledge of any Loan Party, threatened against such Loan Party or any
Subsidiary of such Loan Party at law or equity before any Official Body which
individually or in the aggregate could reasonably be expected to result in a
Material Adverse Change. None of the Loan Parties or any Subsidiaries of any
Loan Party is in violation of any order, writ, injunction or any decree of any
Official Body which could reasonably be expected to result in any Material
Adverse Change.

               6.1.7. Title to Properties.

                    Each Loan Party and each Subsidiary of each Loan Party has good and
marketable title to or valid leasehold interest in all properties, assets and
other rights which it purports to own or lease or which are reflected as owned
or leased on its books and records, free and clear of all Liens and
encumbrances (other than Environmental Complaints which are specifically
addressed in Section 6.1.21 [Environmental Matters]) except Permitted Liens,
and subject to the terms and conditions of the applicable leases. All leases
of property are in full force and effect without the necessity for any consent
which has not previously been obtained upon consummation of the transactions
contemplated hereby.

               6.1.8. Financial Statements.

                         (i) Historical Statements. The Borrower has delivered to the Agent copies
of its audited consolidated year-end financial statements for and as of the end
of

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the fiscal year ended September 30, 2002 (the “Historical Statements”). The
Historical Statements were compiled from the books and records maintained by
the Borrower’s management, are correct and complete and fairly represent the
consolidated financial condition of the Borrower and its Subsidiaries as of
their dates and the results of operations for the fiscal periods then ended and
have been prepared in accordance with GAAP consistently applied.

                         (ii) Accuracy of Financial Statements. Neither the Borrower nor any
Subsidiary of the Borrower has any liabilities, contingent or otherwise, or
forward or long-term commitments that are not disclosed in the Historical
Statements or in the notes thereto, and except as disclosed therein there are
no unrealized or anticipated losses from any commitments of the Borrower or any
Subsidiary of the Borrower that could reasonably be expected to cause a
Material Adverse Change. Since September 30, 2002, no Material Adverse Change
has occurred.

               6.1.9. Use of Proceeds; Margin Stock; Section 20 Subsidiaries.

                         6.1.9.1 General.

                      The Loan Parties intend to use the proceeds of the Loans in accordance
with Sections 2.8 and 8.1.10.

                         6.1.9.2 Margin Stock.

                      None of the Loan Parties or any Subsidiaries of any Loan Party engages or
intends to engage principally, or as one of its important activities, in the
business of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Loan has been or will be used,
immediately, incidentally or ultimately, to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock or to refund Indebtedness originally incurred for such purpose, or
for any purpose which entails a violation of or which is inconsistent with the
provisions of the regulations of the Board of Governors of the Federal Reserve
System. None of the Loan Parties or any Subsidiary of any Loan Party holds or
intends to hold margin stock in such amounts that more than 25% of the
reasonable value of the assets of any Loan Party or Subsidiary of any Loan
Party is or will be represented by margin stock.

                         6.1.9.3 Section 20 Subsidiaries.

                      The Loan Parties are unaware of any circumstances where any portion of the
proceeds of the Loans would be used to purchase any Ineligible Securities being
underwritten by a Section 20 Subsidiary.

               6.1.10. Full Disclosure.

                    Neither this Agreement nor any other Loan Document, nor any certificate,
statement, agreement or other documents furnished to the Agent or any Bank in
connection herewith or therewith, contains any untrue statement of a material
fact or omits to

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state a material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to any Loan Party
that could reasonably be expected to result in a Material Adverse Change which
has not been set forth in this Agreement or in the certificates, statements,
agreements or other documents furnished in writing to the Agent and the Banks
prior to or at the date hereof in connection with the transactions contemplated
hereby or otherwise disclosed in the SEC Filings.

               6.1.11. Taxes.

                    All federal, state, local and other tax returns required to have been
filed with respect to each Loan Party and each Subsidiary of each Loan Party
have been filed, and payment or adequate provision has been made for the
payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received,
except (i) to the extent that such taxes, fees, assessments and other charges
are being contested in good faith by appropriate proceedings diligently
conducted and for which such reserves or other appropriate provisions if any,
as shall be required by GAAP shall have been made or (ii) to the extent that
with respect to taxes (other than any U.S. federal or state income taxes, state
taxes on equity or capital or comparable state taxes on income, equity or
capital and which are otherwise related to the conduct of business, or local
real property taxes all of which taxes are subject to the requirements of the
immediately preceding clause (i)), fees, assessments or other government
charges, the failure to so pay or so contest could not reasonably be expected
to result in a Material Adverse Change. There are no agreements or waivers
extending the statutory period of limitations applicable to any federal income
tax return of any Loan Party or Subsidiary of any Loan Party for any period.

               6.1.12. Consents and Approvals.

                    No consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other Person is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Agreement and the other Loan Documents by any Loan Party,
except as listed on Schedule 6.1.12, all of which shall have been obtained or
made on or prior to the Closing Date except as otherwise indicated on Schedule
6.1.12.

               6.1.13. No Event of Default; Compliance With Instruments.

                    No event has occurred and is continuing and no condition exists or will
exist after giving effect to the borrowings or other extensions of credit to be
made on the Closing Date under or pursuant to the Loan Documents which
constitutes an Event of Default or Potential Default. None of the Loan Parties
or any Subsidiaries of any Loan Party is in violation of (i) any term of its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its properties may
be subject or bound where such violation could reasonably be expected to result
in a Material Adverse Change.

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               6.1.14. Patents, Trademarks, Copyrights, Licenses, Etc.

                    Each Loan Party and each Subsidiary of each Loan Party owns or has the
contractual right to use all the patents, trademarks, service marks, trade
names, copyrights, licenses, registrations, franchises, permits and rights
reasonably necessary to own and operate its properties and to carry on its
business as presently conducted and planned to be conducted by such Loan Party
or Subsidiary, without known possible, alleged or actual conflict
with the rights of others, except where the failure to do so could not
reasonably be expected to have a Material Adverse Change.

               6.1.15. Insurance.

                    No notice has been given or claim made and no grounds exist to cancel or
avoid any of such policies or bonds or to reduce the coverage provided thereby.
Such policies and bonds provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of each Loan Party and each Subsidiary of each Loan Party in accordance with
prudent business practice in the industry of the Loan Parties and their
Subsidiaries.

               6.1.16. Compliance With Laws.

                    The Loan Parties and their Subsidiaries are in compliance in all material
respects with all applicable Laws (other than Environmental Laws which are
specifically addressed in Section 6.1.21 [Environmental Matters]) in all
jurisdictions in which any Loan Party or Subsidiary of any Loan Party is
presently or will be doing business except where the failure to do so could not
reasonably be expected to result in a Material Adverse Change.

               6.1.17. Material Contracts; Burdensome Restrictions.

                    All material contracts relating to the business operations of each Loan
Party and each Subsidiary of any Loan Party, including all employee benefit
plans and Labor Contracts are valid, binding and enforceable upon such Loan
Party or Subsidiary and, to the best of such Loan Parties’ knowledge, each of
the other parties thereto in accordance with their respective terms; and there
is no default thereunder, to the Loan Parties’ knowledge, with respect to
parties other than such Loan Party or Subsidiary. None of the Loan Parties or
their Subsidiaries is bound by any contractual obligation, or subject to any
restriction in any organization document, or any requirement of Law which could
reasonably be expected to result in a Material Adverse Change.

               6.1.18. Investment Companies; Regulated Entities.

                    None of the Loan Parties or any Subsidiaries of any Loan Party is an
“investment company” registered or required to be registered under the
Investment Company Act of 1940 or under the “control” of an “investment
company” as such terms are defined in the Investment Company Act of 1940 and
shall not become such an “investment company” or under such “control.” None of
the Loan Parties or any Subsidiaries of any Loan Party is a “holding company”
or an “affiliate” of a “holding company” or of a “subsidiary company” of a
“holding

62

 

company” within the meaning of the Public Utility Holding Company Act
of 1935, as amended. None of the Loan Parties or any Subsidiaries of any Loan
Party is subject to any other Federal or state statute or regulation limiting
its ability to incur Indebtedness for borrowed money.

               6.1.19. Plans and Benefit Arrangements.

                         (i) The Borrower and each other member of the ERISA Group are in
compliance in all material respects with any applicable provisions of ERISA
with respect to all Benefit Arrangements, Plans and Multiemployer Plans. There
has been no Prohibited Transaction with respect to any Benefit Arrangement or
any Plan or, to the best knowledge of the Borrower, with respect to any
Multiemployer Plan or Multiple Employer Plan, which could result in any
material liability of the Borrower or any other member of the ERISA Group. The
Borrower and all other members of the ERISA Group have made when due any and
all payments required to be made under any agreement relating to a
Multiemployer Plan or a Multiple Employer Plan or any Law pertaining thereto.
With respect to each Plan and Multiemployer Plan, the Borrower and each other
member of the ERISA Group (i) have fulfilled in all material respects their
obligations under the minimum funding standards of ERISA, (ii) have not
incurred any liability to the PBGC, and (iii) have not had asserted against
them any penalty for failure to fulfill the minimum funding requirements of
ERISA. All Plans, Benefit Arrangements and Multiemployer Plans have been
administered in all material respects in accordance with their terms and
applicable Law.

                         (ii) No event requiring notice to the PBGC under Section 302(f)(4)(A) of
ERISA has occurred or is reasonably expected to occur with respect to any Plan,
and no amendment with respect to which security is required under Section 307
of ERISA has been made or is reasonably expected to be made to any Plan.

                         (iii) Neither the Borrower nor any other member of the ERISA Group has
incurred or reasonably expects to incur any material withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the
Borrower nor any other member of the ERISA Group has been notified by any
Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan or
Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the best knowledge of the Borrower, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.

               6.1.20. Employment Matters.

                         Each of the Loan Parties and each of their Subsidiaries is in compliance
with the Labor Contracts and all applicable federal, state and local labor and
employment Laws including those related to equal employment opportunity and
affirmative action, labor relations, minimum wage, overtime, child labor,
medical insurance continuation, worker adjustment and relocation notices,
immigration controls and worker and unemployment compensation, where the
failure to comply could reasonably be expected to result in a Material Adverse
Change. There are no outstanding grievances, arbitration awards or appeals
therefrom arising out of the Labor Contracts or current or threatened strikes,
picketing, handbilling or other

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work stoppages or slowdowns at facilities of
any of the Loan Parties or any of their Subsidiaries which in any case could
reasonably be expected to result in a Material Adverse Change. The Borrower
has delivered to the Agent true and correct copies of each of the Labor
Contracts.

               6.1.21. Environmental Matters.

                    None of the Loan Parties or any Subsidiaries of any Loan Party has
received any Environmental Complaint and none of the Loan Parties has any
reason to believe that such an Environmental Complaint might be received.
There are no pending or, to any Loan Party’s knowledge, threatened
Environmental Complaints relating to any Loan Party or Subsidiary of any Loan
Party or any of the Properties or, to any Loan Party’s knowledge, any prior
owner, operator or occupant of any of the Properties pertaining to, or arising
out of, any Contamination or violations of Environmental Laws or Environmental
Permits which could reasonably be expected to result in a Material Adverse
Change. The Loan Parties and their Subsidiaries are in compliance with all
applicable Environmental Laws in all jurisdictions in which any Loan Party or
Subsidiary of any Loan Party is doing business except where the failure to do
so could not reasonably be expected to result in a Material Adverse Change.
The Loan Parties and their Subsidiaries hold and are operating in compliance
with Environmental Permits, except where the failure to do so could not
reasonably be expected to result in a Material Adverse Change.

               6.1.22. Senior Debt Status.

                    The Obligations of each Loan Party under this Agreement, the Guaranty
Agreement and each of the other Loan Documents to which it is a party do rank
and will rank at least pari passu in priority of payment with all other
Indebtedness of such Loan Party except Indebtedness of such Loan Party to the
extent secured by Permitted Liens. There is no Lien upon or with respect to
any of the properties or income of any Loan Party or Subsidiary of any Loan
Party which secures indebtedness or other obligations of any Person except for
Permitted Liens.

               6.1.23. Hedging Contract Policies.

                    Schedule 6.1.23 is a true and correct copy of the Hedging Contract
Policies. Each Loan Party and each Subsidiary of any Loan Party is subject to
and is in compliance with the Hedging Contract Policies (notwithstanding that
such policies only refer specifically to NJR Energy Services Company) as if
such policies were the stated policies of each Loan Party and each Subsidiary
of each Loan Party, and the Borrower shall cause each Loan Party and each
Subsidiary of any Loan Party which engages in any Hedging Transaction to
continue to comply with the Hedging Contract Policies as if such policies were
the stated policies of each Loan Party and each Subsidiary of each Loan Party.

               6.1.24. Permitted Business Opportunities.

                    The information set forth on Schedule 6.1.24 is true, complete and correct
in all material respects and sets forth a list of the Investments in Permitted
Business

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Opportunities by the Loan Parties and their Subsidiaries as of the
Closing Date and includes, without limitation, the amount and nature of each
such Investment, a description of the activities engaged in by the Loan Parties
and their Subsidiaries in connection with such Investment, and a description of
the activities engaged in by the Person in which the Investment has been made.

               6.1.25. Anti-Terrorism Laws; Executive Order No. 13224.

                    None of the Loan Parties nor any Subsidiary of any Loan Party is any of
the following (each a “Blocked Person”):

                    (i) a Person that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order No. 13224;

                    (ii) a Person owned or controlled by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;

                    (iii) a Person or entity with which any Bank is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;

                    (iv) a Person or entity that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order No. 13224;

                    (v) a Person or entity that is named as a “specially designated national”
on the most current list published by the United States Treasury Department
Office of Foreign Asset Control at its official website or any replacement
website or other replacement official publication of such list, or

                    (vi) a Person or entity who is affiliated or associated with a Person or
entity listed above.

          6.2 Continuation of Representations.

          The Loan Parties make the representations and warranties in this Section 6
on the date hereof, on the Closing Date, on the Restatement Effective Date and
each date thereafter on which a Loan is made or a Letter of Credit is issued as
provided in and subject to Sections 7.1 and 7.2.

7. CONDITIONS TO AMENDMENT AND RESTATEMENT OF ORIGINAL

CREDIT AGREEMENT; CONDITIONS OF LENDING AND ISSUANCE OF LETTERS

OF CREDIT

     The obligation of each Bank to amend and restate the Original Credit
Agreement, effective as of the Restatement Effective Date, and make Loans and
of the Agent to issue Letters of Credit hereunder is subject to the performance
by each of the Loan Parties of its Obligations to

65

 

be performed hereunder at or
prior to the making of any such Loans or issuance of such Letters of Credit and
to the satisfaction of the following further conditions:

          7.1 Conditions to Amendment and Restatement of Original Credit Agreement.

          On the Restatement Effective Date:

               7.1.1. Officer’s Certificate.

                    The representations and warranties of each of the Loan Parties contained
in Section 6 and in each of the other Loan Documents shall be true and accurate
on and as of the Restatement Effective Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and each of the Loan Parties
shall have performed and complied with all covenants and conditions hereof and
thereof, no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; and there shall be delivered to the Agent for the
benefit of each Bank a certificate of each of the Loan Parties, dated the
Restatement Effective Date and signed by the Chief Executive Officer,
President, Chief Financial Officer or other Authorized Officer of each of the
Loan Parties, to each such effect.

               7.1.2. Secretary’s Certificate.

                    There shall be delivered to the Agent for the benefit of each Bank a
certificate dated the Restatement Effective Date and signed by the Secretary or
an Assistant Secretary of each of the Loan Parties, certifying as appropriate
as to:

                         (i) all action taken by each Loan Party in connection with this Agreement
and the other Loan Documents;

                         (ii) the names of the officer or officers authorized to sign this
Agreement and the other Loan Documents and the true signatures of such officer
or officers and specifying the Authorized Officers permitted to act on behalf
of each Loan Party for purposes of this Agreement and the true signatures of
such officers, on which the Agent and each Bank may conclusively rely; and

                         (iii) copies of its organizational documents, including its certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, certificate of formation, and limited liability company agreement as
in effect on the Restatement Effective Date certified by the appropriate state
official where such documents are filed in a state office together with
certificates from the appropriate state officials as to the continued existence
and good standing of each Loan Party in each state where organized or qualified
to do business and a bring-down certificate by facsimile dated the Restatement
Effective Date, provided, however, that each of the Loan Parties may, in lieu
of delivering copies of the foregoing organizational documents and good
standing certificates, certify that the organizational

66

 

documents and good
standing certificates previously delivered by the Loan Parties to the Agent
remain in full force and effect and have not been modified, amended or
rescinded.

               7.1.3. Opinion of Counsel.

                    There shall be delivered to the Agent for the benefit of each Bank a
written opinion of (a) Windels Marx Lane & Mittendorf, LLP, counsel for the
Loan Parties (who may rely on the opinions of such other counsel and
Certificates of the Borrower’s in-house
counsel as may be reasonably acceptable to the Agent), dated the
Restatement Effective Date and in substantially the form attached hereto as
Exhibit 7.1.3(A), and (b) Oleta J. Harden, in-house counsel for the Loan
Parties, dated the Restatement Effective Date and in substantially the form
attached hereto as Exhibit 7.1.3(B).

               7.1.4. Legal Details.

                    All legal details and proceedings in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be in form
and substance satisfactory to the Agent and counsel for the Agent, and the
Agent shall have received all such other counterpart originals or certified or
other copies of such documents and proceedings in connection with such
transactions, in form and substance satisfactory to the Agent and said counsel,
as the Agent or said counsel may reasonably request. The Agent shall have
received this Amended and Restated Credit Agreement executed by the Borrower
and each Bank.

               7.1.5. Payment of Fees.

                    The Borrower shall have paid or caused to be paid to the Agent for itself
and for the account of the Banks to the extent not previously paid all fees
accrued through the Restatement Effective Date and the costs and expenses for
which the Agent and the Banks are entitled to be reimbursed.

               7.1.6. Consents.

                    The material consents, if any, required to effectuate the transactions
contemplated hereby as set forth on Schedule 6.1.12 shall have been obtained.

               7.1.7. Officer’s Certificate Regarding MACs.

                    Since September 30, 2003, no Material Adverse Change shall have occurred;
prior to the Restatement Effective Date, there shall have been no material
change in the management of any Loan Party or Subsidiary of any Loan Party; and
there shall have been delivered to the Agent for the benefit of each Bank a
certificate dated the Restatement Effective Date and signed by the Chief
Executive Officer, President, Chief Financial Officer or other Authorized
Officer of each Loan Party to each such effect.

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               7.1.8. No Violation of Laws.

                    The making of the Loans and the issuance of the Letters of Credit shall
not contravene any Law applicable to any Loan Party or any of the Banks.

               7.1.9. No Actions or Proceedings.

                    No action, proceeding, investigation, regulation or legislation shall have
been instituted, threatened or proposed before any court, governmental agency
or legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, this Agreement, the other Loan Documents or the consummation of
the transactions contemplated hereby or thereby or
which, in the Agent’s sole discretion, would make it inadvisable to
consummate the transactions contemplated by this Agreement or any of the other
Loan Documents.

               7.1.10. Certain New Exhibits and Amended and Restated Schedules.

                    Upon the effectiveness of this Agreement: (a) Exhibit 1.1(P)(1)
[Permitted Additional Indebtedness - Summary of Proposed Terms], (b) Exhibit
1.1(P)(2) [Permitted Additional NJNG Indebtedness - Summary of Proposed Terms],
(c) Exhibit 1.1(U) [Swing Loan (364-Day) Note], (d) Exhibit 2.5.3 [Swing Loan
(364-Day) Request], (e) Exhibit 7.1.3(A) [Opinion of Counsel (Amended and
Restated Credit Agreement)] and (f) Exhibit 7.1.3(B) [Opinion of In-House
Counsel (Amended and Restated Credit Agreement] shall be added as new exhibits
to this Agreement in the form of the exhibits attached hereto, bearing such
respective names and numerical references, and (x) Schedule 1.1(P) [Permitted
Liens], (y) Schedule 6.1.24 [Permitted Business Opportunities] and (z) Schedule
8.2.1 [Permitted Indebtedness] shall be amended and restated in the form of the
schedules attached hereto, bearing such respective names and numerical
references. All other schedules and exhibits to this Agreement shall continue
to be effective and in such form as effective prior to the Restatement
Effective Date.

               7.1.11. Other Related Matters.

                    It is acknowledged that subsequent to the execution of this Agreement and
on the date hereof, pursuant to that certain Consent the expiration date of the
364-Day Revolving Credit Facility has been extended and that the 364-Day
Revolving Credit Commitment has been increased in an aggregate amount of
$20,000,000 along with the corresponding update of Schedule 1.1(B) to give
effect to the increase in the 364-Day Revolving Credit Commitment.

          7.2 Each Additional Loan or Letter of Credit.

          At the time of making any Loans or issuing any Letters of Credit other
than Loans made or Letters of Credit issued on the Closing Date and after
giving effect to the proposed extensions of credit: the representations and
warranties of the Loan Parties contained in Section 6 and in the other Loan
Documents shall be true on and as of the date of such additional Loan or Letter
of Credit with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which expressly relate

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solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates or
times referred to therein) and the Loan Parties shall have performed and
complied with all covenants and conditions hereof; no Event of Default or
Potential Default shall have occurred and be continuing or shall exist; the
making of the Loans or issuance of such Letter of Credit shall not contravene
any Law applicable to any Loan Party or Subsidiary of any Loan Party or any of
the Banks; and the Borrower shall have delivered to the Agent a duly executed
and completed Loan Request or application for a Letter of Credit as the case
may be.

8. COVENANTS

          8.1 Affirmative Covenants.

          The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings, and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties’ other Obligations under the
Loan Documents and termination of the Commitments, the Loan Parties shall
comply at all times with the following affirmative covenants:

               8.1.1. Preservation of Existence, Etc.

                    Each Loan Party shall, and shall cause each of its Subsidiaries to,
maintain its legal existence as a corporation, limited partnership or limited
liability company and its license or qualification and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary, except (i) where the
lack of legal existence of any Subsidiary or the failure to be so licensed or
qualified could not reasonably be expected to have a Material Adverse Change,
or (ii) as otherwise expressly permitted in Section 8.2.5 [Liquidations,
Mergers, Etc.].

               8.1.2. Payment of Liabilities, Including Taxes, Etc.

                    Each Loan Party shall, and shall cause each of its Subsidiaries to, duly
pay and discharge all liabilities to which it is subject or which are asserted
against it, promptly as and when the same shall become due and payable,
including all taxes, assessments and governmental charges upon it or any of its
properties, assets, income or profits, prior to the date on which penalties
attach thereto, except to the extent that such liabilities, including taxes,
assessments or charges, are being contested in good faith and by appropriate
and lawful proceedings diligently conducted and for which such reserve or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made, but only to the extent that failure to discharge any such liabilities
would not result in any additional liability which could reasonably be expected
to result in a Material Adverse Change.

               8.1.3. Maintenance of Insurance.

                    Each Loan Party shall, and shall cause each of its Subsidiaries to, insure
its properties and assets against loss or damage by fire and such other
insurable hazards as

69

 

such assets are commonly insured (including fire, extended
coverage, property damage, workers’ compensation, public liability and business
interruption insurance) and against other risks (including errors and
omissions) in such amounts as similar properties and assets are insured by
prudent companies in similar circumstances carrying on similar businesses, and
with reputable and financially sound insurers, including self-insurance to the
extent customary.

               8.1.4. Maintenance of Properties and Leases.

                    Each Loan Party shall, and shall cause each of its Subsidiaries to,
maintain in good repair, working order and condition (ordinary wear and tear
excepted) in
accordance with the general practice of other businesses of similar
character and size, all of those properties useful or necessary to its
business, and from time to time, such Loan Party will make or cause to be made
all appropriate repairs, renewals or replacements thereof.

               8.1.5. Maintenance of Patents, Trademarks, Etc.

                    Each Loan Party shall, and shall cause each of its Subsidiaries to,
maintain in full force and effect all patents, trademarks, service marks, trade
names, copyrights, licenses, franchises, permits and other authorizations
necessary for the ownership and operation of its properties and business if the
failure so to maintain the same could constitute a Material Adverse Change.

               8.1.6. Visitation Rights.

                    Each Loan Party shall, and shall cause each of its Subsidiaries to, permit
any of the officers or authorized employees or representatives of the Agent or
any of the Banks to visit and inspect any of its properties and to examine and
make excerpts from its books and records and discuss its business affairs,
finances and accounts with its officers, all in such detail and at such times
and as often as any of the Banks may reasonably request, provided that each
Bank shall provide the Borrower and the Agent with reasonable notice prior to
any visit or inspection, and, prior to an Event of Default, any such visit or
inspection shall occur during regular business hours. In the event any Bank
desires to conduct an audit of any Loan Party, such Bank shall make a
reasonable effort to conduct such audit contemporaneously with any audit to be
performed by the Agent, and prior to an Event of Default, any such audit
(whether by the Agent or any Bank) shall be at the sole cost and expense of the
Agent or such Bank, as the case may be.

               8.1.7. Keeping of Records and Books of Account.

                    The Borrower shall, and shall cause each Subsidiary of the Borrower to,
maintain and keep proper books of record and account which enable the Borrower
and its Subsidiaries to issue financial statements in accordance with GAAP and
as otherwise required by applicable Laws of any Official Body having
jurisdiction over the Borrower or any Subsidiary of the Borrower, and in which
full, true and correct entries shall be made in all material respects of all
its dealings and business and financial affairs.

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               8.1.8. Plans and Benefit Arrangements.

                    The Borrower shall, and shall cause each other member of the ERISA Group
to, comply with ERISA, the Internal Revenue Code and other applicable Laws
applicable to Plans and Benefit Arrangements except where such failure, alone
or in conjunction with any other failure, would not reasonably be expected to
result in a Material Adverse Change. Without limiting the generality of the
foregoing, the Borrower shall cause all of its Plans and all Plans maintained
by any member of the ERISA Group to be funded in accordance with the minimum
funding requirements of ERISA and shall make, and cause each member of the
ERISA
Group to make, in a timely manner, all contributions due to Plans, Benefit
Arrangements and Multiemployer Plans.

               8.1.9. Compliance With Laws.

                    Each Loan Party shall, and shall cause each of its Subsidiaries to, comply
with all applicable Laws, including all Environmental Laws, in all material
respects, provided that it shall not be deemed to be a violation of this
Section 8.1.9 if any failure to comply with any Law would not result in fines,
penalties, costs associated with the performance of any Remedial Actions, other
similar liabilities or injunctive relief which in the aggregate could not
reasonably be expected to result in a Material Adverse Change. Without
limiting the generality of the foregoing, each Loan Party shall, and shall
cause each of its Subsidiaries to, obtain, maintain, renew and comply with all
Environmental Permits applicable to their respective operations and activities,
provided that it shall not be deemed to be a violation of this Section 8.1.9 if
any failure to do so would not result in cease and desist orders or fines,
penalties or other similar liabilities or injunctive relief which in the
aggregate could not reasonably be expected to result in a Material Adverse
Change.

               8.1.10. Use of Proceeds.

                    The Loan Parties will use the Letters of Credit and the proceeds of the
Loans only for (i) general corporate purposes of the Borrower and for working
capital of the Borrower (including, without limitation, the use of Letters of
Credit to support obligations arising in the ordinary course of the business of
the Loan Parties, as such business is permitted to be conducted pursuant to
Section 8.2.9), or (ii) to repay and terminate Indebtedness outstanding under
the Credit Agreement among the Borrower, the lenders party thereto, Summit
Bank, as the syndication agent, Bank One, NA, as the documentation agent, PNC
Bank, as the administrative agent and PNC Capital Markets, Inc. and Summit Bank
as co-lead arrangers, dated as of January 5, 2001, providing for a $135,000,000
credit facility. The Loan Parties shall not use the Letters of Credit or the
proceeds of the Loans for any purposes which contravenes any applicable Law or
any provision hereof.

               8.1.11. Hedging Contract Policies.

                    Each Loan Party and each Subsidiary of each Loan Party shall comply with
the Hedging Contract Policies (notwithstanding that such policies only refer

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specifically to NJR Energy Services Company) as if such policies were the
stated policies of each Loan Party and each Subsidiary of each Loan Party.

               8.1.12. Tax Shelter Regulations.

               None of the Loan Parties intends to treat the Loans and/or Letters of
Credit and related transactions as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4). In the event any of the Loan
Parties determines to take any action inconsistent with such intention, the
Borrower will promptly (1) notify the Agent thereof, and (2) deliver to the
Agent a duly completed copy of IRS Form 8886 or any successor
form. If the Borrower so notifies the Agent, the Borrower acknowledges
that one or more of the Banks may treat its Loans and/or Letters of Credit as
part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and such Bank or Banks, as applicable, will maintain the lists and
other records required by such Treasury Regulation.

          8.2 Negative Covenants.

          The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties’ other Obligations hereunder
and termination of the Commitments, the Loan Parties shall comply with the
following negative covenants:

               8.2.1. Indebtedness.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:

                         (i) Indebtedness under the Loan Documents;

                         (ii) Existing Indebtedness as set forth on Schedule 8.2.1 (including any
extensions or renewals thereof, provided there is no increase in the amount
thereof or other significant change in the terms thereof unless otherwise
specified on Schedule 8.2.1);

                         (iii) Indebtedness of a Loan Party to another Loan Party;

                         (iv) Additional Indebtedness issued by New Jersey Natural Gas in
accordance with Article Two of the Mortgage Indenture (as the Mortgage
Indenture is in effect on the Closing Date), provided that such additional
Indebtedness shall not contain covenants, defaults and other terms and
conditions more restrictive than or in addition to those contained in this
Agreement, and, shall specifically and expressly not contain any covenant or
agreement with respect to the issuance or payment of dividends more restrictive
than the restrictions contained in Section 4.1 of the Twenty-Sixth Supplemental
Indenture dated as of October 1, 1995, supplemental to the Mortgage Indenture;

                         (v) Additional, unsecured Indebtedness of the Borrower incurred after the
Closing Date, not to exceed at any time outstanding, after giving effect
thereto,

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65% of Consolidated Total Capitalization, so long as, both before and
after giving effect to any proposed additional Indebtedness: (a) no Default or
Event of Default shall have occurred and be continuing, (b) provided that such
additional Indebtedness shall not contain covenants, defaults and other terms
and conditions more restrictive than or in addition to those contained in this
Agreement; and (c) the Net Cash Proceeds thereof are applied as a mandatory
prepayment of the Loans and a mandatory reduction of the Commitments as
required by and in accordance with Section 5.4.4;

                         (vi) Additional Indebtedness, in respect of capitalized leases (including,
without limitation, capitalized leases for metered assets) not to exceed at any
time
outstanding in the aggregate for the Loan Parties and their Subsidiaries
$17,500,000 during the fiscal year of the Loan Parties ended September 30,
2003, $35,000,000 during the fiscal year of the Loan Parties ended September
30, 2004, $52,500,000 during the fiscal year of the Loan Parties ended
September 30, 2005, and $70,000,000 during the fiscal year of the Loan Parties
ended September 30, 2006, provided, however, that notwithstanding the foregoing
limitations and expressly in limitation thereof, such additional Indebtedness
in respect of capitalized leases, shall not exceed at any time outstanding in
the case of NJR Energy Services Company, a New Jersey corporation, $10,000,000
during the fiscal year of the Loan Parties ended September 30, 2003,
$20,000,000 during the fiscal year of the Loan Parties ended September 30,
2004, $30,000,000 during the fiscal year of the Loan Parties ended September
30, 2005, and $40,000,000 during the fiscal year of the Loan Parties ended
September 30, 2006;

                         (vii) Additional Indebtedness of NJR Energy Services Company or New Jersey
Natural Gas Company (each being a New Jersey corporation) arising under any
Hedging Transaction;

                         (viii) Additional Indebtedness, at any time outstanding not to exceed
$5,000,000, secured by Liens permitted by Section 8.2.2(i);

                         (ix) Additional Indebtedness incurred to finance the Permitted
Construction Project, at any time outstanding not to exceed $20,000,000, which
Indebtedness, if secured is secured by Liens permitted by Section 8.2.2 (v), so
long as, both before and after giving effect to any proposed additional
Indebtedness: (a) no Default or Event of Default shall have occurred and be
continuing, and (b) provided that such additional Indebtedness shall not
contain covenants, defaults and other terms and conditions more restrictive
than or in addition to those contained in this Agreement;

                         (x) Indebtedness of New Jersey Natural Gas under the NJNG Credit
Agreement;

                         (xi) Permitted Additional Indebtedness; and

                         (xii) Permitted Additional NJNG Indebtedness.

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               8.2.2. Liens.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien
on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except:

                         (i) Liens existing on such property at the time of the acquisition of such
property or the acquisition of such Subsidiary (other than any such Liens
created as a result of such acquisition, which Liens are expressly prohibited);
provided that the fair market value of all assets secured as permitted by this
Section 8.2.2 clause (i) shall not exceed, at any time, $5,000,000 and provided
further that the Indebtedness secured by Liens permitted by this Section 8.2.2
clause (i) shall not at any time outstanding exceed $5,000,000;

                         (ii) Permitted Liens,

                         (iii) Extensions or renewals of any Lien described in clause (i) or (ii)
of this Section 8.2.2, provided that: (a) any such extension or renewal shall
be limited to the property theretofore subject to such Lien, and (b) the
principal amount of the Indebtedness secured by such Lien shall not be
increased and shall otherwise be permitted by Section 8.2.1,

                         (iv) in the case of New Jersey Gas Company (being a New Jersey
corporation) and its Subsidiaries, Liens permitted pursuant to Section 8.2.2 of
that certain Credit Agreement by and among New Jersey Gas Company, as borrower,
the financial institutions part thereto, as lenders, and PNC Bank, as agent,
dated as of the date hereof, as hereafter amended, supplemented, restated or
modified from time to time, and

                         (v) Liens in favor of the lenders providing financing permitted by Section
8.2.1(ix) to secure such Indebtedness, so long as (a) such Liens are solely on
the assets acquired or constructed by Commercial Realty and Resources Corp., a
Subsidiary of the Borrower, as part of the Permitted Construction Project, and
(b) the principal amount of the Indebtedness secured by such Liens shall not
exceed $20,000,000.

                    Notwithstanding the foregoing or any other provision of the Loan Documents
to the contrary, each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist
any Lien on, or agree or become liable to do so, any of the capital stock of
New Jersey Natural Gas.

               8.2.3. Guaranties.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for

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                         (i) Guaranties of Indebtedness of the Loan Parties permitted hereunder,

                         (ii) Guaranties of any Loan Party or any of its Subsidiaries of
obligations of NJR Energy Services Company or New Jersey Natural Gas Company
(each being a New Jersey corporation) arising under any Hedging Transaction,
and

                         (iii) Guaranties by the Borrower of various obligations of any of its
Subsidiaries in connection with any transaction arising in connection with its
ordinary course of business as conducted on the Closing Date or as otherwise
permitted to be conducted pursuant to Section 8.2.9.

               8.2.4. Loans and Investments.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time make or suffer to remain outstanding any loan or
advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) or limited
liability company interest in, or any other investment or interest in, or make
any capital contribution to, any other Person, or agree, become or remain
liable to do any of the foregoing (any of the foregoing being an “Investment”),
except:

                         (i) trade credit extended on usual and customary terms in the ordinary
course of business;

                         (ii) advances to employees to meet expenses incurred by such employees in
the ordinary course of business;

                         (iii) Permitted Investments; and

                         (iv) loans, advances and investments in other Loan Parties.

               8.2.5. Liquidations, Mergers, Consolidations, Acquisitions.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party
to any merger or consolidation, or acquire by purchase, lease or otherwise all
or substantially all of the assets or capital stock of any other Person,
provided that:

                    (1) any Loan Party other than the Borrower may consolidate or merge into
another Loan Party which is wholly-owned by one or more of the other Loan
Parties,

                    (2) any Inactive Subsidiary of the Borrower may dissolve, liquidate or
wind-up its affairs or any Inactive Subsidiary of the Borrower may consolidate
or merge into: (a) any other Inactive Subsidiary of the Borrower, or (b) any
Loan Party, other than the Borrower, so long as such Inactive Subsidiary has no
liabilities, contingent or otherwise, other than Indebtedness permitted by
Section 8.2.1, and

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                    (3) any Loan Party may acquire, whether by purchase or by merger, (A) all
of the ownership interests of another Person or (B) substantially all of assets
of another Person or of a business or division of another Person (each an
“Permitted Acquisition”), provided that each of the following requirements is
met:

                         a. if the Loan Parties are acquiring the ownership interests in such
Person, such Person shall execute a Guarantor Joinder and join this Agreement
as a Guarantor pursuant to Section 11.19 [Joinder of Guarantors] on or before
the date of such Permitted Acquisition;

                         b. the Loan Parties, such Person and its owners, as applicable, shall
comply with Section 11.19 [Joinder of Guarantors] on or before the date of such
Permitted Acquisition;

                         c. the board of directors or other equivalent governing body of such
Person shall have approved such Permitted Acquisition and, if the Loan Parties
shall use any portion of the Loans to fund such Permitted Acquisition, the Loan
Parties also shall have delivered to the Banks written evidence of the approval
of the board of directors (or equivalent body) of such Person for such
Permitted Acquisition;

                         d. the business acquired, or the business conducted by the Person whose
ownership interests are being acquired, as applicable, shall be substantially
the same as one or more line or lines of business conducted by the Loan Parties
or otherwise be compliant with Section 8.2.9 [Continuation of or Change in
Business];

                         e. no Potential Default or Event of Default shall exist immediately prior
to and after giving effect to such Permitted Acquisition;

                         f. the Borrower shall demonstrate that it shall be in compliance with the
covenants contained in Sections 8.2.12 and 8.2.13 after giving effect to such
Permitted Acquisition (including in such computation Indebtedness or other
liabilities assumed or incurred in connection with such Permitted Acquisition
but excluding income earned or expenses incurred by the Person, business or
assets to be acquired prior to the date of such Permitted Acquisition) by
delivering at least five (5) Business Days prior to such Permitted Acquisition
a certificate in the form of Exhibit 8.2.5. evidencing such compliance; and

the Loan Parties shall deliver to the Agent at least five (5) Business Days
before such Permitted Acquisition copies of any agreements entered into or
proposed to be entered into by such Loan Parties in connection with such
Permitted Acquisition and shall deliver to the Agent such other information
about such Person or its assets as the Agent or any Bank may reasonably
require.

               8.2.6. Dispositions of Assets or Subsidiaries.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily, any of its properties or assets,
tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or

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general
intangibles with or without recourse or of capital stock, shares of beneficial
interest, partnership interests or limited liability company interests of a
Subsidiary of such Loan Party), except:

                         (i) transactions involving the sale of inventory in the ordinary course of
business;

                         (ii) any sale, transfer or lease of assets in the ordinary course of
business which are no longer necessary or required in the conduct of such Loan
Party’s or such Subsidiary’s business;

                         (iii) any sale, transfer or lease of assets by any wholly owned Subsidiary
of such Loan Party to another Loan Party;

                         (iv) any sale, transfer or lease of assets in the ordinary course of
business which are replaced by substitute assets acquired or leased,

                         (v) any sale, transfer or lease of assets, other than those specifically
excepted pursuant to clauses (i) through (iv) above, provided that (i) at the
time of any disposition, no Event of Default shall exist or shall result from
such disposition, and (ii) the aggregate net book value of all assets so sold
by the Loan Parties and their Subsidiaries shall not exceed in any fiscal year
five (5%) of the consolidated total assets of the Loan Parties and their
Subsidiaries as determined on a consolidated basis in accordance with GAAP, and

                         (vi) any sale, transfer or lease of assets of any Inactive Subsidiary of
the Borrower.

               8.2.7. Affiliate Transactions.

                    Except solely with respect to any Permitted Related Business Opportunities
as previously disclosed to the Agent and each of the Banks, each of the Loan
Parties shall not, and shall not permit any of its Subsidiaries to, enter into
or carry out any transaction (including purchasing property or services from or
selling property or services to any Affiliate of any Loan Party or other
Person) unless such transaction is not otherwise prohibited by this Agreement,
is entered into in the ordinary course of business upon fair and reasonable
arm’s-length terms and conditions and is in accordance with all applicable Law.

               8.2.8. Subsidiaries, Partnerships and Joint Ventures.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, own or create directly or indirectly any Subsidiaries other
than (i) any Subsidiary which is a Regulated Entity, (ii) any Subsidiary which
is an Inactive Subsidiary of the Borrower, (iii) any Subsidiary which has
joined this Agreement as Guarantor on the Closing Date, and (iv) any Subsidiary
formed after the Closing Date which joins this Agreement as a Guarantor
pursuant to Section 11.19 [Joinder of Guarantors]. Each of the Loan Parties
shall not become or agree to (1) become a general or limited partner in any
general or limited partnership, except that the Loan Parties may be general or
limited partners in other Loan Parties and except that the

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Loan Parties or
their Subsidiaries may be a limited partner in a Permitted Related Business
Opportunity, (2) become a member or manager of, or hold a limited liability
company interest in, a limited liability company, except that the Loan Parties
may be members or managers of, or hold limited liability company interests in,
other Loan Parties and except that the Loan Parties or their Subsidiaries may
be members or managers of, or hold limited liability company interests in a
Permitted Related Business Opportunity, or (3) become a joint venturer or hold
a joint venture interest in any joint venture, except that the Loan Parties or
their Subsidiaries may become a joint venturer in or hold a joint venture
interest in any joint venture that is a Permitted Related Business Opportunity.

               8.2.9. Continuation of or Change in Business.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, engage in any business other than the business of each Loan
Party or Subsidiary substantially as conducted and operated by such Loan Party
or Subsidiary during the present fiscal year, and any line of business or
business activity related or complementary to the business of the Loan Parties
conducted as of the Closing Date.

               8.2.10. Plans and Benefit Arrangements.

                    Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with any other
circumstances or set of circumstances resulting in liability under ERISA or
otherwise violate ERISA:

               8.2.11. Fiscal Year.

                    The Borrower shall not, and shall not permit any Subsidiary of the
Borrower to, change its fiscal year from the twelve-month period beginning
October 1 and ending September 30.

               8.2.12. Maximum Leverage Ratio.

                    The Loan Parties shall not at any time permit the ratio of Consolidated
Total Indebtedness of the Borrower and its Subsidiaries to Consolidated Total
Capitalization to exceed 0.65 to 1.00.

               8.2.13. Minimum Interest Coverage Ratio.

                    The Loan Parties shall not permit the ratio of Consolidated Income from
Operations to Consolidated Interest Expense of the Borrower and its
Subsidiaries, calculated as of the end of each fiscal quarter for the four
fiscal quarters then ended, to be less than 2.50 to 1.00.

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               8.2.14. No Limitation on Dividends and Distributions by Subsidiaries.

                    The Loan Parties shall not, and shall not permit any Subsidiary
(including, without limitation, New Jersey Natural Gas) to, enter into or
otherwise be bound by any agreement not to pay dividends or make distributions
to the Borrower, except for the restrictions set forth in this Agreement and
existing on the Closing Date pursuant to the Mortgage Indenture.

               8.2.15. Payment of Dividends; Redemptions.

                    The Loan Parties shall not, and shall not permit any Subsidiary to,
declare or make any dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities on account of any shares of
any class of capital stock of any Loan Party,
or purchase, redeem or otherwise acquire for value (or permit any of its
Subsidiaries to do so) any shares of any class of capital stock or other
securities of any Loan Party or any warrants, rights or options to acquire any
such shares or other securities, now or hereafter outstanding, except that the
Borrower may (a) declare and make any dividend payment or other distribution
payable in common stock of the Borrower, (b) purchase, redeem or otherwise
acquire shares of its common stock or warrants, rights or options to acquire
any such shares so long as no Event of Default or Potential Default shall have
occurred and is continuing or would result therefrom, and (c) declare and make
its quarterly dividend, so long as, after giving effect thereto, no Event of
Default shall have occurred and is continuing.

               8.2.16. No Modification of Hedging Contract Policies.

                    Each Loan Party and each Subsidiary of each Loan Party shall not amend,
modify, supplement, restate or rescind the Hedging Contract Policies in a
manner which, compared with past practice of the Loan Parties and their
Subsidiaries, would render Hedging Transactions entered into pursuant to the
Hedging Contract Policies (as so modified) materially more speculative (it
being understood that without limiting the generality of the foregoing, any
Hedging Transaction which requires notice to or approval of the Borrower’s Risk
Management Committee in accordance with the Hedging Contract Policies (it being
also understood that such policies are applicable to each Loan Party and each
Subsidiary of each Loan Party as if such policies were the stated policies of
each Loan Party and each Subsidiary of each Loan Party) shall be deemed to
require the consent of the Required Banks in accordance with this Section
8.2.16), without the prior written consent of the Required Banks.

               8.2.17. Off-Balance Sheet Financing.

                    Each Loan Party and each Subsidiary of each Loan Party shall not engage in
any off-balance sheet transaction (i.e., the liabilities in respect of which do
not appear on the liability side of the balance sheet, with such balance sheet
prepared in accordance with GAAP) providing the functional equivalent of
borrowed money (including asset securitizations, sale/leasebacks or Synthetic
Leases (other than any sale/leaseback transaction or Synthetic Lease entered
into, in either case, with respect to meter assets and which transaction is
otherwise permitted by this Agreement),) with liabilities in excess, in the
aggregate for the Borrower and its

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Subsidiaries as of any date of
determination, of five (5%) of the total assets of the Borrower and its
Subsidiaries, determined and consolidated in accordance with GAAP as of the
date of determination. For purposes of this Section 8.2.17 (a) “Synthetic
Lease” shall mean any lease transaction under which the parties intend that (i)
the lease will be treated as an “operating lease” by the lessee pursuant to
Statement of Financial Accounting Standards No. 13, as amended, or appropriate
successor thereto, and (ii) the lessee will be entitled to various tax benefits
ordinarily available to owners (as opposed to lessees) of like property and (b)
the amount of any lease which is not a capital lease in accordance with GAAP is
the aggregate amount of minimum lease payments due pursuant to such lease for
any non-cancelable portion of its term.

               8.2.18. Amendments to Permitted Additional Indebtedness Documents and
Permitted Additional NJNG Documents.

                         8.2.18.1 Permitted Additional Indebtedness Documents.

                    Each Loan Party and each Subsidiary of each Loan Party shall not enter
into any amendment or modification to or waiver or consent under (or solicit
any such amendment, modification, waiver or consent) any of the Permitted
Additional Indebtedness Documents that could reasonably be expected to be
material and adverse to the Banks, as determined by the Required Banks in their
reasonable discretion, without the prior written consent of the Required Banks.
For the purposes of this Section 8.2.18.1, any amendment or modification to
the amortization of the principal amount of the Permitted Additional
Indebtedness shall not be considered material and adverse to the Banks and may
be made without the prior written consent of any Bank.

                         8.2.18.2 Permitted Additional NJNG Indebtedness Documents.

                    Each Loan Party and each Subsidiary of each Loan Party shall not enter
into any amendment or modification to or waiver or consent under (or solicit
any such amendment, modification, waiver or consent) any of the Permitted
Additional NJNG Indebtedness Documents that could reasonably be expected to be
material and adverse to the Banks, as determined by the Required Banks in their
reasonable discretion, without the prior written consent of the Required Banks.
For the purposes of this Section 8.2.18.2, any amendment or modification to
the amortization of the principal amount of the Permitted Additional NJNG
Indebtedness shall not be considered material and adverse to the Banks and may
be made without the prior written consent of any Bank.

               8.2.19. No Violation of Anti-Terrorism Laws.

                    The Loan Parties and each Subsidiary of any Loan Party shall not: (i)
violate any of the prohibitions set forth in the Executive Order No. 13224, the
USA Patriot Act or any other Anti-Terrorism Law applicable to any of them or
the business that they conduct, and (ii) require the Agent or the Banks to take
any action that would cause the Agent or the Banks to be in violation of the
prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or
any other Anti-Terrorism Law, it being understood that the Agent or any Bank
can

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refuse to honor any such request or demand otherwise validly made by any
such Loan Party or any Subsidiary of any Loan Party under this Agreement or any
other Loan Document.

          8.3 Reporting Requirements.

          The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties’ other Obligations hereunder
and under the other Loan Documents and termination of the
Commitments, the Loan Parties will furnish or cause to be furnished to the
Agent and each of the Banks:

               8.3.1. Quarterly Financial Statements.

                    As soon as available and in any event within fifty-five (55) calendar days
after the end of each of the first three fiscal quarters in each fiscal year,
financial statements of the Borrower, consisting of a consolidated and
consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, stockholders’ equity and
cash flows for the fiscal quarter then ended and the fiscal year through that
date, all in reasonable detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower as having been prepared in accordance with GAAP,
consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year. The Loan Parties will be deemed to have complied with the
delivery requirements of this Section 8.3.1 if within fifty-five (55) days
after the end of their fiscal quarter, the Borrower delivers to the Agent and
each of the Banks a copy of its Form 10-Q as filed with the SEC and the
financial statements contained therein meets the requirements described in this
Section.

               8.3.2. Annual Financial Statements.

                    As soon as available and in any event within one hundred (100) days after
the end of each fiscal year of the Borrower, financial statements of the
Borrower consisting of a consolidated balance sheet as of the end of such
fiscal year, and related consolidated statements of income, stockholders’
equity and cash flows for the fiscal year then ended, all in reasonable detail
and setting forth in comparative form the financial statements as of the end of
and for the preceding fiscal year, and certified by independent certified
public accountants of nationally recognized standing satisfactory to the Agent.
The certificate or report of accountants shall be free of qualifications
(other than any consistency qualification that may result from a change in the
method used to prepare the financial statements as to which such accountants
concur) and shall not indicate the occurrence or existence of any event,
condition or contingency which would materially impair the prospect of payment
or performance of any covenant, agreement or duty of any Loan Party under any
of the Loan Documents. The Loan Parties will be deemed to have complied with
the delivery requirements of this Section 8.3.2 if within one hundred (100)
days after the end of their fiscal year, the Borrower delivers to the Agent and
each of the Banks a copy of its Annual Report and Form 10-K as filed with the
SEC

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and the financial statements and certification of public accountants
contained therein meets the requirements described in this Section.

                    It is expressly agreed that any financial information or financial
statements (including, without limitation the annual financial statements
required pursuant to this Section 8.3.2) submitted to the Agent or the Banks
which has been prepared by an independent public accountant or other outside
accountant shall be accompanied by a statement in writing signed by such
accountant disclosing that the accountant is aware that the financial
information or financial statements prepared by the accountant would be
submitted to and relied upon by the
Agent and/or the Banks in connection with the Agent’s or the Banks’
determination to grant or continue credit.

               8.3.3. Certificate of the Borrower.

                    Concurrently with the financial statements of the Borrower furnished to
the Agent and to the Banks pursuant to Sections 8.3.1 [Quarterly Financial
Statements] and 8.3.2 [Annual Financial Statements], a certificate (each a
“Compliance Certificate”) of the Borrower signed by the Chief Executive
Officer, President or Chief Financial Officer of the Borrower, in the form of
Exhibit 8.3.3.

               8.3.4. Notice of Default.

                    Promptly after any Authorized Officer (or other executive officer) of any
Loan Party has learned of the occurrence of an Event of Default or Potential
Default, a certificate signed by the Chief Executive Officer, President or
Chief Financial Officer of such Loan Party setting forth the details of such
Event of Default or Potential Default and the action which the such Loan Party
proposes to take with respect thereto.

               8.3.5. Notice of Litigation.

                    Promptly after the commencement thereof, notice of (i) all actions, suits,
proceedings or investigations before or by any Official Body or any other
Person against any Loan Party or Subsidiary of any Loan Party, involve a claim
or series of claims in excess of $5,000,000 or, (ii) any Environmental Claims,
individually or in the aggregate exceed $5,000,000, and in either case which if
adversely determined could reasonably be expected to result in a Material
Adverse Change.

               8.3.6. Notice of Change in Debt Rating.

                    Within five (5) Business Days after Standard & Poor’s or Moody’s announces
a change in the Debt Rating of New Jersey Natural Gas, notice of such change.
The Borrower will deliver, together with such notice, a copy of any written
notification which Borrower or New Jersey Natural Gas received from the
applicable rating agency regarding such change of Debt Rating.

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               8.3.7. Sale of Assets.

                    At least thirty (30) calendar days prior thereto, notice with respect to
any proposed sale or transfer of assets pursuant to Section 8.2.6(iv).

               8.3.8. Budgets, Forecasts, Other Reports and Information.

                    Promptly upon their becoming available to the Borrower:

                         (i) any reports, notices or proxy statements generally distributed by the
Borrower to its stockholders on a date no later than the date supplied to such
stockholders,

                         (ii) regular or periodic reports, including Forms 10-K, 10-Q and 8-K,
registration statements and prospectuses, filed by the Borrower with the SEC,

                         (iii) to the extent not previously reported in regular or periodic
reports, including Forms 10-K, 10-Q and 8-K, registration statements and
prospectuses, filed by the Borrower with the SEC, the Borrower shall notify the
Banks promptly of the enactment or adoption of any Law which may result in a
Material Adverse Change,

                         (iv) to the extent requested by the Agent or any Bank, the annual budget
and any forecasts or projections of the Loan Parties, and

                         (v) with respect to the Hedging Transaction activities of the Loan Parties
and their Subsidiaries, to the extent not previously reported in regular or
periodic reports, including Forms 10-K, 10-Q and 8-K, registration statements
and prospectuses, filed by the Borrower with the SEC, such other reports and
information as any of the Banks may from time to time reasonably request.

               8.3.9. Notices Regarding Plans and Benefit Arrangements.

                         8.3.9.1 Certain Events.

                    Promptly upon becoming aware of the occurrence thereof, notice (including
the nature of the event and, when known, any action taken or threatened by the
Internal Revenue Service or the PBGC with respect thereto) of:

                         (i) any Reportable Event with respect to the Borrower or any other member
of the ERISA Group (regardless of whether the obligation to report said
Reportable Event to the PBGC has been waived),

                         (ii) any Prohibited Transaction which could subject the Borrower or any
other member of the ERISA Group to a civil penalty assessed pursuant to Section
502(i) of ERISA or a tax imposed by Section 4975 of the Internal Revenue Code
in connection with any Plan, any Benefit Arrangement or any trust created
thereunder,

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                         (iii) any assertion of material withdrawal liability with respect to any
Multiemployer Plan,

                         (iv) any partial or complete withdrawal from a Multiemployer Plan by the
Borrower or any other member of the ERISA Group under Title IV of ERISA (or
assertion thereof), where such withdrawal is likely to result in material
withdrawal liability,

                         (v) any cessation of operations (by the Borrower or any other member of
the ERISA Group) at a facility in the circumstances described in Section
4062(e) of ERISA,

                         (vi) withdrawal by the Borrower or any other member of the ERISA Group
from a Multiple Employer Plan,

                         (vii) a failure by the Borrower or any other member of the ERISA Group to
make a payment to a Plan required to avoid imposition of a Lien under Section
302(f) of ERISA,

                         (viii) the adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA, or

                         (ix) any change in the actuarial assumptions or funding methods used for
any Plan, where the effect of such change is to materially increase or
materially reduce the unfunded benefit liability or obligation to make periodic
contributions.

                         8.3.9.2 Notices of Involuntary Termination and Annual Reports.

                         Promptly after receipt thereof, copies of (a) all notices received by the
Borrower or any other member of the ERISA Group of the PBGC’s intent to
terminate any Plan administered or maintained by the Borrower or any member of
the ERISA Group, or to have a trustee appointed to administer any such Plan;
and (b) at the request of the Agent or any Bank each annual report (IRS Form
5500 series) and all accompanying schedules, the most recent actuarial reports,
the most recent financial information concerning the financial status of each
Plan administered or maintained by the Borrower or any other member of the
ERISA Group, and schedules showing the amounts contributed to each such Plan by
or on behalf of the Borrower or any other member of the ERISA Group in which
any of their personnel participate or from which such personnel may derive a
benefit, and each Schedule B (Actuarial Information) to the annual report filed
by the Borrower or any other member of the ERISA Group with the Internal
Revenue Service with respect to each such Plan.

                         8.3.9.3 Notice of Voluntary Termination.

                         Promptly upon the filing thereof, copies of any Form 5310, or any
successor or equivalent form to Form 5310, filed with the PBGC in connection
with the termination of any Plan.

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               8.3.10. Tax Shelter Provisions.

               Promptly after any of the Loan Parties determines that it intends to treat
any of the Loans, Letters of Credit or related transactions as being a
“reportable transaction” as provided in Section 8.1.12

               (1) a written notice of such intention to the Agent; and

               (2) a duly completed copy of IRS Form 8886 or any successor form.

9. DEFAULT

          9.1 Events of Default.

          An Event of Default shall mean the occurrence or existence of any one or
more of the following events or conditions (whatever the reason therefor and
whether voluntary, involuntary or effected by operation of Law):

               9.1.1. Payments Under Loan Documents.

                    The Borrower shall fail to pay (i) any principal of any Loan (including
scheduled installments, mandatory prepayments or the payment due at maturity),
Reimbursement Obligation or Letter of Credit Borrowing when such principal is
due hereunder or (ii) any interest on any Loan, Facility Fee, 364-Day Facility
Fee, Reimbursement Obligation or Letter of Credit Borrowing or any other amount
owing hereunder or under the other Loan Documents within three (3) Business
Days after such interest, fee or other amount becomes due in accordance with
the terms hereof or thereof;

               9.1.2. Breach of Warranty.

                    Any representation or warranty made at any time by any of the Loan Parties
herein or by any of the Loan Parties in any other Loan Document, or in any
certificate, other instrument or statement furnished pursuant to the provisions
hereof or thereof, shall prove to have been false or misleading in any material
respect as of the time it was made or furnished;

               9.1.3. Breach of Negative Covenants or Visitation Rights.

                    Any of the Loan Parties shall default in the observance or performance of
any covenant contained in Section 8.1.6 [Visitation Rights] or Section 8.2
[Negative Covenants];

               9.1.4. Breach of Other Covenants.

                    Any of the Loan Parties shall default in the observance or performance of
any other covenant, condition or provision hereof or of any other Loan Document
and such default shall continue unremedied for a period of thirty (30) Days
after any Authorized

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Officer (or other executive officer) of any Loan Party
becomes aware of the occurrence thereof (such grace period to be applicable
only in the event such default can be remedied by corrective action of the Loan
Parties as determined by the Agent in its reasonable discretion);

               9.1.5. Defaults in Other Agreements or Indebtedness.

                         (i) A default or event of default shall occur at any time under the terms
of any other agreement involving borrowed money or the extension of credit or
any other Indebtedness under which any Loan Party or Subsidiary of any Loan
Party may be obligated as a borrower or guarantor in excess of $5,000,000 in
the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any indebtedness when due (whether at stated maturity,
by acceleration or otherwise) or if such breach or default permits or causes
the acceleration of any indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend;

                         (ii) There shall occur under the NJNG Credit Agreement an “Event of
Default” (as such term is defined in the NJNG Credit Agreement);

                         (iii) A default or event of default shall occur at any time under the
terms of any agreement involving any off balance sheet transaction (including
any asset securitization, sale/leaseback transaction, or Synthetic Lease) with
obligations in the aggregate thereunder for which any Loan Party or Subsidiary
of any Loan Party may be obligated in excess of $5,000,000, and such breach,
default or event of default consists of the failure to pay (beyond any period
of grace permitted with respect thereto, whether waived or not) any obligation
when due (whether at stated maturity, by acceleration or otherwise) or if such
breach or default permits or causes the acceleration of any obligation (whether
or not such right shall have been waived) or the termination of any such
agreement;

               9.1.6. Final Judgments or Orders.

                    Any final judgments or orders for the payment of money in excess of
$5,000,000 in the aggregate, to the extent not covered by insurance, shall be
entered against any Loan Party by a court having jurisdiction in the premises,
which judgment is not discharged, vacated, bonded or stayed pending appeal
within a period of thirty (30) days from the date of entry;

               9.1.7. Loan Document Unenforceable.

                    Any of the Loan Documents shall cease to be legal, valid and binding
agreements enforceable against the party executing the same or such party’s
successors and assigns (as permitted under the Loan Documents) in accordance
with the respective terms thereof or shall in any way be terminated (except in
accordance with its terms) or become or be declared ineffective or inoperative
or shall in any way be challenged or contested or cease to give or provide the
respective rights, titles, interests, remedies, powers or privileges intended
to be created thereby;

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               9.1.8. Uninsured Losses; Proceedings Against Assets.

                    The assets of any Loan Party or the assets of any Subsidiary of any Loan
Party are attached, seized, levied upon or subjected to a writ or distress
warrant; or such
come within the possession of any receiver, trustee, custodian or assignee
for the benefit of creditors and the same is not cured within thirty (30) days
thereafter or otherwise fully bonded or covered by insurance (subject to
reasonable and customary deductible amounts);

               9.1.9. Notice of Lien or Assessment.

                    A notice of Lien or assessment in excess of $5,000,000 which is not a
Permitted Lien or Environmental Complaint in excess of $5,000,000 is filed of
record with respect to all or any part of any of the Loan Parties’ or any of
their Subsidiaries’ assets by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipal or other
governmental agency, including the PBGC, or any taxes or debts owing at any
time or times hereafter to any one of these becomes payable and the same is not
paid within thirty (30) days after the same becomes payable;

               9.1.10. Insolvency.

                    Any Loan Party or any Significant Subsidiary of a Loan Party ceases to be
Solvent or admits in writing to a creditor or Official Body its inability to
pay its debts as they mature;

               9.1.11. Events Relating to Plans and Benefit Arrangements.

                    Any of the following occurs: (i) any Reportable Event, which the Agent
determines in good faith constitutes grounds for the termination of any Plan by
the PBGC or the appointment of a trustee to administer or liquidate any Plan,
shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan, or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in good
faith that the amount of the Borrower’s liability is likely to exceed 10% of
its Consolidated Tangible Net Worth; (v) the Borrower or any member of the
ERISA Group shall fail to make any contributions when due to a Plan or a
Multiemployer Plan; (vi) the Borrower or any other member of the ERISA Group
shall make any amendment to a Plan with respect to which security is required
under Section 307 of ERISA; (vii) the Borrower or any other member of the ERISA
Group shall withdraw completely or partially from a Multiemployer Plan; (viii)
the Borrower or any other member of the ERISA Group shall withdraw (or shall be
deemed under Section 4062(e) of ERISA to withdraw) from a Multiple Employer
Plan; or (ix) any applicable Law is adopted, changed or interpreted by any
Official Body with respect to or otherwise affecting one or more Plans,
Multiemployer Plans or Benefit Arrangements and, with respect to any of the
events specified in (v), (vi), (vii), (viii) or (ix), the Agent determines in
good faith that

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any such occurrence would be reasonably likely to materially
and adversely affect the total enterprise represented by the Borrower and the
other members of the ERISA Group;

               9.1.12. Cessation of Business.

                    Any Loan Party or Subsidiary of a Loan Party ceases to conduct its
business as contemplated, except as expressly permitted under Section 8.2.5
[Liquidations, Mergers, Etc.], Section 8.2.6 [Disposition of Assets or
Subsidiaries] or Section 8.2.8 [Continuation of or Change of Business] or any
Loan Party or Subsidiary of a Loan Party is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of its
business and such injunction, restraint or other preventive order is not
dismissed within thirty (30) days after the entry thereof;

               9.1.13. Change of Control.

                         (i) Any person or group of persons (within the meaning of Sections 13(d)
or 14(a) of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership of (within the meaning of Rule 13d-3 promulgated
by the SEC under said Act) 25% or more of the voting capital stock of the
Borrower (provided that, for purposes of calculating the acquisition of
beneficial ownership, any transfer of voting stock of the Borrower by any
Person or group of Persons to a Permitted Transferee shall be deemed not to
constitute a conveyance and acquisition of such stock), or (ii) within a period
of twelve (12) consecutive calendar months, individuals who were directors of
the Borrower on the first day of such period shall cease to constitute a
majority of the board of directors of the Borrower unless the individuals who
were elected or appointed directors during such twelve (12) month period were
elected or appointed by a majority of the individuals who were directors of the
Borrower on the first day of such period or by their duly appointed or elected
successors; or (iii) Borrower shall cease to own 100% of the issued and
outstanding equity interests of New Jersey Natural Gas; or (iv) Borrower shall
cease to own 51% of the issued and outstanding interest in any other Loan
Party;

               9.1.14. Involuntary Proceedings.

                    A proceeding shall have been instituted in a court having jurisdiction in
the premises seeking a decree or order for relief in respect of any Loan Party
or Subsidiary of a Loan Party in an involuntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or similar official) of any Loan Party or
Subsidiary of a Loan Party for any substantial part of its property, or for the
winding-up or liquidation of its affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of sixty (60) consecutive
days or such court shall enter a decree or order granting any of the relief
sought in such proceeding; or

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               9.1.15. Voluntary Proceedings.

                         Any Loan Party or Subsidiary of a Loan Party shall commence a voluntary
case under any applicable bankruptcy, insolvency, reorganization 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 or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or other similar official) of
itself or for any substantial part of its property or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any action in furtherance of any of the
foregoing.

               9.2 Consequences of Event of Default.

                         9.2.1. Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.

                         If an Event of Default specified under Sections 9.1.1 through 9.1.13 shall
occur and be continuing, the Banks and the Agent shall be under no further
obligation to make Loans or issue Letters of Credit, as the case may be, and
the Agent may, and upon the request of the Required Banks shall, by written
notice to the Borrower, take one or both of the following actions: (i)
terminate the Commitments and thereupon the Commitments shall be terminated and
of no further force and effect, or (ii) declare the unpaid principal amount of
the Notes and Loans then outstanding and all interest accrued thereon, any
unpaid fees and all other Indebtedness of the Borrower to the Banks hereunder
and thereunder to be forthwith due and payable, and the same shall thereupon
become and be immediately due and payable to the Agent for the benefit of each
Bank without presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived, and (iii) require the Borrower to, and
the Borrower shall thereupon, deposit in a non-interest-bearing account with
the Agent, as cash collateral for its Obligations under the Loan Documents, an
amount equal to the maximum amount currently or at any time thereafter
available to be drawn on all outstanding Letters of Credit, and the Borrower
hereby pledges to the Agent and the Banks, and grants to the Agent and the
Banks a security interest in, all such cash as security for such Obligations.
Upon the curing of all existing Events of Default to the satisfaction of the
Required Banks, the Agent shall return such cash collateral to the Borrower;
and

               9.2.2. Bankruptcy, Insolvency or Reorganization Proceedings.

                         If an Event of Default specified under Section 9.1.14 [Involuntary
Proceedings] or 9.1.15 [Voluntary Proceedings] shall occur, the Commitments
shall automatically terminate and be of no further force and effect, the Agent
and the Banks shall be under no further obligations to make Loans or issue
Letters of Credit, as the case may be, and the unpaid principal amount of the
Loans then outstanding and all interest accrued thereon, any unpaid fees and
all other Indebtedness of the Borrower to the Banks hereunder and thereunder
shall be immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived; and

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               9.2.3. Set-off.

                    If an Event of Default shall occur and be continuing, any Bank to whom any
Obligation is owed by any Loan Party hereunder or under any other Loan Document
or any participant of such Bank which has agreed in writing to be bound by the
provisions of Section 10.13 [Equalization of Banks] and any branch, Subsidiary
or Affiliate of such Bank or participant anywhere in the world shall have the
right, in addition to all other rights and remedies
available to it, without notice to such Loan Party, to set-off against and
apply to the then unpaid balance of all the Loans and all other Obligations of
the Borrower and the other Loan Parties hereunder or under any other Loan
Document any debt owing to, and any other funds held in any manner for the
account of, the Borrower or such other Loan Party by such Bank or participant
or by such branch, Subsidiary or Affiliate, including all funds in all deposit
accounts (whether time or demand, general or special, provisionally credited or
finally credited, or otherwise) now or hereafter maintained by the Borrower or
such other Loan Party for its own account (but not including funds held in
custodian or trust accounts) with such Bank or participant or such branch,
Subsidiary or Affiliate. Such right shall exist whether or not any Bank or the
Agent shall have made any demand under this Agreement or any other Loan
Document, whether or not such debt owing to or funds held for the account of
the Borrower or such other Loan Party is or are matured or unmatured and
regardless of the existence or adequacy of any Guaranty or any other security,
right or remedy available to any Bank or the Agent; and

               9.2.4. Suits, Actions, Proceedings.

                    If an Event of Default shall occur and be continuing, and whether or not
the Agent shall have accelerated the maturity of Loans pursuant to any of the
foregoing provisions of this Section 9.2, the Agent or any Bank, if owed any
amount with respect to the Loans, may proceed to protect and enforce its rights
by suit in equity, action at law and/or other appropriate proceeding, whether
for the specific performance of any covenant or agreement contained in this
Agreement or the other Loan Documents; and

               9.2.5. Application of Proceeds; Collateral Sharing.

                         9.2.5.1 Application of Proceeds.

                    From and after the date on which the Agent has taken any action pursuant
to this Section 9.2 and until all Obligations of the Loan Parties have been
paid in full, any and all proceeds received by the Agent from the exercise of
any remedy by the Agent, shall be applied as follows:

                         (i) first, to reimburse the Agent and the Banks for out-of-pocket costs,
expenses and disbursements, including reasonable attorneys’ and paralegals’
fees and legal expenses, incurred by the Agent or the Banks in connection with
collection of any Obligations of any of the Loan Parties under any of the Loan
Documents;

                         (ii) second, to the repayment of all Indebtedness then due and unpaid of
the Loan Parties to the Banks incurred under this Agreement or any of the other

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Loan Documents, whether of principal, interest, fees, expenses or otherwise, in
such manner as the Agent may determine in its discretion; and

                         (iii) the balance, if any, as required by Law.

                         9.2.5.2 Collateral Sharing.

                    All Liens granted under each Loan Document (the “Collateral Documents”)
shall secure ratably and on a pari passu basis (i) the Obligations in favor of
the Agent and the Banks hereunder and (ii) the Obligations incurred by any of
the Loan Parties in favor of any Bank which provides a Bank-Provided Interest
Rate Hedge (the “IRH Provider”). The Agent under the Collateral Documents
shall be deemed to serve as the collateral agent (the “Collateral Agent”) for
the IRH Provider and the Banks hereunder, provided that the Collateral Agent
shall comply with the instructions and directions of the Agent (or the Banks
under this Agreement to the extent that this Agreement or any other Loan
Documents empowers the Banks to direct the Agent), as to all matters relating
to the collateral, including the maintenance and disposition thereof. No IRH
Provider (except in its capacity as a Bank hereunder) shall be entitled or have
the power to direct or instruct the Collateral Agent on any such matters or to
control or direct in any manner the maintenance or disposition of the
collateral.

               9.2.6. Other Rights and Remedies.

                    In addition to all of the rights and remedies contained in this Agreement
or in any of the other Loan Documents, the Agent shall have all of the rights
and remedies under applicable Law, all of which rights and remedies shall be
cumulative and non-exclusive, to the extent permitted by Law. The Agent may,
and upon the request of the Required Banks shall, exercise all post-default
rights granted to the Agent and the Banks under the Loan Documents or
applicable Law.

10. THE CO-AGENTS

          10.1 Appointment.

          Each Bank hereby irrevocably designates, appoints and authorizes PNC Bank
to act as Agent for such Bank under this Agreement and to execute and deliver
or accept on behalf of each of the Banks the other Loan Documents. Each Bank
hereby irrevocably authorizes, the Agent to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and any
other instruments and agreements referred to herein, and to exercise such
powers and to perform such duties hereunder as are specifically delegated to or
required of the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. PNC Bank agrees to act as the Agent on behalf
of the Banks to the extent provided in this Agreement.

          10.2 Delegation of Duties.

          The Agent may perform any of its duties hereunder by or through agents or
employees (provided such delegation does not constitute a relinquishment of its
duties as Agent)

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and, subject to Sections 10.5 [Reimbursement and Indemnification of Agent
by the Borrower] and Section 10.6 [Exculpatory Provisions; Limitation of
Liability], shall be entitled to engage and pay for the advice or services of
any attorneys, accountants or other experts concerning all matters pertaining
to its duties hereunder and to rely upon any advice so obtained. It is
acknowledged and agreed that each of Fleet National Bank and SunTrust Bank has
received the title of syndication agent under this Agreement, that each of Bank
of Tokyo-Mitsubishi Trust Company and JPMorgan Chase Bank has received the
title of documentation agent under this Agreement and that each of Bank One,
NA, Citizens Bank of Massachusetts and The Bank of New York has received the
title of co-agent under this Agreement, however such designations are solely to
give each of Fleet National Bank, SunTrust Bank, Bank of Tokyo-Mitsubishi Trust
Company, JPMorgan Chase Bank, Bank One, NA, Citizens Bank of Massachusetts and
The Bank of New York its respective title and each of Fleet National Bank,
SunTrust Bank, Bank of Tokyo-Mitsubishi Trust Company, JPMorgan Chase Bank,
Bank One, NA, Citizens Bank of Massachusetts and The Bank of New York: (i) has
no duties, responsibilities, functions obligations or liabilities implied or
otherwise under the Loan Documents solely as a result of being so designated as
a syndication agent, documentation agent or co-agent, respectively, and (ii) is
not entitled to any fee solely as a result of being so designated as a
syndication agent, documentation agent or co-agent, respectively, other than
the fees payable on the Closing Date in accordance with that certain agreement
between the Borrower and the Agent dated as of October 14, 2002.

          10.3 Nature of Duties; Independent Credit Investigation.

          The Agent shall have no duties or responsibilities except those expressly
set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this Agreement
a fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Without limiting the generality of the foregoing,
the use of the term “agent” in this Agreement with reference to the Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.
Each Bank expressly acknowledges (i) that the Agent has not made any
representations or warranties to it and that no act by the Agent hereafter
taken, including any review of the affairs of any of the Loan Parties, shall be
deemed to constitute any representation or warranty by the Agent to any Bank;
(ii) that it has made and will continue to make, without reliance upon the
Agent, its own independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of each of the Loan Parties in
connection with this Agreement and the making and continuance of the Loans
hereunder; and (iii) except as expressly provided herein, that the Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information with respect thereto,
whether coming into its possession before the making of any Loan or at any time
or times thereafter.

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          10.4 Actions in Discretion of Agent; Instructions From the Banks.

          The Agent agrees, upon the written request of the Required Banks, to take
or refrain from taking any action of the type specified as being within the
Agent’s rights, powers or discretion herein, provided that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks
or all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
10.6 [Exculpatory Provisions, Etc.]. Subject to the provisions of Section
10.6, no Bank shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder in accordance
with the instructions of the Required Banks, or in the absence of such
instructions, in the absolute discretion of the Agent.

          10.5 Reimbursement and Indemnification of Agent by the Borrower.

          The Borrower agrees to pay or reimburse the Agent and hold the Agent
harmless against (a) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements, including fees and expenses of counsel
(including the allocated costs of staff counsel), appraisers and environmental
consultants, incurred by the Agent (i) in connection with the negotiation,
preparation, printing, execution, administration, syndication, interpretation
and performance of this Agreement and the other Loan Documents, (ii) relating
to any amendments, waivers or consents pursuant to the provisions hereof,
requested by the Borrower or required by applicable law, (iii) in connection
with the enforcement of this Agreement or any other Loan Document or collection
of amounts due hereunder or thereunder or the proof and allowability of any
claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, (iv) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, and (v) in connection with any Environmental Complaint
threatened or asserted against the Agent or the Banks in any way relating to or
arising out of this Agreement or any other Loan Documents (including, without
limitation, the protection, preservation, exercise or enforcement of any of the
terms hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings or in any
workout or restructuring) and (b) all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Agent, in its capacity as such, in any way relating to or
arising out of (i) this Agreement or any other Loan Documents or any action
taken or omitted by the Agent hereunder or thereunder, and (ii) any
Environmental Complaint in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by the Agent
hereunder or thereunder, provided that the Borrower shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Agent’s gross negligence or willful misconduct, or if the Borrower was not
given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that the Borrower shall

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remain liable to the extent such failure to give notice does not result in
a loss to the Borrower), or if the same results from a compromise or settlement
agreement entered into without the consent of the Borrower, which shall not be
unreasonably withheld. In addition, the Borrower agrees to reimburse and pay
all reasonable out-of-pocket expenses of the Agent’s regular employees and
agents engaged periodically to perform audits of the Loan Parties’ books,
records and business properties, subject in all cases to the limitation set
forth in Section 8.1.6 [Visitation Rights].

          10.6 Exculpatory Provisions; Limitation of Liability.

          Neither the Agent nor any of its directors, officers, employees, agents,
attorneys or Affiliates shall (a) be liable to any Bank for any action taken or
omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused by its or their own
gross negligence or willful misconduct, (b) be responsible in any manner to any
of the Banks for the effectiveness, enforceability, genuineness, validity or
the due execution of this Agreement or any other Loan Documents or for any
recital, representation, warranty, document, certificate, report or statement
herein or made or furnished under or in connection with this Agreement or any
other Loan Documents, or (c) be under any obligation to any of the Banks to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions hereof or thereof on the part of the Loan
Parties, or the financial condition of the Loan Parties, or the existence or
possible existence of any Event of Default or Potential Default. No claim may
be made by any of the Loan Parties, any Bank, the Agent or any of their
respective Subsidiaries against the Agent, any Bank or any of their respective
directors, officers, employees, agents, attorneys or Affiliates, or any of
them, for any special, indirect or consequential damages or, to the fullest
extent permitted by Law, for any punitive damages in respect of any claim or
cause of action (whether based on contract, tort, statutory liability, or any
other ground) based on, arising out of or related to any Loan Document or the
transactions contemplated hereby or any act, omission or event occurring in
connection therewith, including the negotiation, documentation, administration
or collection of the Loans, and each of the Loan Parties (for itself and on
behalf of each of its Subsidiaries), the Agent and each Bank hereby waives,
releases and agrees never to sue upon any claim for any such damages, whether
such claim now exists or hereafter arises and whether or not it is now known or
suspected to exist in its favor. Each Bank agrees that, except for notices,
reports and other documents expressly required to be furnished to the Banks by
the Agent hereunder or given to the Agent for the account of or with copies for
the Banks, the Agent and each of its directors, officers, employees, agents,
attorneys or Affiliates shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Loan Parties which may come into the possession of the
Agent or any of its directors, officers, employees, agents, attorneys or
Affiliates.

          10.7 Reimbursement and Indemnification of Agent by Banks.

          Each Bank agrees to reimburse and indemnify, defend and save the Agent (to
the extent not reimbursed by the Borrower and without limiting the Obligation
of the Borrower to do so) in proportion to its Ratable Share harmless from and
against all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, including

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attorneys’ fees and disbursements (including the allocated costs of staff
counsel), and costs of appraisers and environmental consultants, of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent, in its capacity as such, in any way relating to or arising out of this
Agreement or any other Loan Documents or any action taken or omitted by the
Agent hereunder or thereunder, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same results from
the Agent’s gross negligence or willful misconduct, or (b) if such Bank was not
given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that such Bank shall remain liable to
the extent such failure to give notice does not result in a loss to the Bank),
or (c) if the same results from a compromise and settlement agreement entered
into without the consent of such Bank, which shall not be unreasonably
withheld. In addition, each Bank agrees promptly upon demand to reimburse the
Agent (to the extent not reimbursed by the Borrower and without limiting the
Obligation of the Borrower to do so) in proportion to its Ratable Share for all
amounts due and payable by the Borrower to the Agent in connection with the
Agent’s periodic audit of the Loan Parties’ books, records and business
properties.

          10.8 Reliance by Agent.

          The Agent shall be entitled to rely upon any writing, telex or teletype
message, resolution, notice, consent, certificate, letter, statement, order or
other document or conversation by telephone or otherwise believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon the advice and opinions of counsel and other professional
advisers selected by the Agent. The Agent shall be fully justified in failing
or refusing to take any action hereunder unless it shall first be indemnified
to its satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.

          10.9 Notice of Default.

          The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Bank or the Borrower referring to this
Agreement, describing such Potential Default or Event of Default and stating
that such notice is a “notice of default.”

          10.10 Notices.

          The Agent shall promptly send to each Bank a copy of all notices received
from the Borrower pursuant to the provisions of this Agreement or the other
Loan Documents promptly upon receipt thereof. The Agent shall promptly notify
the Borrower and the other Banks of each change in the Base Rate and the
effective date thereof.

          10.11 Banks in Their Individual Capacities; Agents in Its Individual
Capacity.

          With respect to its Commitment and the Loans made by it and any other
rights and powers given to it as a Bank hereunder or under any of the other
Loan Documents, the Agent

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shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the term “Bank” and
“Banks” shall, unless the context otherwise indicates, include the Agent in its
individual capacity. PNC Bank and its Affiliates and each of the Banks and
their respective Affiliates may, without liability to account, except as
prohibited herein, make loans to, issue letters of credit for the account of,
acquire equity interests in, accept deposits from, discount drafts for, act as
trustee under indentures of, and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with, the Loan
Parties and their Affiliates, in the case of the Agent, as though it were not
acting as Agent hereunder and in the case of each Bank, as though such Bank
were not a Bank hereunder, in each case without notice to or consent of the
other Banks. The Banks acknowledge that, pursuant to such activities, the
Agent or its Affiliates may (i) receive information regarding the Loan Parties
or any of their Subsidiaries or Affiliates (including information that may be
subject to confidentiality obligations in favor of the Loan Parties or such
Subsidiary or Affiliate) and acknowledge that the Agent shall be under no
obligation to provide such information to them, and (ii) accept fees and other
consideration from the Loan Parties for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.

          10.12 Holders of Notes.

          The Agent may deem and treat any payee of any Note as the owner thereof
for all purposes hereof unless and until written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority
or consent of any Person who at the time of making such request or giving such
authority or consent is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.

          10.13 Equalization of Banks.

          The Banks and the holders of any participations in any Commitments or
Loans or other rights or obligations of a Bank hereunder agree among themselves
that, with respect to all amounts received by any Bank or any such holder for
application on any Obligation hereunder or under any such participation,
whether received by voluntary payment, by realization upon security, by the
exercise of the right of set-off or banker’s lien, by counterclaim or by any
other non-pro rata source, equitable adjustment will be made in the manner
stated in the following sentence so that, in effect, all such excess amounts
will be shared ratably among the Banks and such holders in proportion to their
interests in payments on the Loans, except as otherwise provided in Section
4.4.3 [Agent’s and Bank’s Rights], 5.4.2 [Replacement of a Bank] or 5.6
[Additional Compensation in Certain Circumstances]. The Banks or any such
holder receiving any such amount shall purchase for cash from each of the other
Banks an interest in such Bank’s Loans in such amount as shall result in a
ratable participation by the Banks and each such holder in the aggregate unpaid
amount of the Loans, provided that if all or any portion of such excess amount
is thereafter recovered from the Bank or the holder making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by law
(including court order) to be paid by the Bank or the holder making such
purchase.

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          10.14 Successor Agent.

          The Agent (i) may resign as Agent or (ii) shall resign if such resignation
is requested by the Required Banks (if the Agent is a Bank, the Agent’s Loans
and its Commitment shall be considered in determining whether the Required
Banks have requested such resignation) or required by Section 5.4.2
[Replacement of a Bank], in either case of (i) or (ii) by giving not less than
thirty (30) days’ prior written notice to the Borrower. If the Agent shall
resign under this Agreement, then either (a) the Required Banks shall appoint
from among the Banks a successor agent for the Banks, subject to the consent of
the Borrower, such consent not to be unreasonably withheld and such consent not
to be required if an Event of Default exists and is continuing, or (b) if a
successor agent shall not be so appointed and approved within the thirty (30)
day period following the Agent’s notice to the Banks of its resignation, then
the Agent shall appoint, with the consent of the Borrower, such consent not to
be unreasonably withheld, a successor agent who shall serve as Agent until such
time as the Required Banks appoint and the Borrower consents to the appointment
of a successor agent. Upon its appointment pursuant to either clause (a) or
(b) above, such successor agent shall succeed to the rights, powers and duties
of the Agent, and the term “Agent” shall mean such successor agent, effective
upon its appointment, and the former Agent’s rights, powers and duties as Agent
shall be terminated without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. After the
resignation of any Agent hereunder, the provisions of this Section 10 shall
inure to the benefit of such former Agent and such former Agent shall not by
reason of such resignation be deemed to be released from liability for any
actions taken or not taken by it while it was an Agent under this Agreement.

          10.15 Agent’s Fee.

          The Borrower shall pay to the Agent a nonrefundable fee (the “Agent’s
Fee”) for Agent’s services hereunder under the terms of a letter (the “Agent’s
Letter”) between the Borrower and Agent dated October 14, 2002.

          10.16 Availability of Funds.

          The Agent may assume that each Bank has made or will make the proceeds of
a Loan available to the Agent unless the Agent shall have been notified by such
Bank on or before the later of (1) the close of Business on the Business Day
preceding the Borrowing Date with respect to such Loan or two (2) hours before
the time on which the Agent actually funds the proceeds of such Loan to the
Borrower (whether using its own funds pursuant to this Section 10.16 or using
proceeds deposited with the Agent by the Banks and whether such funding occurs
before or after the time on which Banks are required to deposit the proceeds of
such Loan with the Agent). The Agent may, in reliance upon such assumption
(but shall not be required to), make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Agent by such Bank, the Agent shall be entitled to recover such amount on
demand from such Bank (or, if such Bank fails to pay such amount forthwith upon
such demand from the Borrower) together with interest thereon, in respect of
each day during the period commencing on the date such amount was made
available to the Borrower and ending on the date the Agent recovers such
amount, at a rate per annum equal to (i) the

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Federal Funds Open Rate during the first three (3) days after such
interest shall begin to accrue and (ii) the applicable interest rate in respect
of such Loan after the end of such three-day period.

          10.17 Calculations.

          In the absence of gross negligence or willful misconduct, the Agent shall
not be liable for any error in computing the amount payable to any Bank whether
in respect of the Loans, fees or any other amounts due to the Banks under this
Agreement. In the event an error in computing any amount payable to any Bank
is made, the Agent, the Borrower and each affected Bank shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error, and any compensation therefor will be calculated at the Federal
Funds Open Rate.

          10.18 Beneficiaries.

          Except as expressly provided herein, the provisions of this Section 10 are
solely for the benefit of the Agent and the Banks, and the Loan Parties shall
not have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for any of the Loan Parties.

          10.19 No Reliance on Agent’s Customer Identification Program.

          Each Bank acknowledges and agrees that neither such Bank, nor any of its
Affiliates, participants or assignees, may rely on the Agent to carry out such
Bank’s, Affiliate’s, participant’s or assignee’s customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any of the Loan Parties,
their Affiliates or their agents, the Loan Documents or the transactions
hereunder or contemplated hereby: (1) any identity verification procedures, (2)
any recordkeeping, (3) comparisons with government lists, (4) customer notices
or (5) other procedures required under the CIP Regulations or such other Laws.

11. MISCELLANEOUS

          11.1 Modifications, Amendments or Waivers.

          With the written consent of the Required Banks, the Agent, acting on
behalf of all the Banks, and the Borrower, on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Banks or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the Obligations of the
Loan Parties hereunder or thereunder. Any such agreement, waiver or consent
made with such

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written consent shall be effective to bind all the Banks and the Loan
Parties; provided, that, no such agreement, waiver or consent may be made which
will:

               11.1.1. Increase of Revolving Credit Commitments; Extension of Expiration
Date.

                    Without the written consent of the Required Banks and all Banks which have
a Revolving Credit Commitment:

                    (i) increase the amount of the Revolving Credit Commitment of any Bank
hereunder (other than any increase in the amount of the Revolving Credit
Commitments in accordance with Section 2.12, which increase shall not require
the consent of any Bank, other than each Bank increasing its Revolving Credit
Commitment and then solely as to the increase in such Bank’s individual 364-Day
Revolving Credit Commitment),

                    (ii) extend the Expiration Date,

                    (iii) whether or not any Revolving Credit Loans are outstanding extend the
time for payment of principal or interest of any Revolving Credit Loan
(excluding the due date of any mandatory prepayment of a Revolving Credit Loan
or any mandatory Revolving Credit Commitment reduction in connection with such
a mandatory prepayment hereunder except for mandatory reductions of the
Revolving Credit Commitments on the Expiration Date), the Facility Fee, or any
other fee payable to any Bank which has a Revolving Credit Commitment, or

                    (iv) reduce the principal amount of or the rate of interest borne by any
Revolving Credit Loan or reduce the Facility Fee or any other fee payable to
any Bank which has a Revolving Credit Commitment, or otherwise affect the terms
of payment of the principal of or interest of any Revolving Credit Loan, the
Facility Fee, or any other fee payable to any Bank which has a Revolving Credit
Commitment;

               11.1.2. Increase of 364-Day Revolving Credit Commitments; Extension of
364-Day Loan Expiration Date.

                    Without the written consent of the Required Banks and all Banks which have
a 364-Day Revolving Credit Commitment:

                    (i) increase the amount of the 364-Day Revolving Credit Commitment of any
Bank hereunder (other than any increase in the amount of the 364-Day Revolving
Credit Commitments in accordance with Section 2.12, which increase shall not
require the consent of any Bank, other than each Bank increasing its 364-Day
Revolving Credit Commitment and then solely as to the increase in such Bank’s
individual 364-Day Revolving Credit Commitment),

                    (ii) extend the 364-Day Loan Expiration Date (other than an extension of
the 364-Day Loan Expiration Date in accordance with Section 2.10, which
extension, if in accordance with Section 2.10.1 shall require the written
consent of all Banks

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which have a 364-Day Revolving Credit Commitment and which extension, if
in accordance with Section 2.10.2 shall require the written consent of the
364-Day Required Banks);

                    (iii) whether or not any 364-Day Revolving Credit Loans are outstanding
extend the time for payment of principal or interest of any 364-Day Revolving
Credit Loan (excluding the due date of any mandatory prepayment of a 364-Day
Revolving Credit Loan or any mandatory 364-Day Revolving Credit Commitment
reduction in connection with such a mandatory prepayment hereunder except for
mandatory reductions of the 364-Day Revolving Credit Commitments on the 364-Day
Loan Expiration Date), the 364-Day Facility Fee, or any other fee payable to
any Bank which has a 364-Day Revolving Credit Commitment,

                    (iv) reduce the principal amount of or the rate of interest borne by any
364-Day Revolving Credit Loan or reduce the 364-Day Facility Fee or any other
fee payable to any Bank which has a 364-Day Revolving Credit Commitment, or
otherwise affect the terms of payment of the principal of or interest of any
364-Day Revolving Credit Loan, the 364-Day Facility Fee, or any other fee
payable to any Bank which has a 364-Day Revolving Credit Commitment, or

                    (v) change the definition of 364-Day Required Banks;

               11.1.3. Release of Collateral or Guarantor.

                    Without the written consent of all Banks, release any Guarantor from its
Obligations under the Guaranty Agreement or any other security for any of the
Loan Parties’ Obligations; or

               11.1.4. Miscellaneous.

                    Without the written consent of all Banks, amend Section 5.2 [Pro Rata
Treatment of Banks], 9.2.5[Application of Proceeds; Collateral Sharing], 10.6
[Exculpatory Provisions, Etc.] or 10.13 [Equalization of Banks] or this Section
11.1, alter any provision regarding the pro rata treatment of the Banks, change
the definition of Required Banks, or change any requirement providing for the
Banks or the Required Banks to authorize the taking of any action hereunder;

provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent or as
the issuer of Letters of Credit shall be effective without the written consent
of the Agent, and no agreement, waiver or consent which would modify the
interests, rights or obligations of PNC Bank with respect to its Swing Loan
Commitment or its Swing Loan (364-Day) Commitment shall be effective without
the written consent of PNC Bank.

          11.2 No Implied Waivers; Cumulative Remedies; Writing Required.

          No course of dealing and no delay or failure of the Agent or any Bank in
exercising any right, power, remedy or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or
operate as a waiver thereof, nor

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shall any single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such a right, power, remedy or privilege
preclude any further exercise thereof or of any other right, power, remedy or
privilege. The rights and remedies of the Agent and the Banks under this
Agreement and any other Loan Documents are cumulative and not exclusive of any
rights or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Bank of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.

          11.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes.

          The Borrower agrees upon demand to pay or reimburse to each Bank (other
than the Agent, as to which the Borrower’s Obligations are set forth in Section
10.5 [Reimbursement and Indemnification of Agent by the Borrower]) and to save
such Bank harmless against (i) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements (including fees and expenses of
counsel (including allocated costs of staff counsel) for each Bank except with
respect to (A) and (B) below), incurred by such Bank (a) in connection with the
administration and interpretation of this Agreement, and other instruments and
documents to be delivered hereunder, (b) relating to any amendments, waivers or
consents pursuant to the provisions hereof requested by the Borrower or
required by applicable law, (c) in connection with the enforcement of this
Agreement or any other Loan Document, or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, (d) in any workout or restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings, and (e)
in connection with any Environmental Complaint threatened or asserted against
such Bank in any way relating to or arising out of this Agreement or any other
Loan Documents (including, without limitation, the protection, preservation,
exercise or enforcement of any of the terms hereof or of any rights hereunder
or under any other Loan Document or in connection with any foreclosure,
collection or bankruptcy proceedings or in any workout or restructuring), or
(ii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against such Bank,
in its capacity as such, in any way relating to or arising out of (y) this
Agreement or any other Loan Documents or any action taken or omitted by such
Bank hereunder or thereunder, and (z) any Environmental Complaint in any way
relating to or arising out of this Agreement or any other Loan Documents or any
action taken or omitted by such Bank hereunder or thereunder, provided that the
Borrower shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (A) if the same results from such Bank’s gross negligence or
willful misconduct, or (B) if the Borrower was not given notice of the subject
claim and the opportunity to participate in the defense thereof, at its expense
(except that the Borrower shall remain liable to the extent such failure to
give notice does not result in a loss to the Borrower), or (C) if the same
results from a compromise or settlement agreement entered into without the
consent of the Borrower, which shall not be unreasonably withheld. The Banks
will attempt to minimize the fees and expenses of legal counsel for the Banks
which are subject to reimbursement by the Borrower

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hereunder by considering the usage of one law firm to represent the Banks
and the Agent if appropriate under the circumstances. The Borrower agrees
unconditionally to pay all stamp, document, transfer, recording or filing taxes
or fees and similar impositions now or hereafter determined by the Agent or any
Bank to be payable in connection with this Agreement or any other Loan
Document, and the Borrower agrees unconditionally to save the Agent and the
Banks harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions.

          11.4 Holidays.

          Whenever payment of a Loan to be made or taken hereunder shall be due on a
day which is not a Business Day such payment shall be due on the next Business
Day (except as provided in Section 4.2 [Interest Periods] with respect to
Interest Periods under the Euro-Rate Option) and such extension of time shall
be included in computing interest and fees, except that the Revolving Credit
Loans and Swing Loans shall be due on the Business Day preceding the Expiration
Date if the Expiration Date is not a Business Day and except that 364-Day
Revolving Credit Loans shall be due on the Business Day preceding the 364-Day
Loan Expiration Date if the 364-Day Loan Expiration Date is not a Business Day.
Whenever any payment or action to be made or taken hereunder (other than
payment of the Loans) shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on the next
following Business Day, and such extension of time shall not be included in
computing interest or fees, if any, in connection with such payment or action.

          11.5 Funding by Branch, Subsidiary or Affiliate.

               11.5.1. Notional Funding.

                    Each Bank shall have the right from time to time, without notice to the
Borrower, to deem any branch, Subsidiary or Affiliate (which for the purposes
of this Section 11.5 shall mean any corporation or association which is
directly or indirectly controlled by or is under direct or indirect common
control with any corporation or association which directly or indirectly
controls such Bank) of such Bank to have made, maintained or funded any Loan to
which the Euro-Rate Option applies at any time, provided that immediately
following (on the assumption that a payment were then due from the Borrower to
such other office), and as a result of such change, the Borrower would not be
under any greater financial obligation pursuant to Section 5.6 [Additional
Compensation in Certain Circumstances] or Section 5.8 [Taxes] than it would
have been in the absence of such change. Notional funding offices may be
selected by each Bank without regard to such Bank’s actual methods of making,
maintaining or funding the Loans or any sources of funding actually used by or
available to such Bank.

               11.5.2. Actual Funding.

                    Each Bank shall have the right from time to time to make or maintain any
Loan by arranging for a branch, Subsidiary or Affiliate of such Bank to make or
maintain such Loan subject to the last sentence of this Section 11.5.2. If any
Bank causes a branch, Subsidiary or Affiliate to make or maintain any part of
the Loans hereunder, all terms

102

 

and conditions of this Agreement shall, except where the context clearly
requires otherwise, be applicable to such part of the Loans to the same extent
as if such Loans were made or maintained by such Bank, but in no event shall
any Bank’s use of such a branch, Subsidiary or Affiliate to make or maintain
any part of the Loans hereunder cause such Bank or such branch, Subsidiary or
Affiliate to incur any cost or expenses payable by the Borrower hereunder or
require the Borrower to pay any other compensation to any Bank (including any
expenses incurred or payable pursuant to Section 5.6 [Additional Compensation
in Certain Circumstances]) or Section 5.8 [Taxes] which would otherwise not be
incurred.

          11.6 Notices; Lending Offices.

          Any notice, request, demand, direction or other communication (for
purposes of this Section 11.6 only, a “Notice”) to be given to or made upon any
party hereto under any provision of this Agreement shall be given or made by
telephone or in writing (which includes means of electronic transmission (i.e.,
“e-mail”) or facsimile transmission or by setting forth such Notice on a
restricted access site on the World Wide Web (a “Website Posting”) if Notice of
such Website Posting (including the information necessary to access such site)
has previously been delivered to the applicable parties hereto by another means
set forth in this Section 11.6) in accordance with this Section 11.6. Any such
Notice must be delivered to the applicable parties hereto at the addresses and
numbers set forth under their respective names on Schedule 1.1(B) hereof or in
accordance with any subsequent unrevoked Notice from any such party that is
given in accordance with this Section 11.6. Any Notice shall be effective:

                    (i) In the case of hand-delivery, when delivered;

                    (ii) If given by mail, four days after such Notice is deposited with the
United States Postal Service, with first-class postage prepaid, return receipt
requested;

                    (iii) In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephonic Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission, a
Website Posting or overnight courier delivery of a confirmatory notice
(received at or before noon on such next Business Day);

                    (iv) In the case of a facsimile transmission, when sent to the applicable
party’s facsimile machine’s telephone number if the party sending such Notice
receives confirmation of the delivery thereof from its own facsimile machine;

                    (v) In the case of electronic transmission, when actually received;

                    (vi) In the case of a Website Posting, upon delivery of a Notice of such
posting (including the information necessary to access such web site) by
another means set forth in this Section 11.6; and

103

 

               (vii) If given by any other means (including by overnight courier), when
actually received.

Any Bank giving a Notice to a Loan Party shall concurrently send a copy thereof
to the Agent, and the Agent shall promptly notify the other Banks of its
receipt of such Notice.

          11.7 Severability.

          The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.

          11.8 Governing Law.

          Each Letter of Credit and Section 2.9 [Letter of Credit Subfacility] shall
be subject to the International Standby Practices 1998 (“ISP98”) and any
subsequent official revision thereof, and to the extent not inconsistent
therewith, the internal laws of the State of New Jersey without regard to its
conflict of laws principles, and the balance of this Agreement shall be deemed
to be a contract under the Laws of the State of New Jersey and for all purposes
shall be governed by and construed and enforced in accordance with the internal
laws of the State of New Jersey without regard to its conflict of laws
principles.

          11.9 Prior Understanding.

          This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and
therein, including any prior confidentiality agreements and commitments.

          11.10 Duration; Survival.

          All representations and warranties of the Loan Parties contained herein or
made in connection herewith shall survive the making of Loans and issuance of
Letters of Credit and shall not be waived by the execution and delivery of this
Agreement, any investigation by the Agent or the Banks, the making of Loans,
issuance of Letters of Credit, or payment in full of the Loans. All covenants
and agreements of the Loan Parties contained in Sections 8.1 [Affirmative
Covenants], 8.2 [Negative Covenants] and 8.3 [Reporting Requirements] herein
shall continue in full force and effect from and after the date hereof so long
as the Borrower may borrow or request Letters of Credit hereunder and until
termination of the Commitments and payment in full of the Loans and expiration
or termination of all Letters of Credit. All covenants and agreements of the
Borrower contained herein relating to the payment of principal, interest,
premiums, additional compensation or expenses and indemnification, including
those set forth in Section 5 [Payments] and Sections 10.5 [Reimbursement and
Indemnification of Agent by the Borrower], 10.7 [Reimbursement and
Indemnification of Agent by the Borrower] and 11.3 [Reimbursement and
Indemnification of Banks by the Borrower], shall survive payment in full of

104

 

the Loans, expiration or termination of the Letters of Credit and
termination of the Commitments.

          11.11 Successors and Assigns; Joinder of a Bank.

                    (i) This Agreement shall be binding upon and shall inure to the benefit of
the Banks, the Agent, the Loan Parties and their respective successors and
assigns, except that none of the Loan Parties may assign or transfer any of its
rights and Obligations hereunder or any interest herein. Each Bank may, at its
own cost, make assignments of or sell participations in all or any part of its
Commitments and the Loans made by it to one or more banks or other entities,
subject to the consent of the Borrower and the Agent with respect to any
assignee, such consent not to be unreasonably withheld, provided that (1) no
consent of the Borrower shall be required (A) if an Event of Default exists and
is continuing, or (B) in the case of an assignment by a Bank to an Affiliate of
such Bank or an Approved Fund of such Bank, (2) any assignment by a Bank to a
Person other than an Affiliate of such Bank may not be made in amounts less
than the lesser of $5,000,000 or the amount of the assigning Bank’s Commitment,
and (3) a Bank may assign an interest or sell a participation in less than 100%
of its Commitments or Loans provided that such Bank sells an equal percentage
interest or participation in each of its Revolving Credit Commitment, 364-Day
Revolving Credit Commitment, Revolving Credit Loans and 364-Day Revolving
Credit Loans. In the case of an assignment, upon receipt by the Agent of the
Assignment and Assumption Agreement, the assignee shall have, to the extent of
such assignment (unless otherwise provided therein), the same rights, benefits
and obligations as it would have if it had been a signatory Bank hereunder, the
Commitments shall be adjusted accordingly, and upon surrender of any Revolving
Credit Note or 364-Day Revolving Credit Note subject to such assignment, the
Borrower shall execute and deliver a new Revolving Credit Note or a new 364-Day
Revolving Credit Note to the assignee, if such assignee requests such a Note in
an amount equal to the amount of the Revolving Credit Commitment or 364-Day
Revolving Credit Commitment assumed by it and a new Revolving Credit Note or
364-Day Revolving Credit Note to the assigning Bank, if the assigning Bank
requests such a Note, in an amount equal to the Revolving Credit Commitment or
364-Day Revolving Credit Commitment retained by it hereunder. Any Bank which
assigns any or all of its Commitment or Loans to a Person other than an
Affiliate of such Bank shall pay to the Agent a service fee in the amount of
$3,500 for each assignment. In the case of a participation, the participant
shall only have the rights specified in Section 9.2.3 [Set-off] (the
participant’s rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto and not to include any voting rights except with
respect to changes of the type referenced in Sections 11.1.1 [Increase of
Revolving Credit Commitments; Extension of Expiration Date], 11.1.2 [Increase
of 364-Day Revolving Credit Commitments; Extension of 364-Day Loan Expiration
Date], or 11.1.3 [Release of Collateral or Guarantor]), all of such Bank’s
obligations under this Agreement or any other Loan Document shall remain
unchanged, and all amounts payable by any Loan Party hereunder or thereunder
shall be determined as if such Bank had not sold such participation.

                    (ii) Any assignee or participant which is not incorporated under the Laws
of the United States of America or a state thereof shall deliver to the
Borrower and the Agent the form of certificate described in Section 11.18.1
[Tax Withholding] relating to

105

 

federal income tax withholding. Each Bank may furnish any publicly
available information concerning any Loan Party or its Subsidiaries and any
other information concerning any Loan Party or its Subsidiaries in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees or participants), provided that such assignees
and participants agree to be bound by the provisions of Section 11.12
[Confidentiality].

                    (iii) Notwithstanding any other provision in this Agreement, any Bank may
at any time pledge or grant a security interest in all or any portion of its
rights under this Agreement, its Note (if any) and the other Loan Documents to
any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section 203.14 without notice to or consent of the
Borrower or the Agent. No such pledge or grant of a security interest shall
release the transferor Bank of its obligations hereunder or under any other
Loan Document.

                    (iv) Additional Bank. A bank which is to become a party to this Agreement
pursuant to Section 2.12 hereof or otherwise (each an “Additional Bank’) shall
execute and deliver to Agent a Bank Joinder to this Agreement in substantially
the form attached hereto as Exhibit 1.1(B). Upon execution and delivery of a
Bank Joinder, such Additional Bank shall be a party hereto and a Bank under
each of the Loan Documents for all purposes, except that such Additional Bank
shall not participate in any Loans to which the Euro-Rate Option applies which
are outstanding on the effective date of such Bank Joinder. If Borrower should
renew after the effective date of such Bank Joinder the Euro-Rate Option with
respect to Loans existing on such date, Borrower shall be deemed to repay the
applicable Loans on the renewal date and then reborrow a similar amount on such
date so that the Additional Bank shall participate in such Loans after such
renewal date. Schedule 1.1(B) shall be amended and restated on the date of
such Bank Joinder to revise the information contained therein as appropriate to
reflect the information on the attachment to such Bank Joinder. Simultaneously
with the execution and delivery of such Bank Joinder, Borrower shall execute a
Revolving Credit Note, and deliver it to such Additional Bank together with
originals of such other documents described in Section 7.1 hereof as such
Additional Bank may reasonably require.

          11.12 Confidentiality.

               11.12.1. General.

                    The Agent and the Banks each agree to keep confidential all information
obtained from any Loan Party or its Subsidiaries which is nonpublic and
confidential or proprietary in nature (including any information the Borrower
specifically designates as confidential), except as provided below, and to use
such information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. The Agent and the Banks
shall be permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such information
in connection with the administration and enforcement of this Agreement,
subject to agreement of such Persons to maintain the confidentiality, (ii) to
assignees and participants as contemplated by Section 11.11, and prospective
assignees and participants, provided that prior to such disclosure, such
parties agree to be bound by this undertaking of confidentiality set forth in
this Section

106

 

11.12, (iii) to the extent requested by any bank regulatory authority or,
with notice to the Borrower, as otherwise required by applicable Law or by any
subpoena or similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this Agreement, (iv)
if it becomes publicly available other than as a result of a breach of this
Agreement or becomes available and is not reasonably known to be subject to
confidentiality restrictions, or (v) if the Borrower shall have consented to
such disclosure. Notwithstanding anything herein to the contrary, the
information subject to this Section 11.12.1 shall not include, and the Agent
and each Bank may disclose without limitation of any kind, any information with
respect to the “tax treatment” and “tax structure” (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to the Agent or such Bank relating to such tax
treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information,
this sentence shall only apply to such portions of the document or similar
items that relate to the tax treatment or tax structure of the Loans, Letters
of Credit and transactions contemplated hereby.

               11.12.2. Sharing Information With Affiliates of the Banks.

                    Each Loan Party acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to the
Borrower or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Bank or by one or more Subsidiaries or Affiliates of such
Bank and each of the Loan Parties hereby authorizes each Bank to share any
information delivered to such Bank by such Loan Party and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of such Bank to
enter into this Agreement, to any such Subsidiary or Affiliate of such Bank, it
being understood that any such Subsidiary or affiliate of any Bank receiving
such information shall be bound by the provisions of Section 11.12.1 as if it
were a Bank hereunder. Such Authorization shall survive the repayment of the
Loans and other Obligations and the termination of the Commitments.

          11.13 Counterparts.

          This Agreement may be executed by different parties hereto on any number
of separate counterparts, each of which, when so executed and delivered, shall
be an original, and all such counterparts shall together constitute one and the
same instrument.

          11.14 Agent’s or Bank’s Consent.

          Whenever the Agent’s or any Bank’s consent is required to be obtained
under this Agreement or any of the other Loan Documents as a condition to any
action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.

107

 

          11.15 Exceptions.

          The representations, warranties and covenants contained herein shall be
independent of each other, and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.

          11.16 WAIVER OF JURY TRIAL.

          EACH LOAN PARTY, THE AGENT AND THE BANKS HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT OR ANY COLLATERAL, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF THE AGENT OR THE BANKS RELATING TO THE ADMINISTRATION OF THE LOANS
OR ENFORCEMENT OF THIS AGREEMENT OR THE LOAN DOCUMENTS, TO THE FULLEST EXTENT
PERMITTED BY LAW. NO LOAN PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH
LOAN PARTY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT OR THE
BANKS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR THE BANKS WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR AGENT AND THE BANKS TO ACCEPT THIS
AGREEMENT AND THE LOAN DOCUMENTS AND MAKE THE LOANS.

          11.17 JURISDICTION & VENUE.

          EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF COURTS IN THE COUNTY OF MIDDLESEX IN THE STATE OF NEW JERSEY
AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL (RETURN RECEIPT
REQUESTED) DIRECTED TO SUCH LOAN PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION
11.6 [NOTICES; LENDING OFFICES] AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON ACTUAL RECEIPT THEREOF. NOTHING CONTAINED HEREIN SHALL AFFECT
THE RIGHT OF AGENT TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
EACH LOAN PARTY IRREVOCABLY WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF
ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT
ANY DEFENSE BASED ON

108

 

FORUM NON CONVENIENS OR ANY LACK OF JURISDICTION OR VENUE THAT IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT.

          11.18 Certifications From Banks and Participants.

               11.18.1. Tax Withholding.

               Each Bank or assignee or Participant of a Bank that is not incorporated
under the laws of the United States of America or a state thereof (and, upon
the written request of the Agent, each other Bank or assignee or Participant or
a Bank) agrees that it will deliver to each of the Borrower and the Agent two
(2) duly completed appropriate valid Withholding Certificates (as defined under
§1.1441-1(c)(16) of the Income Tax Regulations (the “Regulations”)) certifying
its status (i.e., United States or foreign person) and, if appropriate, making
a claim of reduced, or exemption from, United States withholding tax on the
basis of an income tax treaty or an exemption provided by the Internal Revenue
Code (the “Code”). Such delivery may be made by electronic transmission as
described in §1.1441-1(e)(4)(iv) of the Regulations if the Agent establishes an
electronic delivery system. The term “Withholding Certificate” means a Form
W-9; a Form W-8BEN; a Form W-8ECI; a Form W-81MY and the related statements and
certifications as required under §1.1441-1(e)(3) of the Regulations; a
statement described in §1.871-14(c)(2)(v) of the Regulations; or any other
certificates under the Code or Regulations that certify or establish the status
of a payee or beneficial owner as a United States or foreign person. Each
Bank, assignee or Participant required to deliver to the Borrower and the Agent
a valid Withholding Certificate pursuant to the preceding sentence shall
deliver such valid Withholding Certificate as follows: (A) each Bank which is
a party hereto on the Closing Date shall deliver such valid Withholding
Certificate at least five (5) Business Days prior to the first date on which
any interest or Fees are payable by the Borrower hereunder for the account of
such Bank; (B) each assignee or Participant shall deliver such valid
Withholding Certificate at least five (5) Business Days before the effective
date of such assignment or Participation (unless the Agent in its sole
discretion shall permit such assignee or Participant to deliver such
Withholding Certificate less than five (5) Business Days before such date in
which case it shall be due on the date specified by the Agent). Each Bank,
assignee or Participant which so delivers a valid Withholding Certificate
further undertakes to deliver to each of the Borrower and the Agent two (2)
additional copies of such Withholding Certificate (or a successor form) on or
before the date that such Withholding Certificate expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent
Withholding Certificate so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by the Borrower
or the Agent. Notwithstanding the submission of a Withholding Certificate
claiming a reduced rate of, or exemption from, United States withholding taxes,
the Agent shall be entitled to withhold United States federal income taxes at
the full 30% withholding rate if in its reasonable judgment it is required to
do so under the due diligence requirements imposed upon a withholding agent
under §1.1441-7(b) of the Regulations. Further, the Agent is indemnified under
§1.1461-1(e) of the Regulations against any claims and demands of any Bank or
assignee or Participant of a Bank for the amount of any tax it deducts and
withholds in accordance with regulations under §1441 of the Internal Revenue
Code.

109

 

               11.18.2. USA Patriot Act.

               Each Bank or assignee or participant of a Bank that is not incorporated
under the laws of the United States of America or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of the USA
Patriot Act and the applicable regulations because it is both (i) an affiliate
of a depository institution or foreign bank that maintains a physical presence
in the United States or foreign county, and (ii) subject to supervision by a
banking authority regulating such affiliated depository institution or foreign
bank) shall deliver to the Agent the certification, or, if applicable,
recertification, certifying that such Bank is not a “shell” and certifying to
other matters as required by Section 313 of the USA Patriot Act and the
applicable regulations: (1) within 10 days after the Restatement Effective
Date, and (2) as such other times as are required under the USA Patriot Act.

          11.19 Joinder of Guarantors.

          Any Subsidiary of the Borrower which is required to join this Agreement as
a Guarantor pursuant to Section 8.2.5 [Liquidations, Mergers, Consolidations,
Acquisitions] and Section 8.2.8 [Subsidiaries, Partnerships and Joint Ventures]
shall (i) execute and deliver to the Agent a Guarantor Joinder in substantially
the form attached hereto as Exhibit 1.1(G)(1) pursuant to which it shall join
as a Guarantor each of the documents to which the Guarantors are parties; and
(ii) execute and deliver to the Agent documents in the forms described in
Section 7.1.2 [Secretary’s Certificate] modified as appropriate to relate to
such Subsidiary and (iii) satisfy such other requirements as reasonably
requested by the Agent. The Loan Parties shall deliver such Guarantor Joinder
and related documents to the Agent within five (5) Business Days after the date
of the filing of such Subsidiary’s articles of incorporation if the Subsidiary
is a corporation, the date of the filing of its certificate of limited
partnership if it is a limited partnership or the date of its organization if
it is an entity other than a limited partnership or corporation.

          11.20 Amendment and Restatement; No Novation.

          This Agreement amends and restates in its entirety the Original Credit
Agreement; and, the Borrower and each other Loan Party confirms that the
Original Credit Agreement and the other Loan Documents (as all such capitalized
terms are defined in the Original Credit Agreement) have at all times, since
the date of the execution and delivery of such documents, remained in full
force and effect and continued to secure such obligations that are continued as
the Obligations hereunder as amended hereby. Borrower, each other Loan Party,
each Bank and Agent acknowledge and agree that the amendment and restatement of
the Original Credit Agreement by this Agreement is not intended to constitute,
nor does it constitute, a novation, interruption, suspension of continuity,
satisfaction, discharge or termination of the obligations, loans, liabilities,
or indebtedness under the Original Credit Agreement and other Loan Documents
thereunder and this Agreement and the other Loan Documents are entitled to all
rights and benefits originally pertaining to the Original Credit Agreement and
the other Loan Documents (as such term is defined therein). All Obligations
under each Note existing on the Restatement Effective Date remain in full force
and effect and this Agreement is not intended to constitute, and does not
constitute a novation or satisfaction of the Obligations represented by the
Notes. Each Guarantor hereby consents to the amendment and restatement of the
Original Credit

110

 

Agreement by this Agreement and ratifies and confirms its respective
obligations under each of the Loan Documents (including all exhibits and
schedules thereto) to which it is a party, including without limitation each
Guaranty Agreement.

[SIGNATURE PAGES FOLLOW]

111

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have executed this Amendment as of the date first above written.

	 	 	 	 	 	 	 
	 	 	 	 	BORROWER:
	 	 	 	 	 	 	 
	ATTEST:	 	NEW JERSEY RESOURCES CORPORATION
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	[Seal]
	
	 	 	 	

	Name:	 	 	 	Name:	 	 
	 	 	

	 	 	 	

	Title:	 	 	 	Title:	 	 
	 	 	

	 	 	 	

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	GUARANTORS:
	 	 	 	 	 
	 	 	NJNR PIPELINE COMPANY
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

2

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	NJR ENERGY CORPORATION
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

3

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	NJR ENERGY SERVICES COMPANY
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

4

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	NJR HOME SERVICES COMPANY
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

5

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	COMMERCIAL REALTY AND RESOURCES CORP.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

6

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	BANKS:
	 	 	 	 	 
	 	 	BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
	 	 	individually and as Documentation Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

7

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	BANK ONE, NA, individually and as Co-Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

8

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	CITIZENS BANK OF MASSACHUSETTS,
	 	 	individually and as a Co-Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

9

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	FLEET NATIONAL BANK, individually and as
	 	 	Syndication Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

10

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, individually and as
	 	 	
Documentation Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

11

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION,
	 	 	
individually and as Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

12

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	SUNTRUST BANK, individually and as
	 	 	
Syndication Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

13

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	THE BANK OF NEW YORK, individually and as a
	 	 	
Co-Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

14

 

[SIGNATURE PAGE TO AMENDED AND RESTATED

NEW JERSEY RESOURCES CORPORATION CREDIT AGREEMENT]

	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

15

 

SCHEDULE 1.1(A)

Pricing Grid

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	364-Day	 	 	 	 	 	 	 	 
	 	 	 	Debt Rating	 	 	 	 	 	 	 	 	 	Revolving	 	Revolving	 	Revolving	 	364-Day	 	 	 	 
	 	 	 	[S&P and	 	 	 	 	 	364-	 	Credit Base	 	Credit	 	Credit Base	 	Revolving	 	 	 	 
	 	 	 	Moody’s,	 	Facility	 	Day Facility	 	Rate	 	Euro- Rate	 	Rate	 	Credit Euro	 	Letter of
	Level	 	Respectively]	 	Fee	 	Fee	 	Spread	 	Spread	 	Spread	 	Rate Spread	 	Credit Fee
	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	I
	 	 	A+ or above           	 	 	.175%	 	 	 	.150	%	 	 	0	%	 	 	.575	%	 	 	0	%	 	 	.600	%	 	 	.575	%
	 
	 	or	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	A1 or above	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	II
	 	A-or above but less       	 	 	.200%	 	 	 	.175	%	 	 	0	%	 	 	.800	%	 	 	0	%	 	 	.825	%	 	 	.800	%
	 
	 	than A+	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	or	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	A3 or above but	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	less than A1	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	III
	 	BBB or above but          	 	 	.275%	 	 	 	.250	%	 	 	0	%	 	 	.975	%	 	 	0	%	 	 	1.00	%	 	 	.975	%
	 
	 	less than A-	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	or	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Baa2 or above but	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	less than A3	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	IV
	 	Less than BBB or        	 	 	.375%	 	 	 	.350	%	 	 	0	%	 	 	1.375	%	 	 	0	%	 	 	1.40	%	 	 	1.375	%
	 
	 	less than Baa2 or	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	unrated	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

For purposes of determining the Applicable Margin, the Applicable Facility Fee
Rate, the Applicable 364-Day Facility Fee Rate and the Applicable Letter of
Credit Fee Rate:

     (a)  With respect to the Debt Ratings of Moody’s and Standard and Poor’s:
(i) if one or both of Moody’s or Standard and Poor’s shall fail to have a Debt
Rating in effect, then such rating agency which fails to have a Debt Rating in
effect shall be deemed to have established a Debt Rating at Level IV, and (ii)
if the Debt Rating established by Moody’s and the Debt Rating established by
Standard and Poor’s differ, the pricing Level above shall be determined based
upon the higher of the Debt Rating established by Moody’s and the Debt Rating
established by Standard and Poor’s, provided, however, if one of the Debt
Ratings is two or more Levels lower than the other, the applicable pricing
Level shall be determined at the Level next above that of the Level of the
lower of the two Debt Ratings.

     (b)  Any change in the Applicable Margin, the Applicable Facility Fee Rate,
the Applicable 364-Day Facility Fee Rate or the Applicable Letter of Credit Fee
Rate shall become effective on the date of any public announcement of the
change in the Debt Rating requiring such an increase or decrease.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]