10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)     

       X              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

OR

                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to______________________

Commission File Number     001-16385

NUI CORPORATION
(Exact name of registrant as specified in its charter)

New Jersey
(State of incorporation) 22-3708029
(IRS employer identification no.)

550 Route 202-206, PO Box 760, Bedminster, New Jersey 07921-0760
(Address of principal executive offices, including zip code)

(908) 781-0500
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        

Yes X     No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act):

Yes X     No

The number of shares outstanding of each of the registrant's classes of common stock, as of April 30, 2003: Common Stock, No Par Value: 16,021,360 shares outstanding.

Item 1. Financial Statements

NUI Corporation and Subsidiaries
Consolidated Statement of Income (Unaudited)
(Dollars in thousands, except per share amounts)

	Three Months Ended March 31,		Six Months Ended March 31,
	2003	2002	2003	2002
		(Restated- see Note 2)		(Restated- see Note 2)
Operating Margins
Operating revenues	$262,787	$185,271	$447,205	$346,490
Less - Purchased gas and fuel	155,907	102,545	263,796	195,729
Cost of sales and services	11,294	7,291	22,434	13,492
Energy taxes	5,289	4,042	8,783	7,095
Total operating margins	90,297	71,393	152,192	130,174
Other Operating Expenses
Operations and maintenance	42,267	29,485	75,455	57,282
Restructuring costs	---	---	---	1,203
Depreciation and amortization	9,430	7,707	18,342	16,293
Taxes, other than income taxes	2,561	2,020	4,740	4,079
Total other income and expense	54,258	39,212	98,537	78,857
Operating Income	36,039	32,181	53,655	51,317
Other Income and Expense, net	244	190	659	497
Income from Continuing Operations before Interest and Taxes	36,283	32,371	54,314	51,814
Interest expense	4,821	5,598	10,129	11,139
Income from Continuing Operations Before Income Taxes	31,462	26,773	44,185	40,675
Income taxes	13,034	11,353	18,141	17,263
Income from Continuing Operations Before Effect of Change in Accounting	18,428	15,420	26,044	23,412
Discontinued Operations
Loss from discontinued operations	(682)	(2,600)	(1,455)	(2,226)
Income tax benefit	(276)	(1,016)	(588)	(898)
Loss from Discontinued Operations	(406)	(1,584)	(867)	(1,328)
Income before Effect of Change in Accounting	18,022	13,836	25,177	22,084
Effect of change in accounting (net of tax benefit of $4,080 in 2003 and $9,500 in 2002)	(5,869)	---	(5,869)	(17,642)
Net Income	$12,153	$13,836	$19,308	$   4,442
Income from Continuing Operations Per Share of     Common Stock	$    1.15	$    1.08	$    1.62	$     1.66
Net Income Per Share of Common Stock	$    0.76	$    0.97	$    1.20	$     0.32
Dividends Per Share of Common Stock	$  0.245	$  0.245	$  0.49	$     0.49
Weighted Average Number of Shares of Common Stock Outstanding	16,072,702	4,217,626	16,048,767	14,069,297

See the notes to the consolidated financial statements.

NUI Corporation and Subsidiaries
Consolidated Balance Sheet
(Dollars in thousands)

	March 31, 2003 (Unaudited)	September 30, 2002 (*)
ASSETS
Current Assets
Cash and cash equivalents	$89,517	$4,247
Accounts receivable (less allowance for doubtful accounts      of $9,668 and $5,192, respectively)	182,695	83,611
Accounts receivable from affiliated companies	7,210	---
Fuel inventories, at average cost	8,656	37,390
Unrecovered purchased gas costs	35,545	26,756
Derivative assets	22,531	22,540
Federal income tax receivable	---	7,819
Prepayments and other	17,885	33,738
	364,039	216,101
Property, Plant and Equipment
Property, plant and equipment, at original cost	948,352	945,901
Accumulated depreciation and amortization	(314,665)	(304,055)
Unamortized plant acquisition adjustments, net	13,950	14,484
	647,637	656,330
Funds for Construction Held by Trustee	2,056	3,884
Investment in Saltville Storage, LLC	20,009	---
Other Investments	147	117
Assets Held For Sale	---	15,879
Other Assets
Regulatory assets	62,330	75,845
Long-term portion of derivative assets	4,602	7,901
Goodwill	19,322	19,126
Other assets	44,585	46,109
	130,839	148,981
	$1,164,727	$1,041,292
CAPITALIZATION AND LIABILITIES
Current Liabilities
Notes payable to banks	$175,333	$128,690
Notes payable	3,000	3,000
Current portion of long term debt and capital lease obligations	2,327	2,351
Accounts payable, customer deposits and accrued liabilities	172,117	125,484
Derivative liabilities	---	852
Federal income and other taxes	31,123	7,913
Current portion of deferred Federal income taxes	9,852	18,738
	393,752	287,028
Other Liabilities
Capital lease obligations	10,312	10,743
Deferred federal income taxes	56,467	63,150
Liabilities held for sale	---	951
Unamortized investment tax credits	3,655	3,948
Environmental remediation reserve	33,505	33,852
Regulatory and other liabilities	56,088	44,351
	160,027	156,995
Capitalization
Common shareholders' equity	301,913	288,252
Long-term debt	309,035	309,017
	610,948	597,269
	$1,164,727	$1,041,292

*Derived from audited financial statements.
See the notes to the consolidated financial statements.

NUI Corporation and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in thousands)

	Six Months Ended March 31,
	2003	2002
		(Restated- see Note 2)
Operating Activities
Net income	$19,308	$4,442
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization	18,358	16,812
Deferred Federal income taxes	(15,569)	(15,681)
Amortization of deferred investment tax credits	(293)	(220)
Non-cash adjustment to implement new accounting standard	9,949	27,142
Derivative assets and liabilities	817	(7,709)
Regulatory assets and liabilities	23,181	9,660
Other	4,974	(445)
Effect of changes in:
Accounts receivable, net	(99,084)	(71,234)
Accounts receivable from affiliates	(7,210)	---
Fuel inventories	28,734	47,984
Accounts payable, deposits and accruals	46,633	(20,694)
Under-recovered purchased gas costs	(7,863)	(7,724)
Prepaids and other	15,853	31,157
Regulatory assets and liabilities	(8,809)	(3,259)
Federal and state income taxes	31,029	18,055
Other	(2,209)	339
Net cash provided by operating activities	57,799	28,625
Financing Activities
Proceeds from sales of common stock, net of treasury stock purchased	158	36,440
Dividends to shareholders	(7,876)	(6,860)
Funds for construction held by trustee, net	1,849	6,094
Principal payments under capital lease obligations	(1,281)	(1,030)
Net short-term borrowings (repayments)	46,643	(39,759)
Net cash provided by (used in) financing activities	39,493	(5,115)
Investing Activities
Cash expenditures for property, plant and equipment	(25,784)	(26,655)
Investment in Saltville Storage, LLC	(3,688)	---
Acquisitions, net of cash acquired	---	(666)
Changes in assets and liabilities held for sale	14,928	7,796
Other	2,522	(1,029)
Net cash used in investing activities	(12,022)	(20,524)
Net increase in cash and cash equivalents	$85,270	$  2,986
Cash and Cash Equivalents
At beginning of period	$  4,247	$  2,601
At end of period	$89,517	$  5,587
Supplemental Disclosures of Cash Flows
Income taxes paid (refunds received), net	$(2,992)	$  3,691
Interest paid	$  8,520	$11,826

See the notes to the consolidated financial statements.

NUI Corporation and Subsidiaries
Notes to the Consolidated Financial Statements

1.     Basis of Presentation

The consolidated financial statements include all operating divisions and subsidiaries of NUI Corporation (collectively referred to as "NUI," the "company," "we," "our," or "us").  NUI is a diversified energy company that is primarily engaged in the sale and distribution of natural gas, wholesale energy portfolio and risk management, retail energy sales and telecommunications.  NUI's local utility operations serve more than 367,000 customers in four states along the eastern seaboard of the United States and comprise Elizabethtown Gas Company (New Jersey), City Gas Company of Florida, Elkton Gas (Maryland), and Virginia Gas Company (VGC).  The company sold its North Carolina Gas (NC) utility operation during September 2002, and sold its Valley Cities Gas and Waverly Gas (VCW) utility operations during November 2002. VGC is also engaged in other activities, such as pipeline operation and natural gas storage. The company's non-regulated businesses include NUI Energy, Inc. (NUI Energy), an energy retailer; NUI Energy Brokers, Inc. (NUI Energy Brokers), a wholesale energy portfolio and risk management subsidiary; NUI Environmental Group, Inc. (NUI Environmental), an environmental project development subsidiary; Utility Business Services, Inc., (UBS), a geospatial, billing and customer information systems and services subsidiary; NUI Telecom, Inc. (NUI Telecom), a non-facilities-based telecommunications services subsidiary and TIC Enterprises, LLC (TIC), a sales outsourcing subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

As discussed in Note 8, for all periods presented, the company has classified the results of NC, VCW, NUI Environmental, and certain product lines of TIC as Discontinued Operations in the Consolidated Statement of Income. The assets and liabilities of these entities have been classified as Assets Held for Sale and Liabilities Held for Sale in the Consolidated Balance Sheet.

The consolidated financial statements contained herein have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for interim periods. With the exception of the adjustment to record the effect of a change in accounting discussed in Note 14, all adjustments made were of a normal recurring nature. The results of the three and six-month periods ended March 31, 2002 have been restated (see Note 2). The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto that are included in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2002.

NUI is a holding company and is exempt from registration under the Public Utility Holding Company Act of 1935. NUI's wholly owned subsidiary, NUI Utilities, Inc. (NUI Utilities), is subject to regulation as an operating utility by the public utility commissions of the states in which it operates. NUI Utilities includes the natural gas distribution and appliance business operations of Elizabethtown Gas Company, City Gas of Florida, and Elkton Gas. Certain subsidiaries of VGC are regulated by the Virginia State Corporation Commission. Because of the seasonal nature of gas utility operations, the results for interim periods are not necessarily indicative of the company's results for an entire year.

2.     Restatement of Prior Year Results

NUI has restated its fiscal 2000 and 2001 consolidated financial statements, as well as quarterly results for the first three quarters of fiscal 2002. Such restatements were reported in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2002. The consolidated financial statements for the three and six month periods ended March 31, 2002 contained herein have been updated to reflect these restatements, as well as certain reclassifications described below. The restatement adjustments were required either to reflect the use of appropriate accounting methods or to reflect the correct recording of account balances. The following tables summarize the impact of these adjustments on the company's consolidated financial statements, as restated. Amounts contained in the "Results As Reclassified for EITF 02-03 and SFAS 144" include the amounts as originally reported and the required reclassifications due to the adoption of SFAS 144 (see Note 8) and the netting provision of EITF 02-03 (see Note 14).

NUI Corporation and Subsidiaries
Consolidated Statement of Income
(Dollars in thousands, except per share amounts)

	Three months ended March 31, 2002 Results as Reclassified for EITF 02-03 and SFAS 144	Adjustments	Legend	Three months ended  March 31, 2002  As Restated
Operating Margins
Operating revenues	$185,295	$(24)	a	$185,271
Less- Purchased gas and fuel	102,631	(86)	b	102,545
Cost of sales and services	7,291	---		7,291
Energy taxes	4,042	---		4,042
	71,331	62		71,393
Other Operating Expenses
Operations and maintenance	28,869	616	c, d, e	29,485
Depreciation and amortization	7,707	---		7,707
Taxes, other than income taxes	2,020	---		2,020
Total operating expenses	38,596	616		39,212
Operating Income	32,735	(554)		32,181
Other Income and Expense, net	190	--		190
Income from Continuing Operations before Interest and Taxes	32,925	(554)		32,371
Interest expense	5,598	---		5,598
Income from Continuing Operations before Income Taxes	27,327	(554)		26,773
Income taxes	11,257	96	j	11,353
Income (loss) from Continuing Operations before Effect of Change in Accounting	16,070	(650)		15,420
Discontinued Operations
Loss from discontinued operations	(1,569)	(1,031)	f, i	(2,600)
Income tax benefit	(593)	(423)	j	(1,016)
Loss from Discontinued Operations	(976)	(608)		(1,584)
Net Income (loss)	$15,094	$(1,258)		$13,836
Net Income (loss) Per Share of Common Stock	$    1.06	$  (0.09)		$    0.97

See Legend descriptions that follow.

NUI Corporation and Subsidiaries
Consolidated Statement of Income
(Dollars in thousands, except per share amounts)

	Six months ended March 31, 2002 Results as Reclassified for EITF 02-03 and SFAS 144	Adjustments	Legend	Six months ended  March 31, 2002  As Restated
Operating Margins
Operating revenues	$346,533	$(43)	a	$346,490
Less- Purchased gas and fuel	195,879	(150)	b	195,729
Cost of sales and services	13,492	---		13,492
Energy taxes	7,095	---		7,095
	130,067	107		130,174
Other Operating Expenses
Operations and maintenance	56,224	1,058	c, d, e	57,282
Restructuring charges	1,203			1,203
Depreciation and amortization	16,293	---		16,293
Taxes, other than income taxes	4,079	---		4,079
Total operating expenses	77,799	1,058		78,857
Operating Income	52,268	(951)		51,317
Other Income and Expense, net	497	--		497
Income from Continuing Operations before Interest and Taxes	52,765	(951)		51,814
Interest expense	11,139	---		11,139
Income from Continuing Operations before Income Taxes	41,626	(951)		40,675
Income taxes	17,043	220	j	17,263
Income (loss) from Continuing Operations before Effect of Change in Accounting	24,583	(1,171)		23,412
Discontinued Operations
Loss from discontinued operations	(1,955)	(271)	f, g, i	(2,226)
Income tax benefit	(745)	(153)	j	(898)
Loss from Discontinued Operations	(1,210)	(118)		(1,328)
Income (loss) before Effect of Change in Accounting	23,373	(1,289)		22,084
Effect of Change in Accounting	(21,359)	3,717	h	(17,642)
Net Income	$  2,014	$2,428		$   4,442
Net Income Per Share of Common Stock	$    0.15	$  0.17		$     0.32

See Legend descriptions below.

Restatement Adjustment Legend (dollars in thousands):

a.     Recorded an adjustment to revenues of $19 in the first quarter and $24 in the second quarter in order to adjust the unrecorded gas costs balance to equal the underlying gas costs detail.

b.       Recorded an adjustment to purchased gas costs of $64 in the first quarter and $86 in the second quarter to record changes to mark-to-market transactions recorded by NUI Energy Solutions.

c.     Recorded an adjustment of $118 in each of the first two quarters to record rental expense for an operating lease on a straight-line basis. Previously, the company had recognized rent expense as paid on an operating lease.

d.     Recorded adjustments to the pension credit of $349 in the first quarter and $394 in the second quarter to adjust the pension credit as determined by the company's actuaries.

e.     Recorded an adjustment to expense certain previously deferred start-up costs related to various business projects of  $(25) in the first quarter and $104 in the second quarter.

f.      Recorded an adjustment to expense certain costs that had previously been deferred related to pending utility asset sales of  $(191) in the first quarter and $(49) in the second quarter.

g.     Recorded an adjustment to revenue of $686 in the first quarter to appropriately recognize revenue on certain TIC equipment sales, which were previously recognized prior to the completion of required installation obligations.

h.     Recorded an adjustment to the cumulative effect of a change in accounting for goodwill of $5,718 (net of taxes of $2,001) in the first quarter as a result of changes to TIC's goodwill recorded in fiscal 2001.

i.      Recorded an adjustment to expense previously deferred development costs related to NUI Environmental projects of $117 in the first quarter and $1,080 in the second quarter.

j.      Represents the income tax effects of all adjustments

3.     Common Shareholders' Equity

The components of common shareholders' equity were as follows (dollars in thousands):

	March 31, 2003	September 30, 2002
Common stock, no par value	$287,600	$286,783
Shares held in treasury	(4,854)	(4,384)
Retained earnings	23,357	11,925
Unearned employee compensation	(3,413)	(4,949)
Accumulated other comprehensive loss	(777)	(1,123)
Total common shareholders' equity	$301,913	$288,252

4.       Acquisition of Norcom, Inc.

 On March 22, 2002, the company entered into an agreement to acquire certain assets of Norcom, Inc. (Norcom), including approximately 4,000 customer accounts.  The agreement provided for NUI Telecom to assume management control of Norcom as of March 1, 2002. Norcom had operating revenues of $3.9 million, and $7.6 million for the three and six months ended March 31, 2003, respectively, and $0.4 million and $0.8 million of operating income for the three and six months ended March 31, 2003, respectively. Norcom is a non-facilities-based provider of telecommunications services in the Northeast and Southeast regions of the United States and its customer accounts have been combined with the company's NUI Telecom subsidiary. 

On August 28, 2002, the company completed its acquisition of Norcom, subject to post-closing adjustments. The purchase price totaled approximately $4.3 million and included the issuance of 216,039 shares of NUI common stock.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (amounts in thousands).

Cash	$   653
Accounts receivable	1,166
Equipment	7
Intangible assets	2,160
Goodwill	2,403
Total assets acquired	6,389
Current liabilities	2,048
Total liabilities assumed	2,048
Net assets acquired	$4,341

The acquired intangible assets relate to customer relationships, which will be amortized over a 7-year period (see Note 7).

 5.     Acquisition of Telcorp, Ltd.

 On May 31, 2002, the company entered into an agreement to acquire certain assets of Telcorp, Ltd. (Telcorp), including approximately 700 customer accounts.  In addition, the company entered into a letter agreement with Telcorp, which provided that NUI Telecom assume management control of the business effective April 1, 2002.  Telcorp had operating revenues of $1.7 million and $3.4 million for the three and six months ended March 31, 2003, respectively, and $0.4 million and $0.8 million of operating income for the three and six months ended March 31, 2003, respectively. Telcorp is a non-facilities-based reseller that provides a suite of advanced voice and data services to large and small businesses and its customer accounts have been combined with the company's NUI Telecom subsidiary.

On September 1, 2002, the company completed its acquisition of Telcorp, subject to post-closing adjustments. The initial payment of the purchase price totaled approximately $3.5 million, and the remaining purchase price of approximately $3.8 million was paid during April 2003.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (amounts in thousands).

Accounts Receivable	$    832
Equipment	10
Intangible assets	3,060
Goodwill	397
Total assets acquired	4,299
Current liabilities	832
Total liabilities assumed	832
Net assets acquired	$3,467

The acquired intangible assets relate to customer relationships, which will be amortized over a 10-year period (see Note 7).

6.     Goodwill

 The excess of the cost over the fair value of net assets of acquired businesses is recorded as goodwill. On October 1, 2001, the company adoptedStatement of Financial Accounting Standards No. 142, "Goodwill and Intangible Assets" (SFAS 142). The carrying value of goodwill for each of the company's subsidiaries is no longer subject to amortization, but must be tested for impairment annually or earlier under certain circumstances.

The changes in the carrying amount of goodwill (net of amortization) for the six months ended March 31, 2003, are as follows (in thousands):

	NUI Telecom	NUI Virginia Gas	TIC Enterprises	Total
Balance as of September 30, 2002	$7,585	$8,056	$3,485	$19,126
Additions to goodwill	196	---	---	196
Balance as of March 31, 2003	$7,781	$8,056	$3,485	$19,322

The following table sets forth the effect of SFAS 142 for the three and six-month periods ended March 31 (in thousands, except per share amounts):

	Three Months Ended			Six Months Ended
	March 31,			March 31,
	2003	2002	2003		2002
Reported net income	$12,153	$13,836	$19,308		$4,442
Add back: Transitional impairment loss (net of  tax)	---	---	---		17,642
Net income	$12,153	$13,836	$19,308		$22,084
Basic Earnings per Share:
Reported net income	$0.76	$0.97	$1.20		$0.32
Add back: Transitional impairment loss (net   of  tax)	---	---	---		1.25
Net income	$0.76	$0.97	$1.20		$1.59

 *- As restated (see Note 2)

7.     Acquired Intangible Assets

 The company has acquired intangible assets, which are included in Other Assets on the Consolidated Balance Sheet at March 31, 2003 (in thousands):

	Gross Carrying Amount	Accumulated Amortization
Development rights	$2,200	$  (110)
Customer relationships	5,220	(307)
Total	$7,420	$(417)

 The aggregateamortization for the three and six months ended March 31, 2003, was approximately $172,000 and $344,000, respectively. Estimated annual amortization is expected to be approximately $688,000 for each fiscal year through September 30, 2007.

8.     Discontinued Operations

The company has adopted the provisions of Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS 144). This statement excludes from the definition of long-lived assets goodwill and other intangibles that are not amortized in accordance with SFAS 142. SFAS 144 requires that long-lived assets to be disposed of by sale be measured at the lower of their carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. SFAS 144 also expands the reporting of discontinued operations to include components of an entity that have been or will be disposed of rather than limiting such discontinuance to a segment of a business. Accordingly, the revenues, costs and expenses, assets, liabilities, and cash flows of VCW, NC, NUI Environmental, and certain product lines of TIC have been segregated and reported as discontinued operations for all periods presented.

On May 15, 2002, the company agreed to sell the assets of its NC utility operation to Piedmont Natural Gas of North Carolina for approximately $24 million after post-closing adjustments. The transaction closed on September 30, 2002, after all regulatory approvals had been obtained. NC had operating revenues of $9.4 million, operating margins of $4.3 million, and operating income of $1.8 million that have been included in discontinued operations for the six months ended March 31, 2002.

On July 16, 2002, the company ceased the operations of its telephone equipment and United States Postal Service product lines of TIC. These product lines had operating revenues of $7.5 million, operating margins of $3.5 million, and operating losses of $3.9 million that have been included in discontinued operations for the six months ended 
March 31, 2002.

During September 2002, the company approved a plan to sell its NUI Environmental subsidiary, at which time the company began to actively seek a buyer. NUI Environmental has not generated operating revenues as of yet, and incurred operating losses of $0.6 million and $1.3 million that have been included in discontinued operations for the six months ended March 31, 2003 and 2002, respectively.

9.     Earnings per Share

The following table summarizes the company's basic and diluted earnings per share calculations for the three and six-month periods ended March 31 (amounts are in thousands, except per share amounts):
                                                 
                                                                                                          

	Three Months Ended March 31,		Six Months Ended March 31,
	2003	2002	2003	2002
Income from continuing operations	$18,428	$15,420	$26,044	$23,412
Loss from discontinued operations	(406)	(1,584)	(867)	(1,328)
Effect of change in accounting	(5,869)	---	(5,869)	(17,642)
Net income	$12,153	$13,836	$19,308	$  4,442
Weighted average shares outstanding	16,073	14,218	16,049	14,069
Earnings (loss) per share:
Income from continuing operations	$1.15	$1.08	$1.62	$1.66
Loss from discontinued operations	(0.02)	(0.11)	(0.05)	(0.09)
Effect of change in accounting	(0.37)	---	$0.37)	(1.25)
Net income	$0.76	$0.97	$1.20	$0.32

The company does not have dilutive shares as of March 31, 2003. Basic and diluted earnings per share for the three and six-month periods ended March 31, 2002 were the same.

*- As restated (see Note 2)

10.  Comprehensive Income

 The components of Comprehensive Income are as follows (amounts in thousands):

	Three Months Ended			Six Months Ended
	March 31,			March 31,
	2003	2002*	2003		2002*
Net income	$12,153	$13,836	$19,308		$4,442
Other comprehensive income:
Derivatives qualifying as hedges, net	345	---	345		---
Total comprehensive income	$12,498	$13,836	$19,653		$4,442

*- As restated (see Note 2)

Accumulated other comprehensive income, included in Common Shareholders' Equity on the Consolidated Balance Sheet was ($777) at March 31, 2003, and ($1,123) at September 30, 2002. Included in the balance at March 31, 2003, was ($1,123) related to minimum pension liability (net of $780 in taxes) and $345 related to derivatives qualifying as hedges (net of $240 in taxes).

The derivative hedges described above cover various periods of time ranging from April 2003 to March 2004.

11.  Stock Options

 The company measures compensation cost for stock-based compensation plans using the intrinsic value method of accounting as prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. The company has adopted those provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS 123) and Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure," which require disclosure of the pro forma effects on net earnings and earnings per share as if compensation cost had been recognized based upon the fair value-based method at the date of grant for options awarded.

Had employee compensation expense been recognized based on the fair value of the stock options on the grant date under the methodology prescribed by SFAS 123, the company's net income and diluted earnings per share for the periods ended March 31 would have been as shown in the following table (in thousands, except for per share amounts).

	Three Months Ended		Six Months Ended
	March 31,		March 31,
	2003	2002*	2003	2002*
Net income as reported	$12,153	$13,836	$19,308	$4,442
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects	(482)	(462)	(964)	(456)
Pro forma net income	$11,671	$13,374	$18,344	$3,986
Earnings per Share:
Basic & Diluted- as reported	$0.76	$0.97	$1.20	$0.32
Basic & Diluted- pro forma	$0.73	$0.94	$1.14	$0.28

*- As restated (see Note 2)

12.  Notes Payable to Banks

On February 12, 2003, the company and NUI Utilities each entered into a new revolving credit facility that replaced their respective previous credit facilities.  The company's new credit facility consists of a credit agreement that allows it to borrow up to approximately $38.1 million, and NUI Utilities' new credit facility consists of a credit agreement and a 364-day bridge loan, which allows NUI Utilities to borrow up to an aggregate of approximately $141.9 million.  The new credit agreements and the bridge loan agreement mature on February 11, 2004. The credit agreements may be extended in successive 364-day increments upon obtaining approval of all the respective lenders.  The company's credit agreement and NUI Utilities' credit agreement and bridge loan agreement require the company and NUI Utilities, respectively, to meet certain covenants and limitations as well as maintain certain financial ratios.  Included in these covenants are provisions that limit the ability of each of the company and NUI Utilities to incur future indebtedness, make capital expenditures above certain levels, enter into sale-leaseback transactions, pledge or sell assets, make acquisitions, merge and pay dividends on common stock, and prohibit the creation of guarantees (other than those in the normal course of business).  The company must maintain a fixed charge coverage ratio of not less than 1.50x and NUI Utilities must maintain a fixed charge coverage ratio of 1.75x. The company and NUI Utilities each must maintain leverage ratios of not more than 0.65 from March 1 through August 31 and not more than 0.70 from September 1 through February 28 (or 29, if applicable). In addition, if the amounts available under the NUI Utilities' credit agreement are increased, any borrowings under such increase first must be used to repay any amounts outstanding under the bridge loan agreement.  The NUI Utilities' credit agreement and bridge loan agreement also limit the payment of dividends from NUI Utilities to the company to not more than $100 million.  The company and NUI Utilities repaid all of the borrowings outstanding under their prior credit facilities aggregating $195 million from the borrowings under the company's and NUI Utilities' new credit agreements, NUI Utilities' bridge loan agreement and cash on hand. 

At March 31, 2003, aggregate outstanding borrowings under the company's credit agreements were $175.3 million with a combined weighted average interest rate of 4.4 percent. Unused amounts under the credit agreements at March 31, 2003, were approximately $4.7 million.  Also, as of March 31, 2003, approximately $79.3 million of cash was held as short-term investments, a substantial portion of which was being held toward repayment of short-term borrowings under the credit agreements.

The weighted average daily amounts of outstanding borrowings under the credit agreements and the weighted average interest rates on those borrowings were $156.5 million at 2.7 percent for the six-month period ended March 31, 2003, and $199.5 million at 1.5 percent for the six-month period ended March 31, 2002.

 13.  Contingencies

Joint Venture with Duke Energy. On April 30, 2001, the company announced an agreement with a unit of Duke Energy to develop a natural gas storage facility in Saltville, Virginia. A subsidiary of VGC and Duke Energy Gas Transmission (DEGT) have created a limited liability company, Saltville Gas Storage Company LLC (LLC).  VGC received final regulatory approvals during January 2003 and contributed certain storage assets valued at approximately $16.3 million to the LLC. DEGT has contributed an equal amount (approximately $16.3 million) of capital required to expand the facility for its intended purpose.  To the extent the LLC determines it needs additional funding (which decision can only be made jointly by the company and DEGT), the company and DEGT are obligated to fund the development of the LLC equally.

The company currently estimates its share of future funding needs to be approximately $18.3 million in fiscal 2003, $7.3 million in fiscal 2004, $0.8 million in fiscal 2005, $0.7 million in fiscal 2006, and $0.8 million in fiscal 2007. The company is exploring various options to satisfy its funding requirements for the joint venture during fiscal 2003, including a long-term (12 to 15 year) capital lease with a bank for a compressor station.

Guarantees. The company has guarantees of approximately $323 million to 76 counterparties as of March 31, 2003, in support of NUI Energy Brokers' trading activities. These guarantees are necessary to facilitate trading with a broad group of potential counterparties, although typically NUI Energy Brokers uses only a fraction of the issued guarantees at any given time. Further, since NUI Energy Brokers has netting agreements in place with most of its counterparties, the guarantees would apply only to net balances owed to its respective counterparties with which it has such agreements. As of March 31, 2003, the amount covered by outstanding guarantees was approximately $53.3 million and the net balance owed under these guarantees was approximately $32.7 million.

NUI Telecom has a contract with a service provider, which guarantees that NUI Telecom will purchase a minimum of $400,000 of services monthly through February 2004. The guarantee was necessary to support NUI Telecom's purchase of capacity to use in the provision of telecommunications services. The penalty for purchasing less than that amount is 25 percent of each dollar below $400,000. NUI Telecom has historically purchased services in excess of $400,000 from the service provider, and accordingly has not recorded any additional amounts owed in order to satisfy the guarantee at March 31, 2003.

 Environmental Matters. The company owns, or previously owned, certain properties located in the states of New Jersey, North Carolina, South Carolina, Pennsylvania, New York and Maryland on which manufactured gas plants (MGP) were operated by the company or by other parties in the past. In New Jersey, the company is currently conducting remedial activities at such properties with oversight from the New Jersey Department of Environmental Protection and anticipates the initiation of such activities in the state of North Carolina within the next five years.  Although the actual cost of future environmental investigation and remediation efforts cannot be reasonably estimated, the company has recorded a total reserve forenvironmental investigation and remediation costs of approximately $33.5 million, which the company believes is the probable minimum amount that the company may expend over the next 30 years.  Of this reserve, approximately $29.9 million relates to remediation of the New Jersey MGP properties and approximately $3.6 million relates to MGP properties located outside the state of New Jersey.

The company's prudently incurred remediation costs for the New Jersey MGP properties have been authorized by the New Jersey Board of Public Utilities (NJBPU) to be recoverable in rates through its MGP Remediation Adjustment Clause. As a result, the company has begun rate recovery of approximately $8.2 million of environmental costs incurred through June 30, 2000. Recovery of an additional $1.7 million in environmental costs incurred between July 1, 2000, and June 30, 2002, is currently pending NJBPU approval. Accordingly, the company has recorded a regulatory asset of approximately $36.0million as of March 31, 2003, reflecting the future recovery of both incurred costs and future environmental remediation liabilities in the state of New Jersey.  The company has also been successful in recovering a portion of MGP remediation costs incurred in New Jersey from the company's insurance carriers and continues to pursue additional recovery.  With respect to costs associated with the MGP properties located outside New Jersey, the company is currently pursuing or intends to pursue recovery from ratepayers, former owners and operators, and/or insurance carriers. Although the company has been successful in recovering a portion of MGP remediation costs incurred outside New Jersey from the company's insurance carriers, the company is not able to express a belief as to the success of any additional recovery efforts. The company is working with the regulatory agencies to prudently manage its MGP costs so as to mitigate the impact of such costs on both ratepayers and shareholders.

Amendment of Note Purchase Agreement. In January 2003, the company became aware that it was in technical default under certain covenants contained in its Note Purchase Agreement dated as of August 20, 2001. On January 24, 2003, the company obtained a 30-day waiver of certain covenant violations contained in the Note Purchase Agreement from the holders of the notes (the noteholders). The covenants consisted of the minimum fixed charge coverage ratio, restrictions on the ability to enter into sale and leaseback transactions, entering into agreements imposing restrictions on subsidiaries' ability to pay dividends to the company and make advances to and investments in the company, and the requirement that the company deliver certain financial information and statements of cash flows to the noteholders. Prior to obtaining the waiver, the company was in technical default under the Note Purchase Agreement during fiscal 2002.

On February 20, 2003, the company and the noteholders amended the Note Purchase Agreement for the purpose of curing all the technical defaults. The amended agreement contained certain provisions that were subject to the approval of, or required action by, the banks participating in the company's $38.1 million 364-day credit facility. These provisions were: 1) the approval by the banks of an increase in the interest rate under each of the senior notes of 50 basis points (or 0.50 percent), 2) the approval by the banks of the execution by certain of the company's non-regulated subsidiaries (the "non-restricted subsidiaries" as defined in the company's bank credit facility) of guarantees (the senior note guarantees) of prompt payment when due of the indebtedness under the senior notes issued pursuant to the Note Purchase Agreement, and 3) the execution by the banks of an Inter-creditor Agreement, reasonably satisfactory to the banks and noteholders, providing for the pro-rata sharing by the lenders and the noteholders of any proceeds received by any of the lenders under any of the bank guarantees or the senior note guarantees. The amendment also provided for the establishment of a "Priority Indebtedness" covenant requiring the company to maintain a ratio of "priority debt" (all indebtedness of the company secured by liens plus all indebtedness of the restricted subsidiaries, as defined in the agreement) to consolidated assets of not more than 50 percent.

On March 31, 2003, the company and the banks amended the company's 364-day credit facility to approve the interest rate change with respect to the senior notes, to approve the guarantee by the non-restricted subsidiaries of the prompt payment when due of the indebtedness under the senior notes, and to approve the execution of the Inter-creditor Agreement referenced above. This amendment to the company's credit facility also provided for a new pricing grid, which increased the company's cost of borrowing under the credit facility of 25 basis points (0.25 percent).

In addition, on April 1, 2003, the company and the noteholders amended the Note Purchase Agreement to reflect the above changes and to make certain clarifying language amendments.

Agreement to Acquire Assets of Norcom Agency Sales, Inc. On March 22, 2002, the company entered into an agreement to acquire certain assets of Norcom Agency Sales, Inc. (NAS). The agreement provides for the company to pay the seller, Norcom, a purchase price equal to a multiple of total sales to new customers obtained by NAS as agent for NUI Telecom during the period April 1, 2002, through October 31, 2003. The multiple to be paid will be determined based on the actual new customer revenues generated by NAS for the month of October 2003, and is subject to post-closing adjustments.

The purchase price will be paid in NUI common stock. The number of shares of NUI common stock to be issued will be determined by dividing the total purchase price by the average closing price of NUI's common stock for the first 20 of the 25 consecutive trading days immediately preceding October 31, 2003. The company expects to close on this transaction in or around February 2004.

Gas Procurement Contracts. Certain of the company's long-term contracts for the supply, storage and delivery of natural gas include fixed charges that amount to approximately $53.3 million annually.  The company currently recovers, and expects to continue to recover, such fixed charges through its purchased gas adjustment clauses. As a result of the unbundling of natural gas services in New Jersey, these contracts may result in the realization of stranded costs by the company.  Management believes the outcome of these actions will not have a material adverse effect on the company's results.  The company also is committed to purchase from multiple suppliers, at market-related prices, minimum quantities of gas that, in the aggregate, are approximately 2.1 billion cubic feet (Bcf) per year or to pay certain costs in the event the minimum quantities are not taken. During the fiscal year ended September 30, 2002, the company's continuing utility operations purchased a total of 36.0 Bcf, and accordingly the company expects that minimum demand on its systems for the duration of these contracts will continue to exceed these minimum purchase obligations.

Other. Between October 28, 2002 and December 20, 2002, five substantially similar civil actions were commenced in the United States District Court for the District of New Jersey, in which the plaintiffs allege that the company and its president and chief executive officer violated federal securities laws by issuing false statements and failing to disclose information regarding the company's financial condition and current and future financial prospects in its earnings statements, press releases, and in statements to analysts and others.  By orders dated December 19, 2002, January 22, 2003 and February 3, 2003, the five actions were consolidated into one action captioned In re NUI Securities Litigation.  The five consolidated lawsuits include: (1) an action captioned Jack Klebanow, on behalf of himself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on October 28, 2002;  (2) an action captioned Gisela Friedman, on behalf of herself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on October 31, 2002;  (3) an action captioned Thomas Davis, on behalf of himself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on November 6, 2002; (4) an action captioned Marvin E. Russell, on behalf of himself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on December 10, 2002; and (5) an action captioned Phyllis Waltzer, on behalf of herself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on December 20, 2002. By order dated February 3, 2003, a Lead Plaintiff, Lead Counsel and Liaison Counsel were appointed in the consolidated action. By stipulation of the parties, an Amended Consolidated Class Action Complaint was filed on May 12, 2003, and responsive pleadings are to be filed thirty days thereafter. No discovery has yet occurred. The Amended Complaint, brought on behalf of a putative class of purchasers of NUI's common stock between November 8, 2001 and October 17, 2002, asserts claims under Section 10(b), including Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act against the company, its president and chief executive officer, and its chief financial officer. Specifically, the Amended Complaint alleges that the defendants (i) failed to disclose material facts that would impair the company's current and future earnings, including (a) the allegedly accurate amount and explanation of the company's bad debts, (b) a purportedly illegal practice by the company in "re-terminating" intrastate calls, (c) alleged accounting improprieties in connection with purportedly unearned revenue, and (d) allegedly inaccurate earnings per share information, and (ii) inflated the company's earnings materially by (a) allegedly making misleading statements concerning, and failing to properly record, bad debt costs, (b) allegedly attributing the company's rising costs to incorrect and immaterial factors, and (c) purportedly pursuing illegal telecommunications billing practices. The Amended Complaint seeks unspecified monetary damages on behalf of the class, including costs and attorneys fees. Furthermore, on December 23, 2002, a law firm made a public announcement with respect to a lawsuit purportedly filed in the Southern District of New York on behalf of a putative class of purchasers of NUI's common stock between November 8, 2001 and October 17, 2002 against NUI Corporation and John Kean, Jr., alleging violations under Section 10(b), including Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act.  Specifically, the announcement alleges that the company knowingly or recklessly failed to properly record fixed cost expenses, accrue necessary pension expenses and reserve adequate amounts for its self-insured medical benefits in its quarterly financial statements.  At this time, the company has not been served with the purported complaint. Although the company intends to vigorously defend these lawsuits, it is not possible at this time to determine a likely outcome.

The company is involved in other various claims and litigation incidental to its business. In the opinion of management, none of these other claims and litigation will have a material adverse effect on the company's results of operations or its financial condition.

14. New Accounting Standards

During fiscal 2002, the company adopted Statement of Financial Accounting Standards No. 144, "Accounting for Impairment and Disposal of Long-lived Assets" (SFAS 144). SFAS 144 supersedes SFAS 121 and the provisions of APB Opinion No. 30, "Reporting the Results of Operations- Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" with regard to reporting the effects of a disposal of a segment of a business. SFAS 144 establishes a single accounting model for assets to be disposed of by sale and addresses several SFAS 121 implementation issues. As a result of the adoption of this standard, the company has classified the operating results of subsidiaries to be disposed of as "Discontinued Operations" in the Consolidated Statements of Income; assets and liabilities of these subsidiaries as "Held for Sale" in the Consolidated Balance Sheets; and "Changes in Assets and Liabilities Held for Sale" in the Consolidated Statement of Cash Flows. See further discussion of the subsidiaries being disposed of in Note 8.

In August 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" (SFAS 143). This statement establishes accounting standards for recognition and measurement of liabilities for asset retirement obligations and the associated asset retirement costs. The company adopted this statement on October 1, 2002, and recorded an asset retirement obligation of approximately $5.6 million with offsetting amounts to property, plant and equipment and regulatory assets.

In June 2002, the Emerging Issues Task Force (EITF) issued EITF 02-03, "Issues Involved in Accounting for Contracts Under Issue 98-10," (EITF 02-03). The purpose of EITF 02-03 is to address certain issues related to energy trading activities, including (a) gross versus net presentation in the income statement, (b) whether the initial fair value of an energy trading contract can be other than the price at which it was exchanged (i.e., whether there is any profit at inception), and (c) additional disclosure requirements for energy trading activities. On October 25, 2002, the EITF reached a consensus on EITF 02-03 that changes the accounting for certain energy contracts. The main provisions of EITF 02-03 are as follows:

-       The EITF rescinded EITF Issue 98-10, "Accounting for Contracts Involved in Energy Trading and Risk Management Activities" (EITF 98-10), which was the authoritative accounting followed by NUI Energy Brokers and NUI Energy. Pursuant to EITF 98-10, an entity accounted for energy contracts at fair value with changes in fair value recognized in earnings if the energy contract was determined to be part of an entity's trading activities. In contrast to EITF 98-10, EITF 02-03 prohibits mark-to-market accounting for energy-related contracts that do not meet the definition of a derivative under SFAS 133. Any contracts not meeting the definition of a derivative under SFAS 133 must be accounted for on the accrual basis.

-       The consensus applies immediately to non-derivative energy-related contracts executed after October 25, 2002.

-       The consensus applies to existing non-derivative energy-related contracts for fiscal periods beginning after December 15, 2002 (January 1, 2003 for NUI) and the cumulative effect of a change in accounting principle must be reported upon initial application.

-       The EITF minutes relating to EITF 02-03 indicate that an entity should not record unrealized gains or losses at the inception of derivative contracts unless the fair value of each contract in its entirety is evidenced by quoted market prices or other current market transactions for contracts with similar terms and counterparties.

-       The EITF reaffirmed that EITF 02-03 requires gains and losses on derivative energy trading contracts (whether realized or unrealized) to be reported as revenue on a net basis in the income statement.

The EITF deliberations and consensus on EITF 02-03 will not affect the company's cash flows. Additionally, the company continued to mark all existing energy-related contracts to market based on EITF 98-10 during the first quarter of fiscal 2003 prior to applying the new consensus. However, the consensus required NUI to record a cumulative effect adjustment to convert any contracts that did not meet the definition of a derivative under SFAS 133 to accrual accounting effective January 1, 2003.

The primary contracts that were affected as a result of applying the new consensus are the full requirements natural gas sales contracts associated with NUI Energy and a large natural gas storage contract within NUI Energy Brokers. However, the majority of NUI Energy Brokers' contracts are considered derivatives under SFAS 133 and continue to be marked-to-market through earnings. The cumulative effect adjustment to convert the contracts that did not meet the definition of a derivative under SFAS 133 to accrual accounting effective on January 1, 2003, was $9.9 million before taxes.

Additionally, in accordance with one of the provisions of EITF 02-03, the company has recorded the margins earned under the accounting guidance of EITF 98-10 by both NUI Energy Brokers and NUI Energy on a net basis. In previous periods, both NUI Energy Brokers and NUI Energy included both the cost of the purchased gas and the operating margin earned for all physical transactions within operating revenues on the Consolidated Statement of Income. For financial trades such as futures, options and swap transactions, NUI Energy Brokers and NUI Energy had historically recorded only the operating margin component, but within the purchased gas and fuel line item on the Consolidated Income Statement. The adoption of net-basis reporting has no effect on these transactions or cash flows other than to reclassify and present total margins earned within the operating revenues line item on the Consolidated Statement of Income. In accordance with the EITF, all prior periods have been reclassified to conform to this presentation. As a result of net-basis reporting, NUI reduced operating revenues and purchased gas and fuelline items by $89.3 million and $153.0 million for the three and six months ended March 31, 2002, respectively, with no changes to total operating margins.

In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" (SFAS 146). This statement is effective for exit or disposal activities initiated after December 31, 2002. The adoption of this statement had no impact on the company's net income or financial position.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (FIN 45).  FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of FIN 45 apply to guarantees issued or modified after December 31, 2002. The company has included these disclosures under "Guarantees" in Note 13.

In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation- Transition and Disclosure" (SFAS 148). This statement amends Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition for an entity that voluntarily changes to a fair value based method of accounting for stock-based employee compensation and amends disclosure provisions of that Statement to require prominent disclosure about the effects on reported net income of an entity's accounting policy decisions with respect to such compensation. The company expects to continue to account for stock-based compensation in accordance with Accounting Principles Board Opinion No. 25 and has provided the prominent disclosures required in Note 11.

In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46). The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities.  A variable interest entity is a corporation, partnership, trust or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights, or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. Historically, entities generally were not consolidated unless the entity was controlled through voting interests. FIN 46 changes that, by requiring a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. A company that consolidates a variable interest entity is called the "primary beneficiary" of that entity. FIN 46 also requires disclosures about variable interest entities that a company is not required to consolidate but in which it has a significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements of FIN 46 apply to existing entities in the first fiscal year or interim period beginning after June 15, 2003. Also, certain disclosure requirements apply to all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The company is currently evaluating the consolidation requirements with respect to its joint venture with Duke Energy (see Note 13).

In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" (SFAS 149). This statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and hedging activities under SFAS 133. This statement is effective for contracts entered into or modified after June 30, 2003. The company does not expect the adoption of this statement will have a material impact on the company's net income or financial position.

15.    Business Segment Information

The company's operations are organized and managed as three primary segments: Distribution Services, Energy Asset Management (formerly Wholesale Energy Marketing and Trading), and Retail and Business Services. The Distribution Services segment distributes natural gas in three states through the company's regulated utility operations, as well as engaging in appliance leasing, repair and maintenance operations and off-system gas sales. The Energy Asset Management segment reflects the operations of the company's NUI Energy Brokers and all of the VGC subsidiaries. The Retail and Business Services segment reflects the operations of the company's NUI Energy, UBS, and NUI Telecom subsidiaries, the network and wireless product lines of TIC, which are being managed by NUI Telecom.  The company also has corporate operations that do not generate any revenues.

The following table provides information concerning the major segments of the company for the three and six-month periods ended March 31, 2003 and 2002. Revenues include intersegment sales to affiliated entities, which are eliminated in consolidation.  All of the company's operations are in the United States and therefore do not need separate disclosure by geographic region. Certain reclassifications have been made to prior year segment data to conform with the current year's presentation.

	Three Months Ended			Six Months Ended
	March 31,			March 31,
(Dollars in thousands)	2003	2002*	2003		2002*
Revenues:
Distribution Services	$231,827	$169,969	$397,448		$314,926
Energy Asset Management	17,187	5,778	21,426		15,547
Retail and Business Services	15,621	11,907	32,162		21,038
Intersegment Revenues	(1,848)	(2,383)	(3,831)		(5,021)
Total Revenues	$262,787	$185,271	$447,205		$346,490
Operating Margins:
Distribution Services	$68,469	$60,981	$120,010		$106,561
Energy Asset Management	16,622	5,600	20,567		15,219
Retail and Business Services	5,511	6,098	12,484		11,089
Intersegment Operating Margins	(305)	(1,286)	(869)		(2,695)
Total Operating Margins	$90,297	$71,393	$152,192		$130,174
Pre-Tax Operating Income (Loss):
Distribution Services	$28,603	$31,415	$46,692		$46,773
Energy Asset Management	13,188	2,481	14,015		8,360
Retail and Business Services	(4,842)	76	(5,584)		(52)
Total Pre-Tax Operating Income	$36,949	$33,972	$55,123		$55,081

*- As restated (see Note 2)

A reconciliation of the company's segment pre-tax operating income to amounts reported on the consolidated financial statements is as follows:

	Three Months Ended		Six Months Ended
	March 31,		March 31,
(Dollars in thousands)	2003	2002*	2003	2002*
Segment Pre-Tax Operating Income	$36,949	$33,972	$55,123	$55,081
Non-segment pre-tax operating income (loss)	(910)	(1,791)	(1,468)	(3,764)
Pre-Tax Operating Income	$36,039	$32,181	$53,655	$51,317

 *- As restated (see Note 2)

	NUI Corporation and Subsidiaries  Summary Consolidated Operating Data
		Three Months Ended March 31,		Six Months Ended March 31,
		2003	2002*	2003	2002*
Operating Revenues (Dollars in thousands)
Firm Sales:
Residential		$117,576	$94,809	$195,406	$168,904
Commercial		43,608	33,157	74,445	62,643
Industrial		2,561	2,531	5,330	5,084
Interruptible Sales		16,153	9,182	30,892	17,961
Unregulated Sales		46,058	23,682	71,806	51,273
Transportation Services		15,513	14,718	27,740	26,086
Customer Service, Appliance Leasing and Other		21,318	18,700	42,139	37,498
Total Revenues		262,787	196,779	447,758	369,449
Revenues by Discontinued Operations		---	(11,508)	(553)	(22,959)
Operating Revenues from Continuing Operations		$262,787	$185,271	$447,205	$346,490
Gas Sold or Transported (in MMcf)
Firm Sales:
Residential		12,106	9,560	19,813	15,955
Commercial		4,590	3,719	7,895	6,573
Industrial		423	382	656	687
Interruptible Sales		2,186	2,555	5,021	5,091
Unregulated Sales		25,561	30,942	58,292	57,493
Transportation Services		10,302	11,515	20,286	21,022
Total Gas Sold or Transported		55,169	58,672	111,964	106,821
Gas Sold or Transported by Discontinued Operations		---	(2,393)	(239)	(4,026)
Gas Sold or Transported by Continuing Operations		55,169	56,279	111,725	102,795
Average Utility Customers Served
Firm Sales:
Residential		340,913	356,030	347,271	356,763
Commercial		21,830	24,006	22,636	24,054
Industrial		186	264	263	264
Interruptible Sales		25	41	29	41
Transportation		4,122	4,033	4,199	4,088
Total Average Utility Customers Served		367,076	384,373	374,398	385,210
Average Utility Customers Served by Discontinued  Operations		---	(20,573)	(6,548)	(20,706)
Average Utility Customers Served by Continuing Operations		367,076	363,800	367,850	364,504
Degree Days in New Jersey
Actual		2,860	2,116	4,688	3,423
Normal		2,529	2,715	4,242	4,527
Percentage variance from normal		13% colder	22% warmer	11% colder	24% warmer
Employees (period end)		1,114	1,420

*- As restated (see Note 2 of the Notes to the Consolidated Financial Statements)

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

 The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements of NUI Corporation included elsewhere herein and with the company's Annual Report on Form 10-K for the fiscal year ended 
September 30, 2002.

Overview

The following discussion and analysis refers to NUI Corporation and its subsidiaries (collectively referred to as "NUI," the "company," "we," or "our"). The company is a diversified energy company that is primarily engaged in the sale and distribution of natural gas, wholesale energy portfolio and risk management, retail energy sales and telecommunications. Its local distribution operations provide natural gas and related services during fiscal 2003 to more than 367,000 customers in four states along the eastern seaboard of the United States and comprise Elizabethtown Gas Company (New Jersey), City Gas Company of Florida, Elkton Gas (Maryland), and Virginia Gas (VGC). The company sold its North Carolina Gas (NC) utility operation during September 2002, and sold its Valley Cities Gas and Waverly Gas (VCW) utility operations during November 2002. VGC is also engaged in other activities, such as pipeline operation and natural gas storage. The company's non-regulated subsidiaries include NUI Energy, Inc. (NUI Energy), an energy retailer; NUI Energy Brokers, Inc. (NUI Energy Brokers), a wholesale energy portfolio and risk management subsidiary; NUI Environmental Group, Inc. (NUI Environmental), an environmental project development subsidiary; Utility Business Services, Inc. (UBS), a geospatial, billing and customer information systems and services subsidiary; NUI Telecom, Inc. (NUI Telecom), a non-facilities based telecommunications services subsidiary; and TIC Enterprises, LLC (TIC), a sales outsourcing subsidiary.

As of March 31, 2003, the company has classified NC, VCW, NUI Environmental, and certain product lines of TIC as discontinued operations (see Note 8 of the Notes to the Consolidated Financial Statements).

Results of Operations

Consolidated Review of Results of Operations

The following discussion is intended to provide an overview of consolidated results for the three and six-month periods ended March 31, 2003 and 2002. The results of operations for fiscal 2001 and 2000, as well as the first three quarters of fiscal 2002 have been restated (see Note 2 of the Notes to the Consolidated Financial Statements). Following this discussion is a more detailed overview of the results for NUI's three business segments.

Net Income.  NUI had net income of $12.2 million, or $0.76 per share, for the three months ended March 31, 2003, as compared to $13.8 million, or $0.97 per share, for the three months ended March 31, 2002.  The decrease in net income during the current three-month period was primarily due to the company's adoption of the provisions of EITF 02-03, which required the company to record a cumulative effect adjustment related to certain energy contracts of approximately $5.9 million (after-tax), or $0.37 share (see Note 14 of the Notes to the Consolidated Financial Statements). Partially offsetting this decrease were increases in income from continuing operations of approximately $3.0 million and reduced losses from discontinued operations of approximately $1.2 million (see separate discussions below).

NUI had net income of $19.3 million, or $1.20 per share, for the six months ended March 31, 2003, as compared to $4.4 million, or $0.32 per share, for the six months ended March 31, 2002. The increase in income during the current six-month period was primarily due to the company's adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Intangible Assets," during the first quarter of the prior fiscal year, which resulted in a one-time, transitional impairment charge during the three months ended December 31, 2001, of $17.6 million (after-tax), or $1.25 per share (see Note 6 to the Notes to the Consolidated Financial Statements).  As previously discussed, the company was required to record a cumulative effect adjustment of approximately $5.9 million (after-tax) during the current fiscal year related to the adoption of EITF 02-03. During the six months ended March 31, 2003, the company had increased income from continuing operations of approximately $2.6 million and reduced losses from discontinued operations of approximately $0.5 million as compared to the same period during the prior fiscal year.

Income from Continuing Operations.  Income from continuing operations was $18.4 million, or $1.15 per share, for the three-month period ended March 31, 2003, compared with $15.4 million, or $1.08 per share, for the same period in fiscal 2002. The current three-month period increase is primarily due to higher operating margins at the company's Energy Asset Management segment as a result of unrealized margins by NUI Energy Brokers associated with gas supply procurement contracts related to forecasted sales by NUI Energy; increased margins due to weather that was 35 percent colder than the three-month period ended March 31, 2002, and additional margins which resulted from the base rate increase by the company's natural gas distribution company in New Jersey that went into effect on November 22, 2002; and increased margins by the company's telecommunications subsidiary.  These increases were partially offset by severance and other costs associated with exiting the company's retail energy marketing business, as well as increases in bad debts, pension, insurance, bank fees, medical and other operating expenses during the three-month period ended March 31, 2003. 

The decrease in earnings per share for the three months ended March 31, 2003, as compared with the same period during the prior fiscal year, reflects the effect of dilution as a result of increased shares outstanding. DuringMarch 2002, NUI issued 1.725 million shares of its common stock for net proceeds of approximately $37.0 million, and also issued approximately 0.5 million shares of common stock related to certain acquisitions and benefit plans during fiscal 2002.

Income from continuing operations was $26.0 million, or $1.62 per share, for the six-month period ended March 31, 2003, compared with $23.4 million, or $1.66 per share, for the same period in fiscal 2002. The current six-month period increase is primarily due to increased operating margins due to weather that was 37 percent colder than the six-month period ended March 31, 2002; a base rate increase by the company's natural gas distribution company in New Jersey previously noted; unrealized margins associated with gas supply procurement contracts related to forecasted sales by NUI Energy; and increased margins by the company's telecommunications subsidiary. These increases were partially offset by severance and other costs associated with exiting the company's retail energy marketing business, as well as increases in bad debt reserves, pension, insurance, bank fees, medical and other operating expenses during the six-month period ended March 31, 2003. 

Discontinued Operations.  After-tax losses from discontinued operations for the three months ended March 31, 2003, were $0.4 million, or $0.02 per share, compared to $1.6 million, or $0.11 per share during the prior fiscal year. The reduced losses during the fiscal 2003 quarter were primarily due to the closure of two product lines of TIC prior to the start of the current fiscal year. These product lines had losses of approximately $2.1 million for the three months ended March 31, 2002. The losses during the three-months ended March 31, 2003 relate to approximately $0.3 million of losses incurred by NUI Environmental and $0.1 million of post-closing adjustments related to the sale of Valley Cities Gas and Waverly Gas (see Note 8 of the Notes to the Consolidated Financial Statements).

After-tax losses from discontinued operations for the six months ended March 31, 2003, were $0.9 million, or $0.05 per share, compared to $1.3 million, or $0.09 per share during the prior fiscal year. The reduced losses during fiscal 2003 were primarily due to the closure of two product lines of TIC prior to the start of the current fiscal year. These product lines had losses of approximately $2.4 million for the six months ended March 31, 2002. These losses during the prior fiscal year were partially offset by $1.9 million of income from the NC and VCW utility operations, which were sold during September 2002 and November 2002, respectively. These utility operations incurred losses (including post-closing adjustments) of approximately $0.5 million for the six months ended March 31, 2003. NUI Environmental had losses of approximately $0.4 million and $0.8 million for the six month periods ended March 31, 2003 and 2002, respectively.

Business Segment Review of Results of Operations

The following is a discussion of the company's business segment results of operations and is presented based on Income from Continuing Operations before Interest and Taxes. Included in operations and maintenance expenses for each of NUI's business segments are allocations of corporate costs related to shared service functions such as human resources, accounting and information technology, which are allocated based on the company's cost allocation policy. In addition, the company has corporate operations that incurred operations and maintenance expenses of $0.6 million and $1.5 million for the three-month periods ended March 31, 2003 and 2002, respectively, and $0.9 million and $2.1 million for the six-month periods ended March 31, 2003 and 2002, respectively, principally related to the company's investment in various business ventures, which have not yet earned revenues. These costs are not allocated to our business segment results.

Distribution Services Segment

The company's Distribution Services segment distributes natural gas in three states through the company's regulated natural gas utility operations.  These operations are Elizabethtown Gas Company (New Jersey), City Gas Company of Florida, and Elkton Gas (Maryland). This segment also includes the company's appliance leasing, repair, maintenance operations and service business as well as off-system sales. The company recently sold three of its natural gas utility operations: NC was sold in September 2002, and VCW (New York and Pennsylvania operations) was sold in November 2002 (see Note 8 of the Notes to the Consolidated Financial Statements). The results for these operations are reflected in Discontinued Operations in the Consolidated Financial Statements for the three and six-month periods ended March 31, 2003 and 2002. The Income from Continuing Operations before Interest and Taxes results for the segment is as follows:

(Dollars in thousands)	Three Months Ended March 31, 2003	Three Months Ended March 31, 2002*	Six Months Ended March 31, 2003	Six Months Ended March 31, 2002*
Operating Revenues	$231,827	$169,839	$397,448	$314,342
Purchased Gas and Fuel	155,643	102,794	263,477	196,219
Cost of sales and services	2,426	2,022	5,178	4,467
Energy Taxes	5,289	4,042	8,783	7,095
Operating Margins	68,469	60,981	120,010	106,561
Operating Expenses:
Operations & Maintenance Expenses	29,914	21,158	54,160	42,652
Depreciation & Amortization	8,051	6,862	15,720	14,116
Taxes Other than Income	1,901	1,546	3,438	3,020
Total Operating Expenses	39,866	29,566	73,318	59,788
Other Income & Expense	165	117	317	107
Income from Continuing Operations before Interest and Taxes	$28,768	$31,532	$47,009	$46,880

 *- As restated (see Note 2 of the Notes to the Consolidated Financial Statements)

Operating Revenues. Operating revenues include amounts billed for the cost of purchased gas pursuant to purchased gas adjustment clauses utilized by the company's utility operations.  Such clauses enable the company to pass through to its utility customers, via periodic adjustments during the year to customers' bills, changes in costs incurred by the company for purchased gas without affecting operating margins. These purchased gas adjustments are authorized by regulatory authorities in the states in which the company operates. Since the company's utility operations do not earn a profit on the sale of the gas commodity, the company's level of regulated operating revenues is not necessarily indicative of financial performance.

Distribution Services operating revenues increased by $62.0 million, or 36 percent, to $231.8 million during the three months ended March 31, 2003, as compared to $169.8 million in the same period in fiscal 2002. The increase in revenues was primarily attributable to the result of weather in New Jersey that was 13 percent colder than normal and 35 percent colder than the same period in fiscal 2002, the effect of a base rate increase in New Jersey, which went into effect on November 22, 2002 (see Regulatory Matters), increased off-system sales as a result of higher natural gas prices, and customer growth.

Distribution Services operating revenues increased by $83.1 million, or 26 percent, to $397.4 million during the six months ended March 31, 2003, as compared to $314.3 million in the same period in fiscal 2002. The increase in revenues was primarily attributable to the result of weather in New Jersey that was 11 percent colder than normal and 37 percent colder than the same period in fiscal 2002, the effect of a rate increase in New Jersey referred to above, increased off-system sales, and customer growth, consistent with the quarterly changes previously noted.

Operating Margins. Operating margins increased by $7.5 million, or 12 percent, to $68.5 million for the three months ended March 31, 2003, as compared to $61.0 million in the same period in fiscal 2002. Of the factors previously discussed in operating revenues, the operating margin impact of the colder weather contributed approximately $2.9 million, the rate increase contributed approximately $4.1 million, and new customers contributed approximately $0.5 million. Total operating margins from off-system gas sales were $0.5 million for the three months ended March 31, 2003, compared to $0.4 million for the same period in fiscal 2002. The company has a weather normalization clause in its New Jersey tariff, which is designed to help stabilize the company's results by increasing amounts charged to customers when weather has been warmer than normal and by decreasing amounts charged when weather has been colder than normal. As a result of weather normalization clauses, operating margins were approximately $4.0 million lower and $4.4 million higher in the fiscal 2003 and 2002 periods, respectively, than they otherwise would have been without such clauses. Historically, the company's weather normalization clause in New Jersey was based on a 30-year weather average and did not fully protect the company from the adverse impacts of warm weather. As a result of the new base rate increase referred to above, the weather normalization clause was adjusted to a 20-year weather average to better reflect current weather trends and should provide more stability of operating results and improved cash flows for NUI's New Jersey utility throughout fiscal 2003.

Operating margins increased by $13.4 million, or 13 percent, to $120.0 million for the six months ended March 31, 2003, as compared to $106.6 million in the same period in fiscal 2002. Of the factors previously discussed in operating revenues, the operating margin impact of the colder weather contributed approximately $6.1 million, the rate increase contributed approximately $5.8 million, and new customers contributed approximately $1.5 million. Total operating margins from off-system gas sales were $0.8 million for each of the six months ended March 31, 2003 and 2002. As a result of weather normalization clauses, operating margins were approximately $4.8 million lower and $8.0 million higher in the fiscal 2003 and 2002 periods, respectively, than they otherwise would have been without such clauses. With the exception of demand caused by changes in weather, the company does not anticipate any significant improvement in the economic outlook for natural gas sales in this segment for the remainder of fiscal 2003.

Operating Expenses. Operations and maintenance expenses increased by $8.8 million, or 41 percent, to $29.9 million for the three months ended March 31, 2003, as compared with $21.1 million in the same period in fiscal 2002. This was mainly due to increases in bad debt expenses (approximately $2.0 million), pension expenses due to lower discount rate and asset return assumptions (approximately $0.6 million), labor costs related to wage increases and additional personnel (approximately $1.0 million), costs for utility programs such as energy conservation and customer education (approximately $1.3 million), insurance costs for general liability (approximately $0.4 million), materials and supplies costs used by the appliance operations (approximately $0.3 million), as well as increased allocated corporate expenses such as auditing, legal and bank fees (approximately $2.9 million).

Depreciation and amortization expense increased to $8.1 million for the three months ended March 31, 2003, as compared to $6.9 million in the same period in fiscal 2002, as a result of additional plant-in-service.

Operations and maintenance expenses increased by $11.5 million, or 27 percent, to $54.2 million for the six months ended March 31, 2003, as compared with $42.7 million in the same period in fiscal 2002. This was mainly due to increases in bad debt expenses (approximately $2.1 million), pension expenses due to lower discount rate and asset return assumptions (approximately $2.0 million), labor costs related to the rate case, wage increases, and additional personnel (approximately $2.0 million), costs for utility programs such as energy conservation and customer education (approximately $1.3 million), insurance costs for general liability (approximately $0.4 million), materials and supplies costs used by the appliance operations (approximately $0.6 million), as well as increased allocated corporate expenses (approximately $2.8 million).

Because of the increase in operating revenues due to the colder than normal weather discussed earlier, the company has had increased exposure to bad debts during fiscal 2003. This could have an adverse effect on operating results for this segment for the remainder of the fiscal year. The company also anticipates increased costs related to pension expense, insurance costs and allocated corporate expenses resulting from additional auditing, legal, and treasury expenses, as well and other costs incurred by the company associated with fulfilling the requirements of the Sarbanes-Oxley Act of 2002 during the remainder of fiscal 2003.

Depreciation and amortization expense increased to $15.7 million for the six months ended March 31, 2003, as compared to $14.1 million in the same period in fiscal 2002, as a result of additional plant-in-service.

Energy Asset Management Segment

The Energy Asset Management segment (formerly Wholesale Energy Marketing and Trading) includes the operations of the company's NUI Energy Brokers subsidiary, and the distribution, storage and pipeline operations of VGC. Off-system gas sales, which were previously included in this segment, have been included within the Distribution Services segment.

(Dollars in thousands)	Three Months Ended March 31, 2003	Three Months Ended March 31, 2002*	Six Months Ended March 31, 2003	Six Months Ended March 31, 2002*
Operating Revenues	$17,041	$5,350	$20,886	$14,729
Purchased Gas and Fuel	264	(250)	319	(490)
Operating Margins	16,777	5,600	20,567	15,219
Operating Expenses:
Operations & Maintenance Expenses	2,804	2,445	4,996	5,375
Depreciation & Amortization	591	603	1,162	1,292
Taxes Other than Income	194	71	394	192
Total Operating Expenses	3,589	3,119	6,552	6,859
Other Income & Expense	98	62	235	362
Income from Continuing Operations before Interest and Taxes	$13,286	$2,543	$14,250	$8,722

*- As restated (see Note 2 of the Notes to the Consolidated Financial Statements)

 Operating Revenues. As further discussed in Note 14 of the Notes to the Consolidated Financial Statements, operating revenues for NUI Energy Brokers and NUI Energy (see below) have been restated for fiscal years 2000-2002 as a result of adopting a provision in the Emerging Issues Task Force (EITF) Opinion 02-03, "Issues Involved in Accounting for Contracts Under Issue 98-10," which requires that all energy companies that follow the accounting under EITF 98-10 reflect their operating revenues on a net basis. In previous periods, NUI Energy Brokers included both the cost of purchased gas and the operating margin earned on all of its physical energy transactions (physical volumes of gas bought and sold to third parties) in operating revenues and classified the cost of that gas as a component of purchased gas and fuel on the Consolidated Statement of Income. Historically, NUI Energy Brokers had recorded only the operating margin component for all of its financial trades (futures, options, swaps) and had classified these amounts as a component of purchased gas and fuel on the Consolidated Income Statement. Adopting the netting provision of EITF 02-03 had no net effect on these transactions other than to reclassify them and to present total margins earned as operating revenues rather than purchased gas and fuel. As a result of net-basis reporting, NUI reduced operating revenues and purchased gas and fuel line items by $51.7 million and $87.3 million for the three and six month periods ended March 31, 2002, respectively, with no change to total operating margins.

Energy Asset Management operating revenues increased approximately $11.7 million, or 219 percent, to $17.0 million for the three months ended March 31, 2003, as compared to $5.3 million in the same period in fiscal 2002. The increase was primarily due to unrealized margins recorded by NUI Energy Brokers associated with gas supply procurement contracts related to forecasted sales by NUI Energy (approximately $6.3 million), increased operating margins from trading activities due to increased volatility during the current three month period as compared to the prior fiscal year period (approximately $3.3 million), and realized contracts during the current three-month period by NUI Energy Brokers that had been reversed under the provisions of EITF 02-03 and recorded as the effect of a change in accounting (approximately $1.4 million). The operating revenues of VGC increased approximately $0.3 million as a result of higher operating revenues by its distribution company due to an increase in the cost of natural gas during the three months ended March 31, 2003 as compared to the same period in fiscal 2002.

Operating revenues increased approximately $6.2 million, or 42 percent, to $20.9 million for the six months ended March 31, 2003, as compared to $14.7 million in the same period in fiscal 2002. The increase was due to the approximately $6.3 million of unrealized margins recorded by NUI Energy Brokers associated with gas supply procurement contracts previously noted and improved margins from asset management opportunities for the current six-month period, as compared to the same period in fiscal 2002 (approximately $2.0 million).  Partially offsetting these increases was a significant reduction in the mark-to-market valuation of a large storage contract in the NUI Energy Brokers portfolio (approximately $3.8 million).  Also offsetting the increase in the current fiscal year period was the effect of adopting the provisions of EITF 02-03 on October 25, 2002, which required the company to account for energy contracts not falling under the provisions of SFAS 133 on an accrual basis rather than mark-to-market accounting of such non-derivative contracts (see Note 14 of the Notes to the Consolidated Financial Statements). The operating revenues of VGC increased approximately $0.5 million as a result of higher operating revenues by its distribution company due to an increase in the cost of natural gas during the six months ended March 31, 2003, as compared to the same period in fiscal 2002.

Operating Margins. Operating margins increased approximately $11.2 million, or 200 percent, to $16.8 million for the three months ended March 31, 2003, as compared to $5.6 million in the same period in fiscal 2002. Because operating revenues for NUI Energy Brokers are recorded net of gas costs, the increase in operating margins is primarily attributable to the effects of the factors discussed above regarding operating revenues. As further discussed in Note 14 of the Notes to the Consolidated Financial Statements, the company adopted the full provisions of EITF 02-03 on January 1, 2003.

Operating margins increased approximately $5.4 million, or 35 percent, to $20.6 million for the six months ended March 31, 2003, as compared to $15.2 million in the same period in fiscal 2002. This increase was primarily attributable to the effects of the factors discussed above regarding operating revenues. While natural gas prices have begun to increase and volatility has increased, market conditions in the energy trading industry have been dampened due to fewer creditworthy trading partners. The company anticipates credit issues in the industry will continue throughout fiscal 2003, which may decrease or limit the growth in operating margins for NUI Energy Brokers. Also, the recent downgrades of the company's credit ratings (see Liquidity and Capital Resources) could increase the collateral requirements of NUI Energy Brokers, as well as adversely affect the willingness of counterparties to enter into transactions, which may decrease operating margins for the remainder of fiscal 2003. The effect of EITF 02-03 on the accounting for NUI Energy Brokers' operating margins for the fiscal year is estimated to be a decrease of approximately $1.0 million. 

Operating Expenses. Operating and maintenance expenses increased by approximately $0.4 million during the three months ended March 31, 2003, as compared to the same period in fiscal 2002 due to increases in pension costs previously discussed (approximately $0.1 million), employee benefit expenses (approximately $0.3 million), insurance costs for general liability (approximately $0.1 million), as well as increased allocated corporate expenses (approximately $0.2 million). These increases were partially offset by reduced labor costs for commissions for NUI Energy Brokers (approximately $0.1 million) and general cost reductions undertaken by VGC (approximately $0.2 million).

Operating and maintenance expenses decreased by approximately $0.4 million during the six months ended March 31, 2003, as compared to the same period in fiscal 2002 due to reduced labor and commissions for NUI Energy Brokers (approximately $0.4 million), general cost reductions related to subsidiaries disposed of by VGC (approximately $0.8 million), and reduced bank fees (approximately $0.2 million).  These reductions were partially offset by increases in pension costs (approximately $0.3 million), employee benefit expenses (approximately $0.3 million), insurance costs for general liability (approximately $0.2 million), as well as increased allocated corporate expenses (approximately $0.2 million).

As previously noted, the company anticipates increased costs related to pension expense, insurance costs and allocated corporate expenses resulting from additional auditing, legal, and treasury expenses, as well and other costs incurred by the company associated with fulfilling the requirements of the Sarbanes-Oxley Act of 2002 during the remainder of fiscal 2003.

Retail and Business Services Segment

The Retail and Business Services segment includes the operations of the company's NUI Telecom, UBS and NUI Energy subsidiaries, as well as the operations of the network services and wireless divisions of TIC.

(Dollars in thousands)	Three Months Ended March 31,  2003	Three Months Ended March 31, 2002*	Six Months Ended  March 31, 2003	Six  Months Ended March 31, 2002*
Operating Revenues	$13,919	$10,082	$28,871	$17,419
Cost of sales and services	8,868	5,269	17,256	9,025
Operating Margins	5,051	4,813	11,615	8,394
Operating Expenses:
Operations & Maintenance Expenses	8,928	4,352	15,374	7,207
Depreciation & Amortization	768	222	1,420	851
Taxes Other than Income	197	163	405	388
Total Operating Expenses	9,893	4,737	17,199	8,446
Other Income & Expense	(1)	---	32	6
Income from Continuing Operations before Interest and Taxes	$(4,843)	$76	$(5,552)	$(46)

*- As restated (see Note 2 of the Notes to the Consolidated Financial Statements)

Operating Revenues. Retail and Business Services operating revenues increased by approximately $3.8 million, or 38 percent, to $13.9 million for the three months ended March 31, 2003 from $10.1 million in the same period in fiscal 2002. This increase was primarily due to increased revenues by NUI Telecom of approximately $5.5 million due to the acquisitions of Norcom in March 2002 (see Note 4 of the Notes to the Consolidated Financial Statements) and Telcorp in April 2002 (see Note 5 of the Notes to the Consolidated Financial Statements), and customer growth. Norcom and Telcorp contributed $3.9 million and $1.7 million of operating revenues, respectively, during the three-months ended March 31, 2003, compared to $1.1 million for Norcom during the same period in fiscal 2002. Operating revenues of UBS during the three months ended March 31, 2003 were consistent with fiscal 2002. The operating revenues of NUI Energy decreased approximately $1.7 million for the three months ended March 31, 2003 as compared with the same period in the prior fiscal year due to reduced volume of new contracts as the company sought to reduce its exposure to the retail energy marketing business and the continuing effects of adopting the provisions of EITF 02-03 on October 25, 2002. NUI Energy's revenues have been reflected on a net basis for the three and six-month periods ended March 31, 2002 due to the adoption of the netting provisions of EITF 02-03.

Operating revenues increased by approximately $11.5 million, or 66 percent, to $28.9 million for the six months ended March 31, 2003 from $17.4 million in the same period in fiscal 2002. This increase was primarily due to increased revenues by NUI Telecom of approximately $12.5 million due to the acquisitions previously noted of Norcom and Telcorp, and customer growth. Norcom and Telcorp contributed $7.6 million and $3.4 million of operating revenues, respectively, during the six-months ended March 31, 2003, compared to $1.1 million for Norcom during the same period in fiscal 2002. Operating revenues for UBS increased by approximately $0.6 million primarily as a result of the benefit of additional billings related to customer accounts that were converted during the latter portion of fiscal 2002. As a result of the ability to provide billing services to a larger population of customers as compared to the prior year and conversion income to be recognized during the fiscal year, the results of UBS are anticipated to improve in fiscal 2003 and beyond. The operating revenues of NUI Energy for the six months ended March 31, 2003, decreased approximately $1.6 million compared with the same period in the prior fiscal year, for the reasons discussed previously. The company has announced its intention to exit the retail energy marketing business and is attempting to locate a buyer for assets of NUI Energy.

Operating Margins. Retail and Business Services operating margins increased by approximately $0.2 million, or 5 percent, during the three months ended March 31, 2003, to $5.0 million, as compared with $4.8 million in the same period in fiscal 2002 due primarily to an increase in margins from NUI Telecom of $2.4 million. This increase reflects the continued growth in customers and product offerings for NUI Telecom as a result of the acquisitions during the prior fiscal year discussed earlier.  Operating margins for UBS decreased $0.5 million due to the timing of conversion revenues during the three months ended March 31, 2002, which did not recur in the current fiscal year period. As NUI Energy records its revenues net of gas costs, operating margins decreased by $1.7 million for the reasons discussed in operating revenues. As further discussed in Note 14 of the Notes to the Consolidated Financial Statements, the company adopted the full provisions of EITF 02-03 on January 1, 2003.

Operating margins increased by approximately $3.2 million, or 38 percent, during the six months ended March 31, 2003, to $11.6 million as compared with $8.4 million in the same period in fiscal 2002 due primarily to an increase in margins from NUI Telecom of $5.1 million. This increase reflects the continued growth in customers and product offerings for NUI Telecom as a result of the acquisitions during the prior fiscal year discussed above. Operating margins for UBS decreased $0.3 million due to the operating margins related to conversion income noted above, which were partially offset by additional operating revenues discussed above. Operating margins for NUI Energy decreased by $1.6 million during the six months ended March 31, 2003, as compared to the same period in the prior fiscal year for the reasons discussed in operating revenues.

Operating Expenses.  Operations and maintenance expenses, depreciation and amortization, and taxes other than income for the Retail and Business Services segment increased in total by $5.2 million, or 109 percent, to $9.9 million during the three months ended March 31, 2003, as compared with $4.7 million in the same period in fiscal 2002. This was mainly a result of labor costs from additional personnel and temporary employees ($1.1 million), and increases in bad debt reserves (approximately $2.8 million), rent expense (approximately $0.2 million), pension costs (approximately $0.2 million), as well as increased allocated corporate expenses (approximately $0.3 million). The growth of NUI Telecom resulting from acquisitions and customer growth over the past several years resulted in increases in additional personnel, temporary employees and bad debt reserves. During the three months ended March 31, 2003, NUI Energy recorded additional reserves for bad debts of $1.3 million for a large customer and to provide for additional losses in conjunction with exiting the retail energy marketing business. Depreciation and amortization expenses increased approximately $0.5 million due to additional assets placed in service and amortization of intangible assets related to the acquisitions of Norcom and Telcorp.

Operations and maintenance expenses, depreciation and amortization, and taxes other than income increased in total by $8.8 million, or 104 percent, to $17.2 million during the six months ended March 31, 2003, as compared with $8.4 million in the same period in fiscal 2002. This was a result of increased labor costs from additional personnel and temporary employees ($3.7 million), bad debt reserves (approximately $3.0 million), rent expense (approximately $0.4 million), pension costs (approximately $0.5 million), as well as increased allocated corporate expenses (approximately $0.3 million). These increases were mainly due to growth experienced by NUI Telecom as a result of the acquisitions during the prior fiscal year previously discussed. Depreciation and amortization expenses increased approximately $0.6 million due to additional assets placed in service and amortization of intangible assets related to the acquisitions of Norcom and Telcorp.

NUI Telecom's recent acquisitions of new businesses have increased expenses associated with back office functions such as customer service, provisioning and finance that have been required to support these customer additions. During the second half of fiscal 2002 and into fiscal 2003, NUI Telecom has continued to implement various information systems improvements and to integrate its new businesses to streamline functions in order to improve its operating performance.

As previously noted, the company anticipates increased costs related to pension expense, insurance costs and allocated corporate expenses resulting from additional auditing, legal, and treasury expenses, as well as other costs incurred by the company associated with fulfilling the requirements of the Sarbanes-Oxley Act of 2002 during the remainder of fiscal 2003.

Regulatory Matters  

On November 22, 2002, Elizabethtown Gas Company received approval from the New Jersey Board of Public Utilities (NJBPU) to increase its base rates by an annual amount of $14.2 million, or approximately 5 percent.  The increase was effective immediately and covered a portion of the costs of plant investments and higher operating expenses incurred since the company's last base rate increase twelve years ago.  The new rates are based on a return on equity of 10.0 percent and an overall rate of return on rate base of 7.95 percent.  The rate order also revised the normal weather pattern upon which base rates and Elizabethtown's Weather Normalization Clause were reset from a 30-year to a 20-year weather average to better reflect current weather trends.  In addition, the company was allowed to increase service charges to various rate classes of customers to better reflect the cost of providing service to these customers.

On March 30, 2001 the NJPBU issued an order allowing the company to establish a new Gas Cost Under-recovery Adjustment (GCUA) to recover the gas cost under-recovery balance as of October, 31, 2001, with associated interest at a fixed rate of 5.5 percent per annum over a three-year period from December 1, 2001 through November 30, 2004. In addition, pursuant to the order, the company was required to make a filing on November 15, 2001, to establish a new purchased gas adjustment (PGA) clause rate designed to recover purchased gas costs for the period November 1, 2001, through September 30, 2002. In that filing, the company requested approval to decrease its PGA rate and implement its GCUA rate, with a net effect representing a decrease of 12.7 percent in residential customer bills.  The NJBPU approved the company's request on an interim basis and these changes became effective on December 1, 2001.

In response to the Electric Discount and Energy Competition Act which was signed into law in February 1999, on March 30, 2001, the NJBPU approved a stipulation which enabled all retail customers in New Jersey to choose a natural gas supplier, provided an incentive for these customers to choose an alternate natural gas supplier and allowed the company to continue offering basic gas supply service through December 2002. On January 17, 2002, the NJBPU issued an order that continued the obligation of all New Jersey gas utilities to provide basic gas supplyservice until it has had an opportunity to fully investigate major policy issues relating to pricing structure and gas supply reliability.  No timetable has been established for completion of such a review.  As of March 31, 2003, no residential customers in the company's New Jersey service territory have switched to an alternative gas supplier.

On March 20, 2003, the NJBPU announced the initiation of a focused audit of NUI Corporation, NUI Utilities, Inc. and Elizabethtown Gas Company. The NJBPU has expressed the belief that recent downgrades of the senior unsecured debt of NUI Corporation and NUI Utilities, Inc., as well as negative credit rating agency comments, and concerns raised during a recent competitive services audit, substantiated the need for an in-depth review of the financial practices of the company and its affiliates. The NJBPU has issued a Request for Proposal (RFP) for consulting firms to bid to perform the focused audit on behalf of the Board. According to the RFP, the focused audit will cover the following areas: corporate governance; strategic planning; financial interactions; accounting and property records; and affiliate relations.  The RFP anticipates having the NJBPU select a firm to perform the focused audit during the first week in June 2003, and anticipates the audit report being filed with the NJBPU in late October 2003. The company is not able to express a belief at this time as to the outcome of the focused audit.

Liquidity and Capital Resources

The company's cash provided by operating activities was $57.8 million and $28.6 million for the six-month periods ended March 31, 2003 and 2002, respectively.  The improvement of $29.2 million in operating cash flows for the current period was due in part to the timing of payments to the company's gas suppliers and collections in the current period of a portion of under-recovered gas costs as a result of the company's ability to collect the large under-recovered gas balance that existed at September 30, 2001 over a period of three years. As noted in Regulatory Matters, these under-recovered gas costs are now a component of regulatory assets and will be recovered with associated interest over a three-year period. This increase in operating cash flows was partially offset by higher accounts receivable at March 31, 2003 than during the same period a year ago due primarily to higher natural gas prices in the current six-month period than the same period in fiscal 2002.

Because the company's business is highly seasonal, short-term debt is used to meet seasonal working capital requirements. The company also borrows under its bank lines of credit to finance portions of its capital expenditures, pending refinancing through the issuance of equity or long-term indebtedness at a later date, depending upon prevailing market conditions. As of March 31, 2003, the company had drawn approximately $175.3 million under its short-term credit facilities and had overnight cash investments of approximately $79.3 million. As of May 13, 2003, approximately $60 million of this cash had been used to reduce the outstanding borrowings to approximately $115 million. Also on that date, the company had approximately $26 million of cash on hand. The company will continue to focus on reducing short-term indebtedness during fiscal 2003 through the collection of under-recovered gas costs discussed above, additional asset sales, and consideration of opportunistic longer-term debt or equity financing.

The company sold 1.725 million shares of common stock for net proceeds of approximately $37.0 million during March 2002 under the shelf registration statement. The proceeds from the sale were used to pay down short-term debt.

The company completed the sale of its VCW subsidiaries on November 7, 2002, for approximately $15 million (see Note 8 of the Notes to the Consolidated Financial Statements). The proceeds of the transaction were used to further reduce short-term debt.

The company does not have any off-balance sheet financing; however, the company is a 50 percent member of a joint venture that is developing natural gas storage assets and is required to provide funding toward the development of these assets for their intended purpose (see Capital Expenditures and Commitments- Joint Venture with Duke Energy for further discussion).

On February 3, 2003, Moody's Investors' Service (Moody's) downgraded the company's debt rating from Baa-2 to Baa-3. Moody's also downgraded the debt rating of NUI Utilities from Baa-1 to Baa-2. NUI Utilities is a wholly-owned subsidiary of NUI that owns three of the company's four utility operations. Moody's cited the impact of unfavorable results from most of the company's unregulated businesses (i.e. those in the company's Retail and Business Services segment) during fiscal 2002 and their concerns regarding these operations' potential adverse impact on the company's future performance as factors influencing their rating action. As a result of these downgrades, the company's cost of borrowing under its short-term facilities increased 37.5 basis points or 0.375 percent and the cost of borrowing for NUI Utilities increased 25 basis points or 0.25 percent.

On March 10, 2003, Moody's further downgraded the company's debt rating from Baa-3 to Ba-2. Moody's also downgraded the debt rating of NUI Utilities from Baa-2 to Baa-3. Moody's cited the impact of unfavorable results from most of the company's unregulated businesses during fiscal 2002, the company's disclosure of technical defaults under the Note Purchase Agreement dated August 20, 2001, and the quality of the company's internal financial controls as factors influencing their rating action. As a result of these downgrades, the company's cost of borrowing under its short-term facilities increased an additional 62.5 basis points or 0.625 percent and the cost of borrowing for NUI Utilities was unchanged. Moody's also indicated that the company and NUI Utilities would remain under review for further possible downgrade. Moody's cited that, in its continuing review, it will assess the progress being made by management to 1) procure the continued support of its bank lenders and senior noteholders; 2) either demonstrate unequivocal turn-around in the under-performing unregulated businesses (i.e. those in the company's Retail and Business Services segment), accomplish substantial cost reductions or exit them altogether; and 3) further improve internal accounting, legal and financial controls.

On May 7, 2003, Moody's further downgraded the NUI Corporation's debt rating from Ba-2 to B-1. Moody's also downgraded the debt rating of NUI Utilities from Baa-3 to Ba-1. Moody's cited reduced financial flexibility of the company due to under-performance of some of its unregulated businesses, as well as the effective subordination of the company's debtholders to those of NUI Utilities. Moody's also cited the company's continued use of a centrally managed cash process at the corporate level, which effectively ties NUI's Utilities credit more closely to that of the NUI Corporation. As a result of these downgrades, NUI Utilities' cost of borrowing under its short-term facilities increased an additional 37.5 basis points or 0.375 percent and the cost of borrowing for NUI Corporation was unchanged. Should NUI Utilities' current debt ratings be downgraded further, this would adversely affect NUI Utilities' cost of borrowing under its short-term credit facility.  Should NUI Corporation's or NUI Utilities' current debt rating be further downgraded, it could potentially increase the collateral requirements of the NUI Corporation's energy portfolio and risk management business and distribution services business, as the case may be, and could adversely affect the willingness of counterparties to enter into transactions with the company.

Moody's indicated that the downgrades on May 7, 2003, concluded its reviews of both the company and NUI Utilities. Even though the company is no longer on creditwatch, as a result of the rating actions taken by Moody's in recent months, the company is studying various options and strategic alternatives to improve its capital structure in order to improve its credit ratings to investment grade, which may include additional asset sales and/or the issuance of additional equity.

If assets are held for sale, impairment losses could occur if market values are less than carrying values. Such amounts could be material to the company's results of operations and financial position.

The company believes it has made significant progress in addressing the factors cited by Moody's, including entering into the new credit agreements discussed below, commencing the segregation of the cash management functions of its NUI Utilities subsidiary on a stand-alone basis, which is expected to be completed by the fourth quarter of fiscal 2003, and conducting a review of the company's internal controls that is expected to be completed in June 2003.

In connection with segregating the cash management functions of NUI Utilities, which is required to be completed by November 12, 2003, in accordance with the NUI Utilities credit agreement, NUI Corporation is evaluating the impact of this segregation on the cash requirements of each of the company's businesses. The company is also evaluating options with respect to amounts held by NUI Corporation for the benefit of its subsidiaries, including NUI Utilities, as a result of the cash management functions conducted by NUI Corporation.

On February 4, 2003, Standard & Poor's Rating Services (S&P) reaffirmed its BBB investment grade rating, and reiterated their stable outlook, for NUI Utilities.

Outlook for Fiscal 2003. As a result of the factors discussed above, the company believes that the cash provided by operations during fiscal 2003, combined with the cash provided from the already completed sale of VCW and cash to be raised from the sale of the assets of NUI Energy, and availability under the new credit and bridge loan agreements discussed below will enable the company to meet its obligations for the current fiscal year. Additional discussion of certain items noted above follows.

There can be no assurance that additional downgrades by Moody's and/or S&P can be avoided.

Short-Term Debt.  On February 12, 2003, the company and NUI Utilities each entered into a new revolving credit facility that replaced their respective previous credit facilities.  The company's new credit facility consists of a credit agreement that allows it to borrow up to approximately $38.1 million, and NUI Utilities' new credit facility consists of a credit agreement and a 364-day bridge loan, which allows NUI Utilities to borrow up to an aggregate of approximately $141.9 million.  NUI Corporation's previous credit facility allowed it to borrow up to $50 million, and NUI Utilities' previous credit facility allowed it to borrow up to $145 million. The new credit agreements and the bridge loan agreement mature on February 11, 2004. The credit agreements may be extended in successive 364-day increments upon obtaining approval of all the respective lenders.  The company's credit agreement and NUI Utilities' credit agreement and bridge loan agreement require the company and NUI Utilities, respectively, to meet certain covenants and limitations as well as maintain certain financial ratios.  Included in these covenants are provisions that limit the ability of each of the company and NUI Utilities to incur future indebtedness, make capital expenditures above certain levels, enter into sale-leaseback transactions, pledge or sell assets, make acquisitions, merge and pay dividends on common stock, and prohibit the creation of guarantees (other than those in the normal course of business).  The company must maintain a fixed charge coverage ratio of not less than 1.50x and NUI Utilities must maintain a fixed charge coverage ratio of 1.75x. The company and NUI Utilities each must maintain leverage ratios of not more than 0.65 from March 1 through August 31 and not more than 0.70 from September 1 through February 28 (or 29, if applicable). In addition, if the amounts available under the NUI Utilities' credit agreement are increased, any borrowings under such increase first must be used to repay any amounts outstanding under the bridge loan agreement.  The NUI Utilities' credit agreement and bridge loan agreement also limit the payment of dividends from NUI Utilities to the company to not more than $100 million.  The company and NUI Utilities repaid all of the $195 million of borrowings outstanding under their prior credit agreements from the borrowings under the company's and NUI Utilities' new credit agreements, the bridge loan agreement and cash on hand. 

Borrowings under the new credit facilities and the bridge loan agreement bear interest at a rate based on either the London Interbank Offering Rate (LIBOR) or the Prime Rate as of the date of the advance.  Pricing grids have been provided to the company and NUI Utilities by the bank syndication agent, which tier pricing to higher and lower credit ratings should a debt rating change occur. As of March 31, 2003, the total aggregate outstanding borrowings under the company's new credit facilities were $175.3 million. On that date, the company had outstanding borrowings under its credit facility amounting to $35.0 million and unused borrowing capacity amounting to $3.1 million, and NUI Utilities had outstanding borrowings under its credit facility amounting to $140.3 million and unused borrowing capacity amounting to $1.6 million.  Also on that date, the company had available cash in the form of overnight investments of approximately $79.3 million. The weighted average daily amounts outstanding of borrowings under the company's credit facility and the weighted average interest rates on those amounts were $40.8 million and $45.6 million at 2.8 percent and 3.0 percent for the three and six-month periods ended March 31, 2003, respectively, and $74.3 million and $127.9 million at 3.7 percent and 3.9 percent for the three and six-month periods ended March 31, 2002, respectively. The weighted average daily amounts outstanding of borrowings under NUI Utilities' credit facility and the weighted average interest rates on those amounts were $132.8 million and $110.9 million at 2.6 percent and 2.5 percent for the three and six-month periods ended March 31, 2003, respectively, and $125.5 million and $121.9 million at 2.6 percent and 2.8 percent for the three and six-month periods ended March 31, 2002, respectively.

The company expects improved cash flow from operations during fiscal 2003 as a result of the following factors: the collection of approximately $20 million of under-recovered gas costs; the collection of weather normalization recoveries of approximately $8 million related to the warmer than normal weather experienced during fiscal 2002; improved profitability as a result of the outcome of the Elizabethtown Gas rate case; and reduced losses from discontinued operations related to the company's TIC and NUI Environmental subsidiaries.  In November 2002, the company raised approximately $15 million from the sale of its Valley Cities Gas and Waverly Gas subsidiaries. Because of the above factors that are expected to have a positive impact upon the company's cash flows, financial position and debt-servicing capabilities, the company believes that it has sufficient amounts available under its new credit agreement, and that NUI Utilities has sufficient amounts available under the new NUI Utilities credit agreement and bridge loan agreement, to cover their respective projected cash needs for fiscal 2003, as well as to provide a contingent cash reserve for potential unforeseen events.

Long-Term Debt and Funds for Construction Held by Trustee.  The company is scheduled to repay $50 million of medium-term notes on February 1, 2005.

In January 2003, the company became aware that it was in technical default under certain covenants contained in its Note Purchase Agreement dated as of August 20, 2001. On January 24, 2003, the company obtained a 30-day waiver of certain covenant violations contained in the Note Purchase Agreement from the holders of the notes (the noteholders) issued under the agreement.  The covenants consisted of the minimum fixed charge coverage ratio, restrictions on the ability to enter into sale and leaseback transactions, entering agreements providing for restrictions on subsidiaries' ability to pay dividends to the company and make advances to and investments in the company, and the requirement that the company deliver certain financial information and statements of cash flows to the noteholders. Prior to obtaining the waiver, the company was in technical default under the Note Purchase Agreement during fiscal 2002.

On February 20, 2003, the company and the noteholders amended the Note Purchase Agreement for the purpose of curing all the technical defaults. The amended agreement contained certain provisions that were subject to the approval of, or required action by, the banks participating in the company's $38 million 364-day credit facility. These provisions were: 1) the approval by the banks of an increase in the interest rate under each of the senior notes of 50 basis points (or 0.50 percent), 2) the approval by the banks of the execution by certain of the company's non-regulated subsidiaries (the "non-restricted subsidiaries" as defined in the company's bank credit facility) of guarantees (the senior guarantees) of prompt payment when due of the indebtedness under the senior notes issued pursuant to the Note Purchase Agreement, and 3) the execution by the banks of an Inter-creditor Agreement, reasonably satisfactory to the banks and noteholders, providing for the pro-rata sharing of any proceeds received by the lenders under either the bank credit facility or the noteholders of any proceeds received by any of the lenders under any of the bank guarantees or the senior note guarantees. The amendment also provided for the establishment of a "Priority Indebtedness" covenant requiring the company to maintain a ratio of "priority debt" (all indebtedness of the company secured by liens plus all indebtedness of the restricted subsidiaries, as defined in the agreement) to consolidated assets of not more than 50 percent.

On April 1, 2003, the company and the banks amended the company's 364-day credit facility to approve the interest rate change with respect to the senior notes, to approve the guarantee by the non-restricted subsidiaries of the prompt payment when due of the indebtedness under the senior notes, and to approve the execution of the Inter-creditor Agreement referenced above. This amendment to the company's credit facility also provided for a new pricing grid, which increased the company's cost of borrowing under the credit facility of 25 basis points (0.25 percent).

Also on April 1, 2003, the company and the noteholders amended the Note Purchase Agreement to reflect the above changes. The company is now, and expects to continue to be, in full compliance with all the terms of both the Note Purchase Agreement and its bank credit facilities.

The company's long-term debt agreements include, among other things, restrictions as to the payment of cash dividends. Under the most restrictive of these provisions, the company is permitted to pay approximately $13.9 million of cash dividends at March 31, 2003.

The company deposited in trust the unexpended portion of the net proceeds from its Gas Facilities Revenue Bonds until drawn upon for eligible expenditures. As of June 30, 2002, all of the original net proceeds from the bonds had been expended. The remaining $2.1 million classified as Funds for Construction Held by Trustee on the company's Consolidated Balance Sheet at March 31, 2003, represents the unexpended portion of interest earned on the original net proceeds of the bonds.

Common Stock.  The company periodically issues shares of common stock in connection with NUI Direct, the company's dividend reinvestment and stock purchase plan, and various employee benefit plans. From time to time, the company may issue additional equity to reduce short-term indebtedness and for other general corporate purposes.  As previously noted, the company sold 1.725 million shares of its common stock for net proceeds of approximately $37.0 million in March 2002.

The company issued stock in conjunction with several acquisitions during fiscal 2002. This included 144,648 shares worth approximately $3.1 million to acquire VGSC and VGDC (see Commitments and Contingencies- Acquisition of Virginia Gas Storage Company (VGSC) and Virginia Gas Distribution Company (VGDC)), and 216,039 shares worth approximately $4.2 million to acquire Norcom (see Note 4 of the Notes to the Consolidated Financial Statements). In addition, the company issued 47,136 shares to the former owners of NUI Telecom as payment of an incentive of $1.0 million under a provision of the Agreement and Plan of Merger.

Assets and Liabilities Held for Sale.  The company completed the sale of its NC utility operation on September 30, 2002, and completed the sale of its VCW utility operations on November 7, 2002 (see Capital Expenditures and Commitments- Sale of North Carolina Gas and Sale of Valley Cites Gas and Waverly Gas). In accordance with the provisions of Statement of Financial Accounting Standards No. 144, "Accounting for Impairment or Disposal of Long-lived Assets," the company has reclassified the assets and liabilities of NC and VCW as Held for Sale on the Consolidated Balance Sheet at September 30, 2002 (see Note 8 to the Notes to the Consolidated Financial Statements). 

Capital Expenditures and Commitments

Capital Expenditures. Capital expenditures, which consist primarily of expenditures to expand and upgrade the company's gas distribution systems, were $26.6 million for the six months ended March 31, 2003, and $27.3 million for the six months ended March 31, 2002. Capital expenditures are expected to be approximately $54 million in fiscal 2003, which will be used primarily for the company's contribution toward the development and expansion of the Saltville Storage project (see additional discussion below), continued expansion and upkeep of the company's natural gas distribution system and certain information technology projects.

Joint Venture with Duke Energy. On April 30, 2001, the company announced an agreement with a unit of Duke Energy to develop a natural gas storage facility in Saltville, Virginia. A subsidiary of VGC and Duke Energy Gas Transmission (DEGT) have created a limited liability company, Saltville Gas Storage Company LLC (the LLC).  VGC received final regulatory approvals during January 2003 and contributed certain storage assets valued at approximately $16.3 million to the LLC. DEGT has contributed an equal amount (approximately $16.3 million) of capital required to expand the facility for its intended purpose.  To the extent the LLC determines it needs additional funding (which decision can only be made jointly by the company and DEGT), the company and DEGT are obligated to fund the development of the LLC equally. As of March 31, 2003, the company has contributed an additional $3.7 million toward the development of the LLC.

The company currently estimates its share of future funding needs to be approximately $18.3 million in fiscal 2003, $7.3 million in fiscal 2004, $0.8 million in fiscal 2005, $0.7 million in fiscal 2006, and $0.8 million in fiscal 2007. The company is exploring various options to satisfy its funding requirements for the joint venture during fiscal 2003, including a long-term (12 to 15 year) capital lease with a bank for a compressor station.

The LLC plans to expand the present Saltville storage facility from its current capacity of 1 Bcf to approximately 12 Bcf and connect it to DEGT's East Tennessee Natural Gas interstate system and DEGT's Patriot pipeline, which is under construction. At full capacity, the Saltville storage field will be able to deliver up to 500 million cubic feet per day of natural gas to area markets. The Saltville facility features fast-injection and fast-withdrawal capabilities offered by salt cavern storage. The expansion will be completed in phases starting in fiscal 2003, with the Phase I total of 6.1 Bcf of working natural gas storage capacity to be completed by fiscal 2008. The market demand for additional storage will dictate the timing of the other phases of the expansion.

Development of the Saltville facility is intended to create a strategically located energy-trading hub for Energy Brokers, and enable the company to capitalize on the energy supply, wholesale energy portfolio and risk management opportunities in the rapidly developing Mid-Atlantic region. The additional storage capacitywould allow the company to meet the significant demand from local distribution companies as well as power plant development that is underway in the region.

On October 26, 2001, the LLC filed a certification application with the Virginia State Corporation Commission (VSCC). A public hearing was held on this matter on February 20, 2002 and the Hearing Examiner's report was issued on May 31, 2002. On August 6, 2002, the VSCC issued an order granting a Certificate of Public Convenience and Necessity (CPCN) for the storage facilities and attendant pipeline. Those conditions included a final technical analysis to be performed by VSCC staff. The CPCN authorizes the LLC to construct, develop and maintain Phase I of the project, and specifies certain other information, including allowed returns on this regulated storage asset. The VSCC staff completed their technical analysis in January 2003 and the VSCC issued the LLC a final CPCN on January 22, 2003.

On August 23, 2002, the LLC filed an application with the Federal Energy Regulatory Commission requesting a limited jurisdiction certificate that would allow the LLC to serve interstate customers. That certificate was granted to the LLC on January 29, 2003.

Development of Trading Hubs. The company's wholesale energy portfolio and risk management subsidiary, Energy Brokers, has acquired options on the land and mineral rights for property located in Richton, Perry County, Mississippi, that the company plans to develop into a natural gas storage facility to help serve the Southeast United States. Energy Brokers plans to develop a two-well salt dome storage facility in Richton that would have a working gas capacity of approximately 7.8 billion cubic feet.

The first well and a 14-mile pipeline to be developed by the company that will connect with the Destin Pipeline are tentatively scheduled to be operational in fiscal 2005. Implementation of this development plan is dependent on favorable results from testing and other operational issues that are currently under consideration by the company as well as obtaining sufficient financing to fund the development. Accordingly, there can be no assurance that this project will be implemented. This project is not expected to have any material capital requirements in fiscal 2003 and, if the project proves feasible, will primarily impact the company's capital expenditure program in fiscal years 2004 and 2005 after the funding needs of Phase I of the Saltville facility (discussed above) are essentially satisfied.

The benefits of the Richton site to customers and Energy Brokers are: (1) its proximity to a number of major interstate pipelines, including Destin Pipeline and its connections to Williams Gas Pipeline-Transco, Florida Gas Transmission, Gulf South Pipeline, Tennessee Natural Gas, Southern Natural Gas and Gulfstream Pipeline; and (2) the quick-fill, quick-withdrawal capabilities offered by salt dome storage.

Gas Procurement Contracts. Certain of the company's long-term contracts for the supply, storage and delivery of natural gas include fixed charges that amount to approximately $53.3 million annually. The company also is committed to purchase from multiple suppliers, at market-related prices, minimum quantities of gas that, in the aggregate, are approximately 2.1 Bcf per year or to pay certain costs in the event the minimum quantities are not taken. During fiscal year ended September 30, 2002, the company's continuing utility operations purchased a total of 36.0 Bcf, and accordingly the company expects that minimum demand on its systems for the duration of these contracts will continue to exceed these minimum purchase obligations. As discussed earlier, the company's utility operations do not earn a profit on the sale of the gas commodity; changes to gas commodity prices have no effect on operating margins.

Environmental.  The company owns or previously owned properties on which former manufactured gas plants (MGP) were operated in the states of New Jersey, North Carolina, South Carolina, Pennsylvania, New York and Maryland. Although the actual total cost of future environmental investigation and remediation efforts cannot be reasonably estimated, the company has recorded a total reserve of approximately $33.5 million, which the company believes represents the probable minimum amount the company may expend over the next 30 years.  Of this reserve, approximately $29.9 million relates to the New Jersey MGP properties and approximately $3.6 million relates to the MGP properties located outside the state of New Jersey. The company believes that all costs associated with remediation of the New Jersey MGP properties will be recoverable in rates or from insurance carriers. In New Jersey, the company has begun rate recovery of approximately $8.2 million of such costs and recovery of an additional $1.7 million is currently pending NJBPU approval. With respect to costs that may be associated with the MGP properties located outside the state of New Jersey, the company is currently pursuing or intends to pursue recovery from ratepayers, former owners and operators, and/or insurance carriers. Although the company has been successful in recovering a portion of MGP remediation costs incurred outside New Jersey from the company's insurance carriers, the company is not able, at this time, to express a belief as to the success of additional recovery efforts.

Agreement to Acquire Assets of Norcom Agency Sales, Inc. On March 22, 2002, the company entered into an agreement to acquire certain assets of Norcom Agency Sales, Inc. (NAS). The agreement provides for the company to pay the seller, Norcom, a purchase price equal to a multiple of total sales to new customers obtained by NAS as agent for NUI Telecom during the period April 1, 2002, through October 31, 2003. The multiple to be paid will be determined based on the actual new customer revenues generated by NAS for the month of October 2003, and is subject to post-closing adjustments.

The purchase price will be paid in NUI common stock. The number of shares of NUI common stock to be issued will be determined by dividing the total purchase price by the average closing price of NUI's common stock for the first 20 of the 25 consecutive trading days immediately preceding October 31, 2003. The company expects to close on this transaction in or around February 2004.

Application of Critical Accounting Policies

 The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management considers Critical Accounting Policies to be those that could result in materially different financial statement results if the assumptions regarding application of accounting principles were different.  A description of the company's Critical Accounting Policies can be found in the company's Annual Report filed on Form 10-K for the year ended September 30, 2002. Other significant accounting policies are discussed in Note 1 of the Notes to the Consolidated Financial Statements-  "Summary of Significant Accounting Policies" of the company's Annual Report on Form 10-K for its fiscal year ended September 30, 2002. Recently issued accounting standards are also discussed in Note 14 of the Notes to the Consolidated Financial Statements- "New Accounting Standards."

Forward-Looking Statements

This document contains forward-looking statements. These statements are based on management's current expectations and information currently available, are believed to be reasonable and are made in good faith. However, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the statements. Factors that may make the actual results differ from anticipated results include, but are not limited to, the company's ability to control operating expenses; the level of uncollectible receivables; the volatility of natural gas prices; the impact of transactions relating to the company's exit of the retail energy marketing business; economic conditions; weather fluctuations; regulatory changes; competition from other providers of similar products; counterparty credit risk; access to capital markets; the results of the focused audit being conducted by the NJBPU; interest rate changes; future actions by ratings agencies; the company's ability to extend its credit facilities; the willingness of counterparties to continue to trade with, and supply energy to the company and such counterparties willingness to do so on terms similar to those currently in place; and other uncertainties, all of which are difficult to predict and many of which are beyond our control. For these reasons, you should not rely on these forward-looking statements when making investment decisions. The words "expect," "believe," "project," "anticipate," "intend," "should," "could," "will," "might," "estimate" and variations of such words and similar expressions, are intended to identify forward-looking statements. We do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise, except as required by securities laws.

For an additional discussion of factors that may affect the company's business and results of operations, see "Risk Factors" in our Annual Report filed on Form 10-K for the fiscal year ended September 30, 2002.

Item 3. Quantitative and Qualitative Disclosure AboutMarket Risk

Energy Brokers uses derivatives for multiple purposes: i) to hedge price commitments and minimize the risk of fluctuating gas prices, ii) to fulfill its trading strategies and, therefore, ensure favorable prices and margins, and iii) to take advantage of market information and opportunities in the marketplace. These derivative instruments include forwards, futures, options and swaps. The majority of Energy Brokers' positions are short-term in nature (up to 2 years) and can be readily valued using New York Mercantile Exchange settlement prices and those from several other well-established, third-party organizations.

Energy Brokers accounts for its trading activities in accordance with provisions of SFAS 133, Accounting for Derivative Instruments and Hedging Activities.  SFAS 133 requires that all derivatives be recognized on the balance sheet at fair value with changes in the value of derivatives that are not hedges recorded in earnings.

At March 31, 2003 Energy Brokers had designated certain futures contracts and physical forwards associated with the delivery and sale of natural gas into and from storage as cash flow hedges with the objective of fixing an acceptable return.  Under SFAS 133, the changes in the value of derivatives designated as hedges that are effective in offsetting the variability in cash flows of a forecasted transaction are recognized in other comprehensive income until the forecasted transactions occur and the ineffective portion of changes in fair value of derivatives is recognized immediately in earnings.

At March 31, 2003 the value in other comprehensive income associated with these positions is $0.3 million, net of tax, which will be reclassified into earnings over the next twelve months.  However, the actual amount reclassified into earnings could differ based on fluctuations in market prices.  At March 31, 2003 there was no hedge ineffectiveness recognized in earnings

The risk associated with open positions is closely monitored on a daily basis, and controlled in accordance with NUI Energy Brokers' Risk Management Policy. This policy has been prepared by senior management and approved by the company's Board of Directors, and dictates policies and procedures for all trading activities. The policy defines both value-at-risk (VaR) and loss limits, and all traders are required to read, sign, and follow this policy. At the end of each day, all trading positions are marked-to-market and a VaR is calculated. This information, as well as the status of all limits, is disseminated to senior management daily. In addition, the Risk Management Policy is regularly reviewed by senior management to assure that it is current and responsive to all marketplace risks, with any changes approved by the Board of Directors.

The following schedule summarizes the changes in derivative assets and liabilities for the six-month period ended March 31, 2003 (in thousands). Amounts are shown net of valuation reserves.

Derivative assets at September 30, 2002	$30,441
Derivative liabilities at September 30, 2002	(852)
Fair value of contracts outstanding at September 30,      2002		$29,589
Contracts realized or settled during the period		(33,588)
Change in accounting		(9,949)
Changes in fair value attributable to market pricing		41,081
Derivative assets at March 31, 2003	$27,133
Derivative liabilities at March 31, 2003	---
Fair value of contracts outstanding at March 31,      2003		$27,133

Changes in the fair value attributable to market pricing represents the changes in value of the company's unrealized mark-to-market net assets that relate to changes in commodity pricing, volatility of options on commodities, and other market related changes.

The following table summarizes the fair value of the contracts comprising the company's net derivative assets by maturity date (amounts in thousands):

	Fair Value of Contracts at Period-End
Source of Fair Value	Less than 1 Year	1-3 Years	4-5 Years	In Excess of 5 Years	Total
Prices actively quoted	$19,864	$1,402	$---	$---	$21,266
Prices provided by other external sources	1,489	---	---	---	1,489
Prices based on models and other valuation methods, net of valuation reserves	1,178	1,724	1,476	---	4,378
Total Fair Value of Contracts	$22,531	$3,126	$1,476	$---	$27,133

Energy Brokers utilizes the variance/covariance VaR methodology. Using a 95 percent confidence interval and a one-day time horizon, Energy Brokers' VaR was $76,000 and $98,000 at March 31, 2003 and 2002, respectively. The average, high, and low value at risk for the six months ended March 31, 2003 was $180,000, $743,000, and $14,000, respectively.

Item 4. Controls and Procedures

(a)           Evaluation of Disclosure Controls and Procedures

The company's Chief Executive Officer and Chief Financial Officer have each evaluated the effectiveness of NUI's disclosure controls and procedures as of a date within 90 days before the filing of this quarterly report (the "Evaluation Date"). Based on their evaluation as of the Evaluation Date, the Chief Executive and Chief Financial Officer have concluded that the company's disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) of the Securities Exchange Act) are effective to ensure that information required to be disclosed by the company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within required time periods.

(b)         Changes in Internal Controls

The company maintains a system of internal accounting controls that are designed to provide reasonable assurance that the company's books and records accurately reflect the company's transactions and that the company's established policies and procedures are followed. Subsequent to the Evaluation Date, there were no significant changes to the company's internal controls or other factors that could significantly affect our internal controls.

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

Between October 28, 2002 and December 20, 2002, five substantially similar civil actions were commenced in the United States District Court for the District of New Jersey, in which the plaintiffs allege that the company and its president and chief executive officer violated federal securities laws by issuing false statements and failing to disclose information regarding the company's financial condition and current and future financial prospects in its earnings statements, press releases, and in statements to analysts and others.  By orders dated December 19, 2002, January 22, 2003 and February 3, 2003, the five actions were consolidated into one action captioned In re NUI Securities Litigation.  The five consolidated lawsuits include: (1) an action captioned Jack Klebanow, on behalf of himself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on October 28, 2002;  (2) an action captioned Gisela Friedman, on behalf of herself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on October 31, 2002;  (3) an action captioned Thomas Davis, on behalf of himself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on November 6, 2002; (4) an action captioned Marvin E. Russell, on behalf of himself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on December 10, 2002; and (5) an action captioned Phyllis Waltzer, on behalf of herself and all others similarly situated v. NUI Corporation and John Kean, Jr., filed in the United States District Court for the District of New Jersey on December 20, 2002. By order dated February 3, 2003, a Lead Plaintiff, Lead Counsel and Liaison Counsel were appointed in the consolidated action. By stipulation of the parties, an Amended Consolidated Class Action Complaint was filed on May 7, 2003, and responsive pleadings are to be filed thirty days thereafter. No discovery has yet occurred. The Amended Complaint, brought on behalf of a putative class of purchasers of NUI's common stock between November 8, 2001 and October 17, 2002, asserts claims under Section 10(b), including Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act against the company, its president and chief executive officer, and its chief financial officer. Specifically, the Amended Complaint alleges that the defendants (i) failed to disclose material facts that would impair the company's current and future earnings, including (a) the allegedly accurate amount and explanation of the company's bad debts, (b) a purportedly illegal practice by the company in "re-terminating" intrastate calls, (c) alleged accounting improprieties in connection with purportedly unearned revenue, and (d) allegedly inaccurate earnings per share information, and (ii) inflated the company's earnings materially by (a) allegedly making misleading statements concerning, and failing to properly record, bad debt costs, (b) allegedly attributing the company's rising costs to incorrect and immaterial factors, and (c) purportedly pursuing illegal telecommunications billing practices. The Amended Complaint seeks unspecified monetary damages on behalf of the class, including costs and attorneys fees. Furthermore, on December 23, 2002, a law firm made a public announcement with respect to a lawsuit purportedly filed in the Southern District of New York on behalf of a putative class of purchasers of NUI's common stock between November 8, 2001 and October 17, 2002 against NUI Corporation and John Kean, Jr., alleging violations under Section 10(b), including Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act.  Specifically, the announcement alleges that the company knowingly or recklessly failed to properly record fixed cost expenses, accrue necessary pension expenses and reserve adequate amounts for its self-insured medical benefits in its quarterly financial statements.  At this time, the company has not been served with the purported complaint. Although the company intends to vigorously defend these lawsuits, it is not possible at this time to determine a likely outcome.

The company is also involved in various other claims and litigation incidental to its business. In the opinion of management, none of these other claims and litigation will have a material adverse effect on the company's results of operations or its financial condition.

Item 4. Submission of Matters to a vote of Security Holders

The following matters were presented for submission to a vote of security holders through the solicitation of proxies or otherwise during the second quarter of fiscal 2003.

The Annual Meeting of Shareholders of NUI Corporation was held on March 11, 2003.  Proxies for the Annual Meeting were solicited pursuant to Regulation 14A and there was no solicitation in opposition to management's nominees.  At the meeting, the shareholders approved an amendment to the NUI Corporation employee stock purchase plan; elected directors; and ratified the appointment of independent public accountants.

The total votes were as follows:

				Against or
			For	Withheld	Abstain
(1)	Election of directors to serve for three year Terms:
		James J. Forese	12,538,784	724,132
		R. Van Whisnand	12,595,648	667,269
(2)	Approval of an amendment to the NUI Corporation   employee stock purchase plan		12,752,146	342,138	168,632
(3)	Ratification of the appointment of Pricewaterhouse Coopers LLP as independent public accountants		12,634,775	599,549	28,592

Item 6.    Exhibits and Reports on Form 8-K

(a)           Exhibits

10.1              Credit Agreement dated as of February 12, 2003, by and among NUI Corporation and Fleet National Bank, Citizens Bank of Massachusetts, CIBC, Inc., PNC Bank, NA, and Mellon Bank, NA.

10.2              Credit Agreement dated as of February 12, 2003, by and among NUI Utilities, Inc. and Fleet National Bank, Citizens Bank of Massachusetts, CIBC, Inc., PNC Bank, NA, and Mellon Bank, NA.

10.3              Credit Agreement dated as of February 12, 2003, by and among NUI Utilities, Inc. and Fleet National Bank and Fleet Securities.

10.4              First amendment dated as of March 31, 2003, to the Credit Agreement dated as of February 12, 2003, by and among NUI Corporation and Fleet National Bank, Citizens Bank of Massachusetts, CIBC, Inc., PNC Bank, NA, and Mellon Bank, NA.

10.5              Inter-creditor Agreement dated as of April 1, 2003, among Fleet National Bank, Citizens Bank of Massachusetts, CIBC, Inc., PNC Bank, NA, and Mellon Bank, NA and AIG Life Insurance Company, Sunamerica Life Insurance Company, United of Omaha Life Insurance Company, Pacific Life and Annuity Company and Nationwide Life Insurance Company of America (formerly Provident Mutual Life Insurance Company) filed pursuant to the Note Purchase Agreement dated as of August 20, 2001, between NUI Corporation and AIG Life Insurance Company, Sunamerica Life Insurance Company, United of Omaha Life Insurance Company, Pacific Life and Annuity Company and Mutual Life Insurance Company.

10.6              First Amendment and Waiver dated as of February 20, 2003, to the Note Purchase Agreement dated August 20, 2001, between NUI Corporation and AIG Life Insurance Company, Sunamerica Life Insurance Company, United of Omaha Life Insurance Company, Pacific Life and Annuity Company and Mutual Life Insurance Company.

10.7              Second Amendment dated April 1, 2003, to the Note Purchase Agreement dated August 20, 2001, between NUI Corporation and AIG Life Insurance Company, Sunamerica Life Insurance Company, United of Omaha Life Insurance Company, Pacific Life and Annuity Company and Mutual Life Insurance Company.

99.1         Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2         Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)            Reports on Form 8-K

(1)                 On March 14, 2003, the company filed a Current Report on Form 8-K dated March 14, 2003, under Item 5, announcing Robert F. Lurie, Vice President, Corporate Development and Planning of the company, had left the company.

(2)           On April 3, 2003, the company filed a Current Report on Form 8-K dated April 1, 2003, under Item 5, announcing the amendment of the Note Purchase Agreement between the company and the Senior Note Holders party thereto and an amendment to the Credit Purchase Agreement between the company and its bank group.

(3)           On April 30, 2003, the company filed a Current Report on Form 8-K dated April 30, 2003, under Items 7 and 9, announcing results of operations for the period ending March 31, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NUI CORPORATION
May 15, 2003	JOHN KEAN, JR. President and Chief Executive Officer
May 15, 2003	A. MARK ABRAMOVIC Sr. Vice President, Chief Operating Officer & Chief Financial Officer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Kean, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of NUI Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003

/s/ John Kean, Jr.
President and
Chief Executive Officer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, A. Mark Abramovic, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NUI Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003

/s/ A. Mark Abramovic
 Sr. Vice President, Chief Operating
Officer & Chief Financial Officer

EX-10

EXHIBIT 10.1 

CREDIT AGREEMENT

Dated as of

February 12, 2003

By and Among

NUI CORPORATION,

as the Borrower,

THE FINANCIAL INSTITUTIONS PARTY HERETO,

as the Lenders hereunder,

FLEET NATIONAL BANK,

as the  Administrative Agent,

CITIZENS BANK OF MASSACHUSETTS

and

CIBC, INC.,

as Co-Syndication Agents,

and

PNC BANK, NATIONAL ASSOCIATION,

as Documentation Agent

_________________________________________________________

FLEET SECURITIES, INC.,

as the Sole Arranger and Syndication Agent

TABLE OF CONTENTS

ARTICLE I			DEFINITIONS		1
1.1	Defined Terms				1
1.2	GAAP Definitions				19
1.3	Other Definitional Conventions and Rules of Construction				19
ARTICLE II			THE LOANS		19
2.1	The Revolving Credit				19
2.1a	Commitment of Each Lender				20
2.1b	Notes				21
2.1d	Loan Request				21
2.1e	Making Loans				21
2.1f	Swing Loans				22
2.2	Interest Rates, Interest Payment and Certain Provisions Relating to Interest and Fees				23
2.2a	Payments of Interest				23
2.2b	Interest Rate Options				23
2.2c	Interest Periods; Limitations on Elections				24
2.2d	Election, Conversion or Renewal of Interest Rte Options				24
2.2e	Notification of Election of an Interest Rate Option				25
2.2f	Interest After Maturity				25
2.3	Yield-Protection, Capital Adequacy and Miscellaneous Provisions Relating to Euro-Rate				25
2.3a	Yield Protection				25
2.3b	Capital Adequacy				26
2.3c	Euro-Rate Unascertainable				27
2.3d	Illegality				27
2.3e	Change of Lending Office				28
2.4	Fees				28
2.4a	Facility Fee				28
2.4b	Certain Other Fees				28
2.5	Calculation of Interest and Facility Fee				28
2.6	Extension of Termination Date				29
2.7	Substitution or Replacement of a Lender				29
2.8	Loan Repayment				30
2.9	Additional Payments by the Borrower				30
2.10	Voluntary Reduction of Availability				30
2.11	Loan Account				31
2.12	Payment from Accounts Maintained by Borrower				31
2.13	Time, Place and Manner of Payments				31
2.14	Mandatory Payments				31
2.15	Letters of Credit				32
2.15a	L/C Commitment				32
2.15b	Procedure for Issuance of Letters of Credit				32
2.15c	Fees, Commissions and Other Charges				32
2.15d	L/C Participations				33
2.15e	Reimbursement Obligation of the Borrower				34
2.15f	Obligations Absolute				34
2.15g	Letter of Credit Payments				35
2.15h	Application				35
ARTICLE III			REPRESENTATIONS AND WARRANTIES		35
3.1	Corporate Existence, Subsidiaries				35
3.2	Corporate Authority				36
3.3	Enforceability				36
3.4	No Restrictions, No Default				36
3.5	Financial Statements				36
3.6	Absence of Litigation				37
3.7	Tax Returns and Payments				37
3.8	Pension Plans				37
3.9	Compliance with Applicable Laws				37
3.10	Environmental Matters				38
3.11	Governmental approval				38
3.12	Regulations T, U and X				38
3.13	Investment Company Act				38
3.14	Public Utility Holding Company Act				38
3.15	Disclosure				38
ARTICLE IV			AFFIRMATIVE COVENANTS		38
4.1	Use of Proceeds				39
4.2	Furnishing Information				39
4.3	Visitation				41
4.4	Preservation of Existence; Qualification				41
4.5	Compliance with Laws and Contracts				41
4.6	Payment of Taxes and Other Liabilities				41
4.7	Insurance				42
4.8	Maintenance of Properties				42
4.9	Plans and Benefit Arrangement				42
4.10	Senior Debt Status				42
4.11	Ownership of Certain Subsidiaries				42
4.12	New Subsidiaries				42
4.13	Indebtedness of Virginia Gas				43
ARTICLE V			NEGATIVE COVENANTS		43
5.1	Dividends, Etc.				43
5.2	Encumbrances				43
5.3a	Leverage Ratio				44
5.3b	Fixed Charge Coverage Ratio				44
5.4	Acquisitions				44
5.5	Sales of Assets				44
5.6	Merger				45
5.7	Regulation T, U and X Compliance				45
5.8	ERISA				45
5.9	No Limitation of Dividends and Distributions				46
5.10	[Intentionally Omitted.]				46
5.11	Subsidiaries				46
5.12	Limitation on Capital Expenditures				46
5.13	Limitation on Indebtedness				46
5.14	Limitation on Contingent Obligations				47
5.15	[Intentionally Omitted.]				48
5.16	Limitation on Investments, Loans and Advances				48
5.17	Limitation on Optional Payments and Modifications of Debt Instruments				49
5.18	Transactions with Affiliates				49
5.19	Sale and Leaseback				49
ARTICLE VI			CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT		49
6.1	All Extensions of Credit				49
6.1a	No Default				50
6.1b	Representations Correct				50
6.1c	Extension of Credit Requirements				50
6.2	Conditions Precedent to the Initial Extensions of Credit Under the Commitments				50
ARTICLE VII			DEFAULTS		52
7.1	Payment Default				52
7.2	Nonpayment of Other Indebtedness				52
7.3	Insolvency				52
7.3a	Involuntary Proceedings				52
7.3b	Voluntary Proceedings				52
7.4	Termination of Existence				53
7.5	Failure to Comply with Covenants				53
7.5a	Failure to Comply with Certain Article IV Covenants and Article V Covenants				53
7.5b	Failure to Comply with Other Covenants				53
7.6	Misrepresentation				53
7.7	Adverse Judgments, Etc.				53
7.8	Invalidity or Unenforceability				53
7.9	ERISA				54
7.10	Change of Control; Change of Beneficial Ownership or Board				54
7.11	Consequences of an Event of Default				54
7.12	Remedies Upon Default				55
ARTICLE VIII			AGREEMENT AMONG LENDERS		55
8.1	Appointment and Grant of Authority				55
8.2	Delegation of Duties				56
8.3	Reliance by Agent on Lenders for Funding				56
8.4	Non-Reliance on Agent				56
8.5	Responsibility of Agent and Other Matters				56
8.5a	Ministerial Nature of Duties				56
8.5b	Limitation of Liability				57
8.5c	Reliance				57
8.6	Actions in Discretion of Agent; Instructions from the Lenders				57
8.7	Indemnification				57
8.8	Agent's Rights as a Lender				58
8.9	Payment to Lenders				58
8.10	Pro Rata Sharing				58
8.11	Successor Agent				59
8.11a	Resignation of Agent				59
8.11b	Rights of the Former Agent				59
8.12	Notice of Default				59
8.13	Notices				59
8.14	Holders of Notes				59
8.15	Calculations				59
8.16	Beneficiaries				59
ARTICLE IX		GENERAL PROVISIONS		60
9.1	Amendments and Waivers				60
9.2	Expenses				61
9.3	Notices				61
9.4	Tax Withholding				62
9.5	Successors and Assigns				62
9.6	Assignments and Participations				62
9.6a	Assignments				62
9.6b	Assignment Register				64
9.6c	Participations				64
9.7	Severability				64
9.8	Survival				64
9.9	Governing Law				64
9.10	Non-Business Days				65
9.11	Integration				65
9.12	Headings				65
9.13	Set-Off				65
9.14	Consent to Forum				65
9.15	Waiver of Jury Trial				65
9.16	Indemnity				66
9.17	Counterparts				66
9.18	Replacement of Note				66

TABLE OF EXHIBITS

Name of Exhibit

Exhibit A                      Pricing Grid

Exhibit B                      Form of Note

Exhibit C                      Form of Swingline Note

Exhibit D                      Form of Revolving Loan Request

Exhibit E                       Form of Swingline Loan Request

Exhibit F                       Form of Compliance Certificate

Exhibit G                      Form of Opinion of Counsel

Exhibit H                      Form of Assignment and Assumption Agreement

Exhibit I                        Form of Guaranty Agreement

Exhibit J                       Form of Solvency Certificate

Exhibit K                      Form of Increase Request

Schedules

3.1       Subsidiaries

3.8       Plans

5.2       Existing Encumbrances Securing Indebtedness

5.13     Indebtedness

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of February 12, 2003, by and among NUI CORPORATION, a New Jersey corporation (as further defined below, the "Borrower"), the financial institutions listed on the signature pages hereto, and each other financial institution which, from time to time, becomes a party hereto in accordance with Subsection 9.6a (individually, a "Lender" and collectively, the "Lenders"), FLEET NATIONAL BANK, as Administrative Agent for the Lenders (in such capacity the "Agent") and as Swingline Lender, CITIZENS BANK OF MASSACHUSETTS and CIBC INC., as Co-Syndication Agents and PNC BANK, NATIONAL ASSOCIATION, as Documentation Agent.

RECITALS:

WHEREAS, the Borrower desires to obtain a Commitment (as defined below) from each of the Lenders pursuant to which Loans, (as defined below) will be made to, and Letters of Credit will be issued for the account of, the Borrower from time to time prior to the Termination Date (as defined below); and

WHEREAS, the Lenders are willing, on the terms and subject to the conditions hereinafter set forth, to extend such Commitment and make such Loans to, and issue Letters of Credit for the account of, the Borrower.

            NOW THEREFORE, the parties hereto, intending to be legally bound, and in consideration of the foregoing and the mutual covenants contained herein, hereby agree as follows:

ARTICLE 1. DEFINITIONS.

1.1       Defined Terms.  As used herein the following terms shall have the meaning specified unless the context otherwise requires:

            "Adjusted Base Rate" means the interest rate relating to the Base Rate Option as described in item (i) of subsection 2.2(b).

            "Adjusted Euro-Rate" means the interest rate relating to the Euro-Rate Option as described in item (ii) of Subsection 2.2b.

            "Affiliate" means as to any Person, any other Person (other than a Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct use or cause the direction of the management and the policies of such Person, whether by contract or otherwise.

            "Agent" has the meaning set forth in the preamble to this Agreement.

            "Agreement" means this Credit Agreement, together with the exhibits and schedules hereto and all extensions, renewals, amendments, modifications, substitutions and replacements hereto and hereof, as amended, supplemented or modified from time to time.

            "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination, provided, however, that the Applicable Base Rate Margin will be increased by twelve and one-half (12.5) basis points (0.125%) during the period in which more than 50% of the Commitments are utilized.  For the purposes hereof, the Commitments shall be deemed to be utilized by the aggregate amount of Loans and/or Letters of Credit then outstanding.

For purposes of determining the Applicable Base Rate Margin: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by S&P, the "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by Moody's, the "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination.

            "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination, provided, however, that the Applicable Euro-Rate Margin will be increased by twelve and one-half (12.5) basis points (0.125%) during the period in which more than 50% of the Commitments are utilized.  For the purposes hereof, the Commitments shall be deemed to be utilized by the aggregate amount of Loans and/or Letters of Credit then outstanding.

For purposes of determining the Applicable Euro-Rate Margin: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by S&P, the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by Moody's, the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination. 

            "Application" means an application, in such form as the Issuing Bank may specify from time to time, requesting the Issuing Bank to issue a Letter of Credit.

            "Assignment and Assumption Agreement" means an Assignment and Assumption Agreement in the form of Exhibit "H" hereto.

            "Authorized Officer" means the President, any Vice President, the Chief Financial Officer, the Treasurer or the principal accounting officer of the Borrower.  The Agent and the Lenders shall be entitled to rely on the incumbency certificate delivered pursuant to Section 6.2 for the initial designation of each Authorized Officer.  Additions or deletions to the list of Authorized Officers may be made by the Borrower at any time by delivering to the Agent for redelivery to each Lender a revised incumbency certificate.

            "Available Commitment" means as to any Lender, at any time, an amount equal to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's Revolving Extensions of Credit then outstanding.

            "Bank Indebtedness" means the liability of the Borrower to pay the Loans, the Reimbursement Obligations, the Facility Fee, other Fees, any other fees or amounts outstanding in connection with Letters of Credit, interest on any of the foregoing, and the other amounts, including, without limitation, expenses, due hereunder.

            "Base Rate" means, for any day, the higher of (i) the sum of (A) the Federal Funds Effective Rate for such day plus (B) fifty (50) basis points (.50%) per annum and (ii) the Prime Rate, as of such day.

            "Base Rate Option" means the interest rate option described in item (i) of Subsection 2.2b.

            "Base Rate Portion" means a Loan or a portion thereof which bears, or is to bear, interest at the Adjusted Base Rate.

             "Borrower" means NUI Corporation, a New Jersey corporation and its successors and permitted assigns.

            "Borrowing Date" means the date on which any extensions of credit are to be made hereunder.

            "Business Day" means, 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 Boston, Massachusetts or New York, New York and, if the applicable Business Day relates to any extension of credit 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.

            "Capital Adequacy Event" shall have the meaning given it in Subsection 2.3b.

            "Capital Compensation Amount" shall have the meaning given it in Subsection 2.3b.

            "Closing" means the execution and delivery of this Agreement which execution and delivery shall occur at the offices of Edwards & Angell, LLP in Boston, Massachusetts, at 10:00 A.M. (eastern time) on February 12, 2003, or such other location, date and time as is mutually agreeable to the parties hereto.

            "Closing Date" means the day on which the Closing occurs.

            "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation thereto, together with all regulations promulgated and rulings issued thereunder.

            "Commitment" means, as to each Lender, the obligation of such Lender to make Loans available to the Borrower pursuant to Section 2.1 and/or issue or participate in Letters of Credit issued on behalf of the Borrower pursuant to Section 2.15 in an aggregate principal amount and/or face amount at any one time outstanding not to exceed the amount set opposite such Lender's name on the signature pages hereto (as such amount may change from time to time pursuant to the terms hereof, or, in the case of a Purchasing Lender, in its Assignment and Assumption Agreement) and, as to all Lenders, the obligation of the Lenders to make Loans available to the Borrower and/or issue or participate in Letters of Credit issued on behalf of the Borrower in an aggregate amount equal to the Commitments of all of the Lenders.

            "Commitment Percentage" means, as to each Lender, the percentage its Commitment bears to the Total Commitment, as such Lender's Commitment and the Total Commitment may be adjusted from time to in accordance with this Agreement.

            "Commitment Period" means the period from and including the Closing Date to but not including the Termination Date, or such earlier date on which the Commitment shall terminate as provided in this Agreement.

            "Compliance Certificate" means a Compliance Certificate substantially in the form of Exhibit "F".

            "Compressor" has the meaning set forth in Section 5.5(ii).

            "Consolidated" means, as to any two or more Persons, the consolidation of the accounts of such Persons in accordance with GAAP.

            "Consolidated Fixed Charges" means for any period the sum of (a) Consolidated Interest Expense; (b) required amortization of Consolidated Total Indebtedness, determined on a Consolidated basis in accordance with GAAP, for the period involved and discount or premium relating to any such Consolidated Total Indebtedness for any period involved, whether expensed or capitalized; and (c) Consolidated Lease Expense, determined without duplication of items included in Consolidation Interest Expense, in each case of the Borrower and its Subsidiaries.

            "Consolidated Interest Expense" means for any period the amount of interest expense, both expensed and capitalized, of the Borrower and its Subsidiaries, determined on a Consolidated basis in accordance with GAAP, for such period on the aggregate principal amount of their Indebtedness, determined on a Consolidated basis in accordance with GAAP.

            "Consolidated Lease Expense" means for any period, the aggregate amount of fixed and contingent rentals payable by the Borrower and its Subsidiaries, determined on a Consolidated basis in accordance with GAAP, for such period with respect to leases of real and personal property.

            "Consolidated Net Income" means for any period, net income of the Borrower and its Subsidiaries, determined on a Consolidated basis in accordance with GAAP, without giving effect to any non-cash gain, any non-cash loss, or any reversals or adjustments to, or failure to recognize, revenue due to changes in applicable U.S. accounting rules and regulations, in each case to the extent reasonably acceptable to the Agent, including without limitation due to the implementation, effective as of October 25, 2002, of EITF 02-03 ("Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities"), the effects of which EITF implementation are hereby deemed acceptable to the Agent.

            "Consolidated Shareholders' Equity" means the total of those items enumerated under the heading "Common Shareholders' Equity" in the Borrower's relevant balance sheets determined on a Consolidated basis in accordance with GAAP, consistently applied.

           "Consolidated Total Capitalization" means, as of any date of determination, the sum of (i) Consolidated Total Indebtedness plus (ii) Consolidated Shareholders' Equity.

            "Consolidated Total Indebtedness" means all Indebtedness of the Borrower and its Consolidated Subsidiaries, determined on a Consolidated basis in accordance with GAAP, consistently applied.

"Dollars" or "$" means the legal tender of the United States of America.

"Encumbrance" means any encumbrance, mortgage, lien, charge, pledge, security interest, priority payment, conditional sales agreement right, or other title retention agreement right (including any right under a lease which, in accordance with GAAP, would be treated as a capitalized item) in, upon or against any asset of any Person.

"Environmental Law(s)" means any and all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions of any Federal, state or local governmental authority relating to the environment or the release of any materials into the environment, whether now in existence or hereafter enacted, agreed to, issued or otherwise becoming effective.

"ERISA" means the Employee Retirement Income Security Act of 1974, together with the regulations thereunder, as now in effect and as hereafter from time to time amended or any successor statute.

"ERISA Affiliate" means, as of any date, any member of a controlled group of corporations of which the Borrower or any Subsidiary is a member, which, in any event together with the Borrower are treated as of such date as a single employer under Section 414 of the Code.

"Euro Base Rate" means that rate per annum (rounded upward, if necessary, to the nearest one hundred-thousandth of a percentage point) which represents the offered rate for deposits in Dollars, for a period of time comparable to such Interest Period, which appears on the British Bankers' Association Interest Settlement Rate Page, as displayed as Dow Jones Market, Page 3750, as of 11:00 a.m. (London time) on that day that is two Business Days preceding the first day of such Interest Period; provided, however, that if the rate described above does not appear on the Telerate System on any applicable interest determination date, then the Euro Base Rate for any Interest Period will be determined on the basis of the offered rates for deposits in Dollars for a period of time comparable to such Interest Period which are offered by four major banks in the London interbank market at approximately 11:00 a.m. (London time) on that day that is two London Business Days preceding the first day of such Interest Period, as selected by the Agent.  The principal London office of each of four major London banks will be requested to provide a quotation of its Dollar deposit offered rate.  If at least two such quotations are provided, the rate for that date will be the arithmetic mean of the quotations.  If fewer than two quotations are provided as requested, the rate for that date will be determined on the basis of the rates quoted for loans in Dollars to leading European banks for a period of time comparable to such Interest Period offered by major banks in New York City at approximately 11:00 a.m. (New York City time) on that day that is two London Business Days preceding the first day of such Interest Period.  In the event that the Agent is unable to obtain any such quotation as provided above, it will be deemed that the Euro-Rate for the proposed Interest Period cannot be determined. 

"Euro-Rate" means, with respect to each day during each Interest Period pertaining to a Loan to which the Euro-Rate Option applies, a rate per annum determined for such day in accordance with the following formula:

Euro-Rate =                 Euro Base Rate                       

1.00 - - Euro-Rate Reserve Percentage

"Euro-Rate Option" means the interest rate option described in item (ii) of Subsection 2.2b.

            "Euro-Rate Portion" means a Loan, or portion thereof, which bears, or is to bear, interest at the Adjusted Euro-Rate.

            "Euro-Rate Reserve Percentage" means the maximum aggregate reserve requirement (including basic, supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve System against Euro-currency Liabilities as defined in Regulation D.

"Existing Credit Agreement" means the Credit Agreement, dated as of December 19, 2001, among the Borrower, each of the lenders as specified therein, Fleet National Bank, as agent, PNC Bank National Association, as syndication agent and First Union National Bank, as documentation agent.

            "Extension Agreement" has the meaning given it in Section 2.6.

            "Extension Date" has the meaning given it in Section 2.6.

            "Event of Default" has the meaning given it in Article VII.

            "Facility Fee" means the fee described in Subsection 2.4a.

            "Facility Fee Rate" means a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination.  For purposes of determining the Facility Fee Rate: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement the Borrower shall not have a Senior Rating assigned by S&P, the "Facility Fee Rate" means a rate per annum equal to the annualized rates referenced above (stated in terms of basis points) that correspond to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement the Borrower shall not have a Senior Rating assigned by Moody's, the "Facility Fee Rate" means a rate per annum equal to the annualized rates referenced above (stated in terms of basis points) that correspond to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination.

            "Federal Funds Effective Rate" means, for any day, the rate per annum (based on a year of 360 days and the actual days elapsed and rounded upward to the nearest 1/100th of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by the Federal Reserve Bank of New York (or any successor) in substantially the same manner as such Federal Reserve Bank of New York computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, if such Federal Reserve Bank of New York (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day for which such rate was announced.

            "Fee Letter" has the meaning set forth in Section 2.4b.

"Fees" means collectively the fees referenced in Section 2.4.

"Fiscal Quarter" means the three-month fiscal period of the Borrower beginning on each October 1, January 1, April 1 and July 1 and ending on the succeeding December 31, March 31, June 30 and September 30.

"Fiscal Year" means each fiscal period of the Borrower beginning October 1 and ending on the succeeding September 30.

"GAAP" means generally accepted accounting principles which shall include, but not be limited to, the official interpretations thereof as defined by the Financial Accounting Standards Board, its predecessors and its successors consistent with those utilized in preparing the audited financial statements referred to in Section 4.2.

"Governmental Authority" means the government of the United States or the government of any state or locality therein, any political subdivision or any governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body or entity, or other regulatory bureau, authority, body or entity of the United States or any state or locality therein, including the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, and any central bank of any other country or any comparable authority.

"Governmental Rule" means any law, statute, rule, regulation, ordinance, order, judgment, guideline or decision of any Governmental Authority.

            "Guarantors" means the collective reference to each domestic Subsidiary of the Borrower other than (i) NUI Utilities, (ii) Virginia Gas Company and its Subsidiaries and (iii) NUI/Caritrade International. 

"Guaranty" or "Guarantee" means any obligation, direct or indirect, by which a Person undertakes to guaranty, assume or remain liable for the payment or performance of another Person's obligations, including but not limited to (i) endorsements of negotiable instruments, (ii) discounts with recourse, (iii) agreements to pay or perform upon a second Person's failure to pay or perform, (iv) remaining liable on obligations assumed by a second Person, (v) agreements to maintain the capital, working capital solvency or general financial condition of a second Person and (vi) agreements for the purchase or other acquisition of products, materials, supplies or services, if in any case payment therefor is to be made regardless of the non-delivery of such products, materials or supplies or the non-furnishing of such services.

            "Guaranty Agreement" means the Guaranty executed by each Guarantor.

"Hedging Obligations" means, with respect to any Person, all liabilities of such Person under interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

"Incremental Lender" has the meaning given it in Section 2.1a(ii).

"Indebtedness" as applied to any Person means, without duplication, all liabilities of such Person for borrowed money (other than trade accounts payable arising in the ordinary course of business consistent with past practices), direct or contingent, whether evidenced by a bond, note, debenture or otherwise, all preferred equity interests issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration at any time during the period ending one year after the term of this Agreement, and all obligations and liabilities in the nature of a capitalized lease obligation, deferred purchase price arrangement (other than trade accounts payable in the ordinary course of business consistent with past practices), title retention device, letter of credit obligation, Reimbursement Obligation, Hedging Obligation, reimbursement agreement, Guaranty, obligations relating to securitization transactions, synthetic lease transactions and sale-leaseback transactions.

"Insignificant Subsidiary" means a Subsidiary (a) the value of whose assets do not exceed $5,000,000 at the time of determination and (b) which did not earn at least $2,000,000 with respect to the most recently ended period of four Fiscal Quarters.

"Interest Period" means, subject to the provisions of Subsection 2.2c, (i) as to any Swingline Loans, the period commencing on the date of the Swingline Loan and ending on the earlier of (a) 30 days thereafter, (b) on demand or (c) on the Termination Date and (ii) as to any Loans bearing interest at the Euro-Rate Option, any individual period of one, two, three or six months selected by the Borrower commencing on the Borrowing Date, conversion date or renewal date of a Euro-Rate Portion to which such period shall apply.

"Issuing Bank" means Fleet National Bank, in its capacity as issuer of any Letter of Credit.

"L/C Commitment" means $25,000,000.

"L/C Fee Payment Date" means the last day of each March, June, September and December.

"L/C Obligations" means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired face amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 2.15e.

"L/C Participants" means the collective reference to the Lenders other than the Issuing Bank.

"Lender" has the meaning given in the preamble to this Agreement.

            "Letters of Credit" has the meaning given it in Section 2.15a(i).

"Loans" means each advance of funds by a Lender to the Borrower pursuant to Section 2.1a or by the Swingline Lender pursuant to Section 2.1f.

"Loan Account" means the loan account maintained by the Agent as more fully described in Section 2.11.

"Loan Documents" means collectively this Agreement, the Notes, the Guaranty Agreement, the Applications and any other documents furnished in connection herewith.

"Loan Request" means a written request for Loans made in accordance with Section 2.1d hereof which request shall be substantially in the form of Exhibit "D" hereto.

"Mandatory Borrowing" has the meaning given it in Section 2.1f(iii).

"Margin Stock" is defined herein as defined in Regulation U.

"Market Capitalization" has the meaning given it in the definition of "Permitted Acquisitions" hereunder.

"Material Adverse Change" means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect upon the validity or enforceability of this Agreement or any of the other Loan Documents, (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 Borrower and its Subsidiaries, taken as a whole, (c) impairs materially or could reasonably be expected to impair materially the ability of the Borrower and its Subsidiaries taken as a whole to duly and punctually pay their Indebtedness, or (d) impairs materially or could reasonably be expected to impair materially the ability of the Agent or any of the Lenders to enforce their legal remedies pursuant to this Agreement or any other Loan Document.

"Material Adverse Effect" means, with respect to any Person relative to any occurrence of whatever nature (including, without limitation, any adverse determination in any litigation, arbitration or governmental investigation or proceeding), an effect that results in or causes or has a reasonable likelihood of resulting in or causing a Material Adverse Change.

"Moody's" means Moody's Investors Service, Inc. and its successors.

"Negotiated Swingline Rate" means, as applicable to any Swingline Loan, the rate per annum as determined by the Swingline Lender and the Borrower on any applicable interest determination date.

"Net Proceeds" means (i) the aggregate cash consideration received by the Borrower or a Subsidiary in connection with any transaction referred to in Section 5.5(iii) less (ii) the reasonable out-of-pocket expenses incurred by the Borrower or such Subsidiary in connection with such transaction and the amount of any federal and state taxes incurred in connection with such transaction, in each case as certified by an Authorized Officer to the Agent at the time of such transaction.

"New Lender" has the meaning given it in Section 2.1a(ii)

"Notes" means any one or all of the several promissory notes of the Borrower evidencing Indebtedness of the Borrower under this Agreement which notes are substantially in the form of Exhibit "B" to this Agreement, including the Swingline Note, which note is substantially in the form of Exhibit "C" to this Agreement, together with all extensions, renewals, amendments, modifications, substitutions and replacements thereto and thereof.

"NUI Capital" means NUI Capital Corp., a Florida corporation.

"NUI/Caritrade International" means NUI/Caritrade International, L.L.C., a Delaware limited liability company.

"NUI Energy" means NUI Energy, Inc., a Delaware corporation.

"NUI Energy Brokers" means NUI Energy Brokers, Inc., a Delaware corporation.

"NUI Energy Solutions" means NUI Energy Solutions, Inc., a Delaware corporation.

"NUI Environmental" means NUI Environmental Group, Inc., a New Jersey corporation.

"NUI International" means NUI International, Inc., a Delaware corporation.

"NUI Sales Management" means NUI Sales Management, Inc., a Delaware corporation.

            "NUI Service" means NUI Service, Inc., a New Jersey corporation.

"NUI Telecom" means NUI Telecom, a New Jersey corporation.

"NUI Utilities" means NUI Utilities, Inc., a New Jersey corporation and its successors and assigns.

"NUI Utilities Credit Agreement" means the Credit Agreement, dated as of the date hereof, among NUI Utilities, each of the lenders specified therein, and Fleet National Bank, as the agent.

"Option" means any one or both of the Base Rate Option or the Euro-Rate Option.

"Participant" means any financial institution or other Person to which a Lender sells a Participation in its Loan.

"Participation" means the sale by a Lender to any Participant of an undivided interest in all or any part of such Lender's Loan.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor Person.

"Permitted Acquisition" an acquisition by the Borrower or a Guarantor, subject to the fulfillment of the following conditions:

(i)                  the Total Purchase Price for such acquisition, together with the aggregate Total Purchase Price paid by the Borrower and the Guarantors for all other such acquisitions consummated after the date hereof, shall not exceed an amount equal to the lesser of (A) $30,000,000 or (B) 25% of Market Capitalization determined as of the close of business on the day prior to the day on which the applicable acquisition or other similar agreement is executed and delivered by the Borrower or such Subsidiary, and except that the Borrower and any Guarantor may acquire the assets of any other Subsidiary.  For purposes of this definition, "Market Capitalization" means, on any date of determination, the product of (i) the number of issued and outstanding shares of the Borrower's common stock on such day times (ii) the closing sale price of such common stock on such day, as appearing in any regularly published reporting or quotation service or, if there is no such closing sale price, the market value of such common stock as reasonably determined by the Agent;

(ii)                With respect to each acquisition, Target EBITDA of the Target or the assets of the Target being acquired, as applicable, for its most recently ended fiscal year shall not be less than $1.00;

(iii)               With respect to each acquisition, after giving effect thereto and to Indebtedness incurred or assumed in connection therewith, the Borrower shall be in compliance with the provisions of Section 5.3, calculated on a pro forma basis as of the end of and for the period of four Fiscal Quarters most recently ended prior to the date of such acquisition;

(iv)              If such acquisition or any series of related acquisitions involves a Total Purchase Price of more than $5,000,000 in the aggregate, then no later than (A) 5 Business Days prior to the consummation of each such Acquisition, the Borrower shall have delivered to the Agent (1) a certificate of Borrower setting forth the calculations referred to in clause (iii) and (2) copies of executed counterparts of the applicable acquisition or similar agreements, (B) promptly following a request therefor, copies of such other information or documents relating to such acquisition as the Agent shall have reasonably requested, and (C) if requested by the Agent, promptly following the consummation of such acquisition, certified copies of the agreements, instruments and documents referred to above, to the extent the same have been executed and delivered at the closing of the acquisition; and

(v)                No Potential Default or Event of Default shall have occurred and be continuing or reasonably be expected to result from such acquisition, after giving effect thereto and Indebtedness incurred or assumed in connection therewith.

"Permitted Encumbrance" means, as to any Person, any of the followings

(i)         Encumbrances for taxes, assessments, governmental charges or levies on any of such Person's properties, which taxes, assessments, governmental charges or levies are at the time not due and payable or if they can thereafter be paid without penalty or are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are maintained on the books of such Person in conformity with GAAP;

(ii)        Pledges or deposits to secure payment of workers' compensation obligations, unemployment insurance, deposits or indemnities to secure public or statutory obligations or for similar purposes;

(iii)       Encumbrances arising out of judgments or awards against such Person but only to the extent that the creation of any such encumbrance shall not be an event or condition which, with or without notice or lapse of time or both, would cause the Borrower to be in violation of Section 7.7;

(iv)       Mechanics', carriers', workers', repairmen's and other similar statutory Encumbrances incurred in the ordinary course of such Person's business, so long as the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings diligently conducted;

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

(vi)       Encumbrances listed on Schedule 5.2, securing Indebtedness permitted by Section 5.13(d); provided that no such Encumbrance is amended after the date of this Agreement to cover any additional property or to secure additional Indebtedness;

(vii)      Easements, rights-of-way, restrictions, leases or subleases to others or other similar Encumbrances created in the ordinary course of business which Encumbrances do not interfere in any material respect with the ordinary conduct of the business of the Borrower and its Subsidiaries;

(viii)      Encumbrances securing (a) the non-delinquent performance of bids, trade contracts (other than for borrowed money), leases or statutory obligations, (b) contingent obligations on surety and appeal bonds, and (c) other non-delinquent obligations of a like nature; in each case, incurred in the ordinary course of business, provided all such Encumbrances in the aggregate would not (even if enforced) cause a Material Adverse Effect on the Borrower and its Consolidated Subsidiaries taken as a whole;

(ix)        Encumbrances securing Indebtedness of the Borrower and its Subsidiaries (other than NUI Utilities) permitted by Section 5.13(c) incurred to finance the purchase of new fixed or capital assets (including pursuant to capital leases), provided that (1) such Encumbrances shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (2) such Encumbrances do not at any time encumber any property other than the property financed by such Indebtedness, and (3) the Encumbrances are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased;

(x)        Encumbrances on the property or assets of a corporation which becomes a Subsidiary after the date hereof securing Indebtedness permitted by Section 5.13(g), provided that (1) such Encumbrances existed at the time such corporation became a Subsidiary and were not created in anticipation of the acquisition, (2) any such Encumbrances do not by their terms cover any property or assets after the time such corporation becomes a Subsidiary which were not covered immediately prior thereto and (3) any such Encumbrances do not by their terms secure any Indebtedness other than Indebtedness existing immediately prior to the time such corporation becomes a Subsidiary;

(xi)        Encumbrances securing Indebtedness of the Borrower and its Subsidiaries permitted by Section 5.19 incurred in connection with sale/leaseback transactions, provided that (1) such Encumbrances shall be created substantially simultaneously with such sale/leaseback transaction, (2) such Encumbrances do not at any time encumber any property other than the property leased, and (3) the Encumbrances are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased;

(xii)       Existing Encumbrances on the property or assets acquired in a Permitted Acquisition securing Indebtedness of the type permitted by Section 5.13(c), provided that (1) such Encumbrance existed prior to such Permitted Acquisition, (2) any such Encumbrances do not by their terms cover property or assets other than those acquired in the Permitted Acquisition, and (3) any such Encumbrances do not by their terms secure Indebtedness other than Indebtedness of the type permitted by Section 5.13(c) existing prior to such Permitted Acquisition;

(xiii)      Encumbrances created or deemed to exist in connection with a securitization transaction if permitted hereunder, provided such Encumbrance relates solely to the applicable securitization receivables actually sold, contributed, financed or otherwise conveyed or pledged pursuant to such securitization transaction; and

(xiv)      An Encumbrance securing Indebtedness of the Borrower or the Saltville Member permitted by Section 5.13(n), provided that (1) such Encumbrance shall be created substantially simultaneously with the consummation of the Compressor lease or purchase financing transaction, (2) such Encumbrance does not at any time encumber any property other than the Compressor and (3) such Encumbrance is not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased.

"Permitted Investments" means

(a)       marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any agency thereof and backed by the full faith and credit of the United States of America;

(b)       marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof and, at the time of acquisition, having one of the two highest ratings generally obtainable from either S&P or Moody's;

(c)       commercial paper, at the time of acquisition, having a rating of A-1 (or the equivalent) or higher from S&P and P-1 (or the equivalent) or higher from Moody's; or

(d)       mutual funds, the assets of which are primarily invested in items of the kind described in clauses (a), (b) and (c) of this definition;

provided in each case, that such obligations are payable in Dollars and such Permitted Investments by the Borrower and its Subsidiaries are in accordance with Governmental Rules.

"Permitted Transferee" has the meaning given it in Section 7.10.

"Person" means any individual, partnership, corporation, trust, joint venture, banking association, unincorporated organization or any other entity or enterprise or government or department or agency thereof.

"Plan" means an employee pension benefit plan (other than a multiemployer plan) which is maintained by the Borrower or any ERISA Affiliate for employees of the Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 302 of ERISA and Section 412 of the Code.

"Portion" means, with respect to any outstanding Loans, either the Base Rate Portion thereof, the Euro-Rate Portion thereof, or both, as the case may be.

"Potential Default" means an event which, with the passage of time or the giving of notice or both, shall be an Event of Default.

"Prime Rate" means the variable interest rate per annum announced from time to time by Fleet National Bank as its prime rate, which rate is a reference rate and may not be the lowest rate of interest then being charged by Fleet National Bank to its commercial borrowers.

"Proposed Lender" has the meaning given it in Section 2.1a(ii).

"PUHCA" has the meaning given it in Section 3.14.

"Purchasing Lender" has the meaning given it in Subsection 9.6a.

"Register" has the meaning given it in Subsection 9.6b.

"Regulation D" means Regulation D promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 204 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation T" means Regulation T promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 220 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation U" means Regulation U promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation X" means Regulation X promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 224 et seq.) as such regulation is now in effect and as may hereafter be amended.

            "Reimbursement Obligation" means the obligation of the Borrower to reimburse the Issuing Bank pursuant to Section 2.15(e) for amounts drawn under Letters of Credit.

"Reportable Event" means any one or more events, defined in Section 4043(b) of ERISA and in 29 C.F.R. Part 2615, other than an event for which the requirement for the 30 day notice to the PBGC is waived.

"Required Lenders" means as of a particular date (i) prior to the termination of the Commitments, the Lenders whose Commitment Percentages aggregate at least fifty-one percent (51%) of the aggregate Commitment Percentages of all the Lenders and (ii) after the termination of the Commitments, fifty-one (51%) of the aggregate principal amount of the Revolving Extensions of Credit at the particular time outstanding.

            "Restricted Payments" has the meaning given to it in Section 5.1.

            "Restricted Subsidiary" means, individually, any of NUI Utilities, Virginia Gas Company, any Subsidiary of Virginia Gas Company, NUI/Caritrade International, or HPMT Hungarian Portfolio Management and Trading, LLC and "Restricted Subsidiaries" means, collectively, NUI Utilities, Virginia Gas Company, each Subsidiary of Virginia Gas Company, NUI/Caritrade International and HPMT Hungarian Portfolio Management and Trading, LLC. 

"Revolving Credit" has the meaning assigned to it in Section 2.1, as the same may be reduced pursuant to Section 2.10 and 7.11.

"Revolving Extensions of Credit" means as to any Lender at any time, an amount equal to the sum of (a) all Loans  made by such Lender, (b) its Swingline Exposure and (c) such Lender's Commitment Percentage of the L/C Obligations then outstanding.

"S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill, Inc. and its successors.

            "Saltville JV" means Saltville Gas Storage Company L.L.C., a Virginia limited liability company.

            "Saltville Member" means NUI Saltville Storage, Inc., a Delaware corporation.

"Senior Ratings" means, with respect to any Person, the long term senior unsecured public debt ratings in effect from time to time as assigned by Moody's and S&P, as the case may be.

"Subsidiary" means, as to any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the outstanding stock or other applicable ownership interest having by the terms thereof ordinary voting power to elect a majority of the Board of Directors or other managers of such corporation, partnership, limited liability company, or other entity is at the time directly or indirectly owned or controlled by such Person and/or by one or more Subsidiaries of such Person.

"Swingline Exposure" means at any time, in respect of any Lender, an amount equal to the aggregate principal balance of Swingline Loans at such time  multiplied by such Lender's Commitment Percentage at such time.

"Swingline Lender" means Fleet National Bank, in its capacity as lender of Swingline Loans hereunder, and its successors in such capacity.

"Swingline Loan" means any Loan that, at any time, bears interest at a rate based upon the Negotiated Swingline Rate.

"Swingline Note" has the meaning specified inSection 2.1f(i).

"Target" any Person or any division of a Person whose equity interests or assets of which are proposed to be acquired in connection with a Permitted Acquisition.

"Target EBITDA" for any period, as to the Target in the case of an acquisition of equity interests or all assets of a Target, or attributable to assets being purchased from the Target in the case of an acquisition of less than all of the assets of a Target, net income for such period plus, without duplication and to the extent reflected as a charge in the statement of such net income for such period, the sum of (a) income tax expense, (b) interest expense, and (c) depreciation and amortization expense, all calculated in accordance with GAAP consistently applied and as may be adjusted to give effect to cost savings as a result of the acquisition to the extent agreed to in writing by the Agent.  For the purposes of this definition, net income shall be calculated without giving effect to any non-cash gain, any non-cash loss, or any reversals or adjustments to, or failure to recognize, revenue due to changes in applicable U.S. accounting rules and regulations, in each case to the extent reasonably acceptable to the Agent, including without limitation due to the implementation, effective as of October 25, 2002, of EITF 02-03 ("Issues Involved in Accounting for Derivative Contracts Held for Trade Purposes and Contracts Involved in Energy Trading and Risk Management Activities"), the effects of which EITF implementation are hereby deemed acceptable to the Agent.

"Termination Date" means February 11, 2004, unless earlier terminated in accordance with the terms hereof.

"Termination Proceedings" means any action taken by the PBGC under ERISA to terminate any plan.

"TIC Enterprises" means T.I.C. Enterprises, L.L.C., a Delaware limited liability corporation.

"Total Commitment" means the aggregate amount of the Commitments of all Lenders, as in effect from time to time. 

"Total Purchase Price" means the "purchase price" for any acquisition including, without limitation, but without duplication, (a) all cash payable by the Borrower or any of its Subsidiaries to the seller or affiliate of the seller at the closing of the acquisition; (b) all Indebtedness incurred by the Borrower or any of its Subsidiaries in favor of any seller or affiliate of any seller; (c) all Indebtedness and other liabilities of or related to the Target that are assumed by the Borrower or any of its Subsidiaries, or subject to which the acquired assets are acquired, or (in the case of an equity security purchase or merger) that remain unpaid at the closing of the acquisition; and (d) the maximum amount of all contingent future cash payments or other cash consideration payable within the 12-month period following the closing of the acquisition and not otherwise described in this definition, including without limitation cash "earn-out" payments and cash amounts payable upon disposition of the acquired business (unless the Required Lenders shall otherwise agree), but specifically excluding any equity securities of the Borrower and warrants, options, and other rights to acquire equity securities of the Borrower issued at the closing of the acquisition.  For purposes of clause (d) of the preceding sentence, the maximum amount of any payment or other consideration specified therein shall be the maximum amount provided for in the relevant agreement, or, if no maximum amount is so provided, the amount reasonably estimated by Borrower on the basis of assumptions and calculations provided in writing to the Agent and approved by it.  Such assumptions shall include reasonable projections of any measure of financial or other performance that enters into the calculation of the amount of any such payment or other consideration but shall not include any assumption that any other future event that is a condition to such payment or consideration (such as the later disposition of the acquired business or a public or private offering of securities) will not occur. 

                "Total Revolving Extensions of Credit" means, at any time, the aggregate amount of the Revolving Extensions of Credit of the Lenders outstanding at such time.

"Transfer Effective Date" has the meaning given it in each respective Assignment and Assumption Agreement.

"Transferor Lender" has the meaning given it in Subsection 9.6a.

"UBS" means Utility Business Services, Inc., a New Jersey corporation.

"Uniform Customs" means the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, as may be amended from time to time.

"Virginia Gas Company" means Virginia Gas Company, Inc., a Delaware corporation.

1.2       GAAP Definitions Accounting terms used herein but not defined herein shall have the meanings ascribed to them under GAAP consistent with those utilized in preparing the audited financial statements referred to in Section 4.2.

1.3       Other Definitional Conventions and Rules of Construction.  (i) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall, unless otherwise expressly specified, refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section and Subsection references are to this Agreement unless otherwise expressly specified. 

(ii)        All terms defined in this Agreement in the singular shall have comparable meanings when used in plural, and vice versa, unless otherwise specified.

(iii)       The word "or" as used herein shall mean and connote nonexclusive alternatives, unless expressly stated or the context clearly requires otherwise.

ARTICLE II. THE LOANS

2.1       The Revolving Credit

2.1a     Loans. 

(i)         Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender severally agrees to make Loans to the Borrower at any time from time to time on or after the date hereof to, but not including, the Termination Date, provided that the aggregate principal amount of each Lender's Loans outstanding hereunder to the Borrower, when added to such Lender's Commitment Percentage of the then outstanding L/C Obligations, shall not exceed at any one time the amount equal to such Lender's Commitment Percentage of the Total Commitments then in effect and provided, further, that no Loans shall be made if it would cause the Total Revolving Extensions of Credit to exceed the Total Commitments (the "Revolving Credit").  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 2.1a. The aggregate amount of the Commitments on the Closing Date is $38,076,923.10.  All Loans outstanding on the Termination Date shall become due and payable in full on such date. 

(ii)        The Borrower may, at its sole expense and effort after consulting with the Agent, request: (a) one or more Lenders reasonably acceptable to the Agent to increase (in the sole and absolute discretion of each such Lender) the amount of their respective Commitments and/or (b) one or more other lending institutions acceptable to the Agent (each, a "New Lender") to become "Lenders" and extend Commitments hereunder (each such Lender and each New Lender being herein referred to as a "Proposed Lender").  To request an increase pursuant to this Section 2.1a(ii), the Borrower shall submit to the Agent an Increase Request, in the form annexed hereto as Exhibit "K", signed by the Borrower, which shall be irrevocable and shall specify, as the case may be:  (A) each such Lender and the amount of the proposed increase in its Commitment, and/or (B) the proposed Commitment for such New Lender.  Promptly following receipt of an Increase Request, the Agent shall advise each Lender of the details thereof.  If one or more of such Proposed Lenders shall have unconditionally agreed to such Increase Request in a writing delivered to the Borrower and the Agent (each such existing Lender and New Lender being hereinafter referred to as an "Incremental Lender"), then:  (1) each such Incremental Lender which shall then be an existing Lender shall have its Commitment increased by the amount set forth in such Increase Request, and (2) each such New Lender shall be and become a "Lender" hereunder having a Commitment equal to the amount set forth therefor in such Increase Request, provided, however, that in each such case:  (I) immediately before and after giving effect thereto, no Potential Default or Event of Default shall or would exist, (II) each such Incremental Lender shall have executed and delivered to the Agent, a supplement to this Agreement providing for its increased Commitment or its Commitment, as applicable, in form approved by the Agent, (III) immediately after giving effect thereto, the Total Commitment under this Agreement shall not exceed $53,076,923.10, (IV) immediately after giving effect to the Increase Request, the Total Commitment of the Borrower under this Agreement, together with (a) the "Total Commitment" for NUI Utilities under the NUI Utilities Credit Agreement and (b) the aggregate principal amount of Indebtedness incurred by NUI Utilities (and, without duplication, any corresponding commitments to extend credit to NUI Utilities) pursuant to Section 5.13(h)(1) and 5.13(h)(2), shall not exceed $195,000,000 at any time, (V) each such Increase Request shall be in an aggregate minimum amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof, and (VI) the Commitment extended by any such Incremental Lender which is a New Lender shall be in a minimum amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof.

(iii)       Simultaneously with each increase in the aggregate amount of the Commitments under this Section 2.1a(ii), each Incremental Lender shall, to the extent necessary, purchase from each other Lender, and each other Lender shall sell to each Incremental Lender, in each case at par and without representation, warranty, or recourse (in accordance with and subject to the restrictions contained in Section 9.6), such principal amount of the Revolving Extensions of Credit of such other Lender, together with all accrued and unpaid interest thereon, as will result, after giving effect to such transaction, in each Lender's Commitment Percentage of Revolving Extensions of Credit outstanding being equal to such Lender's Commitment Percentage of all Revolving Extensions of Credit, provided that each such assignor Lender shall have received (to the extent of the interests, rights and obligations assigned) payment of the outstanding principal amount of its Loans, accrued interest thereon, accrued fees, commissions and all other amounts payable to it under the Loan Documents from the applicable assignee Lenders (to the extent of such outstanding principal and accrued interest, fees and commissions) or the Borrower (in the case of all other amounts).

2.1b     Commitment of Each Lender.  Each Lender agrees, for itself only, and subject to the terms and conditions of this Agreement, to make Loans to the Borrower from time to time not to exceed an aggregate principal amount at any one time outstanding equal to the amount of its respective Commitment Percentage of the Revolving Credit.  The obligations of each Lender hereunder are several.  The failure of any Lender to perform its obligations hereunder shall not affect the obligations of the Borrower, or any other Lender, to any other party nor shall the Borrower, or any other Lender, be liable for the failure of such Lender to perform its obligations hereunder.  The Lenders shall have no obligation to make Loans hereunder on or after the Termination Date.

2.1c     Notes.  The obligation of the Borrower to repay, on or before the Termination Date, the aggregate unpaid principal amount of all Loans shall be evidenced by the several Notes, each substantially in the form of Exhibit "B" hereto, drawn by the Borrower to the order of a Lender in the maximum amount of such Lender's Commitment.  The principal amount actually due and owing to a Lender at any time shall be the then aggregate unpaid principal amount of all Loans made by such Lender as shown on the Loan Account established and maintained by the Agent in accordance with Section 2.11.  Each Note shall be dated the date hereof and shall be delivered to the Lenders on such date.

2.1d     Loan Request.  Except as otherwise provided herein, the Borrower may from time to time prior to the Termination Date request the Lenders to make Loans to the Borrower by the delivery to the Agent, not later than 12:00 Noon (eastern time) (i) three Business Days prior to the proposed Borrowing Date with respect to the making of Loans to which the Euro-Rate Option applies for any Loans and (ii) one Business Day prior to the proposed Borrowing Date with respect to the making of a Loan to which the Base Rate Option applies of a duly completed request therefor substantially in the form of Exhibit "D" hereto or a request by telephone immediately confirmed in writing by letter, facsimile or electronic transmission in such form (each, a "Loan Request"), it being understood that the Agent may rely on the authority of any person 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 Loans to be made on such Borrowing Date, which amount, as to Base Rate Portions, shall be in integral multiples of $100,000 and not less than $500,000 and, as to Euro-Rate Portions, shall be in integral multiples of $100,000 and not less than $1,000,000; (iii) whether the Euro-Rate Option or the Base Rate Option shall apply to the proposed Loans to be made on such Borrowing Date; and (iv) in the case of Loans to which the Euro-Rate Option applies, an appropriate Interest Period for each Euro-Rate Portion of the Loans to be made on such Borrowing Date.

2.1e     Making Loans.  The Agent shall, promptly after receipt by it of a Loan Request pursuant to Section 2.1d (but not later than 3:00 P.M. (eastern time) one Business Day preceding any Borrowing Date for Loans bearing interest at the Base Rate Option and 2:00 P.M. (eastern time) on the third Business Day preceding any Borrowing Date for which any Portion of the Loans to be made on such Borrowing Date bears interest at the Euro-Rate Option), notify the Lenders of its receipt of such Loan Request specifying: (i) the proposed Borrowing Date and the time and method of disbursement of such Loan; (ii) the amount and type of such Loan and the applicable Euro-Rate Portions and Interest Periods (if any); and (iii) the apportionment among the Lenders of the Loans as determined by the Agent in accordance with Section 2.1b hereof.  Each Lender shall remit the principal amount of each Loan to the Agent such that the Agent is able to, and the Agent shall, to the extent the Lenders have made funds available to it for such purpose, fund such Loan to the Borrower in Dollars and immediately available funds in an account specified by the Borrower to the Agent prior to 2:00 P.M. (eastern time) on the Borrowing Date, provided that if any Lender fails to remit such funds to the Agent in a timely manner, or any Lender fails to advise the Agent of its intention not to fund, then the Agent may elect in its sole discretion to fund with its own funds the Loan of such Lender on the Borrowing Date, subject to the provisions of Section 8.3 below.

2.1f      Swingline Loans

(i)         During the Commitment Period, the Swingline Lender agrees, on the terms and conditions set forth in this Agreement, to lend to the Borrower from time to time amounts that will not result in (x) the aggregate principal amount of outstanding Swingline Loans at any time exceeding $7,500,000, or (y) the Total Revolving Extensions of Credit at any time exceeding the Total Commitments.  Interest on such Swingline Loans shall accrue for each day during the Interest Period applicable thereto at the Negotiated Swingline Rate.  Each Swingline Loan shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Swingline Loan or upon demand.  Accrued interest on each Swingline Loan shall be due and payable on the third Business Day following the end of each calendar month, at maturity or on demand.  Swingline Loans may be repaid and reborrowed.  Swingline Loans may be prepaid at any time, without premium or penalty, provided that notice shall be given not later than 12:00 noon (eastern time) on the date of prepayment.  The Swingline Loans shall be evidenced by a promissory note in the form of Exhibit "C" hereto (as amended, supplemented or modified from time to time, the "Swingline Note").

(ii)        In order to request a Swingline Loan, the Borrower shall notify the Agent of such request not later 12:00 noon, New York City time on the day of a proposed Swingline Loan, specifying the proposed date (which shall be a Business Day) and amount of the requested Swingline Loan (which shall be in a minimum amount of $100,000).  Such request for a proposed Swingline Loan shall be made by delivery to the Agent of a duly completed request therefore substantially in the form of Exhibit "E" hereto or a request by telephone immediately confirmed in writing by letter, facsimile or electronic transmission in such form, it being understood that the Swingline Lender may rely on the authority of any person making such a telephonic request without the necessity of receipt of such written confirmation.  The Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to a deposit account of Borrower with the Swingline Lender (or, if so requested by the Borrower, by means of wire transfer of immediately available funds to such other bank account of the Borrower as Borrower shall designate) by 3:00 p.m. (eastern time) on the requested date of such Swingline Loan. 

(iii)       On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the Lenders that its outstanding Swingline Loans shall be repaid with a borrowing of Loans (provided that each such notice shall be deemed to have been automatically given upon the occurrence of an Event of Default under Section 7.3 or upon the exercise of any of the remedies provided in Section 7.12), in which case a borrowing of Loans bearing interest at the Adjusted Base Rate (each such borrowing, a "Mandatory Borrowing") shall be made on the immediately succeeding Business Day by all Lenders pro rata based on each Lender's Commitment Percentage, and the proceeds thereof shall be applied directly to repay the Swingline Lender for such outstanding Swingline Loans.  Each Lender hereby irrevocably agrees to make Loans bearing interest at the Adjusted Base Rate upon one Business Day's notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Swingline Lender notwithstanding: (a) that the amount of the Mandatory Borrowing may not comply with the minimum borrowing amount otherwise required hereunder, (b) whether any conditions specified in Section 6.1 are then satisfied, (c) whether a Potential Default or an Event of Default has occurred and is continuing, and (d) the date of such Mandatory Borrowing.  In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code in respect of the Borrower), each Lender (other than the Swingline Lender) shall forthwith purchase from the Swingline Lender (without recourse or warranty) such assignment of the outstanding Swingline Loans as shall be necessary to cause such Lenders to share in such Swingline Loans ratably based upon their respective Commitment Percentages, provided that all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date the respective assignment is purchased and, to the extent attributable to the purchased assignment, shall be payable to the Lender purchasing same from and after such date of purchase.

2.2       Interest Rates, Interest Payment and Certain Provisions Relating to Interest and Fees.  

2.2a     Payments of Interest.  The Borrower shall pay interest on the principal amount of the Loans from time to time outstanding hereunder, from the date thereof until payment in full, at the rates of interest determined pursuant to this Section 2.2. The Borrower shall pay accrued interest on the unpaid principal balance of the Loans in arrears: (i) with respect to each Base Rate Portion, at the Adjusted Base Rate on the last Business Day of each Fiscal Quarter during the term thereof, (ii) with respect to each Euro-Rate Portion, at the Adjusted Euro-Rate on the last day of each Interest Period as provided for in Subsection 2.2(b)(ii) (provided, however, if the Interest Period chosen for a Euro-Rate Portion exceeds three  months, interest on that Euro-Rate Portion shall be due and payable on the day which is (A) three months after the first day of such Interest Period and (B) the last day of such Interest Period), and (iii) with respect to all such Portions, at the applicable interest rate (A) when due, at maturity, whether by acceleration or otherwise, and (B) after maturity, on demand until paid in full.

2.2b     Interest Rate Options.  The unpaid principal amount of the Loans shall bear interest, for each day until due, at one or more rates of interest selected by the Borrower from among the Options set forth below; it being understood that, subject to the provisions of this Agreement, the Borrower may select different Options to apply simultaneously to different Portions of the Loans and may select different Interest Periods to apply simultaneously to different Portions of the Euro-Rate Portions of the Loans.

(i)         Base Rate Option:  A rate of interest per annum (computed upon the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed) equal to the sum of (A) the Base Rate plus (B) the Applicable Base Rate Margin from time to time in effect (the "Adjusted Base Rate").  The rate of interest per annum under the Base Rate Option shall be adjusted automatically, from time to time, upon each change in the Adjusted Base Rate.

(ii)        Euro-Rate Option:  A rate of interest per annum (computed on the basis of a year of 360 days and the actual number of days elapsed) equal to the sum of (A) the Euro-Rate plus (B) the Applicable Euro-Rate Margin from time to time in effect (the "Adjusted Euro-Rate").  The Adjusted Euro-Rate for each Euro-Rate Portion then outstanding shall be adjusted automatically, from time to time, effective upon each change in the Applicable Euro-Rate Margin resulting from an increase or decrease in utilization of the Commitments.

2.2c     Interest Periods; Limitations on Elections.  At any time when the Borrower shall select, convert to or renew at the Euro-Rate Option with respect to all or any Portion of the outstanding Loans, it shall fix one or more Interest Periods during which such Option(s) shall apply.  All of the foregoing, however, is subject to the following:

(i)         any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next Business Day unless such Business Day falls in the succeeding calendar month in which case such Interest Period shall end on the next preceding Business Day; and

(ii)        any Interest Period which begins on the last day of a calendar month or on a day for which there is no numerically corresponding day in the subsequent calendar month during which such Interest Period is to end shall end on the last Business Day of such subsequent month.

In addition, elections by the Borrower of the Euro-Rate Option shall be subject to the following further limitations:

(i)         If an Interest Period is elected with regard to amounts outstanding under the Revolving Credit and such Interest Period would end after the Termination Date, such Interest Period shall end on the Termination Date; and

(ii)        At no time may there be more than ten Interest Periods in effect relating to Loans.

2.2d     Election, Conversion or Renewal of Interest Rate Options.  Elections of or conversions to the Base Rate Option shall continue in effect until converted to the Euro-Rate Option as hereinafter provided.  Elections of, conversions to or renewals of the Euro-Rate Option shall expire as to each Euro-Rate Portion at the expiration of the applicable Interest Period.

At any time, with respect to any Base Rate Portion, or at the expiration of the applicable Interest Period, with respect to any Euro-Rate Portion, the Borrower (subject to Subsection 2.2c) may cause all or any part of the principal amount of such Portion to be converted to and/or (in the case of a Euro-Rate Portion) to be renewed under the Euro-Rate Option by notice to each of the Lenders as hereinafter provided.  Such notice (i) shall be irrevocable; (ii) shall be given not later than 11:00 A.M. (eastern time) in the case of a conversion to or renewal of, either in whole or in part, the Euro-Rate Option on the third Business Day prior to the proposed effective date for the conversion or renewal and (iii) shall set forth:

(A)       the effective date of such conversion or renewal, which shall be a Business Day;

(B)       the new Interest Period(s) selected; and

(C)       with respect to each such Interest Period, the aggregate principal amount of the corresponding Euro-Rate Portion.

At the expiration of each Interest Period, any part (including the whole) of the principal amount of the corresponding Euro-Rate Portion as to which no notice of conversion or renewal has been received as provided above, shall automatically be converted to the Base Rate Option.

2.2e     Notification of Election of an Interest Rate Option.  The Borrower, by an Authorized Officer, shall notify the Agent of (i) each election or renewal of an Option and each conversion from one Option to another, (ii) the Portion of the Loans then outstanding to be allocated to each Option and (iii) where relevant, the Interest Periods applicable to each Option, by communication as provided for in this Agreement.  Any such communication may be oral or written and if oral, it shall be followed immediately by written confirmation of such Option election executed by an Authorized Officer.

2.2f      Interest After Maturity.  After the principal amount of all or any part of the Base Rate Portions of the Loans shall have become due and payable, whether by acceleration or otherwise and whether or not judgment has been entered against the Borrower thereon, all Base Rate Portions shall bear interest at a rate per annum which shall be two hundred (200) basis points (2%) per annum above the rate otherwise in effect under the Base Rate Option, such interest rate to change automatically from time to time, effective as of the effective date of each change in the Base Rate.  After the principal amount of all or any part of the Euro-Rate Portions of the Loans shall have become due and payable, whether by acceleration or otherwise and whether or not judgment has been entered against the Borrower thereon, all such Euro-Rate Portions shall bear interest (i) until the end of the then current Interest Period, at a rate per annum which shall be two hundred (200) basis points (2%) per annum above the rate otherwise in effect under the Euro-Rate Option, and (ii) at the end of the then current Interest Period, and thereafter at the sum of (A) the Adjusted Base Rate plus (B) two hundred (200) basis points (2%) per annum.

2.3       Yield-Protection, Capital Adequacy and Miscellaneous Provisions Relating to Euro-Rate.

2.3a     Yield Protection.  Notwithstanding other provisions of this Section 2.3:

(i)         If any Governmental Rule (including, without limitation, Regulation D), or if any change therein on or after the date hereof, or in the interpretation thereof by any Governmental Authority charged with the administration thereof, shall:

(A) subject any Lender to any tax, levy, impost, charge, fee, duty, deduction or withholding of any kind with respect to payments of principal or interest or other amounts due hereunder or pursuant to any Note, any Letter of Credit or any Application (other than any tax imposed or based upon the income of a Lender and payable to any Governmental Authority in the United States of America or any state thereof); or

(B)       change the basis of taxation of any Lender with respect to payments of principal or interest or other amounts due hereunder or pursuant to any Note, any Letter of Credit or any Application (other than any change which affects, and only to the extent that it affects, the taxation by the United States or any state thereof of the total net income of such Lender); or

(C)       impose, modify or deem applicable any reserve, special deposit or similar requirements against assets held by any Lender applicable to the Commitment or Loans made hereunder (other than such requirements which are included in the determination of the applicable rate of interest hereunder); or

(D)       impose upon any Lender any other obligation or condition with respect to this Agreement, and the result of any of the foregoing is to increase the cost to the affected Lender, reduce the income receivable by the affected Lender, reduce the rate of return on the affected Lender's capital, or impose any expenses upon the affected Lender, all with respect to any of the Loans (or any portion thereof) or the issuance of or participation in any Letter of Credit by an amount which the affected Lender reasonably deems material, and if the affected Lender is then demanding similar compensation for such occurrences from other borrowers who are similarly situated and who have a similar relationship with the affected Lender and from which the affected Lender has the right to demand such compensation, then and in any such case:

(1)        the affected Lender shall promptly notify the Borrower of the happening of such event;

(2)        the Borrower shall pay to the affected Lender, within 30 days following demand, such amount as will compensate the affected Lender for such reduction in its rate of return; and

(3)        the Borrower may pay the affected portion of the affected Lender's Loans in full without the payment of any additional amount, including prepayment penalties, other than amounts payable on account of the affected Lender's out-of-pocket losses (including funding loss, if any, as provided in Section 2.9) which are not otherwise provided for in subparagraph (2) immediately above.

(ii)        A certificate (in reasonable detail) as to the increased cost or reduced amount as a result of any event mentioned in this Subsection 2.3a shall be promptly submitted by the affected Lender to the Borrower in accordance with the provisions hereof.  Such certificate shall be prima facie evidence as to the amount of such increased cost or reduced amount.

2.3b     Capital Adequacy.  If, after the date hereof, (i) any adoption of or any change in or in the interpretation of any Governmental Rule, or (ii) compliance with any Governmental Rule of any Governmental Authority exercising control over banks or financial institutions generally or any court of competent jurisdiction, requires that the Commitment (including, without limitation, obligations in respect of any Loans) hereunder be treated as an asset or otherwise be included for purposes of calculating the appropriate amount of capital to be maintained by any Lender or any corporation controlling any Lender (a "Capital Adequacy Event"), the result of which is to reduce the rate of return on a Lender's capital as a consequence of its Commitment to a level below that which the affected Lender could have achieved but for such Capital Adequacy Event, taking into consideration the Lender's policies with respect to capital adequacy, by an amount which the affected Lender reasonably deems to be material, the affected Lender shall promptly deliver to the Borrower a statement (in reasonable detail) of the amount necessary to compensate the affected Lender or the reduction in the rate of return on its capital attributable to its Commitment (the "Capital Compensation Amount").  The affected Lender shall determine the Capital Compensation Amount in good faith, using reasonable attribution and averaging methods.  Each affected Lender shall from time to time notify the Borrower of the amount so determined.  Each such notification shall be prima facie evidence of the amount of the Capital Compensation Amount set forth therein, and such Capital Compensation Amount shall be due and payable by the Borrower to the affected Lender 30 days after such notice is given.  As soon as practicable after any Capital Adequacy Event, the affected Lender shall submit to the Borrower estimates of the Capital Compensation Amounts that would be payable as a function of the affected Lender's Commitment hereunder.

2.3c     Euro-Rate Unascertainable.  If, on any date on which the Adjusted Euro-Rate would otherwise be set, the Agent reasonably shall have determined (which determination shall be final and conclusive) that by reason of circumstances affecting the interbank Eurodollar market, adequate and reasonable means do not exist for ascertaining the Euro-Rate, the Agent shall give prompt notice of such determination to the Borrower and the Lenders and, until the Agent notifies the Borrower and the Lenders that the circumstances giving rise to such determination no longer exist, the right of the Borrower to borrow under, convert to or renew the Euro-Rate Option shall be suspended.  Any notice of borrowing under, conversion to or renewal of the Euro-Rate Option which was to become effective during the period of such suspension shall be treated as a request to borrow under, convert to or renew at the Base Rate Option with respect to the principal amount therein specified.

2.3d     Illegality.  If a Lender shall determine in good faith (which determination shall be final and conclusive) that compliance by such Lender with any applicable law, treaty or other Governmental Rule (whether or not having the force of law), or the interpretation or application thereof by any Governmental Authority, has made it unlawful for such Lender to make or maintain the Loans under the Euro-Rate Option (including but not limited to acquiring Eurodollar liabilities to fund such Loans), such Lender shall give notice of such determination to the Borrower and the other Lenders.  Notwithstanding any provision of this Agreement to the contrary, unless and until the affected Lender shall have given notice to the Borrower and the other Lenders that the circumstances giving rise to such determination no longer apply:

(i)         with respect to any Interest Periods thereafter commencing, interest on the Loans bearing interest at the Adjusted Euro-Rate (whichever one or more have been determined by the affected Lender to be unlawful) shall, unless the Borrower shall have selected a different Option which is then available, be computed and payable under the Base Rate Option; and

(ii)        on such date, if any, as shall be required by law, any Loans bearing interest at the Adjusted Euro-Rate then outstanding shall be automatically converted to the Base Rate Option, and the Borrower shall pay to the affected Lender the accrued and unpaid interest on such Loans to (but not including) the date of such conversion at the applicable interest rate or rates in effect for such Loans prior to such conversion.

2.3e     Change of Lending Office.  Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.3a, 2.3b or 2.3d with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.3a, 2.3b or 2.3d.  In determining whether designating another lending office would cause such Lender or its lending office(s) to suffer economic disadvantage, such Lender may disregard any economic disadvantage that the Borrower agrees in form and substance satisfactory to such Lender to indemnify and hold such Lender harmless therefrom.

2.4       Fees.

2.4a     Facility Fee.  The Borrower agrees to pay to the Lenders, on a pro rata basis, beginning on March 31, 2003, and continuing quarterly in arrears thereafter on the last day of each June, September, December and March during the term hereof to and including the Termination Date, a facility fee (the "Facility Fee") calculated at a rate per annum equal to the Facility Fee Rate on the daily (computed at the opening of business) average amount of the Commitment for the quarter then ending; provided, however, the first payment under this Subsection 2.4b shall be only for the actual number of days elapsed between the Closing Date and March 31, 2003, and the last payment under this Subsection 2.4b shall be only for the actual number of days elapsed between the last quarterly payment date and the Termination Date.  If there isany change in the Facility Fee Rate applicable during the quarter, the Facility Fee shall be calculated with respect to each period that the Facility Fee Rate was in effect during such quarter.

2.4b     Certain Other Fees.  The Borrower agrees (i) to pay to the Agent for the account of the Agent or the Lenders, as applicable, the fees set forth in that certain letter agreement among the Borrower, the Agent, NUI Utilities and Fleet Securities Inc. (the "Fee Letter") dated as of December 3, 2002, as the same may be amended from time to time, as and when payment of such fees is due as set forth therein, and (ii) to pay to the Agent for the account of the Agent and the Proposed Lender, as applicable, the fees in the amount or amounts and on the date or dates agreed to in writing among the Proposed Lender, the Agent and the Borrower in connection with any Increase Request.

2.5       Calculation of Interest and Facility Fee. The calculation of the amount of interest due and owing to each Lender shall be made by the Agent and shall be evidenced by the Agent posting the amount of interest due under each Lender's Loans to the Loan Account established by the Agent pursuant to Section 2.11. The Facility Fee shall be calculated on the basis of a 360 day year and actual number of days elapsed.  The calculation of the amount of the Facility Fee due and owing to each Lender shall be made by the Agent and shall be evidenced by posting such amount due under the Loan Account pursuant to Section 2.11.

2.6       Extension of Termination Date  The Termination Date may be extended, in the manner set forth in this Section 2.6, on February 11, 2004 and on each anniversary of such date (an "Extension Date") for successive periods of 364 days each.  If the Borrower wishes to request an extension of the Termination Date on any Extension Date, it shall give written notice to that effect to the Agent not less than 45 nor more than 60 days prior to such Extension Date.  Each Lender will use its best efforts to respond to such request, whether affirmatively or negatively, within 30 days after receipt of such notice from the Agent.  If the Borrower shall have received affirmative responses from all the Lenders, such response to be in the sole and absolute discretion of each Lender, then, subject to receipt by the Borrower of counterparts of an agreement duly completed and signed by the Borrower and each such Lender (an "Extension Agreement"), the Termination Date shall be extended, effective on such Extension Date, for a period of 364 days to the date stated in such Extension Agreement.  If the Borrower shall not have received affirmative responses from all Lenders the Termination Date shall not be extended.  For purposes of this Section 2.6, the failure of any Lender to respond shall be deemed to be a negative response from such Lender.

2.7       Substitution or Replacement of a Lender.  The Borrower shall have the right (provided that at such time, no Event of Default and no Potential Default has occurred and is continuing), in its sole discretion, to either:

(i)         repay, (A) at any time if Loans bearing interest under the Base Rate Option are the only Loans outstanding, or (B) subject to Section 2.9, upon three days prior notice if the Loans outstanding include Loans bearing interest under the Euro-Rate Option, the outstanding Loans of any Lender in whole, together with interest thereon and any other amount due such Lender pursuant to the terms of this Agreement, and to terminate the Commitment of such Lender; or

(ii)        seek a substitute lending institution or institutions (which may be one or more of the other Lenders) to purchase the Notes and assume the Loans, the Commitment and the other obligations of such Lender under this Agreement,

if any of the following conditions occur with respect to such Lender:

(i)         such Lender shall have delivered a notice or certificate pursuant to Section 2.3a or 2.3b;

(ii)        the obligation of such Lender to make Loans which bear or are to bear interest under the Euro-Rate Option has been suspended pursuant to Subsection 2.3d; or

(iii)       such Lender has responded negatively to a request for extension of the Termination Date pursuant to Section 2.6; provided Required Lenders have responded positively to such request;

and provided, any proposed substitute lending institution, which is not a Lender prior to the Borrower's selection thereof, must be acceptable to the Agent, whose consent shall not be unreasonably withheld or delayed, and provided, further that all of the provisions of Section 9.6 (with respect to any Lender) and Section 8.11 (if the affected Lender is the Agent) must be complied with.

2.8       Loan Repayment.  Each repayment of the Loans (other than Swingline Loans) shall be in the minimum amount of $1,000,000, in the aggregate, or an integral multiple of $100,000 thereof, or such lesser amount as is actually outstanding thereunder.  The Borrower, upon (i) oral or written notice to Agent by 11:00 A.M. (eastern time) on the day of the proposed repayment, in the case of Loans bearing interest at the Adjusted Base Rate or (ii) three Business Days' prior oral or written notice to the Agent, in the case of Loans bearing interest at the Adjusted Euro-Rate, followed immediately thereafter by the Borrower's written confirmation to the Agent of any oral notice, may repay the outstanding amount of the Loans in whole or in part with accrued interest, fees and other amounts then due and payable on the amount repaid to the date of such repayment, subject to the payment of any additional amounts under Section 2.9 below.  The Borrower may prepay any Portion of the Loans bearing interest at the Adjusted Base Rate without premium or penalty.

Any repayment of the Loans shall increase, by the amount of that repayment, the unborrowed balance of the Commitment; it being contemplated that the Borrower may repay and reborrow from time-to-time under the Commitment until the Termination Date.  All Loans outstanding on the Termination Date shall become due and payable in full on such date.

2.9       Additional Payments by the Borrower.  If (i) the Borrower shall fail to make any payment due hereunder on the due date thereof, (ii) the Borrower shall make a payment, prepayment or conversion of any Euro-Rate Portion of the Loans on a day other than the last day of the applicable Interest Period, (iii) the Borrower shall convert any Portion to the Base Rate Option from another Option pursuant to Subsection 2.2d on a day other than the last day of the relevant Interest Period, or (iv) the Borrower shall fail on the date specified therefor to consummate any borrowing, conversion or renewal after giving a request for an extension of credit or notice of conversion or renewal, and, as a result of any such action or inaction, a Lender reasonably incurs any losses and expenses which it would not have incurred but for such action or inaction, the Borrower shall pay such additional amounts as will compensate the affected Lender for such losses and expenses, including the cost of reemployment of any funds prepaid at rates lower than the cost to the affected Lender of such funds.  Such losses and expenses, which the affected Lender shall exercise reasonable efforts to minimize, shall be specified in writing (setting forth, in reasonable detail, the basis of calculation) to the Borrower by the affected Lender, which writing shall be prima facie evidence of the amounts set forth therein, and such amounts shall be payable within 30 days of demand therefor.

2.10     Voluntary Reduction of Availability.  At any time and from time to time upon no less than two Business Days prior written notice to the Agent, the Borrower may terminate, in whole or in part, without penalty, the then unused portion of the Commitments, thereby causing a corresponding abatement of the Facility Fee with respect to the pro rata share so reduced, provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the aggregate principal amount of the Loans then outstanding, when added to the then outstanding L/C Obligations, would exceed the Commitments then in effect.  Each such reduction shall be in a minimum principal amount of $5,000,000 or in integral multiples thereof.  The Facility Fee shall cease to accrue with respect to any unused portion of the commitments so terminated on the date of such termination.  Notice of termination once given shall be irrevocable and the portion of the Commitments so terminated shall not be available for borrowing once such notice has been given under the terms hereof.  The Agent shall promptly notify each Lender of its pro rata share of such terminated unused portion and the date of each such termination.

2.11     Loan Account.  The Agent shall open and maintain on its books a Loan Account in the name of the Borrower with respect to extensions of credit made, repayments, prepayments, the computation and payment of interest and the Facility Fee and the computation of other amounts due and sums paid and payable to each Lender pursuant to this Article II.  Such Loan Account shall be conclusive evidence barring manifest error as to the amount at any time due to any Lender from the Borrower pursuant to this Article II, provided, however, that the failure to make notations, or to make accurate notations, on the Loan Account including without limitation notations with respect to interest and Facility Fees pursuant to Section 2.5 shall not limit, expand or otherwise affect any obligations of the Borrower hereunder.

2.12     Payment from Accounts Maintained by Borrower.  In the event that any payment of principal, interest, Facility Fee or any other amount due to the Lenders or the Agent under this Agreement, the Notes or the other Loan Documents is not paid when due, the Agent is hereby authorized to effect such payment by debiting any demand deposit account of the Borrower maintained with the Agent (excluding however any special purpose fiduciary accounts, which are designated as such at the time of their creation, and mandated by applicable statutes, regulations or rules) and distributing such payment to the party to whom such amounts are due.  This right of debiting accounts of the Borrower is in addition to any right of set-off accorded the Lenders or the Agent hereunder or by operation of law.

2.13     Time, Place and Manner of Payments.  All payments to be made by the Borrower under the Notes (other than those provided for in Sections 2.3 and 2.9 hereof), and of all fees and any other amounts due hereunder (excepting the Fees owed to the Agent for its sole account) shall be made at the principal office of the Agent for the ratable account of the Lenders.  The Agent will promptly pay each such payment received to each Lender or its order in accordance with Section 8.9 hereof.  All payments due a Lender by reason of Sections 2.3 or 2.9 hereof shall be paid at the principal office of the Lender which invoices the Borrower for such payment.  All payments to be made by the Borrower under this Agreement shall be paid in Dollars and in immediately available funds no later than 3:00 P.M. (eastern time) on the date such payment is due, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature.

            2.14     Mandatory Prepayments.  Unless the Required Lenders otherwise agree, the Borrower shall prepay the Loans and reduce the Commitments in an amount equal to 100% of the Net Proceeds of any sale for cash permitted pursuant to the terms of Section 5.5(iii) no later than the Business Day following receipt by the Borrower or such Subsidiary of such proceeds, together with accrued interest to such date on the amount prepaid.  Nothing in this Section 2.14 shall be construed to derogate any restriction or limitation contained in any Loan Document imposed on any transaction of the type described in this Section 2.14, including, without limitation, Sections 5.5, 5.6 and 5.13 hereof.

            2.15     Letters of Credit

            2.15a   L/C Commitment.

            (i)         Subject to the terms and conditions hereof, the Issuing Bank, in reliance on the agreements of the other Lenders set forth in Subsection 2.15d(i), agrees to issue letters of credit ("Letters of Credit") for the account of the Borrower on any Business Day during the Commitment Period in such form as may be approved from time to time by the Issuing Bank; provided that the Issuing Bank shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (1) the L/C Obligations would exceed the L/C Commitment or (2) the Available Commitment of the Issuing Bank would be less than zero.

(ii)        Each Letter of Credit shall be denominated in Dollars and shall (1) be a standby Letter of Credit issued to support obligations of the Borrower or a Guarantor, contingent or otherwise, as may be approved by the Issuing Bank and the Agent (such consent not to be unreasonably withheld) and (2) expire no later than the Termination Date.

            (iii)       Each Letter of Credit shall be subject to the Uniform Customs and, to the extent not inconsistent therewith, the laws of the State of New Jersey.

            (iv)       The Issuing Bank shall not at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or cause the Issuing Bank or any L/C Participant to exceed any limits imposed by, any applicable Governmental Rule.

2.15b   Procedure for Issuance of Letters of Credit.  The Borrower may from time to time request that the Issuing Bank issue a Letter of Credit by delivering to the Issuing Bank at its address for notices specified herein an Application therefor, completed to the reasonable satisfaction of the Issuing Bank, and such other certificates, documents and other papers and information as the Issuing Bank may reasonably request.  Upon receipt of any Application, the Issuing Bank will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Bank be required to issue any Letter of Credit earlier than two Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Bank and the Borrower.  The Issuing Bank shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof.

2.15c   Fees, Commissions and Other Charges

            (i)         The Borrower shall pay to the Agent, for the account of the Issuing Bank, a fronting fee with respect to each Letter of Credit in an amount equal to .125% of the face amount of such Letter of Credit.  Such fronting fee shall be payable in advance on the date of issuance of each Letter of Credit and shall be nonrefundable.

            (ii)        The Borrower shall pay to the Agent, for the account of the Issuing Bank and the L/C Participants, a letter of credit commission with respect to each Letter of Credit, computed for the period from the date of such payment to the date upon which the next such payment is due hereunder at the Applicable Euro-Rate Margin, calculated on the basis of a 365-day (or 366-day, as the case may be) year, of the aggregate amount available to be drawn under such Letter of Credit on the date on which such fee is calculated.  Such commissions shall be payable in arrears on each L/C Fee Payment Date after the issuance of the respective Letter of Credit and shall be nonrefundable.

            (iii)       In addition to the foregoing fees and commissions, the Borrower shall pay or reimburse the Issuing Bank for such normal and customary costs and expenses as are incurred or charged by the Issuing Bank in issuing, effecting payment under, amending or otherwise administering any Letter of Credit.

            (iv)       The Agent shall, promptly following its receipt thereof, distribute to the Issuing Bank and the L/C Participants all fees and commissions received by the Agent for their respective accounts pursuant to this Section 2.15.

2.15d   L/C Participations.

            (i)         The Issuing Bank irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Bank to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Bank, on the terms and conditions hereinafter stated, for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Commitment Percentage in the Issuing Bank's obligations and rights under each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Bank thereunder.  Each L/C Participant unconditionally and irrevocably agrees with the Issuing Bank that, if a draft is paid under any Letter of Credit for which the Issuing Bank is not reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to the Issuing Bank upon demand at the Issuing Bank's address for notices specified herein an amount equal to such L/C Participant's Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed.

            (ii)        If any amount required to be paid by any L/C Participant to the Issuing Bank pursuant to Section 2.15d(i) in respect of any unreimbursed portion of any payment made by the Issuing Bank under any Letter of Credit is not paid to the Issuing Bank within three Business Days after the date such payment is due, such L/C Participant shall pay to the Issuing Bank on demand an amount equal to the product of (1) such amount, times (2) the daily average Federal Funds Effective Rate, as quoted by the Issuing Bank, during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Bank, times (3) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360.  If any such amount required to be paid by any L/C Participant pursuant to Subsection 2.15d(i) is not in fact made available to the Issuing Bank by such L/C Participant within three Business Days after the date such payment is due, the Issuing Bank shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to Loans to which the Base Rate Option applies.  A certificate of the Issuing Bank submitted to any L/C Participant with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error.

            (iii)       Whenever, at any time after the Issuing Bank has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Subsection 2.15d(i), the Issuing Bank receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise), or any payment of interest on account thereof, the Issuing Bank will distribute to such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by the Issuing Bank shall be required to be returned by the Issuing Bank, such L/C Participant shall return to the Issuing Bank the portion thereof previously distributed by the Issuing Bank to it.

2.15e   Reimbursement Obligation of the Borrower

            (i)         The Borrower agrees to reimburse the Issuing Bank on each date on which the Issuing Bank notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the Issuing Bank for the amount of (1) such draft so paid and (2) any taxes, fees, charges or other costs or expenses incurred by the Issuing Bank in connection with such payment.  Each such payment shall be made to the Issuing Bank at its address for notices specified herein in lawful money of the United States of America and in immediately available funds.

            (ii)        Interest shall be payable on any and all amounts remaining unpaid by the Borrower under this subsection from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full at the rate which would be payable on any outstanding Loans bearing interest based on the Base Rate Option which were then overdue.

            (iii)       Each drawing under any Letter of Credit shall constitute a request by the Borrower to the Agent for a borrowing pursuant to Subsection 2.1d of Loans to which the Base Rate Option applies in the amount of such drawing.  The Borrowing Date with respect to such borrowing shall be the date of such drawing.

2.15f    Obligations Absolute.

            (i)         The Borrower's obligations under this Section 2.15 shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the Borrower may have or have had against the Issuing Bank or any beneficiary of a Letter of Credit.

            (ii)        The Borrower also agrees with the Issuing Bank that the Issuing Bank shall not be responsible for, and the Borrower's Reimbursement Obligations under Subsection 2.15e shall not be affected by, among other things, (1) the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, (2) any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or (3) any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee.

            (iii)       The Issuing Bank shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the Issuing Bank's gross negligence or willful misconduct.

            (iv)       The Borrower agrees that any action taken or omitted by the Issuing Bank under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New Jersey, shall be binding on the Borrower and shall not result in any liability of the Issuing Bank to the Borrower.

2.15g   Letter of Credit Payments.  If any draft shall be presented for payment under any Letter of Credit, the Issuing Bank shall promptly notify the Borrower of the date and amount thereof.  The responsibility of the Issuing Bank to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letters of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit.

2.15h   Application.  To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 2.15, the provisions of this Section 2.15 shall apply.

ARTICLE III.  REPRESENTATIONS AND WARRANTIES.

To induce the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit herein provided for, the Borrower represents and warrants to the Lenders that:

3.1       Corporate Existence, Subsidiaries.  The Borrower and each of its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its respective state of incorporation and it is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction where, because of the nature of its respective properties or businesses, such qualification is required or, if not so qualified or in good standing in any state, the lack of such qualification or good standing will not materially affect the Agent's or the Lenders' ability to enforce this Agreement, the Notes or the other Loan Documents or will not have a Material Adverse Effect on the Borrower's or such Subsidiary's ability to carry on its business or the Borrower's ability to comply with this Agreement, the Notes or the other Loan Documents.  All of the direct and indirect Subsidiaries of the Borrower and the ownership interests of the Borrower and its Subsidiaries therein on a fully diluted basis, as of the Closing Date, are listed on Schedule 3.1 of this Agreement.

3.2       Corporate Authority.  The Borrower is duly authorized to execute and deliver this Agreement, the Notes and the other Loan Documents to which it is or will become a party; all necessary corporate action to authorize the execution and delivery of this Agreement, the Notes and the other Loan Documents to which it is or will become a party has been properly taken; and it is and will continue to be duly authorized to borrow hereunder and to perform all of the other terms and provisions of this Agreement, the Notes and the other Loan Documents to which it is or will become a party.

3.3       Enforceability.  This Agreement and the Notes have each been, and each other Loan Document to which it will become a party will be, duly and validly executed and delivered by the Borrower and each constitutes or will constitute a valid and legally binding agreement of the Borrower enforceable in accordance with its terms.

3.4       No Restrictions, No Default.  Neither the execution and delivery of this Agreement, the Notes and the other Loan Documents to which it is or will become a party, the consummation of the transactions herein contemplated nor compliance with the terms and provisions hereof or of the Notes, will conflict with or result in a breach of any of the terms, conditions or provisions of the certificate of incorporation or the by-laws of the Borrower or of any law or of any regulation, order, writ, injunction or decree of any court or governmental agency or of any agreement, indenture or other instrument to which the Borrower or any Subsidiary is a party or by which any of them is bound or to which it is subject, or constitute a default thereunder or result in the creation or imposition of any Encumbrance of any nature whatsoever upon any of the property or assets of the Borrower pursuant to the terms of any agreement, indenture or other instrument, except those restrictions which, individually or in the aggregate, would not have a Material Adverse Effect upon the Borrower and its Subsidiaries taken as a whole.  Except as would not have a Material Adverse Effect, each of the Borrower and its Subsidiaries has good record and marketable title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all of its other property, and none of such property is subject to any Encumbrance except as permitted by Section 5.2.  No event has occurred and is continuing and no condition exists or will exist after giving effect to the borrowings hereunder to be made on the Closing Date which constitutes an Event of Default or Potential Default.

3.5       Financial Statements.  The Borrower has furnished to the Lenders and the Agent the consolidated balance sheets and the related consolidated statements of income, shareholders' equity and changes in financialposition of the Borrower and its consolidated Subsidiaries for the Fiscal Years ending September 30, 2001 and September 30, 2002.  All such financialstatements, including the related notes, have been prepared in accordance with GAAP, except as expressly noted therein and, in the case of the aforementioned quarterly financial statements, subject to changes resulting from year-end adjustments, and fairly present the financial position and consolidated financial positions of the Borrower and its consolidated Subsidiaries as at the dates thereof and the results and consolidated results of their operations and the changes in their financial position and in their consolidated financial position for the periods ended on such dates.  There were no material liabilities of the Borrower and its consolidated Subsidiaries, taken as a whole, contingent or otherwise, not reflected in such financial statements.  Except as has otherwise been fully disclosed in the Borrower's Form 10-K filed on December 31, 2002 with the Securities and Exchange Commission, there has been no Material Adverse Change in the business, condition or operations (financial or otherwise) of the Borrower and its consolidated Subsidiaries from September 30, 2002 to the Closing Date.

3.6       Absence of Litigation.  There are no actions, suits, investigations, litigation or governmental proceedings pending or, to the Borrower's knowledge, threatened against the Borrower or any Subsidiary or any of their respective properties, which would have a Material Adverse Effect on the Borrower and the Subsidiaries taken as a whole, or which purport to affect the legality, validity or enforceability of this Agreement or the Notes.

3.7       Tax Returns and Payments.  As of the date hereof, the Borrower and its Subsidiaries have filed all Federal and other material tax returns required by law to be filed and have paid all material taxes, material assessments and other material governmental charges levied upon the Borrower and its Subsidiaries taken as a whole, or any of the respective properties, assets, income or franchises of the Borrower and its Subsidiaries taken as a whole, which are due and payable, other than those currently payable or deferrable without penalty or interest or those which are being contested in good faith and by appropriate proceedings diligently conducted for which reserves in accord with GAAP have been provided.  As of the date hereof, the charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of Federal, state and local income taxes for all fiscal periods are adequate, and the Borrower knows of no unpaid assessments for additional Federal, state or local income taxes for any such fiscal period or any basis therefor.

3.8       Pension Plans.  Except as otherwise noted on Schedule 3.8, (i) each Plan has been and will be maintained and funded, in all material respects, in accordance with its terms and with all provisions of ERISA and the Code applicable thereto; (ii) no Reportable Event has occurred and is continuing with respect to any Plan; (iii) no liability to PBGC has been incurred with respect to any Plan, other than for premiums due and payable; (iv) no Plan has been terminated, no proceedings have been instituted to terminate any Plan, and there exists no intent to terminate or institute proceedings to terminate any Plan, which has caused or would cause the Borrower or any ERISA Affiliate to incur any liability to the PBGC under Title IV of ERISA; (v) no withdrawal, either complete or partial, has occurred or commenced with respect to any multiemployer Plan, and there exists no intent to withdraw either completely or partially from any multiemployer Plan and (vi) the Borrower is not subject to any liability for unpaid penalties or taxes imposed under Section 502(i) of ERISA or Section 4975 of the Code and has not engaged in a prohibited transaction as defined in Section 406 of ERISA and Section 4975 of the Code.

3.9       Compliance with Applicable Laws.  The Borrower and each Subsidiary (i) is not in default with respect to any order, writ, injunction or decree of any court or of any Federal, state, municipal or other Governmental Authority; and (ii) is substantially complying with all applicable statutes and regulations of each Governmental Authority having jurisdiction over its activities; except for those orders, writs, injunctions, decrees, statutes and regulations, non-compliance with which would not have a Material Adverse Effect upon the Borrower and its Subsidiaries taken as a whole.

3.10    Environmental Matters.  Except to the extent described in the Borrower's most recently filed Form 10-K, Form 10-Q or Form 8K, the Borrower and its Subsidiaries are in compliance with all applicable Environmental Laws, except for matters which do not have a Material Adverse Effect on the financial condition of the Borrower and its Subsidiaries taken as a whole.

3.11     Governmental Approval.  No order, authorization, consent, license, validation or approval of, or notice to, filing, recording, or registration with, any Governmental Authority, or exemption by any Governmental Authority, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Agreement, the Notes or the other Loan Documents to which it is a party or (ii) the legality, binding effect or enforceability of this Agreement, the Notes or the other Loan Documents to which it is a party.

3.12     Regulations T, U and X.  The Borrower is not engaged in the business of purchasing or selling Margin Stock or extending credit to others for the purpose of purchasing or carrying Margin Stock and no part of the proceeds of the Loans will be used to purchase or carry any Margin Stock or for any other purpose which would violate or be inconsistent with Regulations T, U or X.

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

3.14     Public Utility Holding Company Act.  The Borrower is exempt from regulation under the Public Utility Holding Company Act of 1935, as amended ("PUHCA").  Each Guarantor and NUI/Caritrade International is an "affiliate" of an exempt public utility "holding company" with the meaning of PUHCA.  NUI Utilities, Virginia Gas Company and each of Virginia Gas Company's Subsidiaries are "affiliates" of an exempt public utility "holding company" within the meaning of PUHCA.

3.15     Disclosure.  Neither this Agreement nor any other document, certificate or statement furnished to the Lenders or the Agent by or on behalf of the Borrower pursuant to this Agreement contains any untrue statement of a material fact.  There is no fact known to the Borrower which materially and adversely affects or in the future may (so far as the Borrower now foresees) have a Material Adverse Effect on the business, operations, affairs, condition, prospects, properties or assets of the Borrower and its Subsidiaries, taken as a whole, which has not been set forth in this Agreement or in the other documents, certificates and statements (financial or otherwise) furnished to the Lenders or the Agent or otherwise disclosed in writing to the Lenders or the Agent by or on behalf of the Borrower prior to or on the date hereof.

ARTICLE IV.            AFFIRMATIVE COVENANTS.

From the date hereof and thereafter until the termination of the Commitments and until all of the Bank Indebtedness (including, without limitation, any Letters of Credit which remain outstanding and unpaid) is paid in full, the Borrower agrees that:

4.1       Use of Proceeds.  The proceeds of the Loans will be used by the Borrower solely (i) for general corporate purposes of the Borrower, (ii) for working capital purposes in the ordinary course of business of the Borrower, (iii) to pay fees and expenses incurred in connection with the execution and delivery of the Loan Documents, and (iv) to repay amounts due and payable under the Existing Credit Agreement as required by Section 6.2(xiii).

4.2       Furnishing Information.  The Borrower shall:

(i)         deliver to the Agent (with copies for each Lender which Agent shall distribute) within 55 days after the end of each of the first three Fiscal Quarters in each Fiscal Year of the Borrower, the Borrower's Form 10-Q filed with the Securities and Exchange Commission together with (A) consolidated and consolidating balance sheets as at the end of such period for the Borrower and its Subsidiaries, (B) consolidated and consolidating statements of income for such period for the Borrower and its Subsidiaries and, in the case of the second and third quarterly periods, for the period from the beginning of the current Fiscal Year to the end of such quarterly period, and (C) consolidated statements of cash flow for such period for the Borrower and its Subsidiaries and, in the case of the second and third quarterly periods, for the period from the beginning of the current Fiscal Year to the end of such quarterly period; and each such statement shall set forth, in comparative form, corresponding figures for the corresponding period in the immediately preceding Fiscal Year and all such statements shall be prepared in reasonable detail in accordance with GAAP and certified, subject to changes resulting from year-end adjustments, by the chief financial officer or treasurer of the Borrower;

(ii)        deliver to the Agent (with copies for each Lender which Agent shall distribute) within 100 days after the end of each Fiscal Year of the Borrower, the Borrower's Form 10-K filed with the Securities and Exchange Commission together with (A) consolidated and consolidating balance sheets as at the end of such year for the Borrower and its Subsidiaries, (B) consolidated and consolidating statements of income for such year for the Borrower and its Subsidiaries, (C) consolidated statements of cash flow for such year for the Borrower and its Subsidiaries, and (D) consolidated statements of shareholders equity for such year for the Borrower and its Subsidiaries; and each such statement shall set forth, in comparative form, corresponding figures for the immediately preceding Fiscal Year; and all such financial statements shall present fairly in all material respects the financial position of the Borrower and its consolidated Subsidiaries, as at the dates indicated and the results of its operations and its cash flow for the periods indicated, in conformity with GAAP; and the Borrower shall cause each of the consolidated financial statements described in the foregoing clauses (A) through (D) to be certified without limitation as to scope or material qualification by PricewaterhouseCoopers LLP or other independent certified public accountants acceptable to the Agent;

(iii)       deliver to the Agent (with copies for each Lender which Agent shall distribute), together with each delivery of financial statements pursuant to items (i) and (ii) above, a Compliance Certificate of the Borrower substantially in the form of Exhibit "F" hereto, properly completed and signed by an Authorized Officer of the Borrower, (A) stating (1) that such officer has reviewed the terms of the Loan Documents and has made, or caused to be made under his supervision, a review of the transactions and condition of the Borrower and its Subsidiaries during the accounting period covered by such financial statements and that such review has not disclosed any failure by the Borrower during such period to observe or perform all of its covenants and other agreements, nor any failure to satisfy every condition contained in this Agreement, the Notes and the other Loan Documents to which it is a party during such accounting period, and (2) that the Borrower does not have knowledge of the existence, as at the date of such Compliance Certificate, of any condition or event which constitutes an Event of Default or a Potential Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken or is taking or proposes to take with respect thereto, and (B) demonstrating in reasonable detail compliance as at the end of such accounting period with the covenants contained in Sections 5.3a and 5.3b hereof;

(iv)       promptly give written notice to the Agent of any pending or, to the knowledge of the Borrower, overtly threatened claim in writing, litigation or threat of litigation which arises between the Borrower, or any of its Subsidiaries, and any other party or parties (including, without limitation, any Governmental Authority, which claim, litigation or threat of litigation, individually or in the aggregate, is reasonably likely to cause a Material Adverse Change, any such notice to be given not later than five Business Days after the Borrower becomes aware of the occurrence of any such claim, litigation or threat of litigation;

(v)        deliver to the Agent (with copies for each Lender which Agent shall distribute) promptly upon their becoming available, copies of all financial statements, reports, notices and information statements sent or made available generally by the Borrower to its security holders (including, without limitation, proxy materials) and copies of all other regular and periodic reports (including, without limitation, Form    8-K) filed by the Borrower with the Securities and Exchange Commission or any Governmental Authority succeeding to any of its functions, and of all press releases and other statements made available generally by the Borrower to the public concerning material developments in the business of the Borrower and any of its Subsidiaries taken as a whole;

(vi)       promptly after receipt thereof, by the Borrower or the administrator of any Plan, deliver to the Lenders a copy of any notice from the PBGC that the PBGC is instituting Termination Proceedings;

(vii)      deliver to the Agent within two Business Days after S&P or Moody's announces a change in the Borrower's Senior Ratings, or the withdrawal of any Senior Ratings, notice of such change or withdrawal, together with a copy of any written notification which Borrower received from the applicable rating agencies regarding such change or withdrawal of Senior Ratings;

(viii)      promptly and in any event within 30 days after the Borrower or the administrator of any Plan knows or has reason to know that any Reportable Event has occurred which would cause the PBGC to institute Termination Proceedings give notice thereof to the Agent;

(ix)       promptly, but not later than five Business Days, after any officer obtains knowledge of the happening of any event having a Material Adverse Effect or which constitutes an Event of Default or a Potential Default, give written notice thereof to the Agent; and

(x)        promptly, deliver to the Lenders such other information and data with respect to the Borrower or any of its Subsidiaries as from time to time may be reasonably requested by any Lender.

4.3       Visitation.  The Borrower will, and will cause its Subsidiaries to, keep complete and proper books of records and accounts in accordance with GAAP and the Borrower will permit the Lenders and each Lender's designated employees and agents to have access, from time to time, upon reasonable notice (except no such notice shall be required after the occurrence and during the continuance of an Event of Default) and during normal business hours at any reasonable time, to visit any of the properties of the Borrower or any Subsidiary, to examine and make copies of any of its books of record and account and such reports and returns as the Borrower or any Subsidiary may file with any Governmental Authority and discuss the Borrower's or any Subsidiaries' affairs and accounts with, and be advised about them, by any Authorized Officer.

4.4       Preservation of Existence; Qualification.  At its own cost and expense, the Borrower will continue to engage in business of the same general type as now conducted by it and will do all things necessary to preserve and keep in full force and effect its and each of its Subsidiaries' corporate existence and qualification under the laws of their respective states of incorporation and each state where, due to the nature of their respective activities or the ownership of their respective properties, qualification to do business is required except where (i) the lack of corporate existence of a Subsidiary or (ii) the failure to be so qualified would not have a Material Adverse Effect upon the Borrower and its Subsidiaries taken as a whole or except as permitted by Sections 5.6 and 7.4.

4.5       Compliance with Laws and Contracts.  The Borrower shall and shall cause each Subsidiary to comply with all applicable Governmental Rules (including, but not limited to, Environmental Laws), except where failure to comply would not have a Material Adverse Effect on the Borrower and its Subsidiaries taken as a whole.

4.6       Payment of Taxes and Other Liabilities.  The Borrower shall and shall cause each Subsidiary to promptly pay and discharge all obligations, accounts and liabilities to which it is subject or which are asserted against it at or before maturity or before they become delinquent, as the case may be, and which obligations, accounts and liabilities are, to the Borrower and the Subsidiaries taken as a whole, material, including but not limited to all taxes, assessments and governmental charges and levies upon it or upon any of its income, profits, or property prior to the date on which penalties attach thereto to the extent that the non-payment of which would in the aggregate have a Material Adverse Effect upon the Borrower and its Subsidiaries taken as a whole; provided, however, that for purposes of this Agreement, neither the Borrower nor the relevant Subsidiary shall be required to pay any item (i) the payment of which is being contested in good faith by appropriate and lawful proceedings diligently conducted and (ii) as to which the Borrower shall have set aside on its books reserves for such claims as are determined to be adequate pursuant to the accounting procedures employed by the Borrower.  As to the Borrower and each of its direct and indirect Subsidiaries, cause their direct and indirect Subsidiaries to make dividends, distributions and other payments provided the same does not violate any applicable Governmental Rule, to the Borrower from time to time as may be necessary to ensure that the Borrower is able to pay the Bank Indebtedness as and when the same becomes due.

4.7       Insurance.  The Borrower will keep and maintain, and cause each Subsidiary to keep and maintain, insurance with financially sound and reputable insurance companies on such of their respective properties, in such amounts and against such risks as is customarily maintained by similar businesses similarly situated and owning, leasing or operating similar properties.  The Borrower may satisfy the requirements of the preceding sentence with self insurance and deductibles consistent with customary and prudent industry standards.  The Borrower will furnish to the Agent at the Closing and together with the annual reports delivered pursuant to Subsection 4.2(ii) hereof, a certificate of an Authorized Officer of the Borrower certifying that such insurance is in force, provides coverage consistent with the preceding sentence and complies with the Borrower's and each Subsidiary's obligations under this Section 4.7.

4.8       Maintenance of Properties.  The Borrower shall and shall cause its Subsidiaries to maintain, preserve, protect and keep their respective properties in good repair, working order and condition (ordinary wear and tear excepted), and make all necessary and proper repairs, renewals and replacements so that their business carried on in connection therewith may be properly and advantageously conducted at all times, except where the failure to maintain, preserve, protect or keep such properties would not have a Material Adverse Effect upon the Borrower and its Subsidiaries taken as a whole.

4.9       Plans and Benefit Arrangement.  The Borrower shall, and shall cause each ERISA Affiliate to, comply with ERISA, the Code and all other applicable laws which are applicable to Plans, except where the failure to do so, alone or in conjunction with any other failure to do so, would not have a Material Adverse Effect upon the Borrower and its Consolidated Subsidiaries taken as a whole.

4.10     Senior Debt Status.  The Bank Indebtedness will rank at least pari passu in priority of payment with all other Indebtedness of the Borrower, except Indebtedness of the Borrower which may be secured by Encumbrances permitted pursuant to Section 5.2.

4.11     Ownership of Certain Subsidiaries.  The Borrower shall at all times during the term hereof own, directly or indirectly, 100% of the equity interests on a fully diluted basis of (i) Virginia Gas Company and its Subsidiaries and (ii) NUI Utilities, Inc.  Unless the sale thereof is permitted under Section 5.5, the Borrower shall at all times own, directly or indirectly, (a) 90% of the equity interests on a fully diluted basis of NUI/Caritrade International, and (b) 100% of the equity interests on a fully diluted basis of all of its other Subsidiaries (excluding NUI Richton Storage, Inc.) in existence on the Closing Date.

4.12     New Subsidiaries.  Subject to the terms and conditions of Section 5.11, with respect to any Subsidiary created or acquired after the Closing Date by the Borrower or any of its Subsidiaries, cause such new Subsidiary with 30 days of its creation or acquisition (i) to execute and deliver to the Agent for the benefit of the Lenders a Guaranty Agreement in substantially the same form as Exhibit "I" hereto, (ii) to deliver to the Agent a Closing Certificate of such Subsidiary with appropriate insertions and attachments, and (iii) if requested by the Agent, deliver to the Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Agent.

4.13     Indebtedness of Virginia Gas.  The Borrower shall cause Virginia Gas Company and its Subsidiaries to have no Indebtedness except Indebtedness of Virginia Gas Company or any of its Subsidiaries owing to the Borrower.

ARTICLE V.  NEGATIVE COVENANTS.

From the date hereof and thereafter until the Commitments are terminated and until the Bank Indebtedness is paid in full, the Borrower agrees that:

5.1       Dividends, Etc  The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, 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 equity interests of the Borrower or any Subsidiary, or purchase, redeem or otherwise acquire for value (or permit any of its Subsidiaries to do so) any shares of any class of equity interests of the Borrower or any Subsidiary or any warrants, rights or options to acquire any such shares, now or hereafter outstanding (such declarations, payments, other distributions, purchases, redemptions, or other acquisitions being herein called "Restricted Payments"), except that (i) any wholly owned Subsidiary may declare and pay dividends to the Borrower, or in the case of any Subsidiary that is wholly owned by any other Subsidiary, to such Subsidiary, (ii) NUI/Caritrade International may declare and pay ratable dividends to its shareholders provided that it is a Subsidiary hereunder at the time of such ratable dividend, and (iii) the Borrower may (a) declare and make any dividend payment or other distribution payable solely in common equity interests of the Borrower, and (b) purchase, redeem or otherwise acquire shares of its common equity interests or warrants, rights or options to acquire any such shares with the proceeds received from substantially concurrent issue of new shares of its common equity interests and (c) declare or pay cash dividends to its stockholders and purchase, redeem or otherwise acquire shares of its equity interests or warrants, rights or options to acquire for consideration of any such shares, so long as the aggregate of such Restricted Payments made, paid or declared would not exceed $20,000,000; provided, that (x) in the case of the Restricted Payments under clauses (ii) and (iii) above, immediately after giving effect to such proposed Restricted Payments, no Potential Default or Event of Default would exist and (y) in the case of all Restricted Payments, no such payment shall violate any Governmental Rule. 

5.2       Encumbrances.  The Borrower will not create or suffer to exist, or permit any of its Subsidiaries to create or suffer to exist, any Encumbrance or any other type of preferential arrangement, upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to receive income, in each case to secure or provide for the payment of any Indebtedness of any Person, other than Permitted Encumbrances.

5.3a     Leverage Ratio.  At no time shall its ratio of Consolidated Total Indebtedness to its Consolidated Total Capitalization exceed the amount set forth below for each relevant period set forth below:

                        Period                                                                             Ratio

                        March 1 of each year to and

                        including August 31 of such year:                                   .65:1.00

September 1 of each year to and

including February 28 (or 29, if applicable)

of the following year:                                                     .70:1.00

5.3b     Fixed Charge Coverage Ratio.  At no time shall the Borrower permit, for any period of four consecutive Fiscal Quarters ending on or after September 30, 2002, the ratio of (i) the sum of (A) Consolidated Net Income for such period plus (B) income taxes deducted in determining such Net Income plus (C) Consolidated Fixed Charges for such period plus (D) the one-time non-recurring losses recognized by the Borrower on or prior to September 30, 2002 in connection with the discontinuance of TIC Enterprises' operations pursuant to Statement of Financial Accounting Standard No. 144; to (ii) Consolidated Fixed Charges for such period to be less than 1.50 to 1.00.

5.4       Acquisitions.  Unless otherwise consented to by the Required Lenders (such consent not to be unreasonably withheld), the Borrower will not acquire the assets of any Person or any shares of capital stock of, or other equity interest in, any Person, or permit any of its Subsidiaries to do so, except for Permitted Acquisitions.

5.5       Sales of Assets.  The Borrower shall not nor shall it permit any Subsidiary to enter into any arrangement, direct or indirect, pursuant to which the Borrower or any such Subsidiary shall sell or otherwise transfer or dispose of, in a single transaction or a series of transactions, all or any substantial part of its assets, other than (i) a sale of assets by any such Subsidiary (other than any Restricted Subsidiary) to another Subsidiary (other than any Restricted Subsidiary) or to the Borrower, (ii) the transfer of a compressor and related equipment (collectively, the "Compressor") from the Borrower to the Saltville Member and from the Saltville Member to the Saltville JV, (iii) the sale, for at least 90% cash consideration, of the equity interests or assets of NUI Telecom and UBS on terms previously disclosed to the Agent, and (iv) a sale, for at least 90% cash consideration, of all of the equity interests owned by the Borrower or any of its Subsidiaries in any of NUI Capital, NUI Energy Brokers, NUI Energy, TIC Enterprises, NUI/Caritrade International, NUI Energy Solutions, NUI Environmental, NUI International, NUI Sales Management, NUI Service, NUI Hungary, Inc., HPMP, KPT., NUI Ukraine, Inc., the Saltville Member, the Saltville JV, NUI Storage, Inc. or Richton Gas Storage Co., LLC or all or any portion of the equity interests of NUI Richton Storage, Inc. or a sale, for at least 90% cash consideration, of all or any portion of the assets of NUI Capital, NUI Energy Brokers, NUI Energy, TIC Enterprises, NUI/Caritrade International, NUI Energy Solutions, NUI Environmental, NUI International, NUI Sales Management, NUI Service, NUI Hungary, Inc., HPMP, KPT., NUI Ukraine, Inc., the Saltville Member, the Saltville JV, NUI Storage, Inc., NUI Richton Storage, Inc. or Richton Gas Storage Co., LLC, provided (1) the Net Proceeds from all of such sales described in clause (iv) either individually or in the aggregate do not exceed 10% of the Consolidated Shareholder's Equity of the Borrower and the Subsidiaries, and (2) the Net Proceeds of each such sale under clauses (iii) and (iv) are applied to the prepayment of the Loans as provided in Section 2.14.

5.6       Merger.  The Borrower shall not merge or consolidate with any other Person or permit any of its Subsidiaries to do so, except (A) a merger or consolidation of any Subsidiary (other than any Restricted Subsidiary) with or into any other wholly owned Subsidiary (other than any Restricted Subsidiary) (provided that such wholly owned Subsidiary shall be the continuing or surviving corporation) or the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or (B) a merger or consolidation in which each of the following conditions is satisfied:

(i)         the Borrower is the surviving Person or, if the Borrower is not the surviving Person, the surviving Person (a) assumes all obligations of the Borrower hereunder in form and substance reasonably satisfactory to Agent and (b) is acceptable to each Lender in its reasonable discretion;

(ii)        no Event of Default or Potential Default occurs as a result of such a merger or consolidation; and

(iii)       the Borrower's Consolidated Shareholder's Equity immediately after such merger or consolidation is not less than the Borrower's Consolidated Shareholder's Equity immediately prior to such merger or consolidation.

5.7       Regulation T, U and X Compliance.  The Borrower shall not and shall not permit any Subsidiary to use the proceeds of a Loan to purchase or carry Margin Stock or otherwise act so as to cause any Lender, in extending credit hereunder, to be in contravention of Regulations T, U or X.

5.8       ERISA.  The Borrower shall not and shall not permit any ERISA Affiliate to permit any Plan to:

(i)         engage in any "prohibited transaction", as such term is defined in Section 406 of ERISA and Section 4975 of the Code;

(ii)        incur any "accumulated funding deficiency", as such term is defined in Section 302 of ERISA, whether or not waived;

(iii)       be terminated in a manner which could result in liability to the PBGC under Title IV of ERISA or the imposition of a lien on the property of the Borrower or any ERISA Affiliate pursuant to Section 4068 of ERISA; or

(iv)       partially or completely withdraw from any Plan, which withdrawal shall

subject the Borrower or any ERISA Affiliateto multiemployer withdrawal liability pursuant to Section 4201 of ERISA.

5.9       Restrictive Agreements.  The Borrower shall not permit its Subsidiaries or divisions (including, without limitation, any Restricted Subsidiary) to enter into or otherwise be bound by any agreement not to pay dividends or make distributions to the Borrower, except for such agreements existing on the date hereof which have been fully disclosed in writing to Agent and replacements of such agreements (provided that copies of such replacement agreements are provided to the Agent and are no more restrictive in any material respect than those agreements being replaced).

5.10     [Intentionally Omitted.]Error! Bookmark not defined.

5.11     Subsidiaries.  The Borrower shall not create, nor permit to exist, any Subsidiary other than (i) the Guarantors in existence as of the Closing Date, (ii) any Restricted Subsidiaries existing on the date hereof and (iii) Subsidiaries as to which, immediately upon their formation, all requirements of Section 4.12 shall have been satisfied.

5.12     Limitation on Capital Expenditures.  The Borrower shall not, and shall not permit any of its Subsidiaries to, make or commit to make (by way of the acquisition of securities of a Person or otherwise) any expenditure in respect of the purchase or other acquisition of fixed or capital assets (other than those expenditures in connection with Permitted Acquisitions), except for expenditures not exceeding, in the aggregate for the Borrower and its Subsidiaries during any of its Fiscal Years ending after the Closing Date of $75,000,000.

            5.13     Limitation on Indebtedness.  The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except (without duplication):

                        (a)        Indebtedness in respect of the Loans, the Notes and the other obligations of the Borrower under this Agreement;

                        (b)        Indebtedness of the Borrower to any Guarantor;

                        (c)        Indebtedness of the Borrower and any of its Subsidiaries (other than NUI Utilities) incurred solely in order to finance the purchase of new fixed or capital assets (including pursuant to capital leases) in an aggregate principal amount not exceeding, as to the Borrower and its Subsidiaries (other than NUI Utilities) taken together, $10,000,000 at any time outstanding;

                        (d)        Indebtedness listed on Schedule 5.13 and renewals, extensions and modifications thereof which do not increase the principal amount thereof;

                        (e)        Indebtedness of NUI Utilities under the NUI Utilities Credit Agreement, as amended, extended or otherwise modified in accordance with its terms and, without duplication as to the other exceptions under this Section 5.13, other Indebtedness permitted to be incurred by NUI Utilities under such NUI Utilities Credit Agreement;

                        (f)         Indebtedness incurred in connection with Hedging Obligations, provided that such Hedging Obligations shall be in the ordinary course of business consistent with past practices;

                        (g)        Indebtedness of a corporation which becomes a Subsidiary after the date hereof, provided that (1) such Indebtedness existed at the time such corporation became a Subsidiary and was not created in anticipation of the acquisition and (2) immediately after giving effect to the acquisition of such corporation by the Borrower no Potential Default or Event of Default shall have occurred and be continuing;

                        (h)        Indebtedness of any Guarantor to the Borrower or to any other Guarantor;

                        (i)         Indebtedness of Virginia Gas to the Borrower in an aggregate principal amount not to exceed $10,000,000 outstanding at any time, provided that (1) both before and after giving effect to such incurrence of Indebtedness, no Potential Default or Event of Default shall have occurred and be continuing, and (2) such Indebtedness is not in violation of any Governmental Rule;

                        (j)         Indebtedness of any Restricted Subsidiary (other than Virginia Gas) to the Borrower, to any Guarantor or to any other Restricted Subsidiary, provided that (i) such Indebtedness is incurred in the ordinary course of business consistent with past practices and is not in violation of any Governmental Rule, and (ii) such Indebtedness shall be in an aggregate principal amount as to all Restricted Subsidiaries (other than Virginia Gas) not to exceed $1,000,000;

                        (k)        Indebtedness incurred in connection with sale-leaseback transactions permitted by Section 5.19 hereof;

                        (l)         Indebtedness with respect to standby letters of credit issued by a bank other than the Issuing Bank for the benefit of the Borrower or any of its Subsidiaries in an aggregate face amount not to exceed $5,000,000, which letters of credit expire by their terms after the Termination Date;

                        (m)       Indebtedness to third party sellers in connection with Permitted Acquisitions, provided that (1) both before and after giving effect to the incurrence of such Indebtedness, no Potential Default or Event of Default shall occur and be continuing, and (2) the payment of such Indebtedness shall be subordinated to all Bank Indebtedness, with the terms and conditions of such subordination reasonably acceptable to the Agent; and

                        (n)        Indebtedness of the Borrower with respect to a financed lease or purchase of the Compressor incurred in the Fiscal Year ending September 30, 2003 in an aggregate principal amount not to exceed $20,000,000.

            5.14     Limitation on Contingent Obligations.  The Borrower shall not, and shall not permit any of its Subsidiaries to create, incur, assume or suffer to exist any Guarantee except:

                        (a)        Guarantees, if any, created pursuant to this Agreement;

                        (b)        guarantees made in the ordinary course of its business by the Borrower of obligations of any of its Subsidiaries (other than a Restricted Subsidiary) and guarantees made in the ordinary course of business by any Subsidiary (other than Restricted Subsidiary) of obligations of any other Subsidiary (other than a Restricted Subsidiary), provided those obligations are otherwise permitted under this Agreement;

                        (c)        A Guarantee by the Borrower with respect to the Compressor lease or purchase financing described in Section 5.13(n); and

                        (d)        The existing Guarantee by the Borrower of certain obligations of Virginia Gas with respect to a lease/purchase arrangement for an electric power substation, which Guarantee is limited such that the Borrower's maximum liability thereunder does not exceed $1,200,000.

            5.15     [Intentionally Omitted].

5.16     Limitation on Investments, Loans and Advances.  The Borrower shall not, and shall not permit any of its Subsidiaries to, purchase, hold or acquire beneficially any stock, other securities or evidences of Indebtedness of, make or permit to exist any loans or advances to, or make or permit to exist any investment or acquire any interest whatsoever in, any other Person, except:

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

(b)        Permitted Investments;

(c)        loans and advances to employees of the Borrower or its Subsidiaries (other than NUI Utilities) for travel, entertainment and relocation expenses in the ordinary course of business;

(d)        existing equity interests in any Subsidiary;

(e)        loans and advances by the Borrower to (i) any Guarantor, (ii) Virginia Gas Company or any of its Subsidiaries to the extent permitted by Section 5.13(i) hereof, or (iii) any Restricted Subsidiary to the extent permitted by Section 5.13(j) hereof;

(f)         Permitted Acquisitions;

(g)        securities acquired in connection with the bankruptcy of any supplier or customer in the ordinary course of business and consistent with past practices or in connection with the settlement of delinquent accounts of any such supplier or customer;

(h)        loans and advances by any Guarantor to the Borrower or to any other Guarantor; and

(i)         (I)(A) the transfer of the Compressor by the Borrower to the Saltville Member and by the Saltville Member to the Saltville JV as contemplated by Section 5.5 in the Fiscal Year ended September 30, 2003, or (B) in lieu of any such transfer, the equity contribution, loans or advances of an aggregate amount not to exceed $20,000,000 by the Borrower to the Saltville Member and by the Saltville Member to the Saltville JV in the Fiscal Year ended September 30, 2003, and (II) the equity contribution, loans or advances by the Borrower to the Saltville Member and by the Saltville Member to the Saltville JV in an aggregate amount not to exceed $10,000,000 in the Fiscal Year ending September 30, 2004; provided that both before and after giving effect to any such transfer, loan or advance under this Section 5.16(i), no Potential Default or Event of Default shall have occurred and be continuing; and

(j)         securities acquired in connection with asset sales to the extent permitted under Section 5.5.

5.17     Limitation on Optional Payments and Modifications of Debt Instruments.  The Borrower shall not, and shall not permit any of its Subsidiaries to, make any optional payment or prepayment on or redemption, defeasance or purchase of any Indebtedness (other than Indebtedness under this Agreement, Indebtedness under the NUI Utilities Credit Agreement, Indebtedness of any Subsidiary to the Borrower or to any other Guarantor, and if no Potential Default or Event of Default then exists, or would result therefrom, Indebtedness of the Borrower to any Guarantor) or amend, modify or change, or consent or agree to any amendment, modification or change to its certificate of incorporation which could reasonably be expected to result in a Material Adverse Effect or to any of the terms relating to the payment or prepayment or principal of or interest on, any such Indebtedness, other than any amendment, modification or change which would extend the maturity or reduce the amount of any payment of principal thereof or which would reduce the rate or extend the date for payment of interest thereon.

5.18     Transactions with Affiliates.  The Borrower shall not, and shall not permit any of its Subsidiaries to, enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction (a) is permitted under this Agreement or is in the ordinary course of the Borrower's or such Subsidiary's business and (b) is upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary, as the case may be, than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate.

5.19     Sale and Leaseback.  The Borrower shall not, and shall not permit any of its Subsidiaries to, enter into any arrangement with any Person (other than the Borrower or any Guarantor) providing for the leasing by the Borrower or any Subsidiary of real or personal property which has been or is to be sold or transferred by the Borrower or such Subsidiary to such Person if such arrangement(s), individually or in the aggregate, involve(s) consideration exceeding $50,000,000.

ARTICLE VI.  CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT

6.1       All Extensions of Credit.  The obligation of the Lenders to make any extension of credit (including, without limitation, its initial extension of credit) is subject to the satisfaction of each of the following conditions precedent:

6.1a     No Default.  The Borrower shall have performed and complied, in all material respects, with all agreements and conditions herein required to be performed or complied with by it prior to any extension of credit and, at the time of such extension of credit, no Potential Default or Event of Default shall exist.

6.1b     Representations Correct.  The representations and warranties contained in Article III hereof shall be correct in all material respects (i) when made and (ii) at the time of each extension of credit except for such representations and warranties which relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects as of such date) and no Material Adverse Change has occurred, or will occur, as a result of such extension of credit.

6.1c     Extension of Credit Requirements.  The Borrower shall have complied with the requirements of Section 2.1, Section 2.2 or Section 2.15, as appropriate, with respect to the requested extension of credit.

Each request for an extension of credit shall constitute, as at the time made, a representation and warranty by the Borrower that the matters set forth in Sections 6.1a and 6.1b above are true and correct.

6.2       Conditions Precedent to the Initial Extensions of Credit Under the Commitments.  The effectiveness of this Agreement and the obligation of the Lenders to make the initial extensions of credit are subject to the satisfaction of each of the following conditions precedent in addition to the applicable conditions precedent set forth in Section 6.1 above:

(i)         Receipt by the Agent on behalf of each Lender of a counterpart original of this Agreement executed by the other Lenders and the Borrower.

(ii)        Receipt by the Agent on behalf of each Lender of a Note, substantially in the form of Exhibit "B" attached hereto, made payable to such Lender in the amount of such Lender's Commitment and otherwise properly completed and executed by the Borrower, and a Swingline Note properly completed and executed by the Borrower.

(iii)       Receipt by the Agent of the Guaranty Agreement executed by a duly authorized officer of each Guarantor thereunder, with a counterpart for each Lender.

(iv)       Receipt by the Agent of a certified copy (certified by the appropriate governmental official) of the Borrower's and each Guarantor's Certificate of Incorporation, or other like constituent document, which certification is dated not more than 30 days prior to the Closing.

(v)        Receipt by the Agent of a certificate, duly certified as of the date of the Closing by the secretary or assistant secretary of the Borrower, or the applicable Guarantor, as the case may be, as to (A) the By-Laws or other like constituent document of the Borrower and each Guarantor, as the case may be, in effect as of the Closing, (B) the resolutions of the Borrower's Board of Directors authorizing the borrowings hereunder and the execution and delivery of this Agreement, the Notes, and all documents supplemental hereto, (C) the resolutions of each Guarantor's Board of Directors or like entity authorizing the guaranteeing of the Borrower's obligations hereunder and the execution and delivery of the Guaranty Agreement and all documents supplemental thereto and (D) the names of the officers of the Borrower and each Guarantor authorized to sign the Loan Documents to which each such party is a party and all supplemental documentation, and which contains a true signature of each such officer.

(vi)       Receipt by the Agent of a good standing certificate for the Borrower from the Secretary of State of the State of New Jersey dated not more than 30 days prior to the date of Closing and for each Guarantor from the Secretary of State of its respective state of incorporation dated not more than 30 days prior to the date of Closing.

(vii)      Receipt by the Agent of the certificate of the Borrower required pursuant to Section 4.7 of this Agreement and a solvency certificate in the form of Exhibit "J" hereto.

(viii)      Receipt by the Agent of written disbursement instructions addressed to the Agent and executed by an Authorized Officer of the Borrower relating to the initial extensions of credit.

(ix)       Receipt by the Agent on behalf of each Lender of a signed favorable opinion of James Van Horn, general counsel to the Borrower and its Subsidiaries, dated as of the Closing Date and in form and substance satisfactory to Agent and its counsel as to the matters set forth on Exhibit "G" attached hereto.

(x)        The representations and warranties of the Borrower contained in Article III and each Guarantor in the Guaranty Agreement and in the other Loan Documents executed and delivered by such party in connection with the Closing shall be true and correct in all material respects on and as of the Closing 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 date or times referred to therein), and, the Borrower and each Guarantor shall have performed, observed and complied with all covenants and conditions hereof and contained in the other Loan Documents to which each is a party; no Event of Default or Potential Default under this Agreement shall have occurred and be continuing or shall exist; except as disclosed in the Borrower's Form 10-K filed on December 31, 2002 with the Securities and Exchange Commission, no Material Adverse Change shall have occurred; and there shall be delivered to the Agent, for the benefit of each Lender and the Agent, a certificate of the Borrower, dated the Closing Date and signed by an Authorized Officer of the Borrower, to each such effect.

(xi)       Receipt by the Agent on its own behalf and on behalf of the Lenders of all Fees due and payable on or prior to the Closing Date and all invoiced reimbursable expenses incurred on or prior to the Closing Date.

            (xii)      All of the Borrower's audited financial statements and Compliance Certificates for the fiscal years ended September 30, 2001 and September 30, 2002 required under Sections 4.2(ii) and 4.2(iii) shall have been provided to the Lenders.

(xiii)      All amounts owing to the lenders under the Existing Credit Agreement shall have been, or shall be concurrently with the making of the first Loans hereunder, repaid in full, and the Existing Credit Agreement shall terminate and be of no further force and effect upon such repayment; in each case pursuant to such payout letters and other documents as the Agent may require, each of which shall be in form and substance satisfactory to the Agent.

(xiv)     The NUI Utilities Credit Agreement shall be in full force and effect, providing for a "Total Commitment" thereunder of not less than $96,923,076.90, and all amounts owing to the lenders under the "Existing Credit Agreement" as defined in the NUI Utilities Credit Agreement shall have been, or shall be concurrently with the making of the first loans thereunder, repaid in full and all commitments under such "Existing Credit Agreement" of NUI Utilities shall have been terminated.

ARTICLE VII.           DEFAULTS

Each of the events or occurrences described in Sections 7.1 to and including 7.10 below shall constitute an "Event of Default" hereunder.

7.1       Payment Default.  Default in the payment of (i) interest on any Loan, any Reimbursement Obligation, any other Bank Indebtedness, the Facility Fee, or any other amount due hereunder, and continuance of any such nonpayment of such interest, Facility Fee or other amount for five Business Days or (ii) principal of any Loan or any Reimbursement Obligation when due.

7.2       Nonpayment of Other Indebtedness.  The Borrower or any Subsidiary shall fail to pay any Indebtedness of the Borrower or such Subsidiary, as the case may be, other than the Bank Indebtedness, in an aggregate amount as to the Borrower and its Subsidiaries collectively of $15,000,000 or more, as and when the same shall become due, or the occurrence of any default under any agreement or instrument under or pursuant to which such Indebtedness is incurred or issued and continuance of such default beyond the period of grace, if any, allowed with respect thereto, if such default permits or causes the acceleration of such Indebtedness or the termination of any commitment to lend with respect thereto.

7.3       Insolvency.

7.3a     Involuntary Proceedings.  A proceeding shall have been instituted in a court having jurisdiction seeking a decree or order for relief in respect of the Borrower or a Subsidiary in an involuntary case under the Federal bankruptcy laws, or any other similar applicable Federal or state law, now or hereafter in effect, or for the appointment of a receiver, liquidator, trustee, sequestrator or similar official for the Borrower or any of its Subsidiaries or for a substantial part of its or their property, or for the winding up or liquidation of its or their affairs, and the same shall remain undismissed or unstayed and in effect for a period of 60 days.

7.3b     Voluntary Proceedings.  The Borrower or a Subsidiary shall institute proceedings to be adjudicated a voluntary bankrupt, or any of them shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization under the Federal bankruptcy laws, or any other similar applicable Federal or state law now or hereinafter in effect, or shall consent to the filing of any such petition or shall consent to the appointment of a receiver, liquidator, trustee, sequestrator or similar official for the Borrower or any of its Subsidiaries or for a substantial part of its or their property, or shall make an assignment for the benefit of creditors, or shall admit in writing its or their inability to pay its or their debts generally as they become due, or corporate action shall be taken by the Borrower or any of its Subsidiaries in furtherance of any of the aforesaid purposes.

7.4       Termination of Existence.  The Borrower shall terminate its existence or cease to exist or any Subsidiary shall terminate its existence or cease to exist (i) except by reason of a permitted merger or liquidation into or a consolidation with the Borrower or a Subsidiary in accordance with the provisions hereof, or (ii) except where a Subsidiary's termination or cessation of its existence shall have no Material Adverse Effect on the Borrower and its Subsidiaries, taken as a whole.

7.5       Failure to Comply with Covenants.

7.5a     Failure to Comply with Certain Article IV Covenants and Article V Covenants.  The Borrower shall default in the observance or performance of Section 4.3, Section 4.4, Section 4.10, Section 4.11, Section 4.12, Section 4.13 or of any covenant contained in Article V.

7.5b     Failure to Comply with Other Covenants.  The Borrower shall default in the due performance or observance of any other covenant, condition or provision set forth herein and such default shall not be remedied (i) with respect to any default under Section 4.2(ix) for a period of ten days; and (ii) with respect to any other such default for a period of 30 days after such default is known to any officer of the Borrower or notice thereof has been given to the Borrower by the Agent (such grace period to be applicable only in the event such default can be remedied by corrective action of the Borrower as determined by the Agent in its sole discretion).

7.6       Misrepresentation.  Any representation or warranty made by the Borrower or any Subsidiary herein proves to have been untrue in any material respect as of the date when made, or any certificate or other document furnished by the Borrower or any Subsidiary to the Agent or any Lender pursuant to the provisions hereof proves to have been untrue in any material respect on the date as of which the facts set forth therein are stated or certified.

7.7       Adverse Judgments, Etc.  Entry or filing of any one or more judgments, writs or warrants of attachment or of any similar process in an aggregate amount, as to the Borrower and its Subsidiaries collectively, of $2,500,000 or more in excess of any third-party insurance protecting against such liability against the Borrower and its Subsidiaries or against any of their respective properties and failure of the Borrower or its Subsidiaries to vacate, pay, bond, stay or contest in good faith such judgments, writs, warrants of attachment or other process within a period of 30 days.

7.8       Invalidity or Unenforceability.  This Agreement, the Notes or any other Loan Document ceases to be valid and binding on the Borrower or any Guarantor, as applicable, or is declared null and void, or the validity or enforceability thereof is contested by the Borrower or any Guarantor or the Borrower or any Guarantor denies it has any or further liability under this Agreement, any Note or under the other Loan Documents to which it is a party.

7.9      ERISA.  (i) A trustee shall be appointed by a court of competent jurisdiction to administer any Plan of the Borrower or any ERISA Affiliate; (ii) the PBGC shall terminate any Plan of the Borrower or any ERISA Affiliate or appoint a trustee to administer any such Plan; or (iii) the Borrower or any ERISA Affiliate shall incur any liability to the PBGC in connection with any Plan, which, in any such case, likely would have a Material Adverse Effect on the Borrower and its Subsidiaries, taken as a whole.

7.10     Change of Control; Change of Beneficial Ownership or Board.  Any Person or group of Persons (within the meaning of Sections 13 or 14 of the Securities and Exchange Act of 1934), other than the then current officers or directors of the Borrower or an underwriter which obtains such ownership as a result of effecting a firm committed underwriting of a secondary offering of the Borrower's voting stock on behalf of such officers or directors, shall have acquired beneficial ownership of (within the meaning of Rule 13d-3 and 13d-5 promulgated by the Securities and Exchange Commission under said Act) twenty-five percent (25%) or more of the voting stock of the Borrower on a fully diluted basis with respect to which such Persons are entitled to vote on the election of directors or, during any period of up to 24 consecutive months, Persons who at the beginning of such 24-month period were directors of the Borrower (or were appointed, nominated or elected by such Persons) cease for any reason to constitute a majority of the directors of the Borrowers then in office.  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.  A "Permitted Transferee" includes any of the following with respect to any then current officer or director of the Borrower: (i) spouse; (ii) lineal descendants of all generations and spouses of such lineal descendants; (iii) a charitable corporation or trust established by such then current officer or director or by a person described in (i) or (ii) preceding; (iv) a trust (or in the case of a minor, a custodial account under a Uniform Gifts or Transfers to Minors Act) of which the beneficiary(ies) are one or more Persons described in the preceding clauses (i), (ii) or (iii), and (v) an executor or administrator upon the death of such then current officer or director or any Person described in the preceding clauses (i) or (ii).

7.11     Consequences of an Event of Default.  If one or more of the Events of Default occur then (a) if such Event of Default is set forth in Sections 7.3 or 7.4, the Commitments shall automatically terminate and the Notes then outstanding and all other amounts owing under this Agreement (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall become immediately due and payable, without necessity of demand, presentation, protest, notice of dishonor or notice of default or (b) if such Event of Default is set forth in any of the remaining Sections of this Article VII, then the Agent, at the request of the Required Lenders, and upon notice to the Borrower, shall declare the Borrower in default hereunder, and upon such declaration, shall, at the request of the Required Lenders, terminate the Commitment and/or declare the Notes then outstanding and all other amounts owing under this Agreement (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) immediately due and payable, without necessity of any further demand, presentation, protest, notice of dishonor or further notice of default, whereupon the same shall be immediately due and payable.

With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit.  The Borrower hereby grants to the Agent, for the benefit of the Issuing Bank and the L/C Participants, a security interest in such cash collateral to secure all obligations of the Borrower under this Agreement and the other Loan Documents.  Amounts held in such cash collateral account shall be applied to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters ofCredit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the Notes.  After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrower hereunder and under the Notes shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower.  The Borrower shall execute and deliver to the Agent, for the account of the Issuing Bank and the L/C Participants, such further documents and instruments as the Agent may request to evidence the creation and perfection of the within security interest in such cash collateral account.

7.12     Remedies Upon Default.  Upon thetermination of the Commitments and acceleration of the Notes following the occurrence of an Event of Default, the Lenders shall, unless such termination and acceleration subsequently have been rescinded, have the full panoply of rights and remedies granted to them under this Agreement and all those rights and remedies granted by law to creditors, and the Agent, at the direction of the Required Lenders, shall proceed to protect and enforce the Lenders' rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, in the Notes or in any of the other Loan Documents, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law.  No right, power or remedy conferred by this Agreement, in the Notes, or by any other Loan Document, upon the Agent or the Lenders shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  No exercise of any one right or remedy shall be deemed a waiver of other rights or remedies.  The rights and remedies of the Agent and the Lenders specified herein are for the sole and exclusive benefit, use and protection of the Agent and the Lenders, and the Agent and the Lenders shall be entitled, but shall have no duty or obligation, to exercise or to refrain from exercising any right or remedy reserved to the Agent or the Lenders hereunder.

ARTICLE VIII.         AGREEMENT AMONG LENDERS.

8.1      Appointment and Grant of Authority.  Each of the Lenders hereby appoints Fleet National Bank and Fleet National Bank hereby agrees to act as, the Agent under this Agreement, the Notes and the other Loan Documents.  As such Agent, Fleet National Bank shall have and may exercise such powers under this Agreement and the other Loan Documents as are specificallydelegated to the Agent, by the terms hereto or thereof, together with such other powers as are incidental thereto.  Without limiting the foregoing, the Agent, on behalf of the Lenders, is authorized to execute all of the Loan Documents (other than this Agreement) and to accept all of the Loan Documents and all other agreements, documents or instruments reasonably required to carry out the intent of the parties to this Agreement.

8.2       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 duties as the Agent hereunder) and, subject to Sections 8.7 and 9.2 hereof, shall be entitled to engage and pay for the advice or services of any attorneys, accountants, or other experts concerning all matters pertaining to duties hereunder and to rely upon any advice so obtained.

8.3       Reliance by Agent on Lenders for Funding.  Unless the Agent shall have received notice from a Lender prior to any Borrowing Date that such Lender will not make available to the Agent such Lender's portion of net disbursements of Loans, the Agent may assume that such Lender has made such portion available to the Agent and the Agent may, in reliance upon such assumption, make Loans to the Borrower.  If and to the extent that such Lender has not made such portion available to the Agent on or prior to any Borrowing Date, such Lender and the Borrower severally agree to repay to the Agent immediately upon demand, in immediately available funds, such unpaid amount, together with interest thereon for each day from the applicable Borrowing Date until such amount is repaid to the Agent, at (i) in the case of the Borrower, at the rate of interest then in effect for such Loan and (ii) in the case of such Lender, at the Federal Funds Effective Rate.  If such Lender shall repay to the Agent such corresponding amount, such amount shall constitute a Loan made by such Lender for purposes of this Agreement.  The failure by any Lender to pay its portion of a Loan made by the Agent shall not relieve any other Lender of the obligation to pay its portion of net disbursements of Loans on any Borrowing Date, but no Lender shall be responsible for the failure of any other Lender to make its net share of Loans to be made by such other Lender on such Borrowing Date.

8.4       Non-Reliance on Agent.  Each Lender agrees that it has, independently and without reliance on the Agent, based on such documents and information as it has deemed appropriate, made its own credit analysis and evaluation of the Borrower and its operations and decision to enter into this Agreement and that it will, independently and without reliance upon the Agent, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement.  Except as otherwise provided herein, the Agent shall have no duty to keep the Lenders informed as to the performance or observance by the Borrower of this Agreement or any other document or instrument referred to or provided for herein or to inspect the properties or books of the Borrower.  The Agent, in the absence of gross negligence or willful misconduct, shall not be liable to any Lender for its failure to relay or furnish to the Lender any information. 

8.5       Responsibility of Agent and Other Matters

8.5a     Ministerial Nature of Duties.  As among the Lenders and the Agent, the Agent shall have no duties or responsibilities except those expressly set forth in this Agreement, the Notes or in the other Loan Documents, and those duties and responsibilities shall be subject to the limitations and qualifications set forth in this Article VIII.  The duties of the Agent shall be ministerial and administrative in nature.

8.5b     Limitation of Liability.  As among the Lenders and the Agent, neither the Agent nor any of its directors, officers, employees or agents shall be liable for any action taken or omitted (whether or not such action taken or omitted is within or without the Agent's responsibilities and duties expressly set forth in this Agreement) under or in connection with this Agreement or any other instrument or document in connection herewith except for gross negligence or willful misconduct.  Without limiting the foregoing, neither the Agent nor any of its directors, officers or employees shall be responsible for, or have any duty to examine (i) the genuineness, execution, validity, effectiveness, enforceability, value or sufficiency of (A) this Agreement, the Notes or any of the other Loan Documents or (B) any other document or instrument furnished pursuant to or in connection with this Agreement, (ii) the collectability of any amounts owed by the Borrower to the Lenders, (iii) the truthfulness of any recitals, statements, representations or warranties made to the Agent or the Lenders in connection with this Agreement, (iv) any failure of any party to this Agreement to receive any communication sent, including any telegram, teletype, facsimile transmission or telephone message or any writing, application, notice, report, statement, certificate, resolution, request, order, consent letter or other instrument or paper or communication entrusted to the mails or to a delivery service, or (v) the assets, liabilities, financial condition, results of operations, business or prospects, or creditworthiness of the Borrower.

8.5c     Reliance.  The Agent shall be entitled to act, and shall be fully protected in acting upon, any telegram, teletype, facsimile transmission or any writing, application, notice, report, statement, certificate, resolution, request, order, consent, letter or other instrument, paper or communication believed by the Agent in good faith to be genuine and correct and to have been signed or sent or made by a proper Person.  The Agent may consult counsel and shall be entitled to act, and shall be fully protected in any action taken in good faith, in accordance with advice given by counsel.  The Agent may employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact selected by the Agent with reasonable care.  The Agent shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, provisions or conditions of this Agreement or any of the other Loan Documents on the part of the Borrower or any other party thereto.

8.6       Actions in Discretion of Agent; Instructions from the Lenders.  The Agent agrees, upon the written request of the Required Lenders, to take or refrain from taking any action of the type specified as being within the Agent's rights, powers or discretion herein or under any Loan Documents, 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 Lenders, 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 Lenders or all of the Lenders.  Any action taken or failure to act pursuant to such instructions or discretion shall be binding on the Lenders, subject to Section 8.5b hereof.  Subject to the provisions of Section 8.5b, no Lender 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 Lenders.

8.7       Indemnification.  To the extent the Borrower does not reimburse and save harmless the Agent according to the terms hereof for and from all costs, expenses and disbursements in connection herewith, such costs, expenses and disbursements shall be borne by the Lenders ratably in accordance with their respective Commitment Percentages.  Each Lender hereby agrees on such basis (i) to reimburse the Agent for such Lender's pro rata share of all such reasonable costs, expenses and disbursements on request and (ii) to the extent of each such Lender's pro rata share, to indemnify and save harmless the Agent against and from any and all losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent, other than as a consequence of gross negligence or willful misconduct on the part of the Agent, arising out of or in connection with (i) this Agreement, the Notes, the other Loan Documents or any other agreement, instrument or document executed or delivered in connection herewith or therewith, or (ii) any action taken at the request of the Required Lenders or all of the Lenders hereunder, as the case may be, including without limitation the reasonable costs, expenses and disbursements in connection with defending themselves against any claim or liability, or answering any subpoena or other process related to the exercise or performance of any of their powers or duties under this Agreement, the other Loan Documents, or any of the other agreements, instruments or documents executed or delivered in connection herewith or the taking or refraining from any action under or in connection with any of the foregoing.

8.8       Agent's Rights as a Lender.  With respect to the Commitment of the Agent as a Lender hereunder, any Loans of the Agent under this Agreement or the other Loan Documents, with respect to any Letters of Credit issued or participated in by it, and any other amounts due to the Agent under this Agreement, the Agent shall have the same rights and powers, duties and obligations under this Agreement, the Notes, the other Loan Documents or other agreement, instrument or document as any Lender and may exercise such rights and powers and shall perform such duties and fulfill such obligations as though it were not the Agent.  The Agent may accept deposits from, lend money to, and generally engage, and continue to engage, in any kind of business with the Borrower as if it were not the Agent.

8.9       Payment to Lenders.  Except as otherwise set forth in Section 8.3 hereof, promptly after receipt from the Borrower of any principal repayment of the Loans, interest due on the Loans, any payment of the Reimbursement Obligations and any Facility Fees owing to the Lenders or other amounts due under any of the Loan Documents (except for such amounts which are payable for the sole account of any Lender or the Agent), the Agent shall distribute to each Lender that Lender's share of the funds so received.  

8.10     Pro Rata Sharing.  Except as otherwise set forth in Section 8.3 hereof, all interest and principal payments on the Loans, all payments of the Reimbursement Obligations, all payments of letter of credit commissions referred to in Section 2.15(c)(ii), and all payments of Facility Fees are to be divided pro rata among the Lenders in proportion to the extensions of credit outstanding from each Lender or, if no such Loans or Letters of Credit are then outstanding, in accordance with their respective Commitment Percentages.  Any sums obtained from the Borrower by any Lender by reason of the exercise of its rights of set-off, banker's lien or in collection shall be shared (net of costs) pro rata among the Lenders on the basis of the principal amount of Loans and/or Letters of Credit outstanding.  Nothing in this Section 8.10 shall be deemed to require the sharing among the Lenders of collections specifically relating to, or of the proceeds of any collateral securing, any other Indebtedness of the Borrower to any Lender.

8.11     Successor Agent.

8.11a   Resignation of Agent.  The Agent may resign as Agent hereunder by giving 30 days' prior written notice to the Lenders and the Borrower.  If such notice shall be given, the Lenders shall appoint a successor agent for the Lenders, during such 30 day period, which successor agent shall be reasonably satisfactory to the Borrower, to serve as agent hereunder and under the several Loan Documents.  If at the end of such 30 day period, the Lenders have not appointed such a successor, the Agent shall use reasonable commercial efforts to procure a successor reasonably satisfactory to the Lenders and the Borrower, to serve as agent for the Lenders hereunder and under the several Loan Documents.  Any such successor agent shall succeed to the rights, powers and duties of the Agent.

8.11b   Rights of the Former Agent.  Upon the appointment of such successor agent or upon the expiration of such 30 day period (or any longer period to which the Agent has agreed), 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 any retiring Agent's resignation hereunder as Agent hereunder, the provisions of this Article VIII shall inure to the benefit of such retiring Agent as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

8.12     Notice of Default.  The Agent shall not be deemed to have knowledge or notice of the occurrence of an Event of Default unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement, describing such Event of Default and stating that such notice is a "notice of default".

8.13     Notices.  The Agent shall promptly send to each Lender 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 Lenders of each change in the Base Rate and the effective date thereof.

8.14     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.

8.15     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 Lender whether in respect of the Loans, Fees or any other amounts due to the Lenders under this Agreement.  In the event an error in computing any amount payable to any Lender is made, the Agent, the Borrower and each affected Person 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 Effective Rate.

8.16     Beneficiaries.  Except as expressly provided herein, the provisions of this Article VIII are solely for the benefit of the Agent and the Lenders, and the Borrower 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 Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for the Borrower.

ARTICLE IX.            GENERAL PROVISIONS

9.1       Amendments and Waivers.  Subject to the remaining provisions of this Section 9.1, the Agent, the Lenders and the Borrower may, from time to time, enter into amendments, extensions, renewals, modifications, supplements and replacements to and of this Agreement, the Notes or the other Loan Documents and the Lenders or the Required Lenders, as the case may be, may, from time to time, waive compliance with a provision thereof.  No amendment, renewal, modification, extension, supplement, replacement or waiver of any provision of this Agreement, the Notes or the other Loan Documents or consent to any departure therefrom by the Borrower shall be effective unless it is in writing and is signed by the Required Lenders (or the Agent with the written consent of the Required Lenders), and then such waiver or consent shall be effective only for the specific instance and for the specific purpose for which it is given; provided, however, that no amendment, renewal, modification, waiver or consent, unless in writing and signed by all of the Lenders (or the Agent with the written consent of all of the Lenders), shall do any of the following:

(A)       increase the Commitment of any Lender or subject any Lender to any additional obligations hereunder;

(B)       increase any Lender's Commitment Percentage or decrease the aggregate or individual unpaid principal amount of the Notes, or forgive the payment of the principal or interest payable on the Notes;

(C)       waive an Event of Default in the payment of principal and/or interest due hereunder and under any of the Notes;

(D)       decrease the interest rate relating to the Loans;

(E)       postpone any date fixed for any payment of principal of or interest on the Loans, the Facility Fee, or any other obligations of the Borrower set forth in Article II;

(F)       reduce the Facility Fee;

(G)       release of any Guarantor (other than an Insignificant Subsidiary) from the Guaranty Agreement; or

(H)       amend the definition of the term "Required Lenders" or amend or waive the provisions of this Section 9.1.

Any such supplemental agreement shall apply equally to the Borrower and each of the Lenders and shall be binding upon the Borrower, the Lenders, the Agent and all future holders of the Notes.  In the case of any waiver, the Borrower, the Lenders and the Agent shall be restored to their former positions and rights, and any Event of Default waived shall be deemed to be cured and not continuing, but no such waiver shall extend to any subsequent or other Event of Default, or impair any right consequent thereon.

9.2       Expenses.  The Borrower shall pay:

(i)         All reasonable costs and expenses of the Agent (including without limitation the reasonable fees and disbursements of the Agent's special counsel, Edwards & Angell, LLP and any reasonable accounting, consulting, brokerage or other similar professional fees or expenses, and any reasonable fees or expenses associated with travel or other costs relating to any appraisals or examinations conducted in connection with the Loans) incurred in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents and any and all other documents and instruments prepared in connection herewith, including but not limited to all amendments, extensions, modifications, replacements, waivers, consents and other documents and instruments prepared or entered into from time to time;

(ii)        All costs and expenses of the Agent and the Lenders (including without limitation the fees and disbursements of the Agent's and the Lenders' counsels, which may be in house counsel) in connection with (A) the enforcement of this Agreement and the other Loan Documents arising pursuant to a breach by the Borrower or any Guarantor of any of the terms, conditions, representations, warranties or covenants of any Loan Document to which either the Borrower or any Guarantor is a party, and (B) defending or prosecuting any actions, suits or proceedings relating to any of the Loan Documents.

All of such costs and expenses shall be payable by the Borrower to the Lenders or the Agent, as the case may be, upon demand or as otherwise agreed upon by the Lenders or the Agent and the Borrower, and shall constitute Bank Indebtedness under this Agreement.  The Borrower further agrees to pay, and save the Agent and the Lenders harmless from any and all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of this Agreement or the issuance of the Notes.  The Borrower's obligation to pay such costs and expenses shall survive the termination of this Agreement and the repayment of the Bank Indebtedness.

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

Borrower:                                            NUI Corporation
                                                            550 Route 202-206
                                                            P. 0. Box 760
                                                            Bedminster, NJ 07921
                                                            Attention:    Treasurer
                                                            Telecopier:   (908) 781-0718
                                                            Telephone:  (908) 781-0500

The Agent:                                           Fleet National Bank
                                                            100 Federal Street
                                                            Mail Stop:  MADE 10008A
                                                            Boston, Massachusetts  02110
                                                            Attention:   Mr. Stephen J. Hoffman
                                                            Telephone:  (617) 434-6520

                                                                        Telecopier:  (617)434-3652

9.4       Tax Withholding.  At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of each Lender, each Lender or assignee or participant of a Lender that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to the Agent and the Borrower two duly completed copies of either (i) IRS Form W-9, 1001 or 4224 or such other applicable form prescribed by the IRS, certifying in each case that such Lender or assignee or participant of a Lender is entitled to receive payments under this Agreement or its Notes without deduction or withholding of United States federal income taxes, or is subject to such tax at a reduced rate under an applicable tax treaty or (ii) IRS Form W-8 or such other applicable form prescribed by the IRS or a certificate of such Lender or assignee or participant of a Lender indicating that no such exemption or reduced rate of taxation is allowable with respect to such payments.  Each Lender or assignee or participant of a Lender which delivers an IRS Form W-8, W-9, 4224, 1001 or other such applicable form further undertakes to deliver to the Agent and the Borrower two additional copies of any such form (or any successor form) on or before the date on which that form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Borrower or the Agent, either certifying that such Lender or assignee or participant of a Lender is entitled to receive payments under this Agreement or its Notes without deduction or withholding of any United States federal income taxes or is subject to such tax at a reduced rate under an applicable tax treaty or stating the date on which that no such exemption or reduced rate is allowable.  The Agent shall be entitled to withhold, from each payment hereunder or under the Notes payable to it, United States federal income taxes at the full withholding rate unless each Lender referred to in the first sentence of this Section 9.4 establishes an exemption or at the applicable reduced rate established pursuant to the above provisions.

9.5       Successors and Assigns. This Agreement shall be binding upon the Borrower, the Agent and the Lenders and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Agent and the Lenders and the successors and assigns of the Agent and the Lenders; provided, that the Borrower shall not assign its rights or duties hereunder or under any of the other Loan Documents without the prior written consent of the Lenders.

9.6       Assignments and Participations.

9.6a     Assignments.  Subject to the remaining provisions of this Subsection 9.6a, any Lender (a "Transferor Lender"), at any time, in the ordinary course of its commercial banking business and in accordance with applicable law, may sell to one or more financial institutions (individually a "Purchasing Lender"), a portion or all of its rights and obligations under this Agreement and the Notes then held by it, pursuant to an Assignment and Assumption Agreement substantially in the form of Exhibit "H" executed by the Transferor Lender, such Purchasing Lender, the Borrower (if applicable) and the Agent; subject, however to the following requirements:

(i)         Each such assignment must be in a minimum amount of $5,000,000, or, if in excess thereof, in integral multiples of $1,000,000, unless such assignment shall be in the full amount of such Lender's Commitment;

(ii)        During the first 90 days following the Closing Date, each assignment made shall become effective only on a date which coincides with the expiration date of any Interest Period then in effect, unless the Agent agrees to waive this provision;

(iii)       The Agent and the Borrower must each give its prior consent to any such assignment which consent shall not be unreasonably withheld; it being agreed that it shall not be deemed unreasonable for the Borrower to decline to consent to such assignment if (A) such assignment would result in incurrence of additional costs to the Borrower under Article II, or (B) the proposed assignee has not provided to the Borrower any tax forms received under Section 9.4; provided, however, no consent is required for the transfer by a Lender to its Affiliate or to another Lender so long as the conditions in clauses (A) and (B) immediately above are satisfied; and

(iv)       The Transferor Lender shall pay to the Agent a $3,500 service fee for each such transfer at the time of each such transfer;

provided, however the restrictions set forth in item (i) above shall not apply (x) in the case of an assignment by a Lender to an Affiliate of such Lender or (y) in the case of any assignment by any Transferor Lender upon the occurrence and during the continuation of an Event of Default, and provided further, that upon the occurrence and during the continuance of an Event of Default the consent of the Borrower to any assignment is not required.

Upon the execution, delivery, acceptance and recording of any such Assignment and Assumption Agreement, from and after the Transfer Effective Date determined pursuant to such Assignment and Assumption Agreement, all parties hereto agree that (a) the Purchasing Lender thereunder shall be a party hereto as a Lender and, to the extent provided in such Assignment and Assumption Agreement, shall have the rights and obligations of a Lender hereunder with a Commitment as set forth therein, and (b) the Transferor Lender thereunder shall, to the extent provided in such Assignment and Assumption Agreement, be released from its obligations as a Lender under this Agreement.  Such Assignment and Assumption Agreement shall be deemed to amend this Agreement (without further action) to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender as a Lender and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such Transferor Lender under this Agreement and its Notes.  On or prior to the Transfer Effective Date, the Borrower shall execute and deliver to the Agent, in exchange for the surrendered Notes held by the Transferor Lender, new Notes to the order of such Purchasing Lender in an amount equal to the Commitment or the Loans and Reimbursement Obligations assumed by it and purchased by it pursuant to such Assignment and Assumption Agreement, and new Notes to the order of the Transferor Lender in an amount equal to the Commitment or the Loans retained by it hereunder.

In addition to the assignments permitted above, any Lender may assign and pledge all or any portion of its Loans and Notes to any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank.  No such assignment shall release the assigning Lender from its obligations and duties hereunder.

9.6b     Assignment Register.  The Agent shall maintain, at its address referred to in Subsection 9.3, a copy of each Assignment and Assumption Agreement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the amount of the Loans and/or the Letters of Credit owing to each Lender from time to time.  The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Loans recorded therein for all purposes of this Agreement.  The Register shall be available at the office of the Agent set forth in Subsection 9.3 for inspection by either Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

9.6c     Participations.  Each Lender, in the ordinary course of its commercial banking business and in accordance with applicable law, may sell to one or more Participants a participating interest in any Loan owing to such Lender, the interest of such Lender in any Notes or the Commitment of such Lender.  In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of its Notes for all purposes under this Agreement and the Borrower, the other Lenders and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement or its Notes and the Participants shall have voting rights only with respect to matters described in items (B), (C), (D), (E) and (F) of Section 9.l.

9.7       Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 

9.8       Survival.  All representations, warranties, covenants and agreements of the Borrower contained herein in the Notes or in the other Loan Documents or made in writing in connection herewith or therewith shall survive the issuance of the Notes and shall continue in full force and effect so long as the Borrower may borrow hereunder and so long thereafter until payment in full of all the Notes and the Bank Indebtedness.

9.9       Governing Law.  This Agreement, each Note and each other Loan Document shall be a contract made under, governed by and construed in accordance with the laws of the State of New Jersey without reference to the provision thereof regarding conflicts of law except where such law is superseded by applicable Federal law.

9.10     Non-Business Days.  Except as otherwise specifically required pursuant to the terms of this Agreement, whenever any payment hereunder or under the Notes is due and payable on a day which is not a Business Day, such payment may be made on the next succeeding Business Day.

9.11     Integration.  This Agreement constitutes the entire agreement between the parties relating to this financing transaction and it supersedes all prior understandings and agreements, whether written or oral, between the parties hereto concerning the subject matter of this Agreement.

9.12     Headings.  Article, Section and other headings used in this Agreement are intended for convenience only and shall not affect the meaning or construction of this Agreement.

9.13     Set-Off.  The Borrower hereby gives to the Lenders a lien and security interest for the amount of any Bank Indebtedness upon and in any property, credits, securities or money of the Borrower which may at any time be delivered to, or be in the possession of, or owed by any Lender in any capacity whatever, including the balance of any deposit account but excluding any trust or fiduciary accounts, in each case maintained by the Borrower with such Lender.  The Borrower hereby authorizes each Lender in case of an Event of Default, at such Lender's option, at any time and from time to time, to apply, at the discretion of such Lender, to the payment of Bank Indebtedness, any and all such property, credits, securities or money now or hereafter in the hands of such Lender belonging or owed to the Borrower.  Nothing herein shall restrict any Lender's ability to set off any property, credits, securities or money of the Borrower which may at any time be delivered to, or be in possession or owed to any Lender in any capacity whatever to satisfy an independent obligation of the Borrower to the Lender.

9.14     Consent to Forum.  The parties hereto each hereby irrevocably consents to the nonexclusive jurisdiction of the Courts of the Commonwealth of Massachusetts or any Federal court sitting therein in any action or proceeding arising out of or relating to this Agreement, the Notes or the other Loan Documents, and each party agrees that a summons and complaint commencing an action or proceeding in either of such courts shall be properly served and shall confer personal jurisdiction if served personally or by certified mail to the party at its respective address set forth in Section 9.3, or as otherwise provided under the laws of the Commonwealth of Massachusetts.  Further, the parties hereby specifically waive and hereby acknowledge that the parties are estopped from raising any claim that any such court lacks personal jurisdiction over such party so as to prohibit either such court from adjudicating any issues raised in a complaint filed with any such court against the Borrower or the Lenders concerning this Agreement.

9.15     Waiver of Jury Trial.  Each of the Agent, the Lenders and the Borrower hereby knowingly, voluntarily and intentionally waive any rights they may have to a trial by jury in respect of any litigation based hereon, or arising out of, under, or in connection with, this Agreement or any other Loan Document, or any course of conduct, course of dealing, statements (whether verbal or written) or actions of the Agent, the Lenders or the Borrower relating hereto or thereto. Except as prohibited by law, the Borrower hereby waives any right it may have to claim or recover in any litigation any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. The Borrower acknowledges and agrees that it has received full and sufficient consideration for this provision (and each other provision of each other Loan Document to which it is a party) and that this provision is a material inducement for the Lenders to enter into this Agreement and each such other Loan Document.

9.16     Indemnity.  The Borrower hereby agrees to indemnify the Agent, the Lenders and each of their respective directors, officers, employees, attorneys, agents and Affiliates against, and hold each of them harmless from, any loss, liabilities, damages, claims, and reasonable costs and expenses, joint or several (including reasonable attorneys' fees and disbursements reasonably incurred by any such Person in connection with the preparation for or defense of any pending or threatened claim, action or proceeding), suffered or incurred by any of them under any applicable federal or state law or otherwise caused by, arising out of, resulting from or in any manner connected with, the execution, delivery and performance of each of the Loan Documents, the Loans and any and all transactions related to or consummated in connection with the Loans.  The indemnity set forth in this Section 9.16 shall be in addition to any other obligations or liabilities of the Borrower to the Agents or the Lenders, or at common law or otherwise.  The provisions of this Section 9.16 shall survive the payment of the Bank Indebtedness and the termination of this Agreement.  The foregoing provisions of this Section 9.16 to the contrary notwithstanding, the Borrower shall not be obligated to indemnify the Agent, or any Lender pursuant to this Section 9.16 for (i) any losses, liabilities, damages, claims or costs suffered or incurred by any of them in connection with the administrative transfer of funds in connection with this Agreement and which arise directly from the Agent's or such Lender's gross negligence or willful misconduct, or (ii) any other losses, liabilities, damages, claims, or costs which arise directly from the Agent's, or such Lender's gross negligence or willful misconduct.  All amounts owed pursuant to this Section 9.16 shall be part of the Bank Indebtedness.

9.17     Counterparts.  This Agreement and any amendment, modification, extension or renewal hereto or hereof may be executed in several counterparts and by each party on a separate counterpart, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute but one and the same instrument.  In proving this Agreement or any amendment, modification, extension or renewal, it shall not be necessary to produce or account for more than one such counterpart signed by the other party against whom enforcement is sought.

9.18     Replacement of Note.  Upon receipt of an affidavit of an officer of any Lender or the Agent (including an indemnification agreement reasonably satisfactory to the Borrower) as to the loss, theft, destruction or mutilation of any Note or any other Loan Document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such Note or other Loan Document, the Borrower will issue, in lieu thereof, a replacement Note or other Loan Document in the same principal amount thereof and otherwise of like tenor.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,

have caused this Credit Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

  NUI CORPORATION

By:  /s/  A. MARK ABRAMOVIC     
Name:  A. Mark Abramovic
Title:    Sr. Vice President

By:  /s/  CHARLES N. GARBER        
Name:   Charles N. Garber
Title:     Treasurer

FLEET NATIONAL BANK,
in its capacity as the Agent hereunder

By:  /s/  CHARU MANI                           
Name:  Charu Mani
Title:    Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                                    FLEET NATIONAL BANK
$9,871,794.90

                                                                        By:  /s/  CHARU MANI            
                                                                        Name:  Charu Mani
                                                                        Title:    Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                           CITIZENS BANK OF MASSACHUSETTS
$8,461,538.50

                                                               By:  /s/  MICHAEL OUELLET 
                                                               Name:  Michael Ouellet
                                                               Title:    Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                                     CIBC INC.
$8,461,538.50                                    

                                                                        By: /s/  MARYBETH ROSS 
                                                                        Name:  MaryBeth Ross
                                                                        Title:    Authorized Signatory

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                                     PNC BANK, NATIONAL ASSOCIATION
$8,461,538.50

                                                                        By:  /s/  MICHAEL RICHARDS   
                                                                        Name:   Michael Richards
                                                                        Title:     Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                                     MELLON BANK, N.A.
$2,820,512.80

                                                                        By:  /s/  ROGER N. STANIER   
                                                                        Name:  Roger N. Stanier
                                                                        Title:    Vice President

EX-99

Exhibit 99.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of NUI Corporation (the "company") for the period ended March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "report"), I, A. Mark Abramovic, Chief Operating Officer and Chief Financial Officer of the company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1)       the report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2)       the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the company.

/s/  A. Mark Abramovic
A. Mark Abramovic
Chief Operating Officer and
Chief Financial Officer
May 15, 2003

A signed copy of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to the company.

EX-10

EXHIBIT 10.3

CREDIT AGREEMENT

Dated as of

February 12, 2003

By and Among

NUI UTILITIES, INC.,

as the Borrower,

THE FINANCIAL INSTITUTIONS PARTY HERETO,

as the Lenders hereunder,

FLEET NATIONAL BANK,

as the Agent,

and

FLEET SECURITIES, INC.,

as the Arranger

TABLE OF CONTENTS

ARTICLE I			DEFINITIONS		1
1.1	Defined Terms				1
1.2	GAAP Definitions				16
1.3	Other Definitional Conventions and Rules of Construction				17
ARTICLE II			THE LOANS		17
2.1	The Revolving Credit				17
2.1a	Commitment of Each Lender				17
2.1b	Notes				17
2.1d	Loan Request				18
2.1e	Making Loans				18
2.2	Interest Rates, Interest Payment and Certain Provisions Relating to Interest and Fees				18
2.2a	Payments of Interest				18
2.2b	Interest Rate Options				19
2.2c	Interest Periods; Limitations on Elections				19
2.2d	Election, Conversion or Renewal of Interest Rte Options				20
2.2e	Notification of Election of an Interest Rate Option				20
2.2f	Interest After Maturity				20
2.3	Yield-Protection, Capital Adequacy and Miscellaneous Provisions Relating to Euro-Rate				21
2.3a	Yield Protection				21
2.3b	Capital Adequacy				22
2.3c	Euro-Rate Unascertainable				23
2.3d	Illegality				23
2.3e	Change of Lending Office				23
2.4	Fees				24
2.4a	Facility Fee				24
2.4b	Certain Other Fees				24
2.5	Calculation of Interest and Facility Fee				24
2.6	Not Used				24
2.7	Substitution or Replacement of a Lender				24
2.8	Loan Repayment				25
2.9	Additional Payments by the Borrower				25
2.10	Voluntary Reduction of Availability				26
2.11	Loan Account				26
2.12	Payment from Accounts Maintained by Borrower				26
2.13	Time, Place and Manner of Payments				27
2.14	Mandatory Payments				27
ARTICLE III			REPRESENTATIONS AND WARRANTIES		27
3.1	Corporate Existence				27
3.2	Corporate Authority				27
3.3	Enforceability				27
3.4	No Restrictions, No Default				28
3.5	Financial Statements				28
3.6	Absence of Litigation				28
3.7	Tax Returns and Payments				28
3.8	Pension Plans				29
3.9	Compliance with Applicable Laws				29
3.10	Environmental Matters				29
3.11	Governmental approval				29
3.12	Regulations T, U and X				29
3.13	Investment Company Act				30
3.14	Public Utility Holding Company Act				30
3.15	Disclosure				30
3.16	No Subsidiaries				30
ARTICLE IV			AFFIRMATIVE COVENANTS		30
4.1	Use of Proceeds				30
4.2	Furnishing Information				31
4.3	Visitation				32
4.4	Preservation of Existence; Qualification				33
4.5	Compliance with Laws and Contracts				33
4.6	Payment of Taxes and Other Liabilities				33
4.7	Insurance				33
4.8	Maintenance of Properties				33
4.9	Plans and Benefit Arrangement				34
4.10	Senior Debt Status				34
4.11	Ownership				34
4.12	Cash Management				34
ARTICLE V			NEGATIVE COVENANTS		34
5.1	Dividends, Etc.				34
5.2	Encumbrances				35
5.3a	Leverage Ratio				35
5.3b	Fixed Charge Coverage Ratio				35
5.4	Acquisitions				35
5.5	Sales of Assets				35
5.6	Merger				35
5.7	Regulation T, U and X Compliance				36
5.8	ERISA				36
5.9	Restrictive Agreements				36
5.10	[Intentionally Omitted.]				36
5.11	Subsidiaries				36
5.12	Limitation on Capital Expenditures				36
5.13	Limitation on Indebtedness				36
5.14	Limitation on Contingent Obligations				38
5.15	[Intentionally Omitted.]				38
5.16	Limitation on Investments, Loans and Advances				38
5.17	Limitation on Optional Payments and Modifications of Debt Instruments				38
5.18	Transactions with Affiliates				39
5.19	Sale and Leaseback				39
ARTICLE VI			CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT		39
6.1	All Extensions of Credit				39
6.1a	No Default				39
6.1b	Representations Correct				39
6.1c	Extension of Credit Requirements				39
6.2	Conditions Precedent to the Initial Extensions of Credit Under the Commitments				39
ARTICLE VII			DEFAULTS		41
7.1	Payment Default				41
7.2	Nonpayment of Other Indebtedness				41
7.3	Insolvency				42
7.3a	Involuntary Proceedings				42
7.3b	Voluntary Proceedings				42
7.4	Termination of Existence				42
7.5	Failure to Comply with Covenants				42
7.5a	Failure to Comply with Certain Article IV Covenants and Article V Covenants				42
7.5b	Failure to Comply with Other Covenants				42
7.6	Misrepresentation				42
7.7	Adverse Judgments, Etc.				42
7.8	Invalidity or Unenforceability				43
7.9	ERISA				43
7.10	Change of Control; Change of Beneficial Ownership or Board				43
7.11	Consequences of an Event of Default				43
7.12	Remedies Upon Default				44
ARTICLE VIII			AGREEMENT AMONG LENDERS		44
8.1	Appointment and Grant of Authority				44
8.2	Delegation of Duties				44
8.3	Reliance by Agent on Lenders for Funding				45
8.4	Non-Reliance on Agent				45
8.5	Responsibility of Agent and Other Matters				45
8.5a	Ministerial Nature of Duties				45
8.5b	Limitation of Liability				45
8.5c	Reliance				46
8.6	Actions in Discretion of Agent; Instructions from the Lenders				46
8.7	Indemnification				46
8.8	Agent's Rights as a Lender				47
8.9	Payment to Lenders				47
8.10	Pro Rata Sharing				47
8.11	Successor Agent				47
8.11a	Resignation of Agent				47
8.11b	Rights of the Former Agent				48
8.12	Notice of Default				48
8.13	Notices				48
8.14	Holders of Notes				48
8.15	Calculations				48
8.16	Beneficiaries				48
ARTICLE IX		GENERAL PROVISIONS		49
9.1	Amendments and Waivers				49
9.2	Expenses				50
9.3	Notices				50
9.4	Tax Withholding				51
9.5	Successors and Assigns				51
9.6	Assignments and Participations				51
9.6a	Assignments				51
9.6b	Assignment Register				53
9.6c	Participations				53
9.7	Severability				53
9.8	Survival				53
9.9	Governing Law				54
9.10	Non-Business Days				54
9.11	Integration				54
9.12	Headings				54
9.13	Set-Off				54
9.14	Consent to Forum				54
9.15	Waiver of Jury Trial				55
9.16	Indemnity				55
9.17	Counterparts				55
9.18	Replacement of Note				55

TABLE OF EXHIBITS

Exhibit

Exhibit A                      Pricing Grid

Exhibit B                      Form of Note

Exhibit C                      Form of Loan Request

Exhibit D                      Form of Compliance Certificate

Exhibit E                       Form of Opinion of Counsel

Exhibit F                       Form of Assignment and Assumption Agreement

Exhibit G                      Form of Solvency Certificate

Schedules

3.8       Plans

5.2       Existing Encumbrances Securing Indebtedness

5.13            Indebtedness

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of February 12, 2003, by and among NUI UTILITIES, INC., a New Jersey corporation (as further defined below, the "Borrower"), each financial institution which, from time to time, becomes a party hereto in accordance with Subsection 9.6a (individually, a "Lender" and collectively, the "Lenders"), FLEET NATIONAL BANK, as Agent for the Lenders (in such capacity the "Agent"), and FLEET SECURITIES, INC., as Arranger (the "Arranger").

RECITALS:

WHEREAS, the Borrower desires to obtain a Commitment (as defined below) from each of the Lenders pursuant to which Loans, (as defined below) will be made to the Borrower from time to time prior to the Termination Date (as defined below); and

WHEREAS, the Lenders are willing, on the terms and subject to the conditions hereinafter set forth, to extend such Commitment and make such Loans to the Borrower.

            NOW THEREFORE, the parties hereto, intending to be legally bound, and in consideration of the foregoing and the mutual covenants contained herein, hereby agree as follows:

ARTICLE 1. DEFINITIONS.

1.1            Defined Terms.  As used herein the following terms shall have the meaning specified unless the context otherwise requires:

            "Adjusted Base Rate" means the interest rate relating to the Base Rate Option as described in item (i) of subsection 2.2(b).

            "Adjusted Euro-Rate" means the interest rate relating to the Euro-Rate Option as described in item (ii) of Subsection 2.2b.

            "Affiliate" means as to any Person, any other Person (other than a Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct use or cause the direction of the management and the policies of such Person, whether by contract or otherwise.

            "Agency Services Agreement" has the meaning set forth in Section 6.2(xiii).

            "Agent" has the meaning set forth in the preamble to this Agreement.

            "Agreement" means this Credit Agreement, together with the exhibits and schedules hereto and all extensions, renewals, amendments, modifications, substitutions and replacements hereto and hereof, as amended, supplemented or modified from time to time.

            "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination, provided, however, that the Applicable Base Rate Margin will be increased by twelve and one-half (12.5) basis points (0.125%) during the period in which more than 50% of the Commitments are utilized.  For the purposes hereof, the Commitments shall be deemed to be utilized by the aggregate amount of Loans then outstanding.

For purposes of determining the Applicable Base Rate Margin: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by S&P, the "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by Moody's, the "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination. 

            "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination, provided, however, that the Applicable Euro-Rate Margin will be increased by twelve and one-half (12.5) basis points (0.125%) during the period in which more than 50% of the Commitments are utilized.  For the purposes hereof, the Commitments shall be deemed to be utilized by the aggregate amount of Loans then outstanding.

For purposes of determining the Applicable Euro-Rate Margin: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by S&P, the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by Moody's, the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination.

            "Arranger" has the meaning set forth in the preamble to this Agreement.

            "Assignment and Assumption Agreement" means an Assignment and Assumption Agreement in the form of Exhibit "H" hereto.

            "Authorized Officer" means the President, any Vice President, the Chief Financial Officer, the Treasurer or the principal accounting officer of the Borrower.  The Agent and the Lenders shall be entitled to rely on the incumbency certificate delivered pursuant to Section 6.2 for the initial designation of each Authorized Officer.  Additions or deletions to the list of Authorized Officers may be made by the Borrower at any time by delivering to the Agent for redelivery to each Lender a revised incumbency certificate.

            "Available Commitment" means as to any Lender, at any time, an amount equal to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's Revolving Extensions of Credit then outstanding.

            "Bank Indebtedness" means the liability of the Borrower to pay the Loans, the Facility Fee, other Fees, interest on any of the foregoing, and the other amounts, including, without limitation, expenses, due hereunder.

            "Base Rate" means, for any day, the higher of (i) the sum of (A) the Federal Funds Effective Rate for such day plus (B) fifty (50) basis points (.50%) per annum and (ii) the Prime Rate, as of such day.

            "Base Rate Option" means the interest rate option described in item (i) of Subsection 2.2b.

            "Base Rate Portion" means a Loan or a portion thereof which bears, or is to bear, interest at the Adjusted Base Rate.

             "Borrower" means NUI Utilities, Inc., a New Jersey corporation and its successors and permitted assigns.

            "Borrowing Date" means the date on which any extensions of credit are to be made hereunder.

            "Business Day" means, 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 Boston, Massachusetts or New York, New York and, if the applicable Business Day relates to any extension of credit 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.

            "Capital Adequacy Event" shall have the meaning given it in Subsection 2.3b.

            "Capital Compensation Amount" shall have the meaning given it in Subsection 2.3b.

            "Closing" means the execution and delivery of this Agreement which execution and delivery shall occur at the offices of Edwards & Angell, LLP in Boston, Massachusetts, at 10:00 A.M. (eastern time) on February 12, 2003, or such other location, date and time as is mutually agreeable to the parties hereto.

            "Closing Date" means the day on which the Closing occurs.

            "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation thereto, together with all regulations promulgated and rulings issued thereunder.

            "Commitment" means, as to each Lender, the obligation of such Lender to make Loans available to the Borrower pursuant to Section 2.1 in an aggregate principal amount at any one time outstanding not to exceed the amount set opposite such Lender's name on the signature pages hereto (as such amount may change from time to time pursuant to the terms hereof, or, in the case of a Purchasing Lender, in its Assignment and Assumption Agreement) and, as to all Lenders, the obligation of the Lenders to make Loans available to the Borrower in an aggregate amount equal to the Commitments of all of the Lenders.

            "Commitment Percentage" means, as to each Lender, the percentage of the Commitment set forth opposite such Lender's name on the signature pages hereto, as the same may be adjusted from time to time in connection with any changes in each Lender's Commitment or in the case of a Purchasing Lender, in its Assignment and Assumption Agreement.

            "Commitment Period" means the period from and including the Closing Date to but not including the Termination Date, or such earlier date on which the Commitment shall terminate as provided in this Agreement.

            "Compliance Certificate" means a Compliance Certificate substantially in the form of Exhibit "D".

            "Consolidated" means, as to any two or more Persons, the consolidation of the accounts of such Persons in accordance with GAAP.

            "Consolidated Fixed Charges" means for any period the sum of (a) Consolidated Interest Expense; (b) required amortization of Consolidated Total Indebtedness, determined on a Consolidated basis in accordance with GAAP, for the period involved and discount or premium relating to any such Consolidated Total Indebtedness for any period involved, whether expensed or capitalized; and (c) Consolidated Lease Expense, determined without duplication of items included in Consolidation Interest Expense, of the Borrower.

            "Consolidated Interest Expense" means for any period the amount of interest expense, both expensed and capitalized, of the Borrower, determined on a Consolidated basis in accordance with GAAP, for such period on the aggregate principal amount of its Indebtedness, determined on a Consolidated basis in accordance with GAAP.

            "Consolidated Lease Expense" means for any period, the aggregate amount of fixed and contingent rentals payable by the Borrower, determined on a Consolidated basis in accordance with GAAP, for such period with respect to leases of real and personal property.

            "Consolidated Net Income" means for any period, net income of the Borrower, determined on a Consolidated basis in accordance with GAAP, without giving effect to any non-cash gain, any non-cash loss or any reversals or adjustments to, or failure to recognize, revenue due to changes in applicable U.S. accounting rules and regulations, in each case to the extent reasonably acceptable to the Agent, including without limitation due to the implementation, effective as of October 25, 2002, of EITF 02-03 ("Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities"), the effects of which EITF implementation are hereby deemed acceptable to the Agent.

            "Consolidated Shareholders' Equity" means the total of those items enumerated under the heading "Common Shareholders' Equity" in the Borrower's relevant balance sheets determined on a Consolidated basis in accordance with GAAP, consistently applied.

           "Consolidated Total Capitalization" means, as of any date of determination, the sum of (i) Consolidated Total Indebtedness plus (ii) Consolidated Shareholders' Equity.

            "Consolidated Total Indebtedness" means all Indebtedness of the Borrower, determined on a Consolidated basis in accordance with GAAP, consistently applied.

            "Debt Issuance" means any securitization, private debt placement or other incurrence of Indebtedness by the Borrower, excepting the incurrence of Indebtedness covered by Section 5.13(b), (c) (but only to (c) with respect to purchase money debt and capital leases existing on the Closing Date), (d), (e), (f), (g), or (h) (but only as to (h) with respect to Commitments under the Senior Credit Agreement in existence of the date hereof).

"Dollars" or "$" means the legal tender of the United States of America.

"Encumbrance" means any encumbrance, mortgage, lien, charge, pledge, security interest, priority payment, conditional sales agreement right, or other title retention agreement right (including any right under a lease which, in accordance with GAAP, would be treated as a capitalized item) in, upon or against any asset of any Person.

"Environmental Law(s)" means any and all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions of any Federal, state or local governmental authority relating to the environment or the release of any materials into the environment, whether now in existence or hereafter enacted, agreed to, issued or otherwise becoming effective.

"ERISA" means the Employee Retirement Income Security Act of 1974, together with the regulations thereunder, as now in effect and as hereafter from time to time amended or any successor statute.

"ERISA Affiliate" means, as of any date, any member of a controlled group of corporations of which the Borrower is a member, which, in any event together with the Borrower are treated as of such date as a single employer under Section 414 of the Code.

"Euro Base Rate" that rate per annum (rounded upward, if necessary, to the nearest one hundred-thousandth of a percentage point) which represents the offered rate for deposits in Dollars, for a period of time comparable to such Interest Period, which appears on the British Bankers' Association Interest Settlement Rate Page, as displayed as Dow Jones Market, Page 3750, as of 11:00 a.m. (London time) on that day that is two Business Days preceding the first day of such Interest Period; provided, however, that if the rate described above does not appear on the Telerate System on any applicable interest determination date, then the Euro Base Rate for any Interest Period will be determined on the basis of the offered rates for deposits in Dollars for a period of time comparable to such Interest Period which are offered by four major banks in the London interbank market at approximately 11:00 a.m. (London time) on that day that is two London Business Days preceding the first day of such Interest Period, as selected by the Agent.  The principal London office of each of four major London banks will be requested to provide a quotation of its Dollar deposit offered rate.  If at least two such quotations are provided, the rate for that date will be the arithmetic mean of the quotations.  If fewer than two quotations are provided as requested, the rate for that date will be determined on the basis of the rates quoted for loans in Dollars to leading European banks for a period of time comparable to such Interest Period offered by major banks in New York City at approximately 11:00 a.m. (New York City time) on that day that is two London Business Days preceding the first day of such Interest Period.  In the event that the Agent is unable to obtain any such quotation as provided above, it will be deemed that the Euro-Rate for the proposed Interest Period cannot be determined. 

"Euro-Rate" means, with respect to each day during each Interest Period pertaining to a Loan to which the Euro-Rate Option applies, rate per annum determined for such day in accordance with the following formula:

Euro-Rate = Euro Base Rate

1.00 - - Euro-Rate Reserve Percentage

"Euro-Rate Option" means the interest rate option described in item (ii) of Subsection 2.2b.

            "Euro-Rate Portion" means a Loan, or portion thereof, which bears, or is to bear, interest at the Adjusted Euro-Rate.

            "Euro-Rate Reserve Percentage" means the maximum aggregate reserve requirement (including basic supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve System against Euro currency Liabilities as defined in Regulation D. 

"Existing Credit Agreement" means the Credit Agreement, dated as of December 19, 2001, among the Borrower, each of the lenders as specified therein, Fleet National Bank, as agent, PNC Bank National Association, as syndication agent and First Union National Bank, as documentation agent.

            "Event of Default" has the meaning given it in Article VII.

            "Facility Fee" means the fee described in Subsection 2.4a.

            "Facility Fee Rate" means a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit "A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination.  For purposes of determining the Facility Fee Rate: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement the Borrower shall not have a Senior Rating assigned by S&P, the "Facility Fee Rate" means a rate per annum equal to the annualized rates referenced above (stated in terms of basis points) that correspond to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement the Borrower shall not have a Senior Rating assigned by Moody's, the "Facility Fee Rate" means a rate per annum equal to the annualized rates referenced above (stated in terms of basis points) that correspond to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination.

            "Federal Funds Effective Rate" means, for any day, the rate per annum (based on a year of 360 days and the actual days elapsed and rounded upward to the nearest 1/100th of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by the Federal Reserve Bank of New York (or any successor) in substantially the same manner as such Federal Reserve Bank of New York computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, if such Federal Reserve Bank of New York (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day for which such rate was announced.

            "Fee Letter" has the meaning set forth in Section 2.4b.

"Fees" means collectively the fees referenced in Section 2.4.

"Fiscal Quarter" means the three-month fiscal period of the Borrower beginning on each October 1, January 1, April 1 and July 1 and ending on the succeeding December 31, March 31, June 30 and September 30.

"Fiscal Year" means each fiscal period of the Borrower beginning October 1 and ending on the succeeding September 30.

"GAAP" means generally accepted accounting principles which shall include, but not be limited to, the official interpretations thereof as defined by the Financial Accounting Standards Board, its predecessors and its successors consistent with those utilized in preparing the audited financial statements referred to in Section 4.2.

"Governmental Authority" means the government of the United States or the government of any state or locality therein, any political subdivision or any governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body or entity, or other regulatory bureau, authority, body or entity of the United States or any state or locality therein, including the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, and any central bank of any other country or any comparable authority.

"Governmental Rule" means any law, statute, rule, regulation, ordinance, order, judgment, guideline or decision of any Governmental Authority.

"Guaranty" or "Guarantee" means any obligation, direct or indirect, by which a Person undertakes to guaranty, assume or remain liable for the payment or performance of another Person's obligations, including but not limited to (i) endorsements of negotiable instruments, (ii) discounts with recourse, (iii) agreements to pay or perform upon a second Person's failure to pay or perform, (iv) remaining liable on obligations assumed by a second Person, (v) agreements to maintain the capital, working capital solvency or general financial condition of a second Person and (vi) agreements for the purchase or other acquisition of products, materials, supplies or services, if in any case payment therefor is to be made regardless of the non-delivery of such products, materials or supplies or the non-furnishing of such services.

"Hedging Obligations" means, with respect to any Person, all liabilities of such Person under interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

"Indebtedness" as applied to any Person means, without duplication, all liabilities of such Person for borrowed money (other than trade accounts payable arising in the ordinary course of business consistent with past practices), direct or contingent, whether evidenced by a bond, note, debenture or otherwise, all preferred equity interests issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration at any time during the period ending one year after the term of this Agreement, and all obligations and liabilities in the nature of a capitalized lease obligation, deferred purchase price arrangement (other than trade accounts payable in the ordinary course of business consistent with past practices), title retention device, letter of credit obligation, Hedging Obligation, reimbursement agreement and reimbursement obligations arising thereunder, Guaranty, obligations relating to securitization transactions, synthetic lease transactions and sale-leaseback transactions.

"Interest Period" means, subject to the provisions of Subsection 2.2c, any Loans bearing interest at the Euro-Rate Option, any individual period of one, two, three or six months selected by the Borrower commencing on the Borrowing Date, conversion date or renewal date of a Euro-Rate Portion to which such period shall apply.

"Lender" has the meaning given in the preamble to this Agreement.

"Loans" means each advance of funds by a Lender to the Borrower pursuant to Section 2.1a.

            "Loan Account" means the loan account maintained by the Agent as more fully described in Section 2.11.

"Loan Documents" means collectively this Agreement, the Notes, and any other documents furnished in connection herewith.

"Loan Request" means a written request for Loans made in accordance with Section 2.1d hereof which request shall be substantially in the form of Exhibit "C" hereto.

"Margin Stock" is defined herein as defined in Regulation U.

"Market Capitalization" has the meaning given it in the definition of "Permitted Acquisition" hereunder.

"Material Adverse Change" means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect upon the validity or enforceability of this Agreement or any of the other Loan Documents, (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 Borrower, (c) impairs materially or could reasonably be expected to impair materially the ability of the Borrower to duly and punctually pay its Indebtedness, or (d) impairs materially or could reasonably be expected to impair materially the ability of the Agent or any of the Lenders to enforce their legal remedies pursuant to this Agreement or any other Loan Document.

"Material Adverse Effect" means, with respect to any Person relative to any occurrence of whatever nature (including, without limitation, any adverse determination in any litigation, arbitration or governmental investigation or proceeding), an effect that results in or causes or has a reasonable likelihood of resulting in or causing a Material Adverse Change.

"Moody's" means Moody's Investors Service, Inc. and its successors.

"Notes" means any one or all of the several promissory notes of the Borrower evidencing Indebtedness of the Borrower under this Agreement which notes are substantially in the form of Exhibit "B" to this Agreement, together with all extensions, renewals, amendments, modifications, substitutions and replacements thereto and thereof.

"NUI Corporation Credit Agreement" means the Credit Agreement, dated as of the date hereof, among NUI Corporation, each of the lenders specified therein, and Fleet National Bank, as the agent.

"Option" means any one or both of the Base Rate Option or the Euro-Rate Option.

"Participant" means any financial institution or other Person to which a Lender sells a Participation in its Loan.

"Participation" means the sale by a Lender to any Participant of an undivided interest in all or any part of such Lender's Loan.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor Person.

"Permitted Acquisition" an acquisition of assets by the Borrower, subject to the fulfillment of the following conditions:

(i)                  the Total Purchase Price for such acquisition, together with the aggregate Total Purchase Price paid by the Borrower and NUI Corporation and its Subsidiaries (other than the Borrower) for all other such acquisitions consummated after the date hereof, shall not exceed an amount equal to the lesser of (A) $30,000,000 or (B) 25% of Market Capitalization determined as of the close of business on the day prior to the day on which the applicable acquisition or other similar agreement is executed and delivered by the Borrower.  For purposes of this definition, "Market Capitalization" means, on any date of determination, the product of (i) the number of issued and outstanding shares of the common stock of NUI Corporation on such day times (ii) the closing sale price of such common stock on such day, as appearing in any regularly published reporting or quotation service or, if there is no such closing sale price, the market value of such common stock as reasonably determined by the Agent;

(ii)                With respect to each acquisition, Target EBITDA attributable to the assets of the Target being acquired for its most recently ended fiscal year shall not be less than $1.00;

(iii)               With respect to each acquisition, after giving effect thereto and to Indebtedness incurred or assumed in connection therewith, the Borrower shall be in compliance with the provisions of Section 5.3, calculated on a pro forma basis as of the end of and for the period of four Fiscal Quarters most recently ended prior to the date of such acquisition;

(iv)              If such acquisition or any series of related acquisitions involves a Total Purchase Price of more than $5,000,000 in the aggregate, then no later than (A) 5 Business Days prior to the consummation of each such Acquisition, the Borrower shall have delivered to the Agent (1) a certificate of Borrower setting forth the calculations referred to in clause (iii) and (2) copies of executed counterparts of the applicable acquisition or similar agreements, (B) promptly following a request therefor, copies of such other information or documents relating to such acquisition as the Agent shall have reasonably requested, and (C) if requested by the Agent, promptly following the consummation of such acquisition, certified copies of the agreements, instruments and documents referred to above, to the extent the same have been executed and delivered at the closing of the acquisition; and

(v)                No Potential Default or Event of Default shall have occurred and be continuing or reasonably be expected to result from such acquisition, after giving effect thereto and Indebtedness incurred or assumed in connection therewith.

"Permitted Encumbrance" means, as to any Person, any of the followings

(i)            Encumbrances for taxes, assessments, governmental charges or levies on any of such Person's properties, which taxes, assessments, governmental charges or levies are at the time not due and payable or if they can thereafter be paid without penalty or are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are maintained on the books of such Person in conformity with GAAP;

(ii)            Pledges or deposits to secure payment of workers' compensation obligations, unemployment insurance, deposits or indemnities to secure public or statutory obligations or for similar purposes;

(iii)            Encumbrances arising out of judgments or awards against such Person but only to the extent that the creation of any such Encumbrance shall not be an event or condition which, with or without notice or lapse of time or both, would cause the Borrower to be in violation of Section 7.7;

(iv)            Mechanics', carriers', workers', repairmen's and other similar statutory Encumbrances incurred in the ordinary course of such Person's business, so long as the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings diligently conducted;

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

(vi)            Encumbrances listed on Schedule 5.2, securing Indebtedness permitted by Section 5.13(c); provided that no such Encumbrance is amended after the date of this Agreement to cover any additional property or to secure additional Indebtedness;

(vii)            Easements, rights-of-way, restrictions, leases or subleases to others or other similar Encumbrances created in the ordinary course of business which Encumbrances do not interfere in any material respect with the ordinary conduct of the business of the Borrower;

(viii)            Encumbrances securing (a) the non-delinquent performance of bids, trade contracts (other than for borrowed money), leases or statutory obligations, (b) contingent obligations on surety and appeal bonds, and (c) other non-delinquent obligations of a like nature; in each case, incurred in the ordinary course of business, provided all such Encumbrances in the aggregate would not (even if enforced) cause a Material Adverse Effect on the Borrower; and

(ix)            Encumbrances securing Indebtedness of the Borrower permitted by Section 5.13(b) incurred to finance the purchase of new fixed or capital assets (including pursuant to capital leases), provided that (1) such Encumbrances shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (2) such Encumbrances do not at any time encumber any property other than the property financed by such Indebtedness, and (3) the Encumbrances are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased.

(x)            Encumbrances securing Indebtedness of the Borrower permitted by Section 5.19 incurred in connection with sale/leaseback transactions, provided that (1) such Encumbrances shall be created substantially simultaneously with such sale/leaseback transaction, (2) such Encumbrances do not at any time encumber any property other than the property leased, and (3) the Encumbrances are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased;

(xi)            Existing Encumbrances on the property or assets acquired in a Permitted Acquisition securing Indebtedness of the type permitted by Section 5.13(b), provided that (1) such Encumbrance existed prior to such Permitted Acquisition, (2) any such Encumbrances do not by their terms cover property or assets other than those acquired in the Permitted Acquisition, and (3) any such Encumbrances do not by their terms secure Indebtedness other than Indebtedness of the type permitted by Section 5.13(b) existing prior to such Permitted Acquisition; and

(xii)            Encumbrances created or deemed to exist in connection with any securitization transaction permitted under Section 5.13(i), provided such Encumbrances relate solely to the applicable securitization receivables actually sold, contributed, financed or otherwise conveyed or pledged pursuant to such securitization transaction.

"Permitted Investments" means

(a)            marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any agency thereof and backed by the full faith and credit of the United States of America;

(b)            marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof and, at the time of acquisition, having one of the two highest ratings generally obtainable from either S&P or Moody's;

(c)            commercial paper, at the time of acquisition, having a rating of A-1 (or the equivalent) or higher from S&P and P-1 (or the equivalent) or higher from Moody's; or

(d)            mutual funds, the assets of which are primarily invested in items of the kind described in clauses (a), (b) and (c) of this definition;

provided in each case, that such obligations are payable in Dollars and such Permitted Investments by the Borrower are in accordance with Governmental Rules.

"Permitted Transferee" has the meaning given it in Section 7.10.

"Person" means any individual, partnership, corporation, trust, joint venture, banking association, unincorporated organization or any other entity or enterprise or government or department or agency thereof.

"Plan" means an employee pension benefit plan (other than a multiemployer plan) which is maintained by the Borrower or any ERISA Affiliate for employees of the Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 302 of ERISA and Section 412 of the Code.

"Portion" means, with respect to any outstanding Loans, either the Base Rate Portion thereof, the Euro-Rate Portion thereof, or both, as the case may be.

"Potential Default" means an event which, with the passage of time or the giving of notice or both, shall be an Event of Default.

"Prime Rate" means the variable interest rate per annum announced from time to time by Fleet National Bank as its prime rate, which rate is a reference rate and may not be the lowest rate of interest then being charged by Fleet National Bank to its commercial borrowers.

"Purchasing Lender" has the meaning given it in Subsection 9.6a.

"Register" has the meaning given it in Subsection 9.6b.

"Regulation D" means Regulation D promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 204 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation T" means Regulation T promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 220 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation U" means Regulation U promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation X" means Regulation X promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 224 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Reportable Event" means any one or more events, defined in Section 4043(b) of ERISA and in 29 C.F.R. Part 2615, other than an event for which the requirement for the 30 day notice to the PBGC is waived.

"Required Lenders" means as of a particular date (i) prior to the termination of the Commitments, the Lenders whose Commitment Percentages aggregate at least fifty-one percent (51%) of the aggregate Commitment Percentages of all the Lenders and (ii) after the termination of the Commitments, fifty-one (51%) of the aggregate principal amount of the Loans at the particular time outstanding.

            "Restricted Payments" has the meaning given to it in Section 5.1.

"Revolving Credit" has the meaning assigned to it in Section 2.1, as the same may be reduced pursuant to Section 2.10 and 7.11.

"Revolving Extensions of Credit" means as to any Lender at any time, the aggregate amount of all Loans made by such Lender.

"S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill, Inc. and its successors.

"Senior Credit Agreement" means the Credit Agreement, dated as of the date hereof among the Borrower, each of the lenders as specified therein, Fleet National Bank, as the agent and as swingline lender.

"Senior Ratings" means, with respect to any Person, the long term senior unsecured public debt ratings in effect from time to time as assigned by Moody's and S&P, as the case may be.

"Subsidiary" means, as to any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the outstanding stock or other applicable ownership interest having by the terms thereof ordinary voting power to elect a majority of the Board of Directors or other managers of such corporation, partnership, limited liability company, or other entity is at the time directly or indirectly owned or controlled by such Person and/or by one or more Subsidiaries of such Person.

"Target" any Person or any division of a Person whose equity interests or assets of which are proposed to be acquired in connection with a Permitted Acquisition.

"Target EBITDA" for any period, as to the Target in the case of an acquisition of all assets of a Target, or attributable to assets being purchased from the Target in the case of an acquisition of less than all of the assets of a Target, net income for such period plus, without duplication and to the extent reflected as a charge in the statement of such net income for such period, the sum of (a) income tax expense, (b) interest expense, and (c) depreciation and amortization expense, all calculated in accordance with GAAP consistently applied and as may be adjusted to give effect to cost savings as a result of the acquisition to the extent agreed to in writing by the Agent.  For the purposes of this definition, net income shall be calculated without giving effect to any non-cash gain, any non-cash loss or any reversals or adjustments to, or failure to recognize, revenue due to changes in applicable U.S. accounting rules and regulations, in each case to the extent reasonably acceptable to the Agent, including without limitation due to the implementation, effective as of October 25, 2002, of EITF 02-03 ("Issues Involved in Accounting for Derivative Contracts Held for Trade Purposes and Contracts Involved in Energy Trading and Risk Management Activities"), the effects of which EITF implementation are hereby deemed acceptable to the Agent.

"Termination Date" means February 11, 2004, unless earlier terminated in accordance with the terms hereof.

"Termination Proceedings" means any action taken by the PBGC under ERISA to terminate any plan.

"Total Commitment" means the aggregate amount of the Commitments of all Lenders, as in effect from time to time. 

"Total Purchase Price" means the "purchase price" for any acquisition including, without limitation, but without duplication, (a) all cash payable by the Borrower to the seller or affiliate of the seller at the closing of the acquisition; (b) all Indebtedness incurred by the Borrower in favor of any seller or affiliate of any seller; (c) all Indebtedness and other liabilities of or related to the Target that are assumed by the Borrower, or subject to which the acquired assets are acquired, or (in the case of an equity security purchase or merger) that remain unpaid at the closing of the acquisition; and (d) the maximum amount of all contingent future cash payments or other cash consideration payable within the 12 month period following the closing of the acquisition and not otherwise described in this definition, including without limitation cash "earn-out" payments and cash amounts payable upon disposition of the acquired business (unless the Required Lenders shall otherwise agree), but specifically excluding any equity securities of the Borrower and warrants, options, and other rights to acquire equity securities of the Borrower issued at the closing of the acquisition.  For purposes of clause (d) of the preceding sentence, the maximum amount of any payment or other consideration specified therein shall be the maximum amount provided for in the relevant agreement, or, if no maximum amount is so provided, the amount reasonably estimated by Borrower on the basis of assumptions and calculations provided in writing to the Agent and approved by it.  Such assumptions shall include reasonable projections of any measure of financial or other performance that enters into the calculation of the amount of any such payment or other consideration but shall not include any assumption that any other future event that is a condition to such payment or consideration (such as the later disposition of the acquired business or a public or private offering of securities) will not occur.

                "Total Revolving Extensions of Credit" means, at any time, the aggregate amount of the Revolving Extensions of Credit of the Lenders outstanding at such time.

"Transfer Effective Date" has the meaning given it in each respective Assignment and Assumption Agreement.

"Transferor Lender" has the meaning given it in Subsection 9.6a.

"Uniform Customs" means the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, as may be amended from time to time.

1.2            GAAP Definitions.  Accounting terms used herein but not defined herein shall have the meanings ascribed to them under GAAP consistent with those utilized in preparing the audited financial statements referred to in Section 4.2.

1.3            Other Definitional Conventions and Rules of Construction.  (i) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall, unless otherwise expressly specified, refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section and Subsection references are to this Agreement unless otherwise expressly specified. 

(ii)            All terms defined in this Agreement in the singular shall have comparable meanings when used in plural, and vice versa, unless otherwise specified.

(iii)            The word "or" as used herein shall mean and connote nonexclusive alternatives, unless expressly stated or the context clearly requires otherwise.

ARTICLE II.            THE LOANS

2.1            The Revolving Credit

2.1a            Loans.  Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender severally agrees to make Loans to the Borrower at any time from time to time on or after the date hereof to, but not including, the Termination Date, provided that the aggregate principal amount of each Lender's Loans outstanding hereunder to the Borrower shall not exceed at any one time the amount equal to such Lender's Commitment Percentage of the Total Commitments then in effect and provided, further, that no Loans shall be made if it would cause the Total Revolving Extensions of Credit to exceed the Total Commitments (the "Revolving Credit").  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 2.1a. The aggregate amount of the Commitments on the Closing Date is $45,000,000.  All Loans outstanding on the Termination Date shall become due and payable in full on such date. 

2.1b            Commitment of Each Lender.  Each Lender agrees, for itself only, and subject to the terms and conditions of this Agreement, to make Loans to the Borrower from time to time not to exceed an aggregate principal amount at any one time outstanding equal to the amount of its respective Commitment Percentage of the Revolving Credit.  The obligations of each Lender hereunder are several.  The failure of any Lender to perform its obligations hereunder shall not affect the obligations of the Borrower, or any other Lender, to any other party nor shall the Borrower, or any other Lender, be liable for the failure of such Lender to perform its obligations hereunder.  The Lenders shall have no obligation to make Loans hereunder on or after the Termination Date.

2.1c            Notes.  The obligation of the Borrower to repay, on or before the Termination Date, the aggregate unpaid principal amount of all Loans shall be evidenced by the several Notes, each substantially in the form of Exhibit "B" hereto, drawn by the Borrower to the order of a Lender in the maximum amount of such Lender's Commitment.  The principal amount actually due and owing to a Lender at any time shall be the then aggregate unpaid principal amount of all Loans made by such Lender as shown on the Loan Account established and maintained by the Agent in accordance with Section 2.11.  Each Note shall be dated the date hereof and shall be delivered to the Lenders on such date.

2.1d            Loan Request.  Except as otherwise provided herein, the Borrower may from time to time prior to the Termination Date request the Lenders to make Loans to the Borrower by the delivery to the Agent, not later than 12:00 Noon. (eastern time) (i) three Business Days prior to the proposed Borrowing Date with respect to the making of Loans to which the Euro-Rate Option applies for any Loans and (ii) one Business Day prior to the proposed Borrowing Date with respect to the making of a Loan to which the Base Rate Option applies of a duly completed request therefor substantially in the form of Exhibit "C" hereto or a request by telephone immediately confirmed in writing by letter, facsimile or electronic transmission in such form (each, a "Loan Request"), it being understood that the Agent may rely on the authority of any person 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 Loans to be made on such Borrowing Date, which amount, as to Base Rate Portions, shall be in integral multiples of $100,000 and not less than $500,000 and, as to Euro-Rate Portions, shall be in integral multiples of $100,000 and not less than $1,000,000; (iii) whether the Euro-Rate Option or the Base Rate Option shall apply to the proposed Loans to be made on such Borrowing Date; and (iv) in the case of Loans to which the Euro-Rate Option applies, an appropriate Interest Period for each Euro-Rate Portion of the Loans to be made on such Borrowing Date.

2.1e            Making Loans.  The Agent shall, promptly after receipt by it of a Loan Request pursuant to Section 2.1d (but not later than noon (eastern time) on the Borrowing Date for same day funding and 2:00 P.M. (eastern time) on the third Business Day preceding any Borrowing Date for which any Portion of the Loans to be made on such Borrowing Date bears interest at the Euro-Rate Option), notify the Lenders of its receipt of such Loan Request specifying: (i) the proposed Borrowing Date and the time and method of disbursement of such Loan; (ii) the amount and type of such Loan and the applicable Euro-Rate Portions and Interest Periods (if any); and (iii) the apportionment among the Lenders of the Loans as determined by the Agent in accordance with Section 2.1b hereof.  Each Lender shall remit the principal amount of each Loan to the Agent such that the Agent is able to, and the Agent shall, to the extent the Lenders have made funds available to it for such purpose, fund such Loan to the Borrower in Dollars and immediately available funds in an account specified by the Borrower to the Agent prior to 2:00 P.M. (eastern time) on the Borrowing Date, provided that if any Lender fails to remit such funds to the Agent in a timely manner, or any Lender fails to advise the Agent of its intention not to fund, then the Agent may elect in its sole discretion to fund with its own funds the Loan of such Lender on the Borrowing Date, subject to the provisions of Section 8.3 below.

2.2            Interest Rates, Interest Payment and Certain Provisions Relating to Interest and Fees.  

2.2a            Payments of Interest.  The Borrower shall pay interest on the principal amount of the Loans from time to time outstanding hereunder, from the date thereof until payment in full, at the rates of interest determined pursuant to this Section 2.2. The Borrower shall pay accrued interest on the unpaid principal balance of the Loans in arrears: (i) with respect to each Base Rate Portion, at the Adjusted Base Rate on the last Business Day of each Fiscal Quarter during the term thereof, (ii) with respect to each Euro-Rate Portion, at the Adjusted Euro-Rate on the last day of each Interest Period as provided for in Subsection 2.2(b)(ii) (provided, however, if the Interest Period chosen for a Euro-Rate Portion exceeds three  months, interest on that Euro-Rate Portion shall be due and payable on the day which is (A) three months after the first day of such Interest Period and (B) the last day of such Interest Period), and (iii) with respect to all such Portions, at the applicable interest rate (A) when due, at maturity, whether by acceleration or otherwise, and (B) after maturity, on demand until paid in full.

2.2b            Interest Rate Options.  The unpaid principal amount of the Loans shall bear interest, for each day until due, at one or more rates of interest selected by the Borrower from among the Options set forth below; it being understood that, subject to the provisions of this Agreement, the Borrower may select different Options to apply simultaneously to different Portions of the Loans and may select different Interest Periods to apply simultaneously to different Portions of the Euro-Rate Portions of the Loans.

(i)            Base Rate Option:  A rate of interest per annum (computed upon the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed) equal to the sum of (A) the Base Rate plus (B) the Applicable Base Rate Margin from time to time in effect (the "Adjusted Base Rate").  The rate of interest per annum under the Base Rate Option shall be adjusted automatically, from time to time, upon each change in the Adjusted Base Rate.

(ii)            Euro-Rate Option:  A rate of interest per annum (computed on the basis of a year of 360 days and the actual number of days elapsed) equal to the sum of (A) the Euro-Rate plus (B) the Applicable Euro-Rate Margin from time to time in effect (the "Adjusted Euro-Rate").  The Adjusted Euro-Rate for each Euro-Rate Portion then outstanding shall be adjusted automatically, from time to time, effective upon each change in the Applicable Euro-Rate Margin resulting from an increase or decrease in utilization of the Commitments.

2.2c            Interest Periods; Limitations on Elections.  At any time when the Borrower shall select, convert to or renew at the Euro-Rate Option with respect to all or any Portion of the outstanding Loans, it shall fix one or more Interest Periods during which such Option(s) shall apply.  All of the foregoing, however, is subject to the following:

(i)            any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next Business Day unless such Business Day falls in the succeeding calendar month in which case such Interest Period shall end on the next preceding Business Day; and

(ii)            any Interest Period which begins on the last day of a calendar month or on a day for which there is no numerically corresponding day in the subsequent calendar month during which such Interest Period is to end shall end on the last Business Day of such subsequent month.

In addition, elections by the Borrower of the Euro-Rate Option shall be subject to the following further limitations:

(i)            If an Interest Period is elected with regard to amounts outstanding under the Revolving Credit and such Interest Period would end after the Termination Date, such Interest Period shall end on the Termination Date; and

(ii)            At no time may there be more than ten Interest Periods in effect relating to Loans.

2.2d             Election, Conversion or Renewal of Interest Rate Options.  Elections of or conversions to the Base Rate Option shall continue in effect until converted to the Euro-Rate Option as hereinafter provided.  Elections of, conversions to or renewals of the Euro-Rate Option shall expire as to each Euro-Rate Portion at the expiration of the applicable Interest Period.

At any time, with respect to any Base Rate Portion, or at the expiration of the applicable Interest Period, with respect to any Euro-Rate Portion, the Borrower (subject to Subsection 2.2c) may cause all or any part of the principal amount of such Portion to be converted to and/or (in the case of a Euro-Rate Portion) to be renewed under the Euro-Rate Option by notice to each of the Lenders as hereinafter provided.  Such notice (i) shall be irrevocable; (ii) shall be given not later than 11:00 A.M. (eastern time) in the case of a conversion to or renewal of, either in whole or in part, the Euro-Rate Option on the third Business Day prior to the proposed effective date for the conversion or renewal and (iii) shall set forth:

(A)            the effective date of such conversion or renewal, which shall be a Business Day;

(B)            the new Interest Period(s) selected; and

(C)            with respect to each such Interest Period, the aggregate principal amount of the corresponding Euro-Rate Portion.

At the expiration of each Interest Period, any part (including the whole) of the principal amount of the corresponding Euro-Rate Portion as to which no notice of conversion or renewal has been received as provided above, shall automatically be converted to the Base Rate Option.

2.2e            Notification of Election of an Interest Rate Option.  The Borrower, by an Authorized Officer, shall notify the Agent of (i) each election or renewal of an Option and each conversion from one Option to another, (ii) the Portion of the Loans then outstanding to be allocated to each Option and (iii) where relevant, the Interest Periods applicable to each Option, by communication as provided for in this Agreement.  Any such communication may be oral or written and if oral, it shall be followed immediately by written confirmation of such Option election executed by an Authorized Officer.

2.2f            Interest After Maturity.  After the principal amount of all or any part of the Base Rate Portions of the Loans shall have become due and payable, whether by acceleration or otherwise and whether or not judgment has been entered against the Borrower thereon, all Base Rate Portions shall bear interest at a rate per annum which shall be two hundred (200) basis points (2%) per annum above the rate otherwise in effect under the Base Rate Option, such interest rate to change automatically from time to time, effective as of the effective date of each change in the Base Rate.  After the principal amount of all or any part of the Euro-Rate Portions of the Loans shall have become due and payable, whether by acceleration or otherwise and whether or not judgment has been entered against the Borrower thereon, all such Euro-Rate Portions shall bear interest (i) until the end of the then current Interest Period, at a rate per annum which shall be two hundred (200) basis points (2%) per annum above the rate otherwise in effect under the Euro-Rate Option, and (ii) at the end of the then current Interest Period, and thereafter at the sum of (A) the Adjusted Base Rate plus (B) two hundred (200) basis points (2%) per annum.

2.3            Yield-Protection, Capital Adequacy and Miscellaneous Provisions Relating to Euro-Rate.

2.3a            Yield Protection.  Notwithstanding other provisions of this Section 2.3:

(i)            If any Governmental Rule (including, without limitation, Regulation D), or if any change therein on or after the date hereof, or in the interpretation thereof by any Governmental Authority charged with the administration thereof, shall:

(A) subject any Lender to any tax, levy, impost, charge, fee, duty, deduction or withholding of any kind with respect to payments of principal or interest or other amounts due hereunder or pursuant to any Note (other than any tax imposed or based upon the income of a Lender and payable to any Governmental Authority in the United States of America or any state thereof); or

(B)change the basis of taxation of any Lender with respect to payments of principal or interest or other amounts due hereunder or pursuant to any Note (other than any change which affects, and only to the extent that it affects, the taxation by the United States or any state thereof of the total net income of such Lender); or

(C)impose, modify or deem applicable any reserve, special deposit or similar requirements against assets held by any Lender applicable to the Commitment or Loans made hereunder (other than such requirements which are included in the determination of the applicable rate of interest hereunder); or

(D)impose upon any Lender any other obligation or condition with respect to this Agreement, and the result of any of the foregoing is to increase the cost to the affected Lender, reduce the income receivable by the affected Lender, reduce the rate of return on the affected Lender's capital, or impose any expenses upon the affected Lender, all with respect to any of the Loans (or any portion thereof) by an amount which the affected Lender reasonably deems material, and if the affected Lender is then demanding similar compensation for such occurrences from other borrowers who are similarly situated and who have a similar relationship with the affected Lender and from which the affected Lender has the right to demand such compensation, then and in any such case:

(1)the affected Lender shall promptly notify the Borrower of the happening of such event;

(2)the Borrower shall pay to the affected Lender, within 10 days following demand, such amount as will compensate the affected Lender for such reduction in its rate of return; and

(3)the Borrower may pay the affected portion of the affected Lender's Loans in full without the payment of any additional amount, including prepayment penalties, other than amounts payable on account of the affected Lender's out-of-pocket losses (including funding loss, if any, as provided in Section 2.9) which are not otherwise provided for in subparagraph (2) immediately above.

(ii)            A certificate (in reasonable detail) as to the increased cost or reduced amount as a result of any event mentioned in this Subsection 2.3a shall be promptly submitted by the affected Lender to the Borrower in accordance with the provisions hereof.  Such certificate shall be prima facie evidence as to the amount of such increased cost or reduced amount.

2.3b            Capital Adequacy.  If, after the date hereof, (i) any adoption of or any change in or in the interpretation of any Governmental Rule, or (ii) compliance with any Governmental Rule of any Governmental Authority exercising control over banks or financial institutions generally or any court of competent jurisdiction, requires that the Commitment (including, without limitation, obligations in respect of any Loans) hereunder be treated as an asset or otherwise be included for purposes of calculating the appropriate amount of capital to be maintained by any Lender or any corporation controlling any Lender (a "Capital Adequacy Event"), the result of which is to reduce the rate of return on a Lender's capital as a consequence of its Commitment to a level below that which the affected Lender could have achieved but for such Capital Adequacy Event, taking into consideration the Lender's policies with respect to capital adequacy, by an amount which the affected Lender reasonably deems to be material, the affected Lender shall promptly deliver to the Borrower a statement (in reasonable detail) of the amount necessary to compensate the affected Lender or the reduction in the rate of return on its capital attributable to its Commitment (the "Capital Compensation Amount").  The affected Lender shall determine the Capital Compensation Amount in good faith, using reasonable attribution and averaging methods.  Each affected Lender shall from time to time notify the Borrower of the amount so determined.  Each such notification shall be prima facie evidence of the amount of the Capital Compensation Amount set forth therein, and such Capital Compensation Amount shall be due and payable by the Borrower to the affected Lender 30 days after such notice is given.  As soon as practicable after any Capital Adequacy Event, the affected Lender shall submit to the Borrower estimates of the Capital Compensation Amounts that would be payable as a function of the affected Lender's Commitment hereunder.

2.3c            Euro-Rate Unascertainable.  If, on any date on which the Adjusted Euro-Rate would otherwise be set, the Agent reasonably shall have determined (which determination shall be final and conclusive) that by reason of circumstances affecting the interbank Eurodollar market, adequate and reasonable means do not exist for ascertaining the Euro-Rate, the Agent shall give prompt notice of such determination to the Borrower and the Lenders and, until the Agent notifies the Borrower and the Lenders that the circumstances giving rise to such determination no longer exist, the right of the Borrower to borrow under, convert to or renew the Euro-Rate Option shall be suspended.  Any notice of borrowing under, conversion to or renewal of the Euro-Rate Option which was to become effective during the period of such suspension shall be treated as a request to borrow under, convert to or renew at the Base Rate Option with respect to the principal amount therein specified.

2.3d            Illegality.  If a Lender shall determine in good faith (which determination shall be final and conclusive) that compliance by such Lender with any applicable law, treaty or other Governmental Rule (whether or not having the force of law), or the interpretation or application thereof by any Governmental Authority, has made it unlawful for such Lender to make or maintain the Loans under the Euro-Rate Option (including but not limited to acquiring Eurodollar liabilities to fund such Loans), such Lender shall give notice of such determination to the Borrower and the other Lenders.  Notwithstanding any provision of this Agreement to the contrary, unless and until the affected Lender shall have given notice to the Borrower and the other Lenders that the circumstances giving rise to such determination no longer apply:

(i)            with respect to any Interest Periods thereafter commencing, interest on the Loans bearing interest at the Adjusted Euro-Rate (whichever one or more have been determined by the affected Lender to be unlawful) shall, unless the Borrower shall have selected a different Option which is then available, be computed and payable under the Base Rate Option; and

(ii)            on such date, if any, as shall be required by law, any Loans bearing interest at the Adjusted Euro-Rate then outstanding shall be automatically converted to the Base Rate Option, and the Borrower shall pay to the affected Lender the accrued and unpaid interest on such Loans to (but not including) the date of such conversion at the applicable interest rate or rates in effect for such Loans prior to such conversion.

2.3e            Change of Lending Office.  Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.3a, 2.3b or 2.3d with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.3a, 2.3b or 2.3d.  In determining whether designating another lending office would cause such Lender or its lending office(s) to suffer economic disadvantage, such Lender may disregard any economic disadvantage that the Borrower agrees in form and substance satisfactory to such Lender to indemnify and hold such Lender harmless therefrom.

2.4            Fees.

2.4a            Facility Fee.  The Borrower agrees to pay to the Lenders, on a pro rata basis, beginning on March 31, 2003, and continuing quarterly in arrears thereafter on the last day of each June, September, December and March during the term hereof to and including the Termination Date, a facility fee (the "Facility Fee") calculated at a rate per annum equal to the Facility Fee Rate on the daily (computed at the opening of business) average amount of the Commitment for the quarter then ending; provided, however, the first payment under this Subsection 2.4b shall be only for the actual number of days elapsed between the Closing Date and March 31, 2003, and the last payment under this Subsection 2.4b shall be only for the actual number of days elapsed between the last quarterly payment date and the Termination Date.  If there isany change in the Facility Fee Rate applicable during the quarter, the Facility Fee shall be calculated with respect to each period that the Facility Fee Rate was in effect during such quarter.

2.4b            Certain Other Fees.  The Borrower agrees to pay to the Agent for the account of the Agent or any of the Lenders, as applicable, the fees set forth in that certain letter agreement among the Borrower, the Agent, NUI Corporation and Fleet Securities Inc. dated as of December 3, 2002, and the fees set forth in that certain letter agreement among the Borrower, the Agent and Fleet Securities, Inc. dated as of February 6, 2003 (collectively, the "Fee Letter"), each as the same may be amended from time to time, as and when payment of such fees is due as set forth therein.

2.5            Calculation of Interest and Facility Fee. The calculation of the amount of interest due and owing to each Lender shall be made by the Agent and shall be evidenced by the Agent posting the amount of interest due under each Lender's Loans to the Loan Account established by the Agent pursuant to Section 2.11. The Facility Fee shall be calculated on the basis of a 360 day year and actual number of days elapsed.  The calculation of the amount of the Facility Fee due and owing to each Lender shall be made by the Agent and shall be evidenced by posting such amount due under the Loan Account pursuant to Section 2.11.

2.6            Not Used.  

2.7            Substitution or Replacement of a Lender.  The Borrower shall have the right (provided that at such time, no Event of Default and no Potential Default has occurred and is continuing), in its sole discretion, to either:

(i)            repay, (A) at any time if Loans bearing interest under the Base Rate Option are the only Loans outstanding, or (B) subject to Section 2.9, upon three days prior notice if the Loans outstanding include Loans bearing interest under the Euro-Rate Option, the outstanding Loans of any Lender in whole, together with interest thereon and any other amount due such Lender pursuant to the terms of this Agreement, and to terminate the Commitment of such Lender; or

(ii)            seek a substitute lending institution or institutions (which may be one or more of the other Lenders) to purchase the Notes and assume the Loans, the Commitment and the other obligations of such Lender under this Agreement,

if any of the following conditions occur with respect to such Lender:

(i)            such Lender shall have delivered a notice or certificate pursuant to Section 2.3a or 2.3b; or

(ii)            the obligation of such Lender to make Loans which bear or are to bear interest under the Euro-Rate Option has been suspended pursuant to Subsection 2.3d;

Provided, any proposed substitute lending institution, which is not a Lender prior to the Borrower's selection thereof, must be acceptable to the Agent, whose consent shall not be unreasonably withheld or delayed, and provided, further that all of the provisions of Section 9.6 (with respect to any Lender) and Section 8.11 (if the affected Lender is the Agent) must be complied with.

2.8            Loan Repayment.  Each repayment of the Loans shall be in the minimum amount of $1,000,000, in the aggregate, or an integral multiple of $100,000 thereof, or such lesser amount as is actually outstanding thereunder.  The Borrower, upon (i) oral or written notice to Agent by 11:00 A.M. (eastern time) on the day of the proposed repayment, in the case of Loans bearing interest at the Adjusted Base Rate or (ii) three Business Days' prior oral or written notice to the Agent, in the case of Loans bearing interest at the Adjusted Euro-Rate, followed immediately thereafter by the Borrower's written confirmation to the Agent of any oral notice, may repay the outstanding amount of the Loans in whole or in part with accrued interest, fees and other amounts then due and payable on the amount repaid to the date of such repayment, subject to the payment of any additional amounts under Section 2.9 below.  The Borrower may prepay any Portion of the Loans bearing interest at the Adjusted Base Rate without premium or penalty.

Any repayment of the Loans shall increase, by the amount of that repayment, the unborrowed balance of the Commitment; it being contemplated that the Borrower may repay and reborrow from time-to-time under the Commitment until the Termination Date.  All Loans outstanding on the Termination Date shall become due and payable in full on such date.

2.9            Additional Payments by the Borrower.  If (i) the Borrower shall fail to make any payment due hereunder on the due date thereof, (ii) the Borrower shall make a payment, prepayment or conversion of any Euro-Rate Portion of the Loans on a day other than the last day of the applicable Interest Period, (iii) the Borrower shall convert any Portion to the Base Rate Option from another Option pursuant to Subsection 2.2d on a day other than the last day of the relevant Interest Period, or (iv) the Borrower shall fail on the date specified therefor to consummate any borrowing, conversion or renewal after giving a request for an extension of credit or notice of conversion or renewal, and, as a result of any such action or inaction, a Lender reasonably incurs any losses and expenses which it would not have incurred but for such action or inaction, the Borrower shall pay such additional amounts as will compensate the affected Lender for such losses and expenses, including the cost of reemployment of any funds prepaid at rates lower than the cost to the affected Lender of such funds.  Such losses and expenses, which the affected Lender shall exercise reasonable efforts to minimize, shall be specified in writing (setting forth, in reasonable detail, the basis of calculation) to the Borrower by the affected Lender, which writing shall be prima facie evidence of the amounts set forth therein, and such amounts shall be payable within 30 days of demand therefor.

2.10            Voluntary Reduction of Availability.  At any time and from time to time upon no less than two Business Days prior written notice to the Agent, provided no Indebtedness permitted under Section 5.13(h)(1) or related commitments are outstanding, the Borrower may terminate, in whole or in part, without penalty, the then unused portion of the Commitments, thereby causing a corresponding abatement of the Facility Fee with respect to the pro rata share so reduced, provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the aggregate principal amount of the Loans then outstanding would exceed the Commitments then in effect.  Each such reduction shall be in a minimum principal amount of $5,000,000 or in integral multiples thereof.  The Facility Fee shall cease to accrue with respect to any unused portion of the commitments so terminated on date of such termination.  Notice of termination once given shall be irrevocable and the portion of the Commitments so terminated shall not be available for borrowing once such notice has been given under the terms hereof.  The Agent shall promptly notify each Lender of its pro rata share of such terminated unused portion and the date of each such termination.

2.11            Loan Account.  The Agent shall open and maintain on its books a Loan Account in the name of the Borrower with respect to extensions of credit made, repayments, prepayments, the computation and payment of interest and the Facility Fee and the computation of other amounts due and sums paid and payable to each Lender pursuant to this Article II.  Such Loan Account shall be conclusive evidence barring manifest error as to the amount at any time due to any Lender from the Borrower pursuant to this Article II, provided, however, that the failure to make notations, or to make accurate notations, on the Loan Account including without limitation notations with respect to interest and Facility Fees pursuant to Section 2.5 shall not limit, expand or otherwise affect any obligations of the Borrower hereunder.

2.12            Payment from Accounts Maintained by Borrower.  In the event that any payment of principal, interest, Facility Fee or any other amount due to the Lenders or the Agent under this Agreement, the Notes or the other Loan Documents is not paid when due, the Agent is hereby authorized to effect such payment by debiting any demand deposit account of the Borrower maintained with the Agent (excluding however any special purpose fiduciary accounts, which are designated as such at the time of their creation, and mandated by applicable statutes, regulations or rules) and distributing such payment to the party to whom such amounts are due.  This right of debiting accounts of the Borrower is in addition to any right of set-off accorded the Lenders or the Agent hereunder or by operation of law.

2.13            Time, Place and Manner of Payments.  All payments to be made by the Borrower under the Notes (other than those provided for in Sections 2.3 and 2.9 hereof), and of all fees and any other amounts due hereunder (excepting the Fees owed to the Agent for its sole account) shall be made at the principal office of the Agent for the ratable account of the Lenders.  The Agent will promptly pay each such payment received to each Lender or its order in accordance with Section 8.9 hereof.  All payments due a Lender by reason of Sections 2.3 or 2.9 hereof shall be paid at the principal office of the Lender which invoices the Borrower for such payment.  All payments to be made by the Borrower under this Agreement shall be paid in Dollars and in immediately available funds no later than 3:00 P.M. (eastern time) on the date such payment is due, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature.

            2.14            Mandatory Prepayments.  Unless the Required Lenders otherwise agree, the Borrower shall prepay the Loans and reduce the Commitments in an amount equal to 100% of the net proceeds of any Debt Issuance on the date of incurrence thereof, together with accrued interest to such date on the amount prepaid.  Nothing in this Section 2.14 shall be construed to derogate any restriction or limitation contained in any Loan Document imposed on any transaction of the type described in this Section 2.14.

ARTICLE III.  REPRESENTATIONS AND WARRANTIES.

To induce the Lenders to enter into this Agreement and to make the Loans herein provided for, the Borrower represents and warrants to the Lenders that:

3.1            Corporate Existence.  The Borrower is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and it is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction where, because of the nature of its properties or businesses, such qualification is required or, if not so qualified or in good standing in any state, the lack of such qualification or good standing will not materially affect the Agent's or the Lenders' ability to enforce this Agreement, the Notes or the other Loan Documents or will not have a Material Adverse Effect on the Borrower's ability to carry on its business or the Borrower's ability to comply with this Agreement, the Notes or the other Loan Documents.

3.2            Corporate Authority.  The Borrower is duly authorized to execute and deliver this Agreement, the Notes and the other Loan Documents to which it is or will become a party; all necessary corporate action to authorize the execution and delivery of this Agreement, the Notes and the other Loan Documents to which it is or will become a party has been properly taken; and it is and will continue to be duly authorized to borrow hereunder and to perform all of the other terms and provisions of this Agreement, the Notes and the other Loan Documents to which it is or will become a party.

3.3            Enforceability.  This Agreement and the Notes have each been, and each other Loan Document to which it will become a party will be, duly and validly executed and delivered by the Borrower and each constitutes or will constitute a valid and legally binding agreement of the Borrower enforceable in accordance with its terms.

3.4            No Restrictions, No Default.  Neither the execution and delivery of this Agreement, the Notes and the other Loan Documents to which it is or will become a party, the consummation of the transactions herein contemplated nor compliance with the terms and provisions hereof or of the Notes, will conflict with or result in a breach of any of the terms, conditions or provisions of the certificate of incorporation or the by-laws of the Borrower or of any law or of any regulation, order, writ, injunction or decree of any court or governmental agency or of any agreement, indenture or other instrument to which the Borrower is a party or by which it is bound or to which it is subject, or constitute a default thereunder or result in the creation or imposition of any Encumbrance of any nature whatsoever upon any of the property or assets of the Borrower pursuant to the terms of any agreement, indenture or other instrument, except those restrictions which, individually or in the aggregate, would not have a Material Adverse Effect upon the Borrower.  Except as would not have a Material Adverse Effect, the Borrower has good record and marketable title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all of its other property, and none of such property is subject to any Encumbrance except as permitted by Section 5.2.  No event has occurred and is continuing and no condition exists or will exist after giving effect to the borrowings hereunder to be made on the Closing Date which constitutes an Event of Default or Potential Default.

3.5            Financial Statements.  The Borrower has furnished to the Lenders and the Agent the consolidated balance sheets and the related consolidated statements of income, shareholders' equity and changes in financialposition of the Borrower for the Fiscal Years ending September 30, 2001 and September 30, 2002.  All such financialstatements, including the related notes, have been prepared in accordance with GAAP, except as expressly noted therein and, in the case of the aforementioned quarterly financial statements, subject to changes resulting from year-end adjustments, and fairly present the financial position and consolidated financial positions of the Borrower as at the dates thereof and the results and consolidated results of their operations and the changes in their financial position and in their consolidated financial position for the periods ended on such dates.  There were no material liabilities of the Borrower, contingent or otherwise, not reflected in such financial statements.  Except as has otherwise been fully disclosed in NUI Corporation's Form 10-K filed on December 31, 2002 with the Securities and Exchange Commission, there has been no Material Adverse Change in the business, condition or operations (financial or otherwise) of the Borrower from September 30, 2002 to the Closing Date.

3.6            Absence of Litigation.  There are no actions, suits, investigations, litigation or governmental proceedings pending or, to the Borrower's knowledge, threatened against the Borrower or any of its properties, which would have a Material Adverse Effect on the Borrower, or which purport to affect the legality, validity or enforceability of this Agreement or the Notes.

3.7            Tax Returns and Payments.  As of the date hereof, the Borrower has filed all Federal and other material tax returns required by law to be filed and have paid all material taxes, material assessments and other material governmental charges levied upon the Borrower, or any of its properties, assets, income or franchises of the Borrower, which are due and payable, other than those currently payable or deferrable without penalty or interest or those which are being contested in good faith and by appropriate proceedings diligently conducted for which reserves in accord with GAAP have been provided.  As of the date hereof, the charges, accruals and reserves on the books of the Borrower in respect of Federal, state and local income taxes for all fiscal periods are adequate, and the Borrower knows of no unpaid assessments for additional Federal, state or local income taxes for any such fiscal period or any basis therefor.

3.8            Pension Plans.  Except as otherwise noted on Schedule 3.8, (i) each Plan has been and will be maintained and funded, in all material respects, in accordance with its terms and with all provisions of ERISA and the Code applicable thereto; (ii) no Reportable Event has occurred and is continuing with respect to any Plan; (iii) no liability to PBGC has been incurred with respect to any Plan, other than for premiums due and payable; (iv) no Plan has been terminated, no proceedings have been instituted to terminate any Plan, and there exists no intent to terminate or institute proceedings to terminate any Plan, which has caused or would cause the Borrower or any ERISA Affiliate to incur any liability to the PBGC under Title IV of ERISA; (v) no withdrawal, either complete or partial, has occurred or commenced with respect to any multiemployer Plan, and there exists no intent to withdraw either completely or partially from any multiemployer Plan and (vi) the Borrower is not subject to any liability for unpaid penalties or taxes imposed under Section 502(i) of ERISA or Section 4975 of the Code and has not engaged in a prohibited transaction as defined in Section 406 of ERISA and Section 4975 of the Code.

3.9            Compliance with Applicable Laws.  The Borrower (i) is not in default with respect to any order, writ, injunction or decree of any court or of any Federal, state, municipal or other Governmental Authority; and (ii) is substantially complying with all applicable statutes and regulations of each Governmental Authority having jurisdiction over its activities; except for those orders, writs, injunctions, decrees, statutes and regulations, non-compliance with which would not have a Material Adverse Effect upon the Borrower.

3.10            Environmental Matters.  Except to the extent described in NUI Corporation's most recently filed Form 10-K, Form 10-Q or Form 8-K, the Borrower is in compliance with all applicable Environmental Laws, except for matters which do not have a Material Adverse Effect on the financial condition of the Borrower.

3.11            Governmental Approval.  No order, authorization, consent, license, validation or approval of, or notice to, filing, recording, or registration with, any Governmental Authority, or exemption by any Governmental Authority, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Agreement, the Notes or the other Loan Documents to which it is a party or (ii) the legality, binding effect or enforceability of this Agreement, the Notes or the other Loan Documents to which it is a party.

3.12            Regulations T, U and X.  The Borrower is not engaged in the business of purchasing or selling Margin Stock or extending credit to others for the purpose of purchasing or carrying Margin Stock and no part of the proceeds of the Loans will be used to purchase or carry any Margin Stock or for any other purpose which would violate or be inconsistent with Regulations T, U or X.

3.13            Investment Company Act.  The Borrower is not an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended.

3.14            Public Utility Holding Company Act.  The Borrower is a utility subject to regulation under the Public Utility Holding Company Act of 1935, as amended.

3.15            Disclosure.  Neither this Agreement nor any other document, certificate or statement furnished to the Lenders or the Agent by or on behalf of the Borrower pursuant to this Agreement contains any untrue statement of a material fact.  There is no fact known to the Borrower which materially and adversely affects or in the future may (so far as the Borrower now foresees) have a Material Adverse Effect on the business, operations, affairs, condition, prospects, properties or assets of the Borrower, which has not been set forth in this Agreement or in the other documents, certificates and statements (financial or otherwise) furnished to the Lenders or the Agent or otherwise disclosed in writing to the Lenders or the Agent by or on behalf of the Borrower prior to or on the date hereof.

3.16            No Subsidiaries.  The Borrower has no Subsidiaries.

ARTICLE IV.            AFFIRMATIVE COVENANTS.

From the date hereof and thereafter until the termination of the Commitments and until all of the Bank Indebtedness is paid in full, the Borrower agrees that:

4.1            Use of Proceeds.  The proceeds of the Loans will be used by the Borrower solely (i) for general corporate purposes of the Borrower, (ii) for working capital purposes in the ordinary course of business of the Borrower, (iii) to pay fees and expenses incurred in connection with the execution and delivery of the Loan Documents, and (iv) to repay amounts due and payable under the Existing Credit Agreement as required by Section 6.2(xi).

4.2            Furnishing Information.  The Borrower shall:

(i)            deliver to the Agent (with copies for each Lender which Agent shall distribute) within 55 days after the end of each of the first three Fiscal Quarters in each Fiscal Year of the Borrower, (A) balance sheets as at the end of such period for the Borrower, and (B) statements of income for such period for the Borrower and, in the case of the second and third quarterly periods, for the period from the beginning of the current Fiscal Year to the end of such quarterly period; and each such statement shall set forth, in comparative form, corresponding figures for the corresponding period in the immediately preceding Fiscal Year and all such statements shall be prepared in reasonable detail in accordance with GAAP and certified, subject to changes resulting from year-end adjustments, by the chief financial officer or treasurer of the Borrower;

(ii)            deliver to the Agent (with copies for each Lender which Agent shall distribute) within 100 days after the end of each Fiscal Year of the Borrower, (A) balance sheets as at the end of such year for the Borrower, and (B) statements of income for such year for the Borrower; and each such statement shall set forth, in comparative form, corresponding figures for the immediately preceding Fiscal Year; and all such financial statements shall present fairly in all material respects the financial position of the Borrower, as at the dates indicated and the results of its operations and its cash flow for the periods indicated, in conformity with GAAP; and the Borrower shall furnish to the Agent (with copies for each Lender which the Agent shall distribute) the audited consolidated financial statements of NUI Corporation (of which the Borrower is a Subsidiary in its consolidated group) for such Fiscal Year furnished under the NUI Corporation Credit Agreement;

(iii)            deliver to the Agent (with copies for each Lender which Agent shall distribute), together with each delivery of financial statements pursuant to items (i) and (ii) above, a Compliance Certificate of the Borrower substantially in the form of Exhibit "D" hereto, properly completed and signed by an Authorized Officer of the Borrower, (A) stating (1) that such officer has reviewed the terms of the Loan Documents and has made, or caused to be made under his supervision, a review of the transactions and condition of the Borrower during the accounting period covered by such financial statements and that such review has not disclosed any failure by the Borrower during such period to observe or perform all of its covenants and other agreements, nor any failure to satisfy every condition contained in this Agreement, the Notes and the other Loan Documents to which it is a party during such accounting period, and (2) that the Borrower does not have knowledge of the existence, as at the date of such Compliance Certificate, of any condition or event which constitutes an Event of Default or a Potential Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken or is taking or proposes to take with respect thereto, and (B) demonstrating in reasonable detail compliance as at the end of such accounting period with the covenants contained in Sections 5.3a and 5.3b hereof;

(iv)            promptly give written notice to the Agent of any pending or, to the knowledge of the Borrower, overtly threatened claim in writing, litigation or threat of litigation which arises between the Borrower and any other party or parties (including, without limitation, any Governmental Authority, which claim, litigation or threat of litigation, individually or in the aggregate, is reasonably likely to cause a Material Adverse Change, any such notice to be given not later than five Business Days after the Borrower becomes aware of the occurrence of any such claim, litigation or threat of litigation;

(v)            deliver to the Agent (with copies for each Lender which Agent shall distribute) promptly upon their becoming available, copies of all financial statements, reports, notices and information statements sent or made available generally by the Borrower to its security holders (including, without limitation, proxy materials) and copies of all other regular and periodic reports (including, without limitation, Form 8-K) filed by NUI Corporation with the Securities and Exchange Commission or any Governmental Authority succeeding to any of its functions, and of all press releases and other statements made available generally by the Borrower to the public concerning material developments in the business of the Borrower;

(vi)            promptly after receipt thereof, by the Borrower or the administrator of any Plan, deliver to the Lenders a copy of any notice from the PBGC that the PBGC is instituting Termination Proceedings;

(vii)            deliver to the Agent within two Business Days after S&P or Moody's announces a change in the Borrower's Senior Ratings, or the withdrawal of any Senior Ratings, notice of such change or withdrawal, together with a copy of any written notification which Borrower received from the applicable rating agencies regarding such change or withdrawal of Senior Ratings;

(viii)            promptly and in any event within 30 days after the Borrower or the administrator of any Plan knows or has reason to know that any Reportable Event has occurred which would cause the PBGC to institute Termination Proceedings give notice thereof to the Agent;

(ix)            promptly, but not later than five Business Days, after any officer obtains knowledge of the happening of any event having a Material Adverse Effect or which constitutes an Event of Default or a Potential Default, give written notice thereof to the Agent; and

(x)            promptly, deliver to the Lenders such other information and data with respect to the Borrower as from time to time may be reasonably requested by any Lender.

4.3            Visitation.  The Borrower will keep complete and proper books of record and account in accordance with GAAP and will permit the Lenders and each Lender's designated employees and agents to have access, from time to time, upon reasonable notice (except no such notice shall be required after the occurrence and during the continuance of an Event of Default) and during normal business hours at any reasonable time, to visit any of the properties of the Borrower, to examine and make copies of any of its books of record and account and such reports and returns as the Borrower may file with any Governmental Authority and discuss the Borrower's affairs and accounts with, and be advised about them, by any Authorized Officer.

4.4            Preservation of Existence; Qualification.  At its own cost and expense, the Borrower will continue to engage in business of the same general type as now conducted by it and will do all things necessary to preserve and keep in full force and effect its corporate existence and qualification under the laws of its state of incorporation and each state where, due to the nature of its activities or the ownership of its properties, qualification to do business is required except where the failure to be so qualified would not have a Material Adverse Effect upon the Borrower.

4.5            Compliance with Laws and Contracts.  The Borrower shall comply with all applicable Governmental Rules (including, but not limited to, Environmental Laws), except where failure to comply would not have a Material Adverse Effect on the Borrower.

4.6            Payment of Taxes and Other Liabilities.  The Borrower shall promptly pay and discharge all obligations, accounts and liabilities to which it is subject or which are asserted against it at or before maturity or before they become delinquent, as the case may be, and which obligations, accounts and liabilities are material, including but not limited to all taxes, assessments and governmental charges and levies upon it or upon any of its income, profits, or property prior to the date on which penalties attach thereto to the extent that the non-payment of which would in the aggregate have a Material Adverse Effect upon the Borrower; provided, however, that for purposes of this Agreement, the Borrower shall not be required to pay any item (i) the payment of which is being contested in good faith by appropriate and lawful proceedings diligently conducted and (ii) as to which the Borrower shall have set aside on its books reserves for such claims as are determined to be adequate pursuant to the accounting procedures employed by the Borrower.

4.7            Insurance.  The Borrower will keep and maintain insurance with financially sound and reputable insurance companies on each of its properties, in such amounts and against such risks as is customarily maintained by similar businesses similarly situated and owning, leasing or operating similar properties.  The Borrower may satisfy the requirements of the preceding sentence with self insurance and deductibles consistent with customary and prudent industry standards.  The Borrower will furnish to the Agent at the Closing and together with the annual reports delivered pursuant to Subsection 4.2(ii) hereof, a certificate of an Authorized Officer of the Borrower certifying that such insurance is in force, provides coverage consistent with the preceding sentence and complies with the Borrower's obligations under this Section 4.7.

4.8            Maintenance of Properties.  The Borrower shall maintain, preserve, protect and keep its properties in good repair, working order and condition (ordinary wear and tear excepted), and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly and advantageously conducted at all times, except where the failure to maintain, preserve, protect or keep such properties would not have a Material Adverse Effect upon the Borrower.

4.9            Plans and Benefit Arrangement.  The Borrower shall, and shall cause each ERISA Affiliate to, comply with ERISA, the Code and all other applicable laws which are applicable to Plans, except where the failure to do so, alone or in conjunction with any other failure to do so, would not have a Material Adverse Effect upon the Borrower.

4.10            Senior Debt Status.  The Bank Indebtedness will rank at least pari passu in priority of payment with all other Indebtedness of the Borrower, except Indebtedness of the Borrower which may be secured by Encumbrances permitted pursuant to Section 5.2.

4.11            Ownership .  The Borrower shall at all times during the term hereof be a direct 100% wholly owned Subsidiary of NUI Corporation.

4.12            Cash Management.  On or before November 12, 2003, the Borrower shall cause all of its receivables and other revenues to be collected and deposited into and maintained in a segregated account or accounts of the Borrower (the "New Collection System") and the proceeds of such receivables and other revenues shall not be commingled with funds of NUI Corporation or its other Subsidiaries and shall only be used to pay out of such account or accounts obligations of the Borrower and to make dividends and for other uses to the extent expressly permitted hereunder.  At all times until such New Collection System is in place, the Agency Services Agreement is and will remain in full force and effect and the Borrower's receivables and other revenues shall be collected by NUI Corporation, but title thereto shall remain with the Borrower, and expenses and other payables of or on behalf of the Borrower shall be paid by NUI Corporation on behalf of the Borrower, all in accordance with the provisions of the Agency Services Agreement and Governmental Rules.  The Borrower shall ensure that the use of such receivables and revenues by NUI Corporation at all times complies with this Agreement.

ARTICLE V.            NEGATIVE COVENANTS.

From the date hereof and thereafter until the Commitments are terminated and until the Bank Indebtedness is paid in full, the Borrower agrees that:

5.1            Dividends, Etc.  The Borrower will not 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 equity interests of the Borrower, or purchase, redeem or otherwise acquire for value any shares of any class of equity interests of the Borrower or any warrants, rights or options to acquire any such shares, now or hereafter outstanding (such declarations, payments, other distributions, purchases, redemptions, or other acquisitions being herein called "Restricted Payments"), except that the Borrower may (a) declare and make any dividend payment or other distribution payable solely in common equity interests of the Borrower, and (b) purchase, redeem or otherwise acquire shares of its common equity interests or warrants, rights or options to acquire any such shares with the proceeds received from substantially concurrent issue of new shares of its common equity interests and (c) declare or pay cash dividends to NUI Corporation and purchase, redeem or otherwise acquire shares of its equity interests or warrants, rights or options to acquire for consideration of any such shares, so long as the aggregate of such Restricted Payments made, paid or declared since the Closing Date would not exceed the lesser of $100,000,000 or retained earnings of the Borrower on the date of such Restricted Payment; provided, that (x) immediately after giving effect to any such proposed Restricted Payments, no Potential Default or Event of Default would exist and (y) no such payment shall violate any Governmental Rule. 

5.2            Encumbrances.  The Borrower will not create or suffer to exist any Encumbrance or any other type of preferential arrangement, upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign any right to receive income, in each case to secure or provide for the payment of any Indebtedness of any Person, other than Permitted Encumbrances.

5.3a            Leverage Ratio.  At no time shall its ratio of Consolidated Total Indebtedness to its Consolidated Total Capitalization exceed the amount set forth below for each relevant period set forth below:

                        Period                                                                            Ratio

                        March 1 of each year to and

                        including August 31 of such year:                                 .65:1.00

September 1 of each year to and

including February 28 (or 29, if applicable)

of the following year:                                                  .70:1.00

5.3b            Fixed Charge Coverage Ratio.  At no time shall the Borrower permit, for any period of four consecutive Fiscal Quarters ending on or after September 30, 2002, the ratio of (i) the sum of (A) Consolidated Net Income for such period plus (B) income taxes deducted in determining such Net Income plus (C) Consolidated Fixed Charges for such period; to (ii) Consolidated Fixed Charges for such period, to be less than 1.75 to 1.00.

5.4            Acquisitions.  Unless otherwise consented to by the Required Lenders (such consent not to be unreasonably withheld), the Borrower will not acquire the assets of any Person or any shares of capital stock of, or other equity interest in, any Person, except for Permitted Acquisitions.

5.5            Sales of Assets.  The Borrower shall not enter into any arrangement, direct or indirect, pursuant to which the Borrower shall sell or otherwise transfer or dispose of, in a single transaction or a series of transactions, all or any substantial part of its assets; provided, however, a sale or transfer by the Borrower of securitization receivables in connection with a securitization permitted under Section 5.13(i) shall not be prohibited hereunder.

5.6            Merger.  The Borrower shall not merge or consolidate with any other Person.

5.7            Regulation T, U and X Compliance.  The Borrower shall not use the proceeds of a Loan to purchase or carry Margin Stock or otherwise act so as to cause any Lender, in extending credit hereunder, to be in contravention of Regulations T, U or X.

5.8            ERISA.  The Borrower shall not and shall not permit any ERISA Affiliate to permit any Plan to:

(i)            engage in any "prohibited transaction", as such term is defined in Section 406 of ERISA and Section 4975 of the Code;

(ii)            incur any "accumulated funding deficiency", as such term is defined in Section 302 of ERISA, whether or not waived;

(iii)            be terminated in a manner which could result in liability to the PBGC under Title IV of ERISA or the imposition of a lien on the property of the Borrower or any ERISA Affiliate pursuant to Section 4068 of ERISA; or

(iv)            partially or completely withdraw from any Plan, which withdrawal shall

subject the Borrower or any ERISA Affiliateto multiemployer withdrawal liability pursuant to Section 4201 of ERISA.

5.9            Restrictive Agreements.  The Borrower shall not enter into or otherwise be bound by any agreement not to pay dividends or make distributions to NUI Corporation, except for such agreements existing on the date hereof which have been fully disclosed in writing to Agent and replacements of such agreements (provided that copies of such replacement agreements are provided to the Agent and are no more restrictive than those agreements being replaced).

5.10            [Intentionally Omitted.]

5.11            Subsidiaries.  The Borrower shall not create, nor permit to exist, any Subsidiary.

            5.12            Limitation on Capital Expenditures.  The Borrower shall not make or commit to make (by way of the acquisition of securities of a Person or otherwise) any expenditure in respect of the purchase or other acquisition of fixed or capital assets (other than those expenditures in connection with Permitted Acquisitions), except for expenditures, when added to such expenditures made by NUI Corporation and its other Subsidiaries, not exceeding during any of its Fiscal Years ending after the Closing Date, the amount of $75,000,000.

            5.13            Limitation on Indebtedness.  The Borrower shall not, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:

                        (a)            Indebtedness in respect of the Loans, the Notes and the other obligations of the Borrower under this Agreement;

                        (b)            Indebtedness of the Borrower incurred solely in order to finance the purchase of new fixed or capital assets (including pursuant to capital leases) in an aggregate principal amount not exceeding $10,000,000 at any time outstanding;

                        (c)            Indebtedness listed on Schedule 5.13 and renewals, extensions and modifications thereof which do not increase the principal amount thereof;

                        (d)            Indebtedness incurred in connection with Hedging Obligations, provided that such Hedging Obligations shall be in the ordinary course of business consistent with past practices;

                        (e)            Indebtedness incurred in connection with sale-leaseback transactions permitted by Section 5.19 hereof;

                        (f)            Indebtedness with respect to standby letters of credit issued by a bank for the benefit of the Borrower in an aggregate face amount not to exceed $10,000,000, which letters of credit expire by their terms after the Termination Date;

            (g)            Indebtedness to third party sellers in connection with Permitted Acquisitions, provided that (1) both before and after giving effect to the incurrence of such Indebtedness, no Potential Default or Event of Default shall occur and be continuing, and (2) the payment of such Indebtedness shall be subordinated to all Bank Indebtedness, with the terms and conditions of such subordination reasonably acceptable to the Agent;

            (h)            Indebtedness of the Borrower under the Senior Credit Agreement to the extent of the "Total Commitment" thereunder in effect on the date hereof; and additional Indebtedness with respect to increases in the "Total Commitment" relating to "Increase Requests" thereunder; provided that (1) all of the proceeds of such increases are used to pay or prepay Bank Indebtedness hereunder, together with accrued and unpaid interest thereon, and (2) the Total Commitment hereunder is permanently reduced in the amount of such payment or prepayment, all pursuant to Section 2.14; and further provided that the sum of (A) the Total Commitment of the Borrower under this Agreement, (B) the "Total Commitment" of the Borrower under and as defined in the Senior Credit Agreement, (C) the "Total Commitment" of NUI Corporation under and as defined in the NUI Corporation Credit Agreement, and (D) the aggregate principal amount of Indebtedness incurred by the Borrower and, without duplication, any corresponding commitments to extend credit to the Borrower pursuant to Section 5.13(i) of this Agreement shall not exceed $195,000,000 in aggregate principal at any time;

            (i)            Indebtedness of the Borrower relating to a securitization, private debt placement or other financing reasonably acceptable to the Agent in a principal amount not to exceed $45,000,000; provided that (1) all of the proceeds thereof are used to pay or prepay Bank Indebtedness hereunder, together with accrued and unpaid interest thereon, and (2) the Total Commitment hereunder is permanently reduced in the amount of such payment or prepayment, all pursuant to Section 2.14; and further provided that the sum of (A) the Total Commitment of the Borrower under this Agreement, (B) the "Total Commitment" of the Borrower under and as defined in the Senior Credit Agreement, (C) the "Total Commitment" of NUI Corporation under and as defined in the NUI Corporation Credit Agreement, and (D) the aggregate principal amount of Indebtedness incurred by the Borrower and, without duplication, any corresponding commitments to extend credit to the Borrower pursuant to this Section 5.13(i) shall not exceed $195,000,000 in aggregate principal at any time;

            (j)            Indebtedness in principal amount outstanding not to exceed $15,000,000 in the aggregate for the Borrower under lines of credit offered by commercial banks to the Borrower to finance the working capital needs of the Borrower.

            5.14            Limitation on Contingent Obligations.  The Borrower shall not create, incur, assume or suffer to exist any Guarantee.

            5.15            [Intentionally Omitted].

5.16            Limitation on Investments, Loans and Advances.  The Borrower shall not purchase, hold or acquire beneficially any stock, other securities or evidences of Indebtedness of, make or permit to exist any loans or advances to, or make or permit to exist any investment or acquire any interest whatsoever in, any other Person, except:

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

(b)            Permitted Investments;

(c)            loans and advances to employees of the Borrower for travel, entertainment and relocation expenses in the ordinary course of business;

(d)            Permitted Acquisitions; and

(e)            securities acquired in connection with the bankruptcy of any supplier or customer in the ordinary course of business and consistent with past practices or in connection with the settlement of delinquent accounts of any such supplier or customer.

5.17            Limitation on Optional Payments and Modifications of Debt Instruments.  The Borrower shall not make any optional payment or prepayment on or redemption, defeasance or purchase of any Indebtedness (other than Indebtedness under this Agreement and Indebtedness permitted under Section 5.13(h)), or amend, modify or change, or consent or agree to any amendment, modification or change to its certificate of incorporation which could reasonably be expected to result in a Material Adverse Effect or to the Agency Services Agreement or to any of the terms relating to the payment or prepayment or principal of or interest on, any such Indebtedness, other than any amendment, modification or change which would extend the maturity or reduce the amount of any payment of principal thereof or which would reduce the rate or extend the date for payment of interest thereon.

5.18            Transactions with Affiliates.  The Borrower shall not enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction (a) is permitted under this Agreement or is in the ordinary course of the Borrower's business and (b) is upon fair and reasonable terms no less favorable to the Borrower than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate.

5.19            Sale and Leaseback.  The Borrower shall not enter into any arrangement with any Person providing for the leasing by the Borrower of real or personal property which has been or is to be sold or transferred by the Borrower to such Person if such arrangement(s), individually or in the aggregate and together with all such arrangements entered into by NUI Corporation and its other Subsidiaries, involve(s) aggregate consideration exceeding $70,000,000.

ARTICLE VI.  CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT

6.1            All Extensions of Credit.  The obligation of the Lenders to make any extension of credit (including, without limitation, its initial extension of credit) is subject to the satisfaction of each of the following conditions precedent:

6.1a            No Default.  The Borrower shall have performed and complied, in all material respects, with all agreements and conditions herein required to be performed or complied with by it prior to any extension of credit and, at the time of such extension of credit, no Potential Default or Event of Default shall exist.

6.1b            Representations Correct.  The representations and warranties contained in Article III hereof shall be correct in all material respects (i) when made and (ii) at the time of each extension of credit except for such representations and warranties which relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects as of such date) and no Material Adverse Change has occurred, or will occur, as a result of such extension of credit.

6.1c            Extension of Credit Requirements.  The Borrower shall have complied with the requirements of Section 2.1 with respect to the requested extension of credit.

Each request for an extension of credit shall constitute, as at the time made, a representation and warranty by the Borrower that the matters set forth in Sections 6.1a and 6.1b above are true and correct.

6.2            Conditions Precedent to the Initial Extensions of Credit Under the Commitments.  The effectiveness of this Agreement and the obligation of the Lenders to make the initial extensions of credit are subject to the satisfaction of each of the following conditions precedent in addition to the applicable conditions precedent set forth in Section 6.1 above:

(i)            Receipt by the Agent on behalf of each Lender of a counterpart original of this Agreement executed by the other Lenders and the Borrower.

(ii)            Receipt by the Agent on behalf of each Lender of a Note, substantially in the form of Exhibit "B" attached hereto, made payable to such Lender in the amount of such Lender's Commitment and otherwise properly completed and executed by the Borrower.

(iii)            Receipt by the Agent of a certified copy (certified by the appropriate governmental official) of the Borrower's Certificate of Incorporation which certification is dated not more than 30 days prior to the Closing.

(iv)            Receipt by the Agent of a certificate, duly certified as of the date of the Closing by the secretary or assistant secretary of the Borrower as to (A) the By-Laws of the Borrower in effect as of the Closing, (B) the resolutions of the Borrower's Board of Directors authorizing the borrowings hereunder and the execution and delivery of this Agreement, the Notes, and all documents supplemental hereto, and (C) the names of the officers of the Borrower authorized to sign this Agreement, the Notes and all supplemental documentation, and which contains a true signature of each such officer.

(v)            Receipt by the Agent of a good standing certificate for the Borrower from the Secretary of State of the State of New Jersey dated not more than 30 days prior to the date of Closing.

(vi)            Receipt by the Agent of the certificate of the Borrower required pursuant to Section 4.7 of this Agreement and a solvency certificate in the form of Exhibit "G" hereto.

(vii)            Receipt by the Agent of written disbursement instructions addressed to the Agent and executed by an Authorized Officer of the Borrower relating to the initial extensions of credit.

(viii)            Receipt by the Agent on behalf of each Lender of a signed favorable opinion of James Van Horn, general counsel to the Borrower, dated as of the Closing Date and in form and substance satisfactory to Agent and its counsel as to the matters set forth on Exhibit "E" attached hereto.

(ix)            The representations and warranties of the Borrower contained in Article III and in the other Loan Documents executed and delivered by the Borrower in connection with the Closing shall be true and correct in all material respects on and as of the Closing 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 date or times referred to therein), and the Borrower shall have performed, observed and complied with all covenants and conditions hereof and contained in the other Loan Documents; no Event of Default or Potential Default under this Agreement shall have occurred and be continuing or shall exist; except as disclosed in NUI Corporation's Form 10-K filed on December 31, 2002 with the Securities and Exchange Commission, no Material Adverse Change shall have occurred; and there shall be delivered to the Agent, for the benefit of each Lender and the Agent, a certificate of the Borrower, dated the Closing Date and signed by an Authorized Officer of the Borrower, to each such effect.

(x)            Receipt by the Agent on its own behalf and on behalf of the Lenders of all Fees due and payable on or prior to the Closing Date and all invoiced reimbursable expenses incurred on or prior to the Closing Date.

(xi)            The NUI Corporation Credit Agreement shall be in full force and effect, providing for a "Total Commitment" thereunder of not less than $38,076,923.10 and all amounts owing to the Lenders under the "Existing Credit Agreement" as defined in the NUI Corporation Credit Agreement shall have been, or shall be concurrently with the making of the first loans thereunder, repaid in full and all commitments under such "Existing Credit Agreement" of NUI Corporation shall have been terminated.

(xii)            The Senior Credit Agreement shall be in full force and effect, providing for a "Total Commitment" thereunder of not less than $96,923,076.90; and all amounts owing to the lenders under the Existing Credit Agreement shall have been, or shall be concurrently with the making of the first Loans hereunder, repaid in full, and the Existing Credit Agreement shall terminate and be of no further force and effect upon such repayment; in each case pursuant to such payout letters and other documents as the Agent may require, each of which shall be in form and substance satisfactory to the Agent.

            (xiii)            Receipt by the Agent of a copy of the fully executed Agency Services Agreement among NUI Corporation and its Subsidiaries (including the Borrower), effective on or prior to the Closing Date, in form and substance acceptable to the Agent and its counsel (the "Agency Services Agreement").

ARTICLE VII.            DEFAULTS

Each of the events or occurrences described in Sections 7.1 to and including 7.10 below shall constitute an "Event of Default" hereunder.

7.1            Payment Default.  Default in the payment of (i) interest on any Loan, any other Bank Indebtedness, the Facility Fee, or any other amount due hereunder, and continuance of any such nonpayment of such interest, Facility Fee or other amount for five Business Days or (ii) principal of any Loan when due.

7.2            Nonpayment of Other Indebtedness.  The Borrower shall fail to pay any Indebtedness of the Borrower other than the Bank Indebtedness, in an aggregate amount of $15,000,000 or more, as and when the same shall become due, or the occurrence of any default under any agreement or instrument under or pursuant to which such Indebtedness is incurred or issued and continuance of such default beyond the period of grace, if any, allowed with respect thereto, if such default permits or causes the acceleration of such Indebtedness or the termination of any commitment to lend with respect thereto.

7.3            Insolvency.

7.3a            Involuntary Proceedings.  A proceeding shall have been instituted in a court having jurisdiction seeking a decree or order for relief in respect of the Borrower in an involuntary case under the Federal bankruptcy laws, or any other similar applicable Federal or state law, now or hereafter in effect, or for the appointment of a receiver, liquidator, trustee, sequestrator or similar official for the Borrower or for a substantial part of its property, or for the winding up or liquidation of its affairs, and the same shall remain undismissed or unstayed and in effect for a period of 60 days.

7.3b            Voluntary Proceedings.  The Borrower shall institute proceedings to be adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization under the Federal bankruptcy laws, or any other similar applicable Federal or state law now or hereinafter in effect, or shall consent to the filing of any such petition or shall consent to the appointment of a receiver, liquidator, trustee, sequestrator or similar official for the Borrower or for a substantial part of its property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or corporate action shall be taken by the Borrower in furtherance of any of the aforesaid purposes.

7.4            Termination of Existence.  The Borrower shall terminate its existence or cease to exist.

7.5            Failure to Comply with Covenants.

7.5a            Failure to Comply with Certain Article IV Covenants and Article V Covenants.  The Borrower shall default in the observance or performance of Section 4.3, Section 4.4, Section 4.10, Section 4.11, Section 4.12 or of any covenant contained in Article V.

7.5b            Failure to Comply with Other Covenants.  The Borrower shall default in the due performance or observance of any other covenant, condition or provision set forth herein and such default shall not be remedied (i) with respect to any default under Section 4.2(ix) for a period of ten days; and (ii) with respect to any other such default for a period of 30 days after such default is known to any officer of the Borrower or notice thereof has been given to the Borrower by the Agent (such grace period to be applicable only in the event such default can be remedied by corrective action of the Borrower as determined by the Agent in its sole discretion).

7.6            Misrepresentation.  Any representation or warranty made by the Borrower herein proves to have been untrue in any material respect as of the date when made, or any certificate or other document furnished by the Borrower to the Agent or any Lender pursuant to the provisions hereof proves to have been untrue in any material respect on the date as of which the facts set forth therein are stated or certified.

7.7            Adverse Judgments, Etc.  Entry or filing of any one or more judgments, writs or warrants of attachment or of any similar process in an aggregate amount of $2,500,000 or more in excess of any third-party insurance protecting against such liability against the Borrower or against any of its properties and failure of the Borrower to vacate, pay, bond, stay or contest in good faith such judgments, writs, warrants of attachment or other process within a period of 30 days.

7.8            Invalidity or Unenforceability.  This Agreement, the Notes or any other Loan Document ceases to be valid and binding on the Borrower or is declared null and void, or the validity or enforceability thereof is contested by the Borrower or the Borrower denies it has any or further liability under this Agreement, any Note or under the other Loan Documents to which it is a party.

7.9            ERISA.  (i) A trustee shall be appointed by a court of competent jurisdiction to administer any Plan of the Borrower or any ERISA Affiliate; (ii) the PBGC shall terminate any Plan of the Borrower or any ERISA Affiliate or appoint a trustee to administer any such Plan; or (iii) the Borrower or any ERISA Affiliate shall incur any liability to the PBGC in connection with any Plan, which, in any such case, likely would have a Material Adverse Effect.

7.10            Change of Control; Change of Beneficial Ownership or Board.  Any Person or group of Persons (within the meaning of Sections 13 or 14 of the Securities and Exchange Act of 1934), other than the then current officers or directors of the Borrower or an underwriter which obtains such ownership as a result of effecting a firm committed underwriting of a secondary offering of the Borrower's voting stock on behalf of such officers or directors, shall have acquired beneficial ownership of (within the meaning of Rule 13d-3 and 13d-5 promulgated by the Securities and Exchange Commission under said Act) twenty-five percent (25%) or more of the voting stock of the Borrower on a fully diluted basis with respect to which such Persons are entitled to vote on the election of directors or, during any period of up to 24 consecutive months, Persons who at the beginning of such 24-month period were directors of the Borrower (or were appointed, nominated or elected by such Persons) cease for any reason to constitute a majority of the directors of the Borrowers then in office.  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.  A "Permitted Transferee" includes any of the following with respect to any then current officer or director of the Borrower: (i) spouse; (ii) lineal descendants of all generations and spouses of such lineal descendants; (iii) a charitable corporation or trust established by such then current officer or director or by a person described in (i) or (ii) preceding; (iv) a trust (or in the case of a minor, a custodial account under a Uniform Gifts or Transfers to Minors Act) of which the beneficiary(ies) are one or more Persons described in the preceding clauses (i), (ii) or (iii), and (v) an executor or administrator upon the death of such then current officer or director or any Person described in the preceding clauses (i) or (ii).

7.11            Consequences of an Event of Default.  If one or more of the Events of Default occur then (a) if such Event of Default is set forth in Sections 7.3 or 7.4, the Commitments shall automatically terminate and the Notes then outstanding and all other amounts owing under this Agreement shall become immediately due and payable, without necessity of demand, presentation, protest, notice of dishonor or notice of default or (b) if such Event of Default is set forth in any of the remaining Sections of this Article VII, then the Agent, at the request of the Required Lenders, and upon notice to the Borrower, shall declare the Borrower in default hereunder, and upon such declaration, shall, at the request of the Required Lenders, terminate the Commitment and/or declare the Notes then outstanding and all other amounts owing under this Agreement immediately due and payable, without necessity of any further demand, presentation, protest, notice of dishonor or further notice of default, whereupon the same shall be immediately due and payable.

7.12            Remedies Upon Default.  Upon thetermination of the Commitments and acceleration of the Notes following the occurrence of an Event of Default, the Lenders shall, unless such termination and acceleration subsequently have been rescinded, have the full panoply of rights and remedies granted to them under this Agreement and all those rights and remedies granted by law to creditors, and the Agent, at the direction of the Required Lenders, shall proceed to protect and enforce the Lenders' rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, in the Notes or in any of the other Loan Documents, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law.  No right, power or remedy conferred by this Agreement, in the Notes, or by any other Loan Document, upon the Agent or the Lenders shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  No exercise of any one right or remedy shall be deemed a waiver of other rights or remedies.  The rights and remedies of the Agent and the Lenders specified herein are for the sole and exclusive benefit, use and protection of the Agent and the Lenders, and the Agent and the Lenders shall be entitled, but shall have no duty or obligation, to exercise or to refrain from exercising any right or remedy reserved to the Agent or the Lenders hereunder.

ARTICLE VIII.            AGREEMENT AMONG LENDERS.

8.1            Appointment and Grant of Authority.  Each of the Lenders hereby appoints Fleet National Bank and Fleet National Bank hereby agrees to act as, the Agent under this Agreement, the Notes and the other Loan Documents.  As such Agent, Fleet National Bank shall have and may exercise such powers under this Agreement and the other Loan Documents as are specificallydelegated to the Agent, by the terms hereto or thereof, together with such other powers as are incidental thereto.  Without limiting the foregoing, the Agent, on behalf of the Lenders, is authorized to execute all of the Loan Documents (other than this Agreement) and to accept all of the Loan Documents and all other agreements, documents or instruments reasonably required to carry out the intent of the parties to this Agreement.

8.2            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 duties as the Agent hereunder) and, subject to Sections 8.7 and 9.2 hereof, shall be entitled to engage and pay for the advice or services of any attorneys, accountants, or other experts concerning all matters pertaining to duties hereunder and to rely upon any advice so obtained.

8.3            Reliance by Agent on Lenders for Funding.  Unless the Agent shall have received notice from a Lender prior to any Borrowing Date that such Lender will not make available to the Agent such Lender's portion of net disbursements of Loans, the Agent may assume that such Lender has made such portion available to the Agent and the Agent may, in reliance upon such assumption, make Loans to the Borrower.  If and to the extent that such Lender has not made such portion available to the Agent on or prior to any Borrowing Date, such Lender and the Borrower severally agree to repay to the Agent immediately upon demand, in immediately available funds, such unpaid amount, together with interest thereon for each day from the applicable Borrowing Date until such amount is repaid to the Agent, at (i) in the case of the Borrower, at the rate of interest then in effect for such Loan and (ii) in the case of such Lender, at the Federal Funds Effective Rate.  If such Lender shall repay to the Agent such corresponding amount, such amount shall constitute a Loan made by such Lender for purposes of this Agreement.  The failure by any Lender to pay its portion of a Loan made by the Agent shall not relieve any other Lender of the obligation to pay its portion of net disbursements of Loans on any Borrowing Date, but no Lender shall be responsible for the failure of any other Lender to make its net share of Loans to be made by such other Lender on such Borrowing Date.

8.4            Non-Reliance on Agent.  Each Lender agrees that it has, independently and without reliance on the Agent, based on such documents and information as it has deemed appropriate, made its own credit analysis and evaluation of the Borrower and its operations and decision to enter into this Agreement and that it will, independently and without reliance upon the Agent, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement.  Except as otherwise provided herein, the Agent shall have no duty to keep the Lenders informed as to the performance or observance by the Borrower of this Agreement or any other document or instrument referred to or provided for herein or to inspect the properties or books of the Borrower.  The Agent, in the absence of gross negligence or willful misconduct, shall not be liable to any Lender for its failure to relay or furnish to the Lender any information. 

8.5            Responsibility of Agent and Other Matters.

8.5a            Ministerial Nature of Duties.  As among the Lenders and the Agent, the Agent shall have no duties or responsibilities except those expressly set forth in this Agreement, the Notes or in the other Loan Documents, and those duties and responsibilities shall be subject to the limitations and qualifications set forth in this Article VIII.  The duties of the Agent shall be ministerial and administrative in nature.

8.5b            Limitation of Liability.  As among the Lenders and the Agent, neither the Agent nor any of its directors, officers, employees or agents shall be liable for any action taken or omitted (whether or not such action taken or omitted is within or without the Agent's responsibilities and duties expressly set forth in this Agreement) under or in connection with this Agreement or any other instrument or document in connection herewith except for gross negligence or willful misconduct.  Without limiting the foregoing, neither the Agent nor any of its directors, officers or employees shall be responsible for, or have any duty to examine (i) the genuineness, execution, validity, effectiveness, enforceability, value or sufficiency of (A) this Agreement, the Notes or any of the other Loan Documents or (B) any other document or instrument furnished pursuant to or in connection with this Agreement, (ii) the collectibility of any amounts owed by the Borrower to the Lenders, (iii) the truthfulness of any recitals, statements, representations or warranties made to the Agent or the Lenders in connection with this Agreement, (iv) any failure of any party to this Agreement to receive any communication sent, including any telegram, teletype, facsimile transmission or telephone message or any writing, application, notice, report, statement, certificate, resolution, request, order, consent letter or other instrument or paper or communication entrusted to the mails or to a delivery service, or (v) the assets, liabilities, financial condition, results of operations, business or prospects, or creditworthiness of the Borrower.

8.5c            Reliance.  The Agent shall be entitled to act, and shall be fully protected in acting upon, any telegram, teletype, facsimile transmission or any writing, application, notice, report, statement, certificate, resolution, request, order, consent, letter or other instrument, paper or communication believed by the Agent in good faith to be genuine and correct and to have been signed or sent or made by a proper Person.  The Agent may consult counsel and shall be entitled to act, and shall be fully protected in any action taken in good faith, in accordance with advice given by counsel.  The Agent may employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact selected by the Agent with reasonable care.  The Agent shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, provisions or conditions of this Agreement or any of the other Loan Documents on the part of the Borrower or any other party thereto.

8.6            Actions in Discretion of Agent; Instructions from the Lenders.  The Agent agrees, upon the written request of the Required Lenders, to take or refrain from taking any action of the type specified as being within the Agent's rights, powers or discretion herein or under any Loan Documents, 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 Lenders, 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 Lenders or all of the Lenders.  Any action taken or failure to act pursuant to such instructions or discretion shall be binding on the Lenders, subject to Section 8.5b hereof.  Subject to the provisions of Section 8.5b, no Lender 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 Lenders.

8.7            Indemnification.  To the extent the Borrower does not reimburse and save harmless the Agent according to the terms hereof for and from all costs, expenses and disbursements in connection herewith, such costs, expenses and disbursements shall be borne by the Lenders ratably in accordance with their respective Commitment Percentages.  Each Lender hereby agrees on such basis (i) to reimburse the Agent for such Lender's pro rata share of all such reasonable costs, expenses and disbursements on request and (ii) to the extent of each such Lender's pro rata share, to indemnify and save harmless the Agent against and from any and all losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent, other than as a consequence of gross negligence or willful misconduct on the part of the Agent, arising out of or in connection with (i) this Agreement, the Notes, the other Loan Documents or any other agreement, instrument or document executed or delivered in connection herewith or therewith, or (ii) any action taken at the request of the Required Lenders or all of the Lenders hereunder, as the case may be, including without limitation the reasonable costs, expenses and disbursements in connection with defending themselves against any claim or liability, or answering any subpoena or other process related to the exercise or performance of any of their powers or duties under this Agreement, the other Loan Documents, or any of the other agreements, instruments or documents executed or delivered in connection herewith or the taking or refraining from any action under or in connection with any of the foregoing.

8.8            Agent's Rights as a Lender.  With respect to the Commitment of the Agent as a Lender hereunder, any Loans of the Agent under this Agreement or the other Loan Documents, and any other amounts due to the Agent under this Agreement, the Agent shall have the same rights and powers, duties and obligations under this Agreement, the Notes, the other Loan Documents or other agreement, instrument or document as any Lender and may exercise such rights and powers and shall perform such duties and fulfill such obligations as though it were not the Agent.  The Agent may accept deposits from, lend money to, and generally engage, and continue to engage, in any kind of business with the Borrower as if it were not the Agent.

8.9            Payment to Lenders.  Except as otherwise set forth in Section 8.3 hereof, promptly after receipt from the Borrower of any principal repayment of the Loans, interest due on the Loans, and any Facility Fees owing to the Lenders or other amounts due under any of the Loan Documents (except for such amounts which are payable for the sole account of any Lender or the Agent), the Agent shall distribute to each Lender that Lender's share of the funds so received.  

8.10            Pro Rata Sharing.  Except as otherwise set forth in Section 8.3 hereof, all interest and principal payments on the Loans, and all payments of Facility Fees are to be divided pro rata among the Lenders in proportion to the extensions of credit outstanding from each Lender or, if no such Loans are then outstanding, in accordance with their respective Commitment Percentages.  Any sums obtained from the Borrower by any Lender by reason of the exercise of its rights of set-off, banker's lien or in collection shall be shared (net of costs) pro rata among the Lenders on the basis of the principal amount of Loans outstanding.  Nothing in this Section 8.10 shall be deemed to require the sharing among the Lenders of collections specifically relating to, or of the proceeds of any collateral securing, any other Indebtedness of the Borrower to any Lender.

8.11            Successor Agent.

8.11a            Resignation of Agent.  The Agent may resign as Agent hereunder by giving 30 days' prior written notice to the Lenders and the Borrower.  If such notice shall be given, the Lenders shall appoint a successor agent for the Lenders, during such 30 day period, which successor agent shall be reasonably satisfactory to the Borrower, to serve as agent hereunder and under the several Loan Documents.  If at the end of such 30 day period, the Lenders have not appointed such a successor, the Agent shall use reasonable commercial efforts to procure a successor reasonably satisfactory to the Lenders and the Borrower, to serve as agent for the Lenders hereunder and under the several Loan Documents.  Any such successor agent shall succeed to the rights, powers and duties of the Agent.

8.11b            Rights of the Former Agent.  Upon the appointment of such successor agent or upon the expiration of such 30 day period (or any longer period to which the Agent has agreed), 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 any retiring Agent's resignation hereunder as Agent hereunder, the provisions of this Article VIII shall inure to the benefit of such retiring Agent as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

8.12            Notice of Default.  The Agent shall not be deemed to have knowledge or notice of the occurrence of an Event of Default unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement, describing such Event of Default and stating that such notice is a "notice of default".

8.13            Notices.  The Agent shall promptly send to each Lender 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 Lenders of each change in the Base Rate and the effective date thereof.

8.14            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.

8.15            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 Lender whether in respect of the Loans, Fees or any other amounts due to the Lenders under this Agreement.  In the event an error in computing any amount payable to any Lender is made, the Agent, the Borrower and each affected Person 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 Effective Rate.

8.16            Beneficiaries.  Except as expressly provided herein, the provisions of this Article VIII are solely for the benefit of the Agent and the Lenders, and the Borrower 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 Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for the Borrower.

ARTICLE IX.            GENERAL PROVISIONS

9.1            Amendments and Waivers.  Subject to the remaining provisions of this Section 9.1, the Agent, the Lenders and the Borrower may, from time to time, enter into amendments, extensions, renewals, modifications, supplements and replacements to and of this Agreement, the Notes or the other Loan Documents and the Lenders or the Required Lenders, as the case may be, may, from time to time, waive compliance with a provision thereof.  No amendment, renewal, modification, extension, supplement, replacement or waiver of any provision of this Agreement, the Notes or the other Loan Documents or consent to any departure therefrom by the Borrower shall be effective unless it is in writing and is signed by the Required Lenders (or the Agent with the written consent of the Required Lenders), and then such waiver or consent shall be effective only for the specific instance and for the specific purpose for which it is given; provided, however, that no amendment, renewal, modification, waiver or consent, unless in writing and signed by all of the Lenders (or the Agent with the written consent of all of the Lenders), shall do any of the following:

(A)            increase the Commitment of any Lender or subject any Lender to any additional obligations hereunder;

(B)            increase any Lender's Commitment Percentage or decrease the aggregate or individual unpaid principal amount of the Notes, or forgive the payment of the principal or interest payable on the Notes;

(C)            waive an Event of Default in the payment of principal and/or interest due hereunder and under any of the Notes;

(D)            decrease the interest rate relating to the Loans;

(E)            postpone any date fixed for any payment of principal of or interest on the Loans, the Facility Fee, or any other obligations of the Borrower set forth in Article II;

(F)            reduce the Facility Fee; or

(G)            amend the definition of the term "Required Lenders" or amend or waive the provisions of this Section 9.1.

Any such supplemental agreement shall apply equally to the Borrower and each of the Lenders and shall be binding upon the Borrower, the Lenders, the Agent and all future holders of the Notes.  In the case of any waiver, the Borrower, the Lenders and the Agent shall be restored to their former positions and rights, and any Event of Default waived shall be deemed to be cured and not continuing, but no such waiver shall extend to any subsequent or other Event of Default, or impair any right consequent thereon.

9.2            Expenses.  The Borrower shall pay:

(i)            All reasonable costs and expenses of the Agent (including without limitation the reasonable fees and disbursements of the Agent's special counsel, Edwards & Angell, LLP and any reasonable accounting, consulting, brokerage or other similar professional fees or expenses, and any reasonable fees or expenses associated with travel or other costs relating to any appraisals or examinations conducted in connection with the Loans) incurred in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents and any and all other documents and instruments prepared in connection herewith, including but not limited to all amendments, extensions, modifications, replacements, waivers, consents and other documents and instruments prepared or entered into from time to time;

(ii)            All costs and expenses of the Agent and the Lenders (including without limitation the fees and disbursements of the Agent's and the Lenders' counsels, which may be in house counsel) in connection with (A) the enforcement of this Agreement and the other Loan Documents arising pursuant to a breach by the Borrower of any of the terms, conditions, representations, warranties or covenants of any Loan Document, and (B) defending or prosecuting any actions, suits or proceedings relating to any of the Loan Documents.

All of such costs and expenses shall be payable by the Borrower to the Lenders or the Agent, as the case may be, upon demand or as otherwise agreed upon by the Lenders or the Agent and the Borrower, and shall constitute Bank Indebtedness under this Agreement.  The Borrower further agrees to pay, and save the Agent and the Lenders harmless from any and all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of this Agreement or the issuance of the Notes.  The Borrower's obligation to pay such costs and expenses shall survive the termination of this Agreement and the repayment of the Bank Indebtedness.

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

Borrower:                                            NUI Utilities, Inc.

            550 Route 202-206

            P. 0. Box 760

            Bedminster, NJ 07921

            Attention:    Treasurer

            Telecopier:   (908) 781-0718

                        Telephone:  (908) 781-0500

The Agent:            Fleet National Bank

            100 Federal Street

            Mail Stop:  MADE 10008A

            Boston, Massachusetts  02110

            Attention:   Mr. Stephen J. Hoffman

            Telephone:  (617) 434-6520

            Telecopier:  (617) 434-3652

9.4            Tax Withholding.  At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of each Lender, each Lender or assignee or participant of a Lender that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to the Agent and the Borrower two duly completed copies of either (i) IRS Form W-9, 1001 or 4224 or such other applicable form prescribed by the IRS, certifying in each case that such Lender or assignee or participant of a Lender is entitled to receive payments under this Agreement or its Notes without deduction or withholding of United States federal income taxes, or is subject to such tax at a reduced rate under an applicable tax treaty or (ii) IRS Form W-8 or such other applicable form prescribed by the IRS or a certificate of such Lender or assignee or participant of a Lender indicating that no such exemption or reduced rate of taxation is allowable with respect to such payments.  Each Lender or assignee or participant of a Lender which delivers an IRS Form W-8, W-9, 4224, 1001 or other such applicable form further undertakes to deliver to the Agent and the Borrower two additional copies of any such form (or any successor form) on or before the date on which that form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Borrower or the Agent, either certifying that such Lender or assignee or participant of a Lender is entitled to receive payments under this Agreement or its Notes without deduction or withholding of any United States federal income taxes or is subject to such tax at a reduced rate under an applicable tax treaty or stating the date on which that no such exemption or reduced rate is allowable.  The Agent shall be entitled to withhold, from each payment hereunder or under the Notes payable to it, United States federal income taxes at the full withholding rate unless each Lender referred to in the first sentence of this Section 9.4 establishes an exemption or at the applicable reduced rate established pursuant to the above provisions.

9.5            Successors and Assigns.  This Agreement shall be binding upon the Borrower, the Agent and the Lenders and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Agent and the Lenders and the successors and assigns of the Agent and the Lenders; provided, that the Borrower shall not assign its rights or duties hereunder or under any of the other Loan Documents without the prior written consent of the Lenders.

9.6            Assignments and Participations.

9.6a            Assignments.  Subject to the remaining provisions of this Subsection 9.6a, any Lender (a "Transferor Lender"), at any time, in the ordinary course of its commercial banking business and in accordance with applicable law, may sell to one or more financial institutions (individually a "Purchasing Lender"), a portion or all of its rights and obligations under this Agreement and the Notes then held by it, pursuant to an Assignment and Assumption Agreement substantially in the form of Exhibit "F" executed by the Transferor Lender, such Purchasing Lender, the Borrower (if applicable) and the Agent; subject, however to the following requirements:

(i)            Each such assignment must be in a minimum amount of $5,000,000, or, if in excess thereof, in integral multiples of $1,000,000, unless such assignment shall be in the full amount of such Lender's Commitment;

(ii)            During the first 90 days following the Closing Date, each assignment made shall become effective only on a date which coincides with the expiration date of any Interest Period then in effect, unless the Agent agrees to waive this provision;

(iii)            The Agent and the Borrower must each give its prior consent to any such assignment which consent shall not be unreasonably withheld; it being agreed that it shall not be deemed unreasonable for the Borrower to decline to consent to such assignment if (A) such assignment would result in incurrence of additional costs to the Borrower under Article II, or (B) the proposed assignee has not provided to the Borrower any tax forms received under Section 9.4; provided, however, no consent is required for the transfer by a Lender to its Affiliate or to another Lender so long as the conditions in clauses (A) and (B) immediately above are satisfied; and

(iv)            The Transferor Lender shall pay to the Agent a $3,500 service fee for each such transfer at the time of each such transfer;

provided, however the restrictions set forth in item (i) above shall not apply (x) in the case of an assignment by a Lender to an Affiliate of such Lender or (y) in the case of any assignment by any Transferor Lender upon the occurrence and during the continuation of an Event of Default, and provided further, that upon the occurrence and during the continuance of an Event of Default the consent of the Borrower to any assignment is not required.

Upon the execution, delivery, acceptance and recording of any such Assignment and Assumption Agreement, from and after the Transfer Effective Date determined pursuant to such Assignment and Assumption Agreement, all parties hereto agree that (a) the Purchasing Lender thereunder shall be a party hereto as a Lender and, to the extent provided in such Assignment and Assumption Agreement, shall have the rights and obligations of a Lender hereunder with a Commitment as set forth therein, and (b) the Transferor Lender thereunder shall, to the extent provided in such Assignment and Assumption Agreement, be released from its obligations as a Lender under this Agreement.  Such Assignment and Assumption Agreement shall be deemed to amend this Agreement (without further action) to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender as a Lender and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such Transferor Lender under this Agreement and its Notes.  On or prior to the Transfer Effective Date, the Borrower shall execute and deliver to the Agent, in exchange for the surrendered Notes held by the Transferor Lender, new Notes to the order of such Purchasing Lender in an amount equal to the Commitment or the Loans assumed by it and purchased by it pursuant to such Assignment and Assumption Agreement, and new Notes to the order of the Transferor Lender in an amount equal to the Commitment or the Loans retained by it hereunder.

In addition to the assignments permitted above, any Lender may assign and pledge all or any portion of its Loans and Notes to any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank.  No such assignment shall release the assigning Lender from its obligations and duties hereunder.

9.6b            Assignment Register.  The Agent shall maintain, at its address referred to in Subsection 9.3, a copy of each Assignment and Assumption Agreement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the amount of the Loans owing to each Lender from time to time.  The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Loans recorded therein for all purposes of this Agreement.  The Register shall be available at the office of the Agent set forth in Subsection 9.3 for inspection by either Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

9.6c            Participations.  Each Lender, in the ordinary course of its commercial banking business and in accordance with applicable law, may sell to one or more Participants a participating interest in any Loan owing to such Lender, the interest of such Lender in any Notes or the Commitment of such Lender.  In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of its Notes for all purposes under this Agreement and the Borrower, the other Lenders and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement or its Notes and the Participants shall have voting rights only with respect to matters described in items (B), (C), (D), (E) and (F) of Section 9.l.

9.7            Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 

9.8            Survival.  All representations, warranties, covenants and agreements of the Borrower contained herein in the Notes or in the other Loan Documents or made in writing in connection herewith or therewith shall survive the issuance of the Notes and shall continue in full force and effect so long as the Borrower may borrow hereunder and so long thereafter until payment in full of all the Notes and the Bank Indebtedness.

9.9            Governing Law.  This Agreement, each Note and each other Loan Document shall be a contract made under, governed by and construed in accordance with the laws of the State of New Jersey without reference to the provision thereof regarding conflicts of law except where such law is superseded by applicable Federal law.

9.10            Non-Business Days.  Except as otherwise specifically required pursuant to the terms of this Agreement, whenever any payment hereunder or under the Notes is due and payable on a day which is not a Business Day, such payment may be made on the next succeeding Business Day.

9.11            Integration.  This Agreement constitutes the entire agreement between the parties relating to this financing transaction and it supersedes all prior understandings and agreements, whether written or oral, between the parties hereto concerning the subject matter of this Agreement.

9.12            Headings.  Article, Section and other headings used in this Agreement are intended for convenience only and shall not affect the meaning or construction of this Agreement.

9.13            Set-Off.  The Borrower hereby gives to the Lenders a lien and security interest for the amount of any Bank Indebtedness upon and in any property, credits, securities or money of the Borrower which may at any time be delivered to, or be in the possession of, or owed by any Lender in any capacity whatever, including the balance of any deposit account but excluding any trust or fiduciary accounts, in each case maintained by the Borrower with such Lender.  The Borrower hereby authorizes each Lender in case of an Event of Default, at such Lender's option, at any time and from time to time, to apply, at the discretion of such Lender, to the payment of Bank Indebtedness, any and all such property, credits, securities or money now or hereafter in the hands of such Lender belonging or owed to the Borrower.  Nothing herein shall restrict any Lender's ability to set off any property, credits, securities or money of the Borrower which may at any time be delivered to, or be in possession or owed to any Lender in any capacity whatever to satisfy an independent obligation of the Borrower to the Lender.

9.14            Consent to Forum.  The parties hereto each hereby irrevocably consents to the nonexclusive jurisdiction of the Courts of the Commonwealth of Massachusetts or any Federal court sitting therein in any action or proceeding arising out of or relating to this Agreement, the Notes or the other Loan Documents, and each party agrees that a summons and complaint commencing an action or proceeding in either of such courts shall be properly served and shall confer personal jurisdiction if served personally or by certified mail to the party at its respective address set forth in Section 9.3, or as otherwise provided under the laws of the Commonwealth of Massachusetts.  Further, the parties hereby specifically waive and hereby acknowledge that the parties are estopped from raising any claim that any such court lacks personal jurisdiction over such party so as to prohibit either such court from adjudicating any issues raised in a complaint filed with any such court against the Borrower or the Lenders concerning this Agreement.

9.15            Waiver of Jury Trial.  Each of the Agent, the Lenders and the Borrower hereby knowingly, voluntarily and intentionally waive any rights they may have to a trial by jury in respect of any litigation based hereon, or arising out of, under, or in connection with, this Agreement or any other Loan Document, or any course of conduct, course of dealing, statements (whether verbal or written) or actions of the Agent, the Lenders or the Borrower relating hereto or thereto. Except as prohibited by law, the Borrower hereby waives any right it may have to claim or recover in any litigation any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. The Borrower acknowledges and agrees that it has received full and sufficient consideration for this provision (and each other provision of each other Loan Document to which it is a party) and that this provision is a material inducement for the Lenders to enter into this Agreement and each such other Loan Document.

9.16            Indemnity.  The Borrower hereby agrees to indemnify the Agent, the Lenders and each of their respective directors, officers, employees, attorneys, agents and Affiliates against, and hold each of them harmless from, any loss, liabilities, damages, claims, and reasonable costs and expenses, joint or several (including reasonable attorneys' fees and disbursements reasonably incurred by any such Person in connection with the preparation for or defense of any pending or threatened claim, action or proceeding), suffered or incurred by any of them under any applicable federal or state law or otherwise caused by, arising out of, resulting from or in any manner connected with, the execution, delivery and performance of each of the Loan Documents, the Loans and any and all transactions related to or consummated in connection with the Loans.  The indemnity set forth in this Section 9.16 shall be in addition to any other obligations or liabilities of the Borrower to the Agents or the Lenders, or at common law or otherwise.  The provisions of this Section 9.16 shall survive the payment of the Bank Indebtedness and the termination of this Agreement.  The foregoing provisions of this Section 9.16 to the contrary notwithstanding, the Borrower shall not be obligated to indemnify the Agent, or any Lender pursuant to this Section 9.16 for (i) any losses, liabilities, damages, claims or costs suffered or incurred by any of them in connection with the administrative transfer of funds in connection with this Agreement and which arise directly from the Agent's or such Lender's negligence or willful misconduct, or (ii) any other losses, liabilities, damages, claims, or costs which arise directly from the Agent's, or such Lender's gross negligence or willful misconduct.  All amounts owed pursuant to this Section 9.16 shall be part of the Bank Indebtedness.

9.17            Counterparts.  This Agreement and any amendment, modification, extension or renewal hereto or hereof may be executed in several counterparts and by each party on a separate counterpart, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute but one and the same instrument.  In proving this Agreement or any amendment, modification, extension or renewal, it shall not be necessary to produce or account for more than one such counterpart signed by the other party against whom enforcement is sought.

9.18            Replacement of Note.  Upon receipt of an affidavit of an officer of any Lender or the Agent (including an indemnification agreement reasonably satisfactory to the Borrower) as to the loss, theft, destruction or mutilation of any Note or any other Loan Document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such Note or other Loan Document, the Borrower will issue, in lieu thereof, a replacement Note or other Loan Document in the same principal amount thereof and otherwise of like tenor.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,

have caused this Credit Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

                        NUI UTILITIES, INC.

By:    /s/   A.. MARK ABRAMOVIC

Name:    A. Mark Abramovic

Title        Vice President

By:  /s/  CHARLES N. GARBER

Name:    Charles N. Garber

Title:       Treasurer

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI UTILITIES, INC., THE LENDERS PARTY HERETO, FLEET NATIONAL BANK, as Agent, and FLEET SECURITIES, INC., as Arranger, to be executed by its duly authorized officers as of the date first above written.

Commitment:FLEET NATIONAL BANK

$45,000,000

Commitment Percentage:                        By:    /s/ CHARU MANI            

            100%

                        Name:      Charu Mani

            Title:         Vice President

FLEET SECURITIES, INC.,

as Arranger

                        By:   /s/ JEFFREY BLOOMQUIST                     

                        Name:      Jeffrey Bloomquist

            Title:         Vice President

EX-10

EXHIBIT 10.4

FIRST AMENDMENT TO CREDIT AGREEMENT

            THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is executed as of March 31, 2003, effective (unless otherwise indicated) as of March 31, 2003, by and among NUI CORPORATION, a New Jersey corporation (the "Borrower"); the lenders from time to time parties thereto (collectively, the "Lenders" and each individually, a "Lender"); FLEET NATIONAL BANK, as Agent for the Lenders (in such capacity, with its successors and assigns, the "Agent"); CITIZENS BANK OF MASSACHUSETTS and CIBC INC., as Co-Syndication Agents; and PNC BANK, NATIONAL ASSOCIATION, as Documentation Agent.

RECITALS

            A.            The Borrower, the Lenders and the Agent are parties to that certain Credit Agreement dated as of February 12, 2003 (as amended, extended, supplemented or otherwise modified from time to time, the "Credit Agreement").  Capitalized terms used herein without definition have the meanings assigned to them in the Credit Agreement.

            B.            The Borrower has requested certain amendments to the Credit Agreement, all as set forth below.

            C.            The Lenders signing below are willing to consent to such amendments on the terms and conditions hereinafter set forth.

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

I.            CONSENTS AND AGREEMENT. 

A.            Interest Rate Adjustment to Senior Notes.  Section 5.17 of the Credit Agreement prohibits any amendment, modification or change to any of the terms relating to the payment or prepayment of principal of, or interest on, any Indebtedness without the consent of the Required Lenders.  The Borrower has requested that the Required Lenders consent to a modification to that certain Note Purchase Agreement dated as of August 20, 2001, as amended by that certain First Amendment and Waiver to Note Purchase Agreement dated as of February 20, 2003 (as the same has been, is as of the date hereof, and may hereafter be amended from time to time, the "Note Purchase Agreement"), among the Borrower and the senior noteholders party thereto (the "Senior Noteholders") pursuant to which modification the interest rates applicable to the Notes (as defined in the Note Purchase Agreement) are adjusted as follows:  (i) the interest rate applicable to the Series A Notes (as defined in the Note Purchase Agreement) is increased from 6.60% to 7.10%, and all references to the interest rates of 6.60% and 8.60% appearing therein and in the Note Purchase Agreement are changed to 7.10% and 9.10%, respectively; (ii) the interest rate applicable to the Series B Notes and the Series C Notes (each as defined in the Note Purchase Agreement) is increased from 6.884% to 7.384%, and all references to the interest rate of 6.884% and 8.884% appearing therein and in the Note Purchase Agreement are changed to 7.384% and 9.384% respectively; and (iii) the interest rate applicable to the Series D Notes (as defined in the Note Purchase Agreement) is increased from 7.29% to 7.79%, and all references to the interest rates of 7.29% and 9.29% appearing therein and in the Note Purchase Agreement are changed to 7.79% and 9.79% respectively (all of the foregoing interest rate adjustments, collectively, the "Senior Note Rate Increase").  The Lenders signing below hereby consent to the Senior Note Rate Increase.

B.            Subsidiary Guaranties.  Section 5.14 of the Credit Agreement prohibits any Subsidiary from guaranteeing, assuming or otherwise remaining liable for the obligations of another Person (other than certain guaranties in existence on the Closing Date and guarantees made in the ordinary course of business) without the consent of the Required Lenders.  The Borrower has requested that the Required Lenders consent to a guarantee by the Borrower's direct and indirect non-regulated domestic Subsidiaries of the obligations of the Borrower to the Senior Noteholders (the "Subsidiary Note Guaranty") which guarantee will be substantially similar in form and substance to the Guaranty of the Guarantors in favor of the Agent.  The Lenders signing below hereby consent to the execution by such Subsidiaries of the Subsidiary Note Guaranty.

C.            Intercreditor Agreement.  Subject to satisfaction of the conditions precedent contained in Article V hereof, the Lenders signing below hereby agree to enter into an Intercreditor Agreement with the Senior Noteholders, with respect to the obligations of the Guarantors to the Lenders and the Senior Noteholders.  Such Intercreditor Agreement shall be in form and substance mutually satisfactory to the Lenders and the Senior Noteholders.

II.            AMENDMENTS TO CREDIT AGREEMENT.  Subject to the satisfaction of each of the conditions set forth herein, the Credit Agreement is hereby amended as follows:

A.            Modification of Debt Instruments.  Section 5.17 of the Credit Agreement is hereby amended to read in its entirety as follows:

"5.17  Limitation on Optional Payments and Modifications of Debt Instruments.  The Borrower shall not, and shall not permit any of its Subsidiaries to, (a) make any optional payment or prepayment on or redemption, defeasance or purchase of any Indebtedness (other than Indebtedness under this Agreement, Indebtedness under the NUI Utilities Credit Agreement, Indebtedness of any Subsidiary to the Borrower or to any other Guarantor, and if no Potential Default or Event of Default then exists, or would result therefrom, Indebtedness of the Borrower to any Guarantor); or (b) amend, modify or change, or consent or agree to any amendment, modification or change to (i) its certificate of incorporation which could reasonably be expected to result in a Material Adverse Effect; (ii) the Note Purchase Agreement in any manner materially adverse to the Lenders without the Agent's prior written consent; or (iii) without limiting, or being limited by, clause (ii) above, the definition of "Priority Indebtedness" in the Note Purchase Agreement (except as required hereunder) or the covenants relating thereto or any of the terms relating to the payment or prepayment or principal of or interest on, any such Indebtedness described in subsection (a) hereof, except for any amendment, modification or change which would extend the maturity or reduce the amount of any payment of principal thereof or which would reduce the rate or extend the date for payment of interest thereon."

B.            Events of Default. 

1.            Section 7.2 of the Credit Agreement is amended by deleting the numerals "$15,000,000" contained therein and by substituting "$5,000,000" therefor.

2.            Section 7.7 of the Credit Agreement is hereby amended to read in its entirety as follows:

"7.7  Adverse Judgments, Etc.  Entry or filing of any one or more judgments, writs or warrants of attachment or of any similar process against any one or more of the Borrower and its Subsidiaries or against any of their respective properties and failure of the Borrower or its Subsidiaries to vacate, pay, bond, stay or contest in good faith such judgments, writs, warrants of attachment or other process within a period of 60 days."

C.            Pricing Revisions. 

1.            Exhibit A to the Credit Agreement is amended by deleting the pricing grid set forth therein and substituting the following in its stead: 

Senior Unsecured Debt Rating	Applicable Base Rate Margin (basis points)	Applicable Euro-Rate Margin (basis points)	Facility Fee (basis points)
Level 1 Rated greater than or equal to A-/A3	- 0 -	112.5	12.5
Level 2 BBB+/Baa1	- 0 -	135.0	15.0
Level 3 BBB/Baa2	- 0 -	155.0	20.0
Level 4 BBB-/Baa3	7.5	182.5	30.0
Level 5 Rated less than BBB-/Baa3	50.0	225.0	50.0

                        2.            The definitions of "Applicable Base Rate Margin" and "Applicable Euro-Rate Margin" are deleted in their entirety and the following definitions are substituted therefor: 

"Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination.

For purposes of determining the Applicable Base Rate Margin: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by S&P, the "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by Moody's, the "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination.

"Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination.

For purposes of determining the Applicable Euro-Rate Margin: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by S&P, the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by Moody's, the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination. 

            D.            Fee Letter.  The definition of "Fee Letter" in Section 2.4b of the Credit Agreement is revised to refer collectively to the letter agreements dated as of December 3, 2002 and December 6, 2002 among the Borrower, NUI Utilities, the Agent and Fleet Securities, Inc.

            E.            Utilization Fee.  The following new Section 2.4c is hereby inserted into the Credit Agreement immediately following Section 2.4b thereof:

"2.4cUtilization Fee.  The Borrower agrees to pay to the Lenders, on a pro rata basis, utilization fees (the "Utilization Fees") as follows:  (i) twelve and one-half (12.5) basis points (0.125%) for each day on which the average daily utilization of the aggregate amount of the Commitments is equal to or greater than 33% but less than 50% of such aggregate amount, (ii) twenty-five (25) basis points (0.25%) for each day on which the average daily utilization of the aggregate amount of the Commitments is equal to or greater than 50% but less than 75% of such aggregate amount, and (iii) thirty seven and one-half (37.5) basis points (0.375%) for each day on which the average daily utilization of the aggregate amount of the Commitments is equal to or greater than 75% of such aggregate amount.  For the purposes hereof, the Commitments shall be deemed to be utilized by the aggregate amount of Loans and/or Letters of Credit then outstanding.  Such Utilization Fees shall be payable quarterly in arrears on the last day of each March, June, September and December during the term hereof to and including the Termination Date."

            F.            No Default.  Section 3.4 of the Credit Agreement is hereby amended by inserting the following immediately after the second sentence thereof:

"Neither the Borrower nor any of its Subsidiaries is in default under or with respect to any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound which would have a Material Adverse Effect upon the Borrower and its Subsidiaries taken as a whole."

            G.            Furnishing Information.  Section 4.2(ix) of the Credit Agreement is hereby amended by deleting the word "and" at the end thereof; Section 4.2(x) of the Credit Agreement is hereby renumbered as Section 4.2(xi); and the following new Section 4.2(x) is hereby inserted into the Credit Agreement after Section 4.2(ix): 

"(x)give notice to the Agent promptly upon Borrower's knowledge of any proposed amendment, waiver or modification to the Note Purchase Agreement, but in no event less than two (2) Business Days' prior to the execution of any amendment, waiver, or other modification to the Note Purchase Agreement; together with prompt delivery to the Agent of a copy of the documentation evidencing such amendment, modification or waiver; and"

III.            REFERENCES IN LOAN DOCUMENTS; CONFIRMATION.  All references to the "Credit Agreement" in any Loan Documents shall, from and after the date hereof, refer to the Credit Agreement as amended by this Amendment.  All Loan Documents heretofore executed by the Borrower shall remain in full force and effect and, by the execution of this Amendment by the Borrower, such Loan Documents are hereby ratified and affirmed.

IV.            REPRESENTATIONS, WARRANTIES AND COVENANTS.  The Borrower hereby represents and warrants to, and covenants and agrees with, the Agent and the Lenders that:

            A.            The execution and delivery of this Amendment has been duly authorized by all requisite corporate action on the part of the Borrower.

            B.            The representations and warranties of the Borrower and each of the Guarantors contained in the Credit Agreement, as amended hereby, and the other Loan Documents are true and correct in all material respects on and as of the date of this Amendment as though made at and as of such date.  Since the Closing Date, no event or circumstance has occurred or existed which could reasonably be expected to have Material Adverse Effect.  As of the date hereof and after giving effect to this Amendment, no Potential Default or Event of Default has occurred and is continuing.

            C.            Except for the consent of Senior Noteholders holding at least 51% of the outstanding principal amount of the Notes (as defined in the Note Purchase Agreement) in connection with an amendment to the Note Purchase Agreement to be executed prior to or concurrently herewith, neither the Borrower, nor any of the Guarantors, is required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any governmental instrumentality or other agency or any other Person in connection with, or as a condition to, the execution, delivery or performance of this Amendment by such party.

            D.            This Amendment constitutes the legal, valid and binding obligation of the Borrower, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights and remedies of creditors generally or the application of principles of equity, whether in any action at law or proceeding in equity.

            E.            The documents, agreements and instruments listed on Exhibit A attached hereto constitute all of the agreements for borrowed money (other than capital leases involving consideration in the amount of less than $5,000,000), including without limitation, all amendments and waivers in connection with any such agreement, to which the Borrower or any of its Subsidiaries is a party.

V.            CONDITIONS.   The willingness of the Agent and the Lenders to amend the Credit Agreement is subject to the satisfaction of the following conditions precedent:

A.            The Borrower shall cause the Note Purchase Agreement to be amended; such amendment to be substantially in the form attached as Annex I hereto.

B.            The Borrower shall have executed and delivered to the Agent (or shall have caused to be executed and delivered to the Agent by the appropriate persons) the following:

1.            On or before the date hereof:

(a)            This Amendment;

(b)            The Confirmation of Guaranty executed by the Guarantors; and

(c)            True and complete copies of (i) any required stockholders' and/or directors' consents and (ii) any resolutions required for the due authorization of the execution, delivery and performance by the Borrower of this Amendment, certified by a duly authorized officer of the Borrower.

(d)          A fully-executed copy of the amendment to Note Purchase Agreement (which amendment shall be substantially in the form attached as Annex I hereto), together with any required director consents and resolutions required for the due authorization of the execution, delivery and performance of such amendment, certified by a duly authorized officer of Borrower, and an intercreditor agreement among the Lenders and the Senior Noteholders, in form and substance satisfactory to the Lenders.

(e)          The favorable opinion of White & Case LLP, special counsel to the Borrower, which opinion shall be in form and substance reasonably satisfactory to the Agent and its counsel.

2.            Such other supporting documents and certificates as the Agent, any Lender or their counsel may reasonably request within the time period(s) reasonably designated by the Agent, such Lender or their counsel.

C.            All legal matters incident to the transactions hereby contemplated shall be reasonably satisfactory to the Agent's counsel and to the Lenders' counsel.

D.            The Borrower shall have paid to the Agent a fully-earned non-refundable amendment fee in an amount equal to 0.5% of the Commitment amount of each Lender who returns its executed signature page to the Agent on or before 4:00 p.m. (EST) on March 28, 2003.

VI.            MISCELLANEOUS.

A.            As provided in the Credit Agreement, the Borrower agrees to reimburse the Agent upon demand for all fees and disbursements of counsel to the Agent incurred in connection with the preparation of this Amendment.

B.            This Amendment shall be governed by, and construed in accordance with, the law of the State of New Jersey.

C.                    This Amendment may be executed by the parties hereto in several counterparts hereof and by the different parties hereto on separate counterparts hereof, all of which counterparts shall together constitute one and the same agreement.  Delivery of an executed signature page of this Amendment by facsimile transmission shall be effective as an in-hand delivery of an original executed counterpart hereof.

[The next pages are the signature pages.]

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this First Amendment to Credit Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

                                                                                    NUI CORPORATION

                                                                                     By:  /s/ A. MARK ABRAMOVIC
                                                                                     Name:  A. Mark Abramovic
                                                                                     Title:    Sr. Vice President, Chief
                                                                                                 Financial Officer & Chief Operating Officer

                                                                                      By:  /s/ JAMES R. VAN HORN
                                                                                      Name:  James R. Van Horn
                                                                                      Title: Chief Administrative Officer,
                                                                                              General Counsel & Secretary

FLEET NATIONAL BANK,
in its capacity as the Agent hereunder

By:  /s/ STEPHEN J. HOFFMAN
Name:  Stephen J. Hoffman
Title:    Director

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this First Amendment to Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

FLEET NATIONAL BANK

By:  /s/ STEPHEN J. HOFFMAN
Name:  Stephen J. Hoffman
Title:    Director

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this First Amendment to Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

PNC BANK, NATIONAL ASSOCIATION

By:  /s/  MICHAEL RICHARDS
Name:  Michael Richards
Title:    Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this First Amendment to Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

CITIZENS BANK OF MASSACHUSETTS

By:  /s/  MICHAEL OUELLET      
Name:  Michael Ouellet
Title:    Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this First Amendment to Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

CIBC INC.

By:  /s/  MARYBETH ROSS             
Name:  MaryBeth Ross
Title:    Authorized Signatory

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this First Amendment to Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

MELLON BANK, N.A.

By:  /s/  ALAN J. KOPOLOW                       
Name:  Alan J. Kopolow
Title:    First Vice President

Annex I

NUI Corporation

___________________________________

Second Amendment

Dated as of April 1, 2003

to

Note Purchase Agreement

Dated as of August 20, 2001

___________________________________

Re: $5,000,000 6.60% Senior Notes, Series A,
due August 20, 2006

$15,000,000 6.884% Senior Notes, Series B,
due August 20, 2008

$7,000,000 6.884% Senior Notes, Series C,
due August 20, 2011

and

$33,000,000 7.29% Senior Notes, Series D,
due August 20, 2011

Second Amendment to Note Purchase Agreement

This Second Amendment dated as of April 1, 2003 (the or this "Second Amendment") to the Note Purchase Agreement dated as of August 20, 2001 is among the undersigned, NUI Corporation, a New Jersey corporation (the "Company"), and each of the institutions which is a signatory to this Second Amendment (collectively, the Noteholders"). 

Recitals:

            A.  The Company and each of the Noteholders have heretofore entered into the Note Purchase Agreement dated as of August 20, 2001 (the "Original Note Agreement") and the First Amendment and Waiver dated as of February 20, 2003 (the "First Amendment"; the Original Note Agreement as amended by the First Amendment is hereinafter referred to as the "Note Agreement").  The Company has heretofore issued (i) $5,000,000 aggregate principal amount of its 6.60% Senior Notes, Series A, due August 20, 2006 (the "Series A Notes"), (ii) $15,000,000 aggregate principal amount of its 6.884% Senior Notes, Series B, due August 20, 2008 (the "Series B Notes"), (iii) $7,000,000 aggregate principal amount of its 6.884% Senior Notes, Series C, due August 20, 2011 (the "Series C Notes")and(iv) $33,000,000aggregate principal amount of its 7.29% Senior Notes, Series D, due August 20, 2011 (the "Series D Notes", the Series A Notes, Series B Notes, Series C Notes and Series D Notes are hereinafter collectively referred to as the "Notes").

            B.  The Company and the Noteholders now desire to amend the Note Agreement in the respects, but only in the respects, hereinafter set forth.

            C.  Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require.

            D. All requirements of law have been fully complied with and all other acts and things necessary to make this Second Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

Now, therefore, upon the full and complete satisfaction of the conditions precedent to the effectiveness of this Second Amendment set forth in Section 3 hereof, and in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:

Section 1.        Amendments.

     Section 1.1. Amendment to Section 9.9.  Section 9.9 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

"Section 9.9. Subsidiary Guarantors.  Subject to Section  9.10 hereof, the Company will cause each Subsidiary (whether existing or newly acquired) that delivers a Guaranty, or otherwise becomes obligated in any manner (including, without limitation, as a co-obligor with the Company) (each, a "Bank Guaranty"), to any Bank Lender with respect to any Indebtedness of the Company outstanding under the Company Credit Agreement (or under any modification, amendment, renewal or replacement thereof) (each such Subsidiary, a "Subsidiary Guarantor") to concurrently enter into a guaranty agreement, in form and substance satisfactory to the Required Holders (each, a "Subsidiary Note Guaranty"), pursuant to which such Subsidiary Guarantor shall guarantee the prompt payment when due (whether at maturity, by acceleration or otherwise) of the principal of all of the Notes and of the interest and the Make-Whole Amount, if any, thereon and the full and prompt performance and compliance by the Company with each of its other obligations under the Note Agreement and the Notes, and, concurrently therewith, (except in the case that such Subsidiary Guarantor is co-obligor with the Company under the Company Credit Agreement (or under any modification, amendment, renewal or replacement thereof)) the Company shall cause the Bank Lenders to enter into an intercreditor agreement with the holders of the Notes in form and substance reasonably satisfactory to the Bank Lenders and the Required Holders (the "Section 9.9 Intercreditor Agreement") with respect to the obligations of such Subsidiary Guarantor to the Bank Lenders and the holders of the Notes providing for, inter alia, the pro rata sharing of any proceeds received by the Bank Lenders or the holders of the Notes under any Bank Guaranty or Subsidiary Note Guaranty.  Within three Business Days after entering into the Subsidiary Note Guaranty and any Section 9.9 Intercreditor Agreement, the Company shall deliver to each of the holders of the Notes the following items:

(a) an executed counterpart of such Subsidiary Note Guaranty;

(b) an executed counterpart of any Section 9.9 Intercreditor Agreement;

(c) a certificate signed by the President, a Vice President or another authorized officer of such Subsidiary Guarantor making representations and warranties to the effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7, but with respect to such Subsidiary Guarantor and the Subsidiary Note Guaranty, as applicable;

(d) such documents and evidence with respect to such Subsidiary Guarantor as any holder of the Notes may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated by the Subsidiary Note Guaranty; and

(e) an opinion of internal legal counsel to the Company to the effect that the Subsidiary Note Guaranty has been duly authorized, executed and delivered and constitutes the legal, valid and binding contract and agreement of such Subsidiary Guarantor enforceable in accordance with its terms, except as an enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles.

     Section 1.2. Amendment to Section 10.6.  Section 10.6 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

"Section 10.6. Guaranties.  The Company will not, and will not permit any Restricted Subsidiary to, become or be liable in respect of any Guaranty, except (a) Guaranties by the Company which constitute Guaranties of obligations incurred by any Restricted Subsidiary in compliance with the provisions of this Agreement, (b) Guaranties existing on March 31, 2003 by NUI Capital Corp. of obligations of NUI Energy Brokers under gas purchase and energy‑related contracts, which obligations do not exceed $20,000,000 in the aggregate, and (c) any Bank Guaranties."

     Section 1.3. Amendment to Definition of "Guaranty".  The definition of "Guaranty" in Schedule B of the Note Agreement is hereby amended by adding the following sentence at the end of such definition:

For the purposes of all computations made under this Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be in an amount equal to the outstanding principal amount of such Indebtedness for borrowed money which has been guaranteed, and a Guaranty in respect of any other obligation or liability or any divided shall be deemed to be in an amount equal to the aggregate amount of such obligation or liability outstanding or dividend declared.

     Section 1.4. Amendment to Definitions.  The following defined terms as set forth in Schedule B to the Note Agreement is hereby amended and restated in its entirety to read as follows:

"Intercreditor Agreement" means (a) any Section 9.9 Intercreditor Agreement, and (b) any other intercreditor agreement with the holders of the Notes in form and substance reasonably satisfactory to the Required Holders with respect to any Indebtedness of a Subsidiary Guarantor to the Bank Lenders and the holders of the Notes providing for, inter alia, the pro rata sharing of any proceeds received by the Bank Lenders and the holders of the Notes from such Subsidiary Guarantor with respect to such Indebtedness.

"Priority Indebtedness" means the sum of (a) all Indebtedness of the Company secured by Liens, plus (b) all Indebtedness of Restricted Subsidiaries (except (i) any Indebtedness held by the Company or any other Restricted Subsidiary, (ii) at any time on or before May 31, 2003, Guaranties existing on March 31, 2003 of NUI Capital Corp. of obligations of NUI Energy Brokers under gas purchase and energy-related contracts, which obligations do not exceed $20,000,000 in the aggregate, and (iii) any Indebtedness of any Restricted Subsidiary to the Bank Lenders to the extent that (1) such Restricted Subsidiary has guaranteed the Notes pursuant to a valid and enforceable Subsidiary Note Guaranty in accordance with the terms and conditions of Section 9.9 hereof and (2) such Bank Lenders and the holders of the Notes have entered into a valid and enforceable Intercreditor Agreement with respect to such Indebtedness of such Restricted Subsidiary to such Bank Lenders and such holders).

     Section 1.5.       Additional Definitions.  The following shall be added as new definitions in alphabetical order to Schedule B to the Note Agreement:

"Bank Lenders" means the holders of any Indebtedness outstanding under the Company Credit Agreement, and any modification, amendment, renewal or replacement thereof (including any such modification, amendment, renewal or replacement that results in any increase in the Indebtedness permitted thereunder).

"Section 9.9  Intercreditor Agreement" is defined in Section 9.9.

Section 2.        Representations and Warranties of the Company.

To induce the Noteholders to execute and deliver this Second Amendment (which representations shall survive the execution and delivery of this Second Amendment), the Company represents and warrants to the Noteholders that:

        (a)       this Second Amendment has been duly authorized, executed and delivered by it and this Second Amendment constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally;

       (b)       the Note Agreement, as amended by this Second Amendment, constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally;

        (c)  the execution, delivery and performance by the Company of this Second Amendment (i) has been duly authorized by all requisite corporate action and, if required, shareholder action, (ii) does not require the consent or approval of any governmental or regulatory body or agency, and (iii) will not (A) violate (1) any provision of law, statute, rule or regulation or its Certificate of Incorporation or bylaws, (2) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (3) any provision of any material indenture, agreement or other instrument to which it is a party or by which its properties or assets are or may be bound, including, without limitation, the Company Credit Agreement and each of the NUI Utilities Credit Agreements, or (B) result in a breach or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause (iii)(A)(3) of this Section 2(c);

       (d)   as of the date hereof and after giving effect to this Second Amendment, no Default or Event of Default has occurred which is continuing; and

        (e)  all the representations and warranties contained in Section 5 of the Note Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof.

Section 3.        Conditions to Effectiveness of This Second Amendment.

            This Second Amendment shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:

        (a) executed counterparts of this Second Amendment, duly executed by the Company and the holders of at least 51% of the outstanding principal amount of the Notes, shall have been delivered to the Noteholders;

       (b) the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof;

      (c) the Company shall have paid all reasonable costs and expenses incurred by the Noteholders in connection with the consummation of the transactions contemplated by this Second Amendment, including, without limitation, the reasonable fees and expenses of Chapman and Cutler, special counsel to the Noteholders, which are reflected in statements of such counsel rendered on or prior to the effective date of this Second Amendment;

Upon receipt of all of the foregoing, this Second Amendment shall become effective.

Section 4.        Miscellaneous.

     Section 4.1.  Construction.  This Second Amendment shall be construed in connection with and as part of the Note Agreement, and except as modified and expressly amended by this Second Amendment, all terms, conditions and covenants contained in the Note Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.

     Section 4.2. Notices.  Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Second Amendment may refer to the Note Agreement without making specific reference to this Second Amendment but nevertheless all such references shall include this Second Amendment unless the context otherwise requires.

     Section 4.3. Captions.  The descriptive headings of the various Sections or parts of this Second Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

     Section 4.4. Governing Law.  This Second Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

     Section 4.5.Counterparts.  The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Second Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

In Witness Whereof, the Company and the Noteholders have caused this Second Amendment to be executed, all as of the day and the year first above-written.

NUI Corporation

By:

Its:

Accepted and Agreed to:

 AIG Life Insurance Company

By:  AIG Global Investment Corp., investment advisor

By:________

Name:___

Title:____

SunAmerica Life Insurance Company

By:  AIG Global Investment Corp., investment advisor

By:________

Name:___

Title:____

United of Omaha Life Insurance Company

By:________

Name:___

Title:____

Pacific Life and Annuity Company

By:________

__ Name:___

__ Title:____

By:________

Name:___

Title:____

Pacific Life Insurance company

By:________

Name:___

Title:____

By:________

Name:___

Title:____

Nationwide Life Insurance Company of America (formerly Provident Mutual Life Insurance Company)

By:________

Name:___

Title:____

EXHIBIT A

Agreements for Borrowed Money

(1) Credit Agreement, dated as of February 12, 2003, among the Company, the Financial Institutions Party Thereto, Fleet National Bank as the Administrative Agent, Citizens Bank of Massachusetts and CIBC Inc., as Co-Syndication Agents and PNC Bank, National Association, as Documentation Agent.

(2) First Amendment to Credit Agreement dated March 31, 2003 among the Company, the lenders from time to time party thereto, Fleet National Bank as Agent for the Lenders, Citizens Bank of Massachusetts and CIBC Inc., as Co-Syndication Agents and PNC Bank, National Association, as Documentation Agent.

(3) Guaranty dated February 12, 2003, among the direct and indirect non-regulated domestic subsidiaries of NUI Corporation and Fleet National Bank.

(4) Note dated February 12, 2003 made by NUI Corporation in favor of Fleet National Bank in the principal amount of $9,871,794.90.

(5) Note dated February 12, 2003 made by NUI Corporation in favor of Citizens Bank of Massachusetts in the principal amount of $8,461,538.50.

(6) Note dated February 12, 2003 made by NUI Corporation in favor of CIBC, Inc. in the principal amount of $8,461,538.50.

(7) Note dated February 12, 2003 made by NUI Corporation in favor of PNC Bank, National Association in the principal amount of $8,461,538.50.

(8) Note dated February 12, 2003 made by NUI Corporation in favor of Mellon Bank, N.A. in the principal amount of $2,820,512.80.

(9) Swingline Note dated February 12, 2003 made by NUI Corporation in favor of Fleet National Bank in the principal amount of $7,500,000.

(10) Note Purchase Agreement between NUI Corporation and the Purchasers Listed Therein dated August 20, 2001, as amended by First Amendment and Waiver dated February 20, 2003 and by Second Amendment to Note Purchase Agreement dated April 1, 2003 ((A) $5 million 6.60% Series A Senior Notes due August 20, 2006, (B) $15 million 6.884% Series B Senior Notes due August 20, 2008, (C) $7 million 6.884% Series C Senior Notes due August 20, 2011 and (D) $33 million 7.29% Series D Senior Notes due August 20, 2011).

(11) Credit Agreement, among NUI Utilities, Inc., the Financial Institutions Party Thereto, Fleet National Bank as the Administrative Agent, Citizens Bank of Massachusetts and CIBC Inc., as Co-Syndication Agents and PNC Bank, National Association, as Documentation Agent, dated as of February 12, 2003. 

(12) Master Equipment Lease Agreement between NUI Corporation and Fleet Capital Corporation dated October 15, 2001, as amended by Maintenance and Return Amendment dated July 8, 2002 and Self Insurance Amendment dated July 8, 2002.

(13) Loan Agreement between New Jersey Economic Development Authority and NUI Corporation (post reorganization, NUI Utilities, Inc.) dated December 1, 1998 ($40 million 5.25% bonds, due November 1, 2033).

(14) Trust Indenture made by New Jersey Economic Development Authority to First Union National Bank dated December 1, 1998.

(15) Loan Agreement between New Jersey Economic Development Authority and NUI Corporation (post reorganization, NUI Utilities, Inc.) dated June 1, 1997  ($54.6 million, 5.70% bonds, due June 1, 2032).

(16) Trust Indenture made by New Jersey Economic Development Authority to The Bank of New York dated June 1, 1997.

(17) Loan Agreement between New Jersey Economic Development Authority and NUI Corporation (post reorganization, NUI Utilities, Inc.) dated June 1, 1996 ($39 million, variable rate bonds, due June 1, 2026).

(18) Trust Indenture between New Jersey Economic Authority and First Union National Bank dated June 1, 1996.

(19) Amended and Restated Standby Bond Purchase Agreement among NUI Utilities, Inc., Participating Banks and the Bank of New York as purchasing bank dated June 12, 2001 as amended by Amended No. 1 and Waiver dated November 21, 2001 and Amendment No. 2 dated June 3, 2002.

(20) Remarketing Agreement between NUI Corporation (post reorganization, NUI Utilities, Inc.) and Morgan Stanley & Co. Incorporated dated June 12, 1996.

(21) Tax Regulatory Agreement between New Jersey Economic Development Authority and NUI Corporation (post reorganization, NUI Utilities, Inc.) dated June 12, 1996.

(22) Bond Purchase Agreement among New Jersey Economic Development Authority, NUI Corporation (post reorganization, NUI Utilities, Inc.) and Morgan Stanley & Co. Incorporated dated June 11, 1996.

(23) Indenture between NUI Corporation (post reorganization, NUI Utilities, Inc.) and First Fidelity Bank, National Association dated February 1, 1995 ($50 million note due February 1, 2005).

(24) Loan Agreement between New Jersey Economic Development Authority and NUI Corporation (post reorganization, NUI Utilities, Inc.) dated July 15, 1994 ($46.5 million, 6.35% bonds due October 1, 2022).

(25) Trust Indenture made by New Jersey Economic Development Authority to First Fidelity National Association dated July 15, 1994.

(26) Loan Agreement between Brevard County, Florida and NUI Corporation (post reorganization, NUI Utilities, Inc.) dated July 15, 1994 ($20 million, 6.4% bonds due October 1, 2024).

(27) Indenture made by Brevard County, Florida to First Fidelity Bank, National Association dated July 15, 1994.

CONFIRMATION OF GUARANTY

            Each of the undersigned Guarantors hereby joins in the execution of the foregoing First Amendment to Credit Agreement, dated as of March 31, 2003 and effective as of March 31, 2003 (the "Amendment"), to which this Confirmation of Guaranty is attached (1) to confirm its consent, to the extent required, to all of the transactions contemplated by the Amendment and (2) to confirm and ratify its Guaranty Agreement (the "Guaranty") entered into as required under such Credit Agreement, dated as of February 12, 2003, in favor of the Agent on behalf of the Lenders, which Guaranty remains in full force and effect.  Capitalized terms used herein without definition have the meanings assigned to them in the Credit Agreement, as amended.

Each of the undersigned Guarantors hereby agrees that the representations and warranties contained in the Credit Agreement and the other Loan Documents with respect to the undersigned are true and correct in all material respects on and as of the date hereof as though made at and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date.  Since the Closing Date, no event or circumstance has occurred or exists which could reasonably be expected to have Material Adverse Effect.  As of the date hereof and after giving effect to the Amendment, no Potential Default or Event of Default has occurred and is continuing.

NUI CAPITAL CORP.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

UTILITY BUSINESS SERVICES, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

(Signature page to Confirmation of Guaranty)

NUI ENERGY BROKERS, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

NUI ENERGY SOLUTIONS, INC.

By:  /s/ PETER E. MARICONDO
Title:  Treasurer

NUI ENVIRONMENTAL GROUP, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

NUI ENERGY, INC.

By:  /s/ PETER E. MARICONDO
Title:  Treasurer

NUI INTERNATIONAL, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

NUI TELECOM, INC.

By:  /s/ PETER E. MARICONDO
Title:  Treasurer

 (Signature page to Confirmation of Guaranty)

NUI SERVICE, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

NUI SALES MANAGEMENT, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

T.I.C. ENTERPRISES, L.L.C.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

NUI STORAGE, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

NUI SALTVILLE STORAGE, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

NUI RICHTON STORAGE, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

 (Signature page to Confirmation of Guaranty)

RICHTON GAS STORAGE CO., LLC

By:  /s/ A. MARK ABRAMOVIC
Title:  Manager

NUI HUNGARY, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

NUI UKRAINE, INC.

By:  /s/ JAMES R. VAN HORN
Title:  Vice President & Secretary

 (Signature page to Confirmation of Guaranty)

EX-10

EXHIBIT 10.5

Intercreditor Agreement

Dated as of April 1, 2003

among

Fleet National Bank

Citizens Bank of Massachusetts

CIBC Inc.

PNC Bank, National Association

and

Mellon Bank, N.A.

and

AIG Life Insurance Company

SunAmerica Life Insurance Company

United of Omaha Life Insurance Company

Pacific Life and Annuity Company

Pacific Life Insurance Company

and

Nationwide Life Insurance Company of America

Table of Contents

Section                   Heading                                                         Page

Parties                                                                                              1

Recitals                                                                                            1

Section 1............  Definitions...........                                                 2

Section 2............ Sharing of Recoveries...........                                 6

Section 3............ Agreements Among the Creditors...........               8

Section 3.1......    Independent Actions by Creditors.....                    8

Section 3.2......    Relation of Creditors.....                                        8

Section 3.3......    Acknowledgment of Subsidiary Agreements.....     8

Section 3.4......    Additional Guarantors.....                                      9

Section 3.5......    Representations and Warranties.....                       9

Section 3.6         Defective Claims                                                   9

Section 4            Additional Parties                                                  9

Section 5            Miscellaneous                                                     10

Section 5.1         Entire Agreement                                                10

Section 5.2         Notices                                                              10

Section 5.3         Successors and Assigns                                      10

Section 5.4        Consents, Amendment, Waivers                          10

Section 5.5       Governing Law                                                     11

Section 5.6       Counterparts                                                        11

Section 5.7       Severability                                                          11

Signature Page                                                                             12

Schedule A -  Existing Noteholder Subsidiary Agreements

Schedule B -  Existing Lender Subsidiary Agreements

Exhibit A   -   Form of Acknowledgment to Intercreditor Agreement for Successor Lenders under a Successor Credit Agreement

Exhibit B   -   Form of Acknowledgment to Intercreditor Agreement for Successor Noteholders under a Successor Note Purchase Agreement

Intercreditor Agreement

Intercreditor Agreement, (this "Agreement") dated as of April 1, 2003 among Fleet National Bank, as Administrative Agent (in such capacity, "Agent"), Fleet National Bank, as Issuing Bank, Fleet National Bank, as Swingline Lender, and Fleet National Bank, as a Lender, Citizens Bank of Massachusetts, as a Lender, CIBC Inc., as a Lender, PNC Bank, National Association, as a Lender,and Mellon Bank, N.A., as a Lender (collectively, the "Lenders") and AIG Life Insurance Company, SunAmerica Life Insurance Company, United of Omaha Life Insurance Company, Pacific Life and Annuity Company, Pacific Life Insurance Company and Nationwide Life Insurance Company of America (formerly Provident Mutual Life Insurance Company) (collectively, the "Noteholders"; the Noteholders, the Agent, the Lenders and the Successor Creditors (as hereinafter defined) are collectively referred to herein as the "Creditors").

R e c i t a l s:

            A.     Under and pursuant to the Note Purchase Agreement dated as of August 20, 2001, as amended by the First Amendment and Waiver to Note Purchase Agreement, dated as of February 18, 2003 and the Second Amendment to Note Purchase Agreement dated as of April 1, 2003 (as so amended and as further amended or otherwise modified from time to time, the "2001 Note Purchase Agreement"), among NUI Corporation, a New Jersey corporation (the "Company"), and each of the Noteholders, the Company has issued and sold to the Noteholders  (i) $5,000,000 aggregate principal amount of its 6.60% Senior Notes, Series A, due August 20, 2006 (the "Series A Notes"), (ii) $15,000,000 aggregate principal amount of its 6.884% Senior Notes, Series B, due August 20, 2008 (the "Series B Notes"), (iii) $7,000,000 aggregate principal amount of its 6.884% Senior Notes, Series C, due August 20, 2011 (the "Series C Notes")and(iv) $33,000,000aggregate principal amount of its 7.29% Senior Notes, Series D, due August 20, 2011 (the "Series D Notes", the Series A Notes, Series B Notes, Series C Note and Series D Notes are hereinafter collectively referred to as the "2001 Notes").

            B.    Under and pursuant to that certain Credit Agreement dated as of February 12, 2003, as amended by the First Amendment to Credit Agreement, dated on or about the date hereof (as so amended and as further amended or otherwise modified from time to time, the "2003 Credit Agreement"), among the Company, the Agent and the Lenders, the Lenders have agreed, subject to the terms thereof, to make loans (the "Loans") to the Company and/or issue or participate in letters of credit issued on behalf of the Company (such Loans and any reimbursement obligations and undrawn amounts relating to letters of credit issued under the 2003 Credit Agreement being hereinafter collectively referred to as the "2003 Credit Extensions").

            C.     In connection with the execution of the 2003 Credit Agreement and as support for the 2003 Credit Extensions made thereunder, (i) NUI Capital Corp., (ii) Utility Business Services, Inc., (iii) NUI Energy Brokers, Inc., (iv) NUI Energy Solutions, Inc., (v) NUI Environmental Group, Inc., (vi) NUI Energy, Inc., (vii) NUI International, Inc., (viii) NUI Telecom, Inc., (ix) NUI Service, Inc., (x) NUI Sales Management, Inc., (xi) T.I.C. Enterprises, L.L.C., (xii) NUI Storage, Inc., (xiii) NUI Saltville Storage, Inc., (xiv) NUI Richton Storage, Inc., (xv) Richton Gas Storage Co., LLC, (xvi) NUI Hungary, Inc. and (xvii) NUI Ukraine, Inc., each of which is a subsidiary of the Company (together with any other subsidiaries of the Company required from time to time to execute and deliver a Subsidiary Agreement (as hereinafter defined) pursuant to the provisions of the Note Purchase Agreements (as hereinafter defined) or the Credit Agreements (as hereinafter defined), collectively, the "Subsidiary Guarantors"), have guaranteed to the Lenders the payment of the Loans and obligations relating to the 2003 Credit Extensions and all other obligations of the Company arising under and in connection with the 2003 Credit Agreement and Hedging Obligations under a Guaranty dated as of February 12, 2003 (as such Guaranty may be modified, amended, renewed or replaced, including any increase in the amount thereof, and together with any other guaranty executed and delivered from time to time pursuant to the provisions of the 2003 Credit Agreement, collectively, the "2003 Lender Subsidiary Agreements").

            D.        Each Subsidiary Guarantor has entered into a Subsidiary Note Guaranty dated as of April 1, 2003 (as such Subsidiary Note Guaranty may be modified, amended, renewed or replaced, including any increase in the amount thereof, and together with any other guaranty executed and delivered from time to time pursuant to the provisions of the 2001 Note Purchase Agreement, collectively, the "Noteholder Subsidiary Agreements") pursuant to which each Subsidiary Guarantor has guaranteed to the Noteholders the payment of the principal of, premium, if any, and interest on the 2001 Notes and the payment of all other obligations of the Company arising under and in connection with the 2001 Note Purchase Agreement.

            E.     It is contemplated that the Lenders, the Noteholders or other financial institutions may enter into one or more agreements with the Company either extending or refinancing all or any portion of the Subject Obligations (as hereinafter defined) or making additional extensions of credit, which would be guaranteed by the Subsidiary Guarantors.

            F.     In consideration of the mutual benefit to be provided hereby and intending to be legally bound, the Agent, the Lenders and the Noteholders have agreed to enter into this Agreement.

Now, Therefore, in consideration of the premises and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.        Definitions.

The following terms shall have the meanings assigned to them below in this Section 1 or in the provisions of this Agreement referred to below:

"Bankruptcy Proceeding" shall mean, with respect to any person, a general assignment of such person for the benefit of its creditors, or the institution by or against such person of any proceeding seeking relief as debtor, or seeking to adjudicate such person as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of such person or its debts, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for such person or for any substantial part of its property.

"Company" shall have the meaning assigned thereto in the Recitals hereof.

"Credit Agreements" shall mean the 2003 Credit Agreement and any Successor Credit Agreements.

"Credit Extensions" shall mean the 2003 Credit Extensions and any Successor Credit Extensions.

"Creditor" shall have the meaning assigned thereto in the introductory paragraph hereto.

"Excess Subject Payment" shall mean as to any Creditor an amount equal to (a) the Subject Payment received by such Creditor less (b) the sum of (i) the Pro Rata Share of Subject Payments to which such Creditor is then entitled plus (ii) all reasonable costs incurred by such Creditor in connection with the collection of such Subject Payment.

"Federal Funds Effective Rate" means, for any day, the rate per annum (based on a year of 360 days and the actual days elapsed and rounded upward to the nearest 1/100^th of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by the Federal Reserve Bank of New York (or any successor) in substantially the same manner as such Federal Reserve Bank of New York computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, if such Federal Reserve Bank of New York (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day for which such rate was announced.

"Hedging Obligations" shall mean, with respect to any Person, all liabilities of such Person under interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

"Lender" shall have the meaning assigned thereto in the introductory paragraph hereto.

"Loans" shall have the meaning assigned thereto in the Recitals hereof.

"New Credit Agreement" shall mean any replacement, refinancing or restructuring of the 2003 Credit Agreement and any additional credit agreement entered into by the Company with lenders pursuant to which such lenders make available to the Company credit facilities which are pari passu with the existing Subject Obligations and guaranteed by the Subsidiary Guarantors.

"New Note Purchase Agreement" shall mean any replacement, refinancing or restructuring of the 2001 Note Purchase Agreement and any additional note purchase agreement entered into by the Company with institutional investors pursuant to which the Company issues and sells to such institutional investors senior notes to be pari passu with the existing Subject Obligations and benefiting ratably with the existing Subject Obligations and guaranteed by the Subsidiary Guarantors.

"Note Purchase Agreements" shall mean the 2001 Note Purchase Agreement and any Successor Note Purchase Agreements.

"Noteholder" shall have the meaning assigned thereto in the introductory paragraph hereto.

"Notes" shall mean the 2001 Notes and any Successor Notes.

"Person" means an individual, partnership, corporation, trust, joint venture, banking association, unincorporated organization or any other entity or enterprise or government or department or agency thereof.

"Pro Rata Share of Subject Payments" shall mean as of the date of any Subject Payment to a Creditor under a Subsidiary Agreement or the date on which a Creditor has exercised its right of set-off or banker's lien, as applicable, against any deposit, credit or property of a Subsidiary Guarantor, in each case pursuant to Section 2, an amount equal to the product obtained by multiplying (a) the amount of all Subject Payments made to all Creditors concurrently with such Subject Payment to such Creditor less all reasonable costs incurred by the Creditors in connection with the collection of all such Subject Payments, by (b) a fraction, the numerator of which shall be the Specified Amount owing to such Creditor, and the denominator of which is the aggregate amount of all outstanding Subject Obligations (without giving effect in the numerator or the denominator to the application of any such Subject Payments).

"Receiving Creditor" shall have the meaning assigned thereto in Section 2.

"Specified Amount" shall mean as to any Creditor the aggregate amount of the Subject Obligations owed to such Creditor.

"Subject Obligations" shall mean all principal of, premium, if any, fees and interest on, the Notes and the Credit Extensions, and all other obligations of the Company under or in respect of the Notes and the Credit Extensions and under the Note Purchase Agreements and the Credit Agreements and any other obligations of the Company to any of the Creditors which are guaranteed pursuant to the Subsidiary Agreements.

"Subject Payment" shall have the meaning assigned thereto in Section 2.

"Subsidiary Agreements" shall mean the 2003 Lender Subsidiary Agreements, the 2003 Noteholder Subsidiary Agreements, any Successor Lender Subsidiary Agreements and any Successor Noteholder Subsidiary Agreements.

"Subsidiary Guarantors" shall have the meaning assigned thereto in the Recitals hereof.

"Successor Credit Agreement" shall mean any New Credit Agreement; provided that each lender thereunder or an agent acting on behalf of all such lenders has executed an acknowledgment to this Agreement in the form attached hereto as Exhibit A in order to share ratably with the existing Creditors the Subsidiary Agreements (including, without limitation, the related Successor Lender Subsidiary Agreements).

"Successor Credit Extensions" shall mean any Successor Loans and any reimbursement obligations and undrawn amounts relating to letters of credit issued under any Successor Credit Agreements.

"Successor Creditors" shall mean the Successor Lenders and Successor Noteholders.

"Successor Lender Subsidiary Agreements" shall mean any guaranties entered into by the Subsidiary Guarantors for the benefit of the Successor Lenders guaranteeing the obligations of the Company under the Successor Credit Agreements.

"Successor Lenders" shall mean any lenders which are parties to any Successor Credit Agreement.

"Successor Loans" shall mean all loans to the Company under any Successor Credit Agreements.

"Successor Note Purchase Agreement" shall mean any New Note Purchase Agreement; provided that each institutional investor thereunder has executed an acknowledgment to this Agreement in the form attached hereto as Exhibit B in order to share ratably with the existing Creditors the Subsidiary Agreements (including, without limitation, the related Successor Noteholder Subsidiary Agreements).

"Successor Noteholder Subsidiary Agreements" shall mean any guaranties entered into by the Subsidiary Guarantors for the benefit of the Successor Noteholders guaranteeing the obligations of the Company under the Successor Note Purchase Agreements.

"Successor Noteholders" shall mean any noteholders which are parties to any Successor Note Purchase Agreements.

"Successor Notes" shall mean any senior notes issued under any Successor Note Purchase Agreements.

"2001 Note Purchase Agreement" shall have the meaning assigned thereto in the Recitals hereof.

"2001 Notes" shall have the meaning assigned thereto in the Recitals hereof.

"2003 Credit Agreement" shall have the meaning assigned thereto in the Recitals hereof.

"2003 Credit Extensions" shall have the meaning assigned thereto in the Recitals hereof.

"2003 Lender Subsidiary Agreements" shall have the meaning assigned thereto in the Recitals hereof.

"2003 Noteholder Subsidiary Agreements" shall have the meaning assigned thereto in the Recitals hereof.

Section 2.        Sharing of Recoveries.

Each Creditor hereby agrees with each other Creditor that payments made with respect to Subject Obligations by a Subsidiary Guarantor pursuant to a demand made under the terms of a Subsidiary Agreement or pursuant to any Creditor's right of set-off or banker's lien (whether based on common law, statute, contract or otherwise) against any deposit, credit or property of a Subsidiary Guarantor in the possession or control of such Creditor (a) within 90 days prior to the commencement of a Bankruptcy Proceeding with respect to any Subsidiary Guarantor or (b) following the acceleration of any Notes or any Credit Extensions or any other Subject Obligations (any of the foregoing being hereinafter referred to as a "Subject Payment"), shall be shared so that each Creditor shall receive its Pro Rata Share of Subject Payments.  Accordingly, each Creditor hereby agrees that in the event (i) an event described in clauses (a) or (b) above shall have occurred, (ii) any Creditor shall receive a Subject Payment (a "Receiving Creditor"), and (iii) any other Creditor shall not concurrently receive its Pro Rata Share of Subject Payments, then the Receiving Creditor shall remit the Excess Subject Payment to each other Creditor who shall then be entitled thereto (together with, to the extent not remitted within fifteen (15) business days after such receipt by the Receiving Creditor, interest at the then applicable Federal Funds Effective Rate from and including the date of such receipt to, but excluding, the date of payment to such other Creditor) so that after giving effect to such payment (and any other payments then being made by any other Receiving Creditor pursuant to this Section 2) each Creditor shall have received its Pro Rata Share of Subject Payments.  Whenever any Receiving Creditor receives a Subject Payment, it shall notify the other Creditors of such receipt and request that each such Creditor certify in writing the existence and amount of the Subject Obligations owed to such Creditor.  Such Receiving Creditor shall be entitled, absent manifest error, to determine the amount of any Excess Subject Payments for remittance to other Creditors based on one or more certificates of each such Creditor with respect to the Subject Obligations owed to such Creditor, provided, however, that if, notwithstanding the request of such Receiving Creditor, any Creditor shall fail or refuse within five (5) business days of such request to certify as to the existence or amount of any Subject Obligations owed to such Creditor, such Receiving Creditor shall be entitled to determine such existence or amount by such method as such Receiving Creditor may, in its sole discretion, determine, including by reliance upon a certificate of the Company, and such Receiving Creditor shall give notice of such determination to such Creditor.  Such Receiving Creditor shall be held harmless, and have no liability (except for its own gross negligence or willful misconduct) to any of the other Creditors (other than the obligation to pay Excess Subject Payments to such other Creditors pursuant to the terms hereof) for making payments in accordance with certificates of the Creditors and determinations made in good faith by such Receiving Creditor.

Any such payments shall be deemed to be and shall be made in consideration of the purchase for cash at face value, but without recourse except as hereinafter provided, ratably from the other Creditors of such amount of Notes or Credit Extensions (or interest therein), as the case may be, to the extent necessary to cause such Creditor to share such Excess Subject Payment with the other Creditors as hereinabove provided; provided, however, that if any such purchase or payment is made by any Receiving Creditor and if such Excess Subject Payment or part thereof is thereafter recovered from such Receiving Creditor by any Subsidiary Guarantor or the Company (including, without limitation, by any trustee in bankruptcy of any Subsidiary Guarantor or the Company or any creditor thereof), the related purchase from the other Creditors shall be rescinded ratably and the purchase price restored as to the portion of such Excess Subject Payment so recovered (together with, to the extent not restored in full within fifteen (15) business days after demand by the Receiving Creditor, interest at the then applicable Federal Funds Effective Rate from and including the date of such demand to, but excluding, the date of payment to the Receiving Creditor); and provided further nothing herein contained shall obligate any Creditor to resort to any setoff, application of deposit balance or other means of payment under any Subsidiary Agreement or otherwise or avail itself of any recourse by resort to any property of the Company or any Subsidiary Guarantor, the taking of any such action to remain within the absolute discretion of such Creditor without obligation of any kind to the other Creditors to take any such action.

Notwithstanding anything in this Section 2 to the contrary, any amounts distributed to any Creditor for application to the Company's liabilities with respect to any undrawn amounts relating to letters of credit issued under any Credit Agreement shall be held by such Creditor as collateral security for such liabilities until a drawing thereon, at which time such collateral shall be applied to such liabilities.  If letters of credit issued under any Credit Agreement and constituting part of the Subject Obligations expire without having been drawn upon in full, the undrawn portion shall be excluded from the Subject Obligations for purposes of the first paragraph of this Section 2, all as though such undrawn portion never existed.  If distributions to any Creditor have previously been made under the first paragraph of this Section 2 with respect to letters of credit issued under any Credit Agreement and constituting part of the Subject Obligations which expire without having been drawn upon in full, the amount of each Creditor's Pro Rata Share of Subject Payments shall be redetermined by excluding the undrawn amount of such expired letters of credit from the calculations under the first paragraph of this Section 2 and if a redetermination reveals that there has been an overpayment to any Creditor, each Creditor which received such an overpayment shall pay to those other Creditors who were underpaid in respect of such distribution the amount of the underpayment (together with, to the extent not paid within fifteen (15) business days after expiration of such letter of credit, interest at the then applicable Federal Funds Effective Rate from and including the date of such expiration to, but excluding, the date of payment by the Receiving Creditor to such other Creditors) and in return the remitting Creditor shall receive from each such underpaid Creditor a non-recourse (except as otherwise provided in the preceding paragraph) participation in the Subject Obligations owing to such underpaid Creditors in the amount of the underpayment paid over to such Creditor.

If at any time any Creditor determines that for any reason it has received more than its Pro Rata Share of Subject Payments, such Creditor shall notify in writing (an "Overpayment Notice") the other Creditors and the amount of each Creditor's Pro Rata Share of Subject Payments shall be redetermined under the first paragraph of this Section 2.  If a redetermination reveals that there has been an overpayment to any Creditor, each Creditor which received such an overpayment shall pay to those other Creditors who were underpaid in respect of such distribution the amount of the underpayment (together with, to the extent not paid within fifteen (15) business days after the Overpayment Notice, interest at the then applicable Federal Funds Effective Rate from and including the date of such Overpayment Notice to, but excluding, the date of payment by the Receiving Creditor to such other Creditors) and in return the remitting Creditor shall receive from each such underpaid Creditor a non-recourse (except as otherwise provided in the second paragraph of this Section 2) participation in the Subject Obligations owing to such underpaid Creditors in the amount of the underpayment paid over to such Creditor.

Each Creditor also agrees that if at any time it receives proceeds of any collateral or security securing the obligations of a Subsidiary Guarantor under any of the Subsidiary Agreements, such proceeds shall be shared by such Creditor as a Receiving Creditor in accordance with the terms of this Section 2.

Section 3.        Agreements Among the Creditors.

     Section 3.1.    Independent Actions by Creditors.  Nothing contained in this Agreement shall prohibit any Creditor from accelerating the maturity of, or demanding payment from any Subsidiary Guarantor on, any Subject Obligation of the Company to such Creditor or from instituting legal action against the Company or any Subsidiary Guarantor to obtain a judgment or other legal process in respect of such Subject Obligation, but any funds received from any Subsidiary Guarantor in connection with any recovery therefrom shall be subject to the terms of this Agreement.

     Section 3.2.Relation of Creditors.  This Agreement is entered into solely for the purposes set forth herein, and no Creditor assumes any responsibility to any other party hereto to advise such other party of information known to such other party regarding the financial condition of the Company or any Subsidiary Guarantor or of any other circumstances bearing upon the risk of nonpayment of any Subject Obligation.  Each Creditor specifically acknowledges and agrees that nothing contained in this Agreement is or is intended to be for the benefit of the Company or any Subsidiary Guarantor and nothing contained herein shall limit or in any way modify any of the obligations of the Company or any Subsidiary Guarantor to the Creditors.

     Section 3.3.Acknowledgment of Subsidiary Agreements.  (a) The Agent and the 2003 Lenders hereby expressly acknowledge and consent to the execution and delivery of the 2003 Noteholder Subsidiary Agreements as of the date hereof as described on Schedule A hereto and agree that such 2003 Noteholder Subsidiary Agreements are enforceable against the Subsidiary Guarantors that are party thereto and the Noteholders hereby expressly acknowledge the 2003 Lender Subsidiary Agreements that exist as of the date hereof as described on Schedule B hereto and agree that such 2003 Lender Subsidiary Agreements are enforceable against the Subsidiary Guarantors that are party thereto.  Each of the Agent and the 2003 Lenders agrees that it will not challenge or contest the validity or enforceability of the 2003 Noteholder Subsidiary Agreements.  Each of the Noteholders agrees that it will not challenge or contest the validity or enforceability of the 2003 Lender Subsidiary Agreements.

     Section 3.4.       Additional Guarantors.  Additional Persons may become "Subsidiary Guarantors" hereunder by executing and delivering to a then existing Creditor a guaranty by which such Person has become a guarantor of any Notes or any Credit Extensions pursuant to the terms of the Note Purchase Agreements or the Credit Agreements.  Accordingly, upon the execution and delivery of any such copy of the guaranty by any such Person, such Person shall, thereinafter become a "Subsidiary Guarantor" for all purposes of this Agreement.

     Section 3.5.Representations and Warranties.  Each of the parties hereto represents and warrants to the other parties hereto that (a) it has the corporate power and authority to enter into and perform this Agreement, (b) the execution, delivery and performance of this Agreement have been duly authorized by all requisite corporate action on its part and (c) this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally.

     Section 3.6.         Defective Claims.  Notwithstanding the other terms of this Agreement, no Receiving Creditor shall be obligated to make any payments hereunder with respect to any Subject Payment to any Creditor to the extent that (a) the Subject Obligations allegedly owed to such Creditor by the Company have been determined by a court of competent jurisdiction (with a final, nonappealable order) to be invalid or unenforceable or equitably subordinated to such Receiving Creditor other than as a result of a fraudulent conveyance or preference or (b) the Subsidiary Guaranties with respect to any Subject Obligations have been determined by a court of competent jurisdiction (with a final nonappealable order) to be invalid or unenforceable or equitably subordinated to such Receiving Creditor other than as a result of a fraudulent conveyance or preference (collectively, the "Defective Subject Obligations").  In the event payments are made on any such Defective Subject Obligations to such Creditor and such Defective Subject Obligations are thereafter determined by a court of competent jurisdiction (with a final, nonappealable order) to be invalid or unenforceable or equitably subordinated to any of the other Creditors other than as a result of a fraudulent conveyance or preference, such Creditor shall disgorge to the other Creditors any payments on the Defective Subject Obligations so received based on such other Creditors' Pro Rata Share of Subject Obligations (without giving effect to such Defective Subject Obligations) in the same manner as described in the second paragraph of Section 2. 

Section 4.        Additional Parties.

If at any time the Company enters into a New Credit Agreement or a New Note Purchase Agreement, the lenders (or the agent on behalf of all such lenders) under such New Credit Agreement or the institutional investors under such New Note Purchase Agreement may agree to be bound by, and benefit from, the terms of this Agreement by signing, at such time, an acknowledgment in the form of Exhibit A or Exhibit B, as the case may be, attached to this Agreement, and delivering a signed acknowledgment hereof executed by the Company and each Subsidiary Guarantor to the other Creditors.  Upon receipt by such other Creditors of such acknowledgment signed by all lenders (or the agent on behalf of all such lenders) under such New Credit Agreement or all institutional investors under such New Note Purchase Agreement, as the case may be, such lenders or institutional investors, as the case may be, shall thereupon become vested with all rights and benefits, and become subject to all the obligations, in respect thereof granted to or imposed upon Creditors by this Agreement and such other Creditors shall continue to be vested with all rights and benefits, and be subject to all the obligations, in respect thereof granted to or imposed upon Creditors by this Agreement.

Section 5.        Miscellaneous.

     Section 5.1.              Entire Agreement.  This Agreement represents the entire Agreement among the Creditors and, except as otherwise provided, this Agreement may not be altered, amended or modified except in a writing executed by all the parties to this Agreement.

     Section 5.2.           Notices.  Notices hereunder shall be given to the Creditors at their addresses as set forth in the Note Purchase Agreements or the Credit Agreements, as the case may be, or at such other address as may be designated by each in a written notice to the other parties hereto.

     Section 5.3.       Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of each of the Creditors and their respective successors and assigns (including, without limitation, any holder of a participation interest in any Subject Obligation), whether so expressed or not, and, in particular, shall inure to the benefit of and be enforceable by any future holder or holders of any Subject Obligations, and the term "Creditor" shall include any such subsequent holder of Subject Obligations, wherever the context permits.  Without limiting the generality of the foregoing sentence, any Creditor may sell, assign or otherwise transfer (in whole or in part) to any other person or entity the obligations of the Company or any of the Subsidiary Guarantors to such Creditor under the Note Purchase Agreements, the Credit Agreements or any Subsidiary Agreement and such other person or entity shall thereupon become vested with all rights and benefits, and become subject to all the obligations, in respect thereof granted to or imposed upon such Creditor by this Agreement.  For the avoidance of doubt, nothing in this Section 5.3 shall affect or limit any provision in the Credit Agreements, the Note Purchase Agreements or any Subsidiary Agreement relating to the sale, assignment or transfer of any Creditor's interest thereunder or in any of the Notes or Credit Extensions contemplated thereby.

     Section 5.4.        Consents, Amendment, Waivers  All amendments, waivers or consents of any provision of this Agreement shall be effective only if the same shall be in writing and signed by each of (a) with respect to the Notes, the Required Holders (as defined in the respective Note Purchase Agreements), (b) with respect to the Credit Extensions, the Required Lenders (as defined in the respective Credit Agreements) and (c) if no Default (as defined in any Note Purchase Agreement) or Potential Default (as defined in any Credit Agreement) has occurred and is continuing, the Company.  Nothing in this Agreement may be modified to confer on the Company any obligations or duties without its prior written consent.

     Section 5.5.       Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

     Section 5.6.Counterparts.  This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one Agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart.

     Section 5.7.    Severability.  In case any one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

In Witness Whereof, each ofthe parties hereto has caused this Agreement to be executed as of the date first above written.

Fleet National Bank, as the Agent, the Issuing Bank, the Swingline Lender and as a Lender

By

/s/ STEPHEN HOFFMAN 
Its: Director

Citizens Bank of Massachusetts, as a Lender

By

/s/ MICHAEL OVELLET
Its:  Vice President

CIBC Inc., as a Lender

By

/S/ MARYBETH ROSS
Its:  Authorized Signatory

PNC Bank, National Association, as a Lender

By

/s/ MICHAEL RICHARDS
Its:  Vice President

Mellon Bank, N.A., as a Lender

By

/s/ ALAN J. KOPOLOW
Its:  First Vice President

AIG Life Insurance Company, as a Noteholder

SunAmerica Life Insurance Company, as a Noteholder

By: AIG Global Investment Corp., investment advisor

By

/s/ VICTORIA Y. CHIN
Its:  Vice President

United of Omaha Life Insurance Company, as a Noteholder

By

/s/ EDWIN H. GARRISON, JR.
Its:  First Vice President

Pacific Life and Annuity Company, as a Noteholder

By

/s/ ELAINE M. HAVENS
Its:  Vice President

By

/s/ CATHY SCHWARTZ
Its:  Assistant Secretary

Pacific Life Insurance Company, as a Noteholder

By

/s/ ELAINE M. HAVENS
Its:  Vice President

By

/s/ CATHY SCHWARTZ
Its:  Assistant Secretary

Nationwide Life Insurance Company of America, as a Noteholder

By

/s/ JOSPEH P. YOUNG
Its:  Credit Officer

The undersigned hereby acknowledge and agree to the foregoing Agreement.

NUI Corporation

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Capital Corp.

By:  /s/ CHARLES N. GARBER
            Treasurer

Utility Business Services, Inc.

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Energy Brokers, Inc.

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Energy Solutions, Inc.

By:  /s/ PETER E. MARICONDO
            Treasurer

NUI Environmental Group, Inc.

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Energy, Inc.

By:  /s/ PETER E. MARICONDO
            Treasurer

NUI International, Inc.

By:  /s/ CHARLES N. GARBER
            Tresurer

NUI Telecom, Inc.

By:  /s/ PETER E. MARICONDO
            Treasurer

NUI Service, Inc., a Delaware corporation

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Sales Management, Inc.

By:  /s/ CHARLES N. GARBER
            Treasurer

T.I.C. Enterprises, L.L.C.

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Storage, Inc.

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Saltville Storage, Inc.

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Richton Storage, Inc.

By:  /s/ A. MARK ABRAMOVIC
            Vice President & Treasurer

Richton Gas Storage Co., LLC

By:  /s/ A. MARK ABRAMOVIC
            Manager

NUI Hungary, Inc.

By:  /s/ CHARLES N. GARBER
            Treasurer

NUI Ukraine, Inc.

By:  /s/ CHARLES N. GARBER
            Treasurer

Existing Noteholder Subsidiary Agreements

The Subsidiary Note Guaranty, dated as of April 1, 2003 by NUI Capital Corp., Utility Business Services, Inc., NUI Energy Brokers, Inc., NUI Energy Solutions, Inc., NUI Environmental Group, Inc., NUI Energy, Inc., NUI International, Inc., NUI Telecom, Inc., NUI Service, Inc., NUI Sales Management, Inc., T.I.C. Enterprises, L.L.C., NUI Storage, Inc., NUI Saltville Storage, Inc., NUI Richton Storage, Inc., Richton Gas Storage Co., LLC, NUI Hungary, Inc. and NUI Ukraine, Inc., in favor of the Noteholders.

SCHEDULE A

Existing Lender Subsidiary Agreements

The Guaranty, dated as of February 12, 2003 among Fleet National Bank, as Agent for the benefit of the Lenders, NUI Capital Corp., Utility Business Services, Inc., NUI Energy Brokers, Inc., NUI Energy Solutions, Inc., NUI Environmental Group, Inc., NUI Energy, Inc., NUI International, Inc., NUI Telecom, Inc., NUI Service, Inc., NUI Sales Management, Inc., T.I.C. Enterprises, L.L.C., NUI Storage, Inc., NUI Saltville Storage, Inc., NUI Richton Storage, Inc., Richton Gas Storage Co., LLC, NUI Hungary, Inc. and NUI Ukraine, Inc.

SCHEDULE B

Form of Acknowledgment to
Intercreditor Agreement for Successor Lenders
under a Successor Credit Agreement

Reference is hereby made to the Intercreditor Agreement dated as of April 1, 2003 (the "Agreement"), attached hereto as Exhibit I, among the Lenders party to the 2003 Credit Agreement and the Noteholders party thereto.  The undersigned Successor Lender or its agent has entered into a Credit Agreement dated as of _______________ with NUI Corporation and the obligations of NUI Corporation thereunder are guaranteed by certain subsidiaries of the Company.  The undersigned Successor Lender desires that the guaranties by such subsidiaries be shared with the Creditors under the Agreement.  The undersigned acknowledges the terms of the Agreement and agrees to be bound thereby.

______________________ ,
as a Successor Lender

By

Title

Date

Notice Address:

Acknowledged and Agreed:

NUI Corporation

By

Title

Date

[Subsidiary Guarantors]

By

Title

Date

EXHIBIT A

Form of Acknowledgment to
Intercreditor Agreement for Successor Noteholders
under a Successor Note Purchase Agreement

Reference is hereby made to the Intercreditor Agreement dated as of April 1, 2003 (the "Agreement"), attached hereto as Exhibit I, among the Lenders party to the 2003 Credit Agreement and the Noteholders party thereto.  The undersigned Successor Noteholder has entered into a Note Purchase Agreement dated as of _____________ with NUI Corporation and the obligations of NUI Corporation thereunder are guarantied by certain subsidiaries.  The undersigned Successor Noteholder desires that the guaranties by such subsidiaries be shared with the Creditors under the Agreement.  The undersigned acknowledges the terms of the Agreement and agrees to be bound thereby.

__________________,
as a Successor Noteholder

By

Title

Date

Notice Address:

Acknowledged and Agreed:

NUI Corporation

By

Title

Date

[Subsidiary Guarantors]

By

Title

Date

EXHIBIT B

EX-10

EXHIBIT 10.6

NUI Corporation

___________________________________

First Amendment and Waiver

Dated as of February 20, 2003

to

Note Purchase Agreement

Dated as of August 20, 2001

___________________________________

Re: $5,000,000 6.60% Senior Notes, Series A,
due August 20, 2006

$15,000,000 6.884% Senior Notes, Series B,
due August 20, 2008

$7,000,000 6.884% Senior Notes, Series C,
due August 20, 2011

and

$33,000,000 7.29% Senior Notes, Series D,
due August 20, 2011

First Amendment and Waiver to Note Purchase Agreement

This First Amendment and Waiver dated as of February 20, 2003 (the or this "First Amendment") to the Note Purchase Agreement dated as of August 20, 2001 is among the undersigned, NUI Corporation, a New Jersey corporation (the "Company"), and each of the institutions which is a signatory to this First Amendment (collectively, the Noteholders"). 

Recitals:

            A.     The Company and each of the Noteholders have heretofore entered into the Note Purchase Agreement dated as of August 20, 2001 (the "Note Agreement").  The Company has heretofore issued (i) $5,000,000 aggregate principal amount of its 6.60% Senior Notes, Series A, due August 20, 2006 (the "Series A Notes"), (ii) $15,000,000 aggregate principal amount of its 6.884% Senior Notes, Series B, due August 20, 2008 (the "Series B Notes"), (iii) $7,000,000 aggregate principal amount of its 6.884% Senior Notes, Series C, due August 20, 2011 (the "Series C Notes")and(iv) $33,000,000aggregate principal amount of its 7.29% Senior Notes, Series D, due August 20, 2011 (the "Series D Notes", the Series A Notes, Series B Notes, Series C Notes and Series D Notes are hereinafter collectively referred to as the "Notes").

            B.     The Company and the Noteholders now desire to amend the Note Agreement in the respects, but only in the respects, hereinafter set forth.

            C.     Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require.

            D.     All requirements of law have been fully complied with and all other acts and things necessary to make this First Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

Now, therefore, upon the full and complete satisfaction of the conditions precedent to the effectiveness of this First Amendment set forth in Section 3 hereof, and in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:

Section 1.        Amendments.

          Section 1.1.     Amendment to Section 1.  Section 1 of the Note Agreement shall be and is hereby amended by (a) adding the phrase "; Adjusted Interest Rate" after the word "Notes" in the section heading of Section 1 of the Note Agreement and (b) adding the phrase "Section 1.1." before the first occurrence of the word "The" appearing in the first sentence of Section 1 of the Note Agreement.

          Section 1.2.     New Section 1.2.  The following shall be added as a new Section 1.2 to the Note Agreement:

            "Section 1.2.    Interest Rate Adjustments. Notwithstanding the express terms contained in this Agreement or the Notes in the respective forms attached as Exhibits 1‑A, 1‑B, 1‑C and 1‑D hereto, but subject to Section 9.10 hereof, on April 1, 2003 (a) the interest rate applicable to the Series A Notes shall increase from 6.60% to 7.10% and all references to the interest rates of 6.60% and 8.60% appearing in this Agreement and the Series A Notes shall be changed to 7.10% and 9.10%, respectively, (b) the interest rate applicable to the Series B Notes shall increase from 6.884% to 7.384% and all references to the interest rates of 6.884% and 8.884% appearing in this Agreement and the Series B Notes shall be changed to 7.384% and 9.384%, respectively, (c) the interest rate applicable to the Series C Notes shall increase from 6.884% to 7.384% and all references to the interest rates of 6.884% and 8.884% appearing in this Agreement and the Series C Notes shall be changed to 7.384% and 9.384%, respectively and (d) the interest rate applicable to the Series D Notes shall increase from 7.29% to 7.79% and all references to the interest rates of 7.29% and 9.29% appearing in this Agreement and the Series D Notes shall be changed to 7.79% and 9.79%, respectively. Subject to Section 9.10 hereof, such increases shall apply from April 1, 2003 to the respective maturity of each of the Notes.  The Company further agrees that it shall promptly take all other actions as shall be reasonably requested by any holder of the Notes to reflect such increase in the interest rate applicable to the Notes, including, without limitation, the issuance of new Notes reflecting the increased interest rates."

          Section 1.3.     Amendment to Section 7.1(b)(ii).  Section 7.1(b)(ii) of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

             "(ii)      consolidated and consolidating statements of income of the Company and its Subsidiaries, and consolidated changes in shareholders' equity and cash flows of the Company and its Subsidiaries, for such Fiscal Year,"

          Section 1.4.     New Sections 9.9 and 9.10.  The following shall be added as new Sections 9.9 and 9.10 to the Note Agreement:

        "Section 9.9.     Subsidiary Guarantors.  Subject to Section  9.10 hereof, the Company will cause each Subsidiary (whether existing or newly acquired) that delivers a Guaranty, or otherwise becomes obligated in any manner (including, without limitation, as a co‑obligor with the Company) (each, a "Bank Guaranty"), to any holder of any Indebtedness of the Company outstanding under the Company Credit Agreement (or under any credit facility or other Indebtedness instrument replacing all or part of the Company Credit Agreement) (each such Subsidiary, a "Subsidiary Guarantor") to concurrently enter into a guaranty agreement, in form and substance satisfactory to the Required Holders (each, a "Subsidiary Note Guaranty"), pursuant to which such Subsidiary Guarantor shall guarantee the prompt payment when due (whether at maturity, by acceleration or otherwise) of the principal of all of the Notes and of the interest and the Make-Whole Amount, if any, thereon and the full and prompt performance and compliance by the Company with each of its other obligations under the Note Agreement and the Notes, and, concurrently therewith, the Company shall cause the lenders under such Company Credit Agreement to enter into an intercreditor agreement with the holders of the Notes in form and substance reasonably satisfactory to the lenders under such Company Credit Agreement and the Required Holders (the "Intercreditor Agreement") with respect to the obligations of such Subsidiary Guarantor to the Banks and the holders of the Notes providing for, inter alia, the pro rata sharing of any proceeds received by the lenders under such Company Credit Agreement or the holders of the Notes under any Bank Guaranty or Subsidiary Note Guaranty.  Within three Business Days after entering into the Subsidiary Note Guaranty and the Intercreditor Agreement, the Company shall deliver to each of the holders of the Notes the following items:

              (a)      an executed counterpart of such Subsidiary Note Guaranty;

              (b)      an executed counterpart of such Intercreditor Agreement;

              (c)      a certificate signed by the President, a Vice President or another authorized officer of such Subsidiary Guarantor making representations and warranties to the effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7, but with respect to such Subsidiary Guarantor and the Subsidiary Note Guaranty, as applicable;

              (d)      such documents and evidence with respect to such Subsidiary Guarantor as any holder of the Notes may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated by the Subsidiary Note Guaranty; and

              (e)      an opinion of internal legal counsel to the Company to the effect that the Subsidiary Note Guaranty has been duly authorized, executed and delivered and constitutes the legal, valid and binding contract and agreement of such Subsidiary Guarantor enforceable in accordance with its terms, except as an enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles.

        Section 9.10.     Effectiveness of Sections 1.2 and 9.9; Bank Consent.  (a) Sections 1.2 and 9.9 hereof shall only be and become effective on and after receipt by the Company of written consent from the Required Lenders (as defined in the Company Credit Agreement) or of the Agent (as defined in the Company Credit Agreement) with the written consent of the Required Lenders.

              (b)      On or before April 1, 2003, the Company shall (i) obtain the written consent of the Required Lenders (as defined in the Company Credit Agreement) or of the Agent (as defined in the Company Credit Agreement) with the written consent of the Required Lenders, to the provisions of Section 1.2 and 9.9 hereof, and shall send a copy of such written consent to each of the holders of the Notes, (ii) acknowledge in writing to each of the holders of the Notes that the written consent obtained under clause (i) of this Section 9.10(b) satisfies the requirements of Section 9.10(a) and, therefore, Sections 1.2 and 9.9 hereof are effective, and (iii) upon obtaining such written consent under clause (i) of this Section 9.10(b), comply with the terms of Section 9.9 hereof with respect to any Subsidiary that has previously delivered a Bank Guaranty."

          Section 1.5.     Amendment to Section 10.2.  Section 10.2 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

      "Section 10.2.     Fixed Charges Coverage Ratio.  The Company will not at any time permit, for any period of four consecutive Fiscal Quarters ending on or after September 30, 2002, the ratio of (a) the sum of (i) Consolidated Net Income for such period plus (ii) income taxes deducted in determining such Consolidated Net Income plus (iii) Consolidated Fixed Charges for such period; to (b) Consolidated Fixed Charges for such period to be less than 1.50 to 1.00."

          Section 1.6.     Amendment to Section 10.3.  Section 10.3 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

      "Section 10.3.     Leverage Ratio. The Company will not at any time permit the ratio of Consolidated Total Indebtedness to Consolidated Total Capitalization during any period specified below to exceed the ratio set forth opposite such period:

Period	Ratio
March 1 of each year to and including August 31 of such year:	0.65:1.00
September 1 of each year to and including February 28 (or 29, if applicable) of the following year:	0.70:1.00"

          Section 1.7.     Amendment to Section 10.4(a).  Section 10.4(a) of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

      "Section 10.4.     Restricted Payments.  (a) Except as hereinafter provided, the Company will not:

               (i)      Declare or pay any dividends, either in cash or property, on any shares of its capital stock of any class (except dividends or other distributions payable solely in shares of common stock of the Company);

              (ii)      Directly or indirectly, or through any Subsidiary or Affiliate of the Company, purchase, redeem or retire any shares of its capital stock of any class or any warrants, rights or options to purchase or acquire any shares of its capital stock (other than (i) in exchange for or out of the net cash proceeds to the Company from the substantially concurrent issue or sale of shares of common stock of the Company or warrants, rights or options to purchase or acquire any shares of its common stock or (ii) any of the foregoing with respect to capital stock, warrants, rights or options issued to employees, directors or agents of the Company pursuant to a benefit or compensation plan or agreement of the Company); or

             (iii)      Make any other payment or distribution, either directly or indirectly or through any Subsidiary or Affiliate of the Company, in respect of its capital stock;

(such declarations or payments of dividends, purchases, redemptions or retirements of capital stock and warrants, rights or options and all such other payments or distributions being herein collectively called "Restricted Payments"), if at the time of such Restricted Payments and after giving effect thereto any Default or Event of Default shall have occurred and be continuing or the aggregate amount of all Restricted Payments made, paid or declared by the Company since the date of the Closing to and including the date of the making of the Restricted Payment in question would exceed the sum of (A) $20,000,000 plus (B) 100% of Consolidated Net Income for such period, beginning with the first Fiscal Year ending after the date of the Closing to and including the date of the making of the Restricted Payment in question, computed on a cumulative basis for said entire period (or if such Consolidated Net Income is a deficit figure, then minus 100% of such deficit).  The Company will not declare any dividend which constitutes a Restricted Payment payable more than 60 days after the date of declaration thereof."

          Section 1.8.     Amendment to Clause (b) of Section 10.5.  Clause (b) of Section 10.5 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

            "(b)      (i) Investments of the Company and its Restricted Subsidiaries existing as of the date of the Closing and described on Schedule 10.5 hereto and (ii) any Bank Guaranties;"

          Section 1.9.     Amendment to Section 10.6.  Section 10.6 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

      "Section 10.6.     Guaranties.  The Company will not, and will not permit any Restricted Subsidiary to, become or be liable in respect of any Guaranty, except (a) Guaranties by the Company which constitute Guaranties of obligations incurred by any Restricted Subsidiary in compliance with the provisions of this Agreement and (b) any Bank Guaranties."

        Section 1.10.     Amendment to Section 10.7.  Section 10.7 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

      "Section 10.7.     No Restrictions on Dividends of Restricted Subsidiaries.  The Company will not, and will not permit any Restricted Subsidiary (including without limitation, Virginia Gas Company, Elizabethtown Gas Company and City Gas Company of Florida) to, enter into any agreement which would restrict any Restricted Subsidiary's ability or right to pay dividends to, or make advances to or Investments in, the Company, except for:

              (a)      this Agreement,

              (b)      any agreements as may be required pursuant to regulatory statutes, regulations or administrative orders,

              (c)      restrictions contained in the Company Credit Agreement, and any modification, amendment, renewal or replacement thereof, on the ability and right of Restricted Subsidiaries of the Company to make advances to or Investments in the Company, other than loans and advances by any Subsidiary Guarantor to the Company,

              (d)      restrictions contained in each of the NUI Utilities Credit Agreements, and any modification, amendment, renewal or replacement thereof, on the ability and right of NUI Utilities, Inc. to make advances to or Investments in the Company,

              (e)      restrictions contained in the Company Credit Agreement, and any modification, amendment, renewal or replacement thereof, on the ability and right of Restricted Subsidiaries of the Company 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 equity interests of the Company or any such Restricted Subsidiary, or purchase, redeem or otherwise acquire for value (or permit any of such Restricted Subsidiaries to do so) any shares of any class of equity interests of the Company or any such Restricted Subsidiary or any warrants, rights or options to acquire any such shares, now or hereafter outstanding (such declarations, payments, other distributions, purchases, redemptions, or other acquisitions being herein called "Subsidiary Restricted Distributions"), except that (i) NUI Utilities, Inc., Virginia Gas Company, Elizabethtown Gas Company and City Gas Company of Florida and any other Wholly-Owned Restricted Subsidiary of the Company shall be permitted to declare and pay dividends to the Company, and any other Restricted Subsidiary that is wholly owned by any other Restricted Subsidiary, shall be permitted to declare and pay dividends to such other Restricted Subsidiary, and (ii) NUI/Caritrade International shall be permitted to declare and pay ratable dividends to its shareholders provided that it is a Subsidiary at the time of such ratable dividend; provided, that (x) in the case of the Subsidiary Restricted Distributions under clause (ii) above, immediately after giving effect to such proposed Subsidiary Restricted Distributions, no Potential Default or Event of Default (each as defined in the Company Credit Agreement) would exist and (y) in the case of all Subsidiary Restricted Distributions, no such payment shall violate any Governmental Rule (as defined in the Company Credit Agreement), and

               (f)      restrictions contained in each of the NUI Utilities Credit Agreements, and any modification, amendment, renewal or replacement of either thereof, on the ability and right of NUI Utilities, Inc. 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 equity interests of NUI Utilities, Inc., or purchase, redeem or otherwise acquire for value any shares of any class of equity interests of NUI Utilities, Inc. or any warrants, rights or options to acquire any such shares, now or hereafter outstanding (such declarations, payments, other distributions, purchases, redemptions, or other acquisitions being herein called "Restricted Distributions"), provided that

               (i)      on and before February 11, 2004, NUI Utilities, Inc. shall be permitted to declare or pay cash dividends to the Company and purchase, redeem or otherwise acquire shares of its equity interests or warrants, rights or options to acquire for consideration of any such shares, so long as (1) the aggregate of such Restricted Distributions made, paid or declared since February 12, 2003 would not exceed the lesser of $100,000,000 or retained earnings of NUI Utilities Inc. on the date of such Restricted Distribution, (2) immediately after giving effect to any such proposed Restricted Distributions, no Potential Default or Event of Default (each as defined in the respective NUI Utilities Credit Agreement) would exist and (3) no such payment shall violate any Governmental Rule (as defined in the respective NUI Utilities Credit Agreements), and

              (ii)      after February 11, 2004, NUI Utilities, Inc. shall be permitted to declare or pay cash dividends to the Company and purchase, redeem or otherwise acquire shares of its equity interests or warrants, rights or options to acquire for consideration of any such shares, so long as (1) such Restricted Distributions made, paid or declared would not exceed retained earnings of NUI Utilities Inc. on the date of such Restricted Distribution, (2) immediately after giving effect to any such proposed Restricted Distributions, no Event of Default (each as defined in the respective NUI Utilities Credit Agreement) would exist and (3) no such payment shall violate any Governmental Rule (as defined in the respective NUI Utilities Credit Agreements)."

        Section 1.11.     Amendment to Section 10.9.  Section 10.9 of the Note Agreement shall be and is hereby amended by (a) deleting the word "and" appearing at the end of clause (h) thereof, (b) deleting the period appearing at the end of clause (i) thereof and replacing it with the phrase "; and", and (c) adding the following as a new clause (j) following clause (i) of such Section:

             "(j)      Liens securing Indebtedness of the Company and its Restricted Subsidiaries permitted by Section 10.10 incurred in connection with sale/leaseback transactions, provided that (i) such Liens shall be created substantially simultaneously with such sale/leaseback transaction, (ii) such Liens do not at any time encumber any property other than the property leased, and (iii) such Liens are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased."

        Section 1.12.     Amendment to Section 10.10.  Section 10.10 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

    "Section 10.10.     Limitation on Sale and Leaseback.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any arrangement with any Person (other than the Company or any Restricted Subsidiary (other than Brokers)) providing for the leasing by the Company or any Restricted Subsidiary of real or personal property which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person if such arrangement(s), individually or in the aggregate, involve(s) consideration exceeding $50,000,000."

        Section 1.13.     New Section 10.11.  The following shall be added as a new Section 10.11 to the Note Agreement:

    "Section 10.11.     Priority Indebtedness.  The Company will not at any time permit Priority Indebtedness to exceed the sum of (a) 40% of Consolidated Assets at such time, plus (b) solely with respect to Priority Indebtedness incurred by the Company and its Restricted Subsidiaries to make seasonal gas purchases, 10% of Consolidated Assets at such time, provided that there shall have been during the immediately preceding 12 months a period of at least 30 consecutive days on each of which there shall have been no Priority Indebtedness outstanding in excess of 40% of Consolidated Assets."

        Section 1.14.     Amendment to Section 11(c).    Clause (c) of Section 11 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

            "(c)      the Company defaults in the performance of or compliance with any term contained in Sections 7.1(d), 9.10, 10.2, 10.3, 10.4, 10.6, 10.8, 10.9, 10.10 or 10.11; or"

        Section 1.15.     Amendment to Section 11(f).     Clause (f) of Section 11 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

            "(f)(i) the Company or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount exceeding $5,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or any Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount exceeding $5,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the Company or any Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount exceeding $5,000,000, or (y) one or more Persons have the right to require the Company or any Subsidiary so to purchase or repay such Indebtedness, or (iv) any Subsidiary Note Guaranty ceases to be binding on any Subsidiary Guarantor that is a party thereto, or is declared null and void, or the validity or enforceability thereof is contested by the Company or any Subsidiary Guarantor or any Subsidiary Guarantor denies it has any or further liability under any Subsidiary Note Guaranty to which it is a party; or"

        Section 1.16.     Amendment to Definitions.  The following defined terms as set forth in Schedule B to the Note Agreement are hereby amended and restated in their entirety to read as follows:

"Consolidated Fixed Charges" means for any period the sum of (a) Consolidated Interest Expense; (b) required amortization of Consolidated Total Indebtedness, determined on a Consolidated basis in accordance with GAAP, for the period involved and discount or premium relating to any such Consolidated Total Indebtedness for any period involved, whether expensed or capitalized; and (c) Consolidated Lease Expense, determined without duplication of items included in Consolidated Interest Expense, in each case of the Company and its Restricted Subsidiaries.

"Consolidated Net Income' shall mean for any period, net income of the Company and its Restricted Subsidiaries, determined on a Consolidated basis in accordance with GAAP, without giving effect to (a) the one-time non-recurring losses recognized by the Company on or prior to September 30, 2002 in connection with the discontinuance of TIC's operations pursuant to Statement of Financial Accounting Standard No. 144, (b) the one-time non-cash goodwill impairment loss in an amount of $32,900,000 (or $21,400,000 net of income taxes of $11,500,000) recognized by the Company (in the Fiscal Quarter ending December 31, 2001) relating to its Subsidiary, TIC, pursuant to Statement of Financial Accounting Standard No. 142, or (c) any non-cash gain, any non-cash loss, or any reversals or adjustments to, or failure to recognize, revenue due to changes in applicable U.S. accounting rules and regulations in each case to the extent reasonably acceptable to the Required Holders, including, without limitation, due to the implementation, effective as of October 25, 2002, of EITF 02-03 ("Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities"), the effects of which EITF implementation are hereby deemed acceptable to the Required Holders.

"Consolidated Total Capitalization" means, as of any date of determination, the sum of (a) Consolidated Total Indebtedness plus (b) Consolidated Net Worth.

"Indebtedness" as applied to any Person means, without duplication, all liabilities of such Person for borrowed money (other than trade accounts payable arising in the ordinary course of business consistent with past practices), direct or contingent, whether evidenced by a bond, note, debenture or otherwise, all preferred equity interests issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration at any time during the period ending one year after the final maturity of the Notes, and all obligations and liabilities in the nature of a capitalized lease obligation, deferred purchase price arrangement (other than trade accounts payable in the ordinary course of business consistent with past practices), title retention device, letter of credit obligation, Reimbursement Obligation, Hedging Obligation, reimbursement agreement, Guaranty, obligations relating to securitization transactions, synthetic lease transactions and sale-leaseback transactions.

"Person" means any individual, partnership, corporation, trust, joint venture, banking association, unincorporated organization or any other entity or enterprise or government or department or agency thereof.

        Section 1.17.     Deletion of Certain Definitions.  Schedule B to the Note Agreement is hereby amended by deleting the definitions of "Capital Leases", "Capital Lease Obligations", "Interest Charges" and "Lease Rentals" contained in Schedule B to the Note Agreement.

        Section 1.18.     Additional Definitions.  The following shall be added as new definitions in alphabetical order to Schedule B to the Note Agreement:

"Bank Guaranty" is defined in Section 9.9.

"Company Credit Amendment" means the Credit Agreement dated as of February 12, 2003 among the Company, the financial institutions party thereto, as the Lenders thereunder, Fleet National Bank, as the Administrative Agent and Swingline Lender, Citizens Bank of Massachusetts and CIBC Inc., as Co‑Syndication Agents, and PNC Bank, National Association, as Documentation Agent.

"Consolidated" means, as to any two or more Persons, the consolidation of the accounts of such Persons in accordance with GAAP.

"Consolidated Assets" means, at any time, the total assets of the Company and its Restricted Subsidiaries which would be shown as assets on a consolidated balance sheet of the Company and its Restricted Subsidiaries as of such time prepared in accordance with GAAP, after eliminating all amounts properly attributable to minority interests, if any, in the stock and surplus of Restricted Subsidiaries.

"Consolidated Interest Expense" means for any period the amount of interest expense, both expensed and capitalized, of the Company and its Restricted Subsidiaries, determined on a Consolidated basis in accordance with GAAP, for such period on the aggregate principal amount of their Indebtedness, determined on a Consolidated basis in accordance with GAAP.

"Consolidated Lease Expense" means for any period, the aggregate amount of fixed and contingent rentals payable by the Company and its Restricted Subsidiaries, determined on a Consolidated basis in accordance with GAAP, for such period with respect to leases of real and personal property.

"Consolidated Total Indebtedness" means all Indebtedness of the Company and its Restricted Subsidiaries, determined on a Consolidated basis in accordance with GAAP, consistently applied.

"Hedging Obligations" means, with respect to any Person, all liabilities of such Person under interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

"Intercreditor Agreement" is defined in Section 9.9.

"NUI Utilities Credit Agreements" means (a) the Credit Agreement dated as of February 12, 2003 among NUI Utilities, Inc., the financial institutions party thereto, as the Lenders thereunder, Fleet National Bank, as Administrative Agent and Swingline Lender, Citizens Bank of Massachusetts and CIBC Inc., as Co-Syndication Agents, and PNC Bank, National Association, as Documentation Agent, and (b) the Credit Agreement dated as of February 12, 2003 among NUI Utilities, Inc., the financial institutions party thereto, as the Lenders thereunder, Fleet National Bank, as Agent, and Fleet Securities, Inc., as Arranger.

"Priority Indebtedness" means the sum of (a) all Indebtedness of the Company secured by Liens, plus (b) all Indebtedness of Restricted Subsidiaries (except (i) Indebtedness held by the Company or any other Restricted Subsidiary, and (ii) Indebtedness of any Restricted Subsidiary to the lenders under the Company Credit Agreement, provided that, in accordance with the terms and conditions of Section 9.9 hereof, on and after April 1, 2003 (1) such Subsidiary Guarantor has guaranteed the Notes pursuant to a valid and enforceable Subsidiary Note Guaranty and (2) such lenders and the holders of the Notes have entered into a valid and enforceable Intercreditor Agreement with respect to the Indebtedness of such Restricted Subsidiary to such lenders and such holders).

"Reimbursement Obligation" means the obligation of the Company under the Company Credit Agreement to reimburse the Issuing Bank (as defined in the Company Credit Agreement) for amounts drawn under letters of credit issued under the Company Credit Agreement.

"Subsidiary Guarantor" is defined in Section 9.9.

"Subsidiary Note Guaranty" is defined in Section 9.9.

"TIC" means T.I.C. Enterprises, L.L.C.

Section 2.        Representations and Warranties of the Company.

To induce the Noteholders to execute and deliver this First Amendment (which representations shall survive the execution and delivery of this First Amendment), the Company represents and warrants to the Noteholders that:

              (a)      this First Amendment has been duly authorized, executed and delivered by it and this First Amendment constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally;

              (b)      the Note Agreement, as amended by this First Amendment, constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally;

              (c)      the execution, delivery and performance by the Company of this First Amendment (i) has been duly authorized by all requisite corporate action and, if required, shareholder action, (ii) does not require the consent or approval of any governmental or regulatory body or agency, and (iii) will not (A) violate (1) any provision of law, statute, rule or regulation or its Certificate of Incorporation or bylaws, (2) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (3) any provision of any material indenture, agreement or other instrument to which it is a party or by which its properties or assets are or may be bound, including, without limitation, the Company Credit Agreement and each of the NUI Utilities Credit Agreements, or (B) result in a breach or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause (iii)(A)(3) of this Section 2(c);

              (d)      as of the date hereof and after giving effect to this First Amendment, no Default or Event of Default has occurred which is continuing; and

              (e)      all the representations and warranties contained in Section 5 of the Note Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof.

Section 3.        Conditions to Effectiveness of This First Amendment.

            This First Amendment shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:

              (a)      executed counterparts of this First Amendment, duly executed by the Company and the holders of at least 51% of the outstanding principal amount of the Notes, shall have been delivered to the Noteholders;

              (b)      the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof;

              (c)      the Company shall have paid all reasonable costs and expenses incurred by the Noteholders in connection with the consummation of the transactions contemplated by this First Amendment, including, without limitation, the reasonable fees and expenses of Chapman and Cutler, special counsel to the Noteholders, which are reflected in statements of such counsel rendered on or prior to the effective date of this First Amendment;

              (d)      in consideration of the agreement of the Noteholders to amend the Note Agreement as set forth in Section 1, each Noteholder shall have received a fee equal to 0.50% of the unpaid principal amount of the Notes held by such Noteholder, whether or not such Noteholder shall have executed and delivered a counterpart to this First Amendment; and

              (e)      the Noteholders shall have received (i) the favorable opinion of internal legal counsel to the Company as to the matters set forth in Sections 2(a), 2(b) and 2(c) hereof, which opinion shall be in form and substance satisfactory to the Noteholders and (ii) the favorable opinion of White & Case LLP, special counsel to the Company, that this First Amendment and the Note Agreement, as amended by this First Amendment, constitute the legal, valid and binding obligations, contracts and agreements of the Company enforceable against it in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally (provided that in delivering such opinion, White & Case LLP may assume the enforceability of the Note Agreement).

Upon receipt of all of the foregoing, this First Amendment shall become effective.

Section 4.        Waivers.

Upon and by virtue of this First Amendment becoming effective as herein contemplated (a) all waivers of the Noteholders contained in the letter dated January 24, 2003 and attached as Exhibit A hereto shall remain effective through and including February 24, 2003 notwithstanding anything to the contrary contained in such letter, (b) the failure of the Company to deliver to the Noteholders statements of cash flows of the Company and its Subsidiaries solely for the fiscal quarters ended March 31, 2002 and June 30, 2002 (as opposed to the year-to-date cash flows for the periods ended on such dates (which have been delivered to the Noteholders)) as required by Section 7.1(a) of the Note Agreement which constitutes a Default under the Note Agreement shall be deemed to be waived by the Noteholders, and (c) the failure of the Company to deliver to the Noteholders on or before January 28, 2003 financial information for the Fiscal Year ended September 30, 2002 as required by Section 7.1(b) of the Note Agreement, which constitutes a Default under the Note Agreement, shall be deemed to be waived by the Noteholders, it being understood that the Company shall be required to deliver such financial information under this clause (c) to the Noteholders on or before March 15, 2003 and a failure to so deliver such financial information on or before such date shall be deemed a Default under Section 11(d) of the Note Agreement.  The Company understands and agrees that the waivers contained in this Section 4 pertain only to the Defaults herein described and to the extent so described and not to any other Default or Event of Default which may exist under, or any other matters arising in connection with, the Note Agreement or to any rights which the Noteholders have arising by virtue of any such other actions or matters.

Section 5.        Miscellaneous.

          Section 5.1.     Construction.  This First Amendment shall be construed in connection with and as part of the Note Agreement, and except as modified and expressly amended by this First Amendment, all terms, conditions and covenants contained in the Note Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.

          Section 5.2.     Notices.  Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this First Amendment may refer to the Note Agreement without making specific reference to this First Amendment but nevertheless all such references shall include this First Amendment unless the context otherwise requires.

          Section 5.3.     Captions.  The descriptive headings of the various Sections or parts of this First Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

          Section 5.4.     Governing Law.  This First Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‑of‑law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

          Section 5.5.     Counterparts.  The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this First Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

In Witness Whereof, the Company and the Noteholders have caused this First Amendment to be executed, all as of the day and the year first above-written.

NUI Corporation

By:/s/ CHARLES N. GARBER
       Treasurer

Accepted and Agreed to:

AIG Life Insurance Company

By:  AIG Global Investment Corp., investment advisor

By: /S/ VICTORIA Y. CHIN
            Vice President

SunAmerica Life Insurance Company

By:  AIG Global Investment Corp., investment advisor

By: /S/ VICTORIA Y. CHIN
           Vice President

United of Omaha Life Insurance Company

By: /S/ CURTIS R. CALDWELL
             Vice President

Pacific Life and Annuity Company

By:  /S/ BERNARD J. DOUGHERTY
             Assistant Vice President

By:  /S/ CATHY L. SCHWARTZ
              Assistant Secretary

Pacific Life Insurance company

By:  /S/ BERNARD J. DOUGHERTY
             Assistant Vice President

By:  /S/ CATHY L. SCHWARTZ
              Assistant Secretary

Nationwide Life Insurance Company of America (formerly Provident Mutual Life Insurance Company)

By:  /S/ MARK W. POEPPELMAN
              Vice President

EXHIBIT A

NUI Corporation

550 Route 202-206

Bedminster, New Jersey  07921-0760

Waiver

Re:                   Note Purchase Agreement, dated as of August 20, 2001

and

$5,000,000 6.60% Senior Notes, Series A,

due August 20, 2006,

$15,000,000 6.884% Senior Notes, Series B,

due August 20, 2008,

$7,000,000 6.884% Senior Notes, Series C,

due August 20, 2011,

and

$33,000,000 7.29% Senior Notes, Series D,

Due August 20, 2011

Dated as of
January 24, 2003

To the holders of the Notes listed
   on Schedule I attached hereto

Ladies and Gentlemen:

Reference is made to the Note Purchase Agreement, dated as of August 20, 2001 (as amended, supplemented or otherwise modified from time to time, the "Note Agreement"), pursuant to which NUI Corporation, a New Jersey corporation (the "Company"), has issued $5,000,000 aggregate principal amount of its 6.60% Senior Notes, Series A, due August 20, 2006; $15,000,000 aggregate principal amount of its 6.884% Senior Notes, Series B, due August 20, 2008; $7,000,000 aggregate principal amount of its 6.884% Senior Notes, Series C, due August 20, 2011; and $33,000,000 aggregate principal amount of its 7.29% Senior Notes, Series D, due August 20, 2011 (collectively, the "Notes").  You are hereinafter sometimes referred to as the "Noteholders."  Capitalized terms used herein and not otherwise defined shall have the meanings given thereto in the Note Agreement.

The Company requests that you waive certain provisions of the Note Agreement in the respects, but only in the respects, hereinafter set forth.

All requirements of law have been fully complied with and all other acts and things necessary to make this Waiver a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

Now, therefore, in consideration of the premises and other good and sufficient consideration, the Company agrees with each of you as follows:

Section 1.        Description of Defaults and Events of Default.

Defaults and Events of Default exist, and may exist on or prior to the Waiver Expiration Date, under certain provisions of the Note Agreement described below (the "Specified Defaults"):

          Section 1.1.     Fixed Charge Coverage Ratio; Restricted Payments.  As a result of (i) the Company's adoption of the Statement of Financial Accounting Standards No. 142, "Goodwill and Intangible Assets" in the first quarter of the Fiscal Year ended September 30, 2002 and its resulting recognition of a non-cash goodwill impairment loss related to TIC Enterprises, LLC ("TIC"), a Subsidiary of the Company, in an amount of $32,900,000 (or $21,400,000 net of income taxes of $11,500,000) and (ii) the closure of certain business operations of TIC which caused the Company to record (under Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets,") a net loss for discontinued operations of $9,200,000 for the nine-month period ended June 30, 2002, from and after December 31, 2001, through and including the Waiver Expiration Date (as defined in Section 3.2), the Fixed Charge Coverage Ratio was and will be less than the Fixed Charged Coverage Ratio of 1.75 to 1 required under Section 10.2 of the Note Agreement.

          Section 1.2.     Limitation on Sale and Leaseback.  The Company has completed an $8,600,000 sale and leaseback of certain gas meters at its City Gas unit (a subsidiary of NUI Utilities, Inc.) at a cost of less than 5% per annum fixed interest rate for a term of 11 years.  Such sale and leaseback is prohibited under Section 10.10 of the Note Agreement and certain Liens entered into by the Company in connection therewith may be prohibited under Section 10.9 of the Note Agreement.

          Section 1.3.     Restrictions on Dividends of Restricted Subsidiaries.  The Credit Agreement dated as of December 19, 2001 (the "Company Credit Agreement") among the Company, the financial institutions party thereto, Fleet National Bank, as the Agent, PNC Bank, National Association, as the Syndication Agent, and First Union National Bank, as the Documentation Agent, and the Credit Agreement dated as of December 19, 2001 (the "NUI Utilities Credit Agreement") among NUI Utilities, Inc., the financial institutions party thereto, Fleet National Bank, as the Agent, PNC Bank, National Association, as the Syndication Agent, and First Union National Bank, as the Documentation Agent, contain restrictions on the ability and right of certain Restricted Subsidiaries of the Company (not including Virginia Gas Company, Elizabethtown Gas Company and City Gas Company of Florida) to pay dividends to the Company and restrictions on the ability and right of certain Restricted Subsidiaries of the Company to make advances to or Investments in the Company.  Such restrictions contained in the Company Credit Agreement and the NUI Utilities Credit Agreement are prohibited under Section 10.7 of the Note Agreement. 

          Section 1.4.     Financial Information.  (a) The Company has delivered to each of the Noteholders quarterly consolidated year-to-date statements of cash flows of the Company and its Subsidiaries as of the end of the fiscal quarters ended March 31, 2002 and June 30, 2002, but has not delivered to the Noteholders statements of cash flows of the Company and its Subsidiaries solely for such fiscal quarters as required by Section 7.1(a) of the Note Agreement.

           (b)     The Company has indicated that the financial information for the Fiscal Year ended September 30, 2002 required to be delivered to the Noteholders under Section 7.1(b) of the Note Agreement will not be delivered on or before January 28, 2003, which would be a violation of Section 7.1(b).

Section 2.        Waiver.

Subject to the term and conditions herein set forth, the Noteholders hereby waive the Specified Defaults.

Section 3.        Conditions and Terms of and Limitations on Waiver.

          Section 3.1.     Effective Date of Waiver.  This Waiver shall be effective from and after the date on which the Company and the holders of at least 51% in aggregate principal amount of the Notes shall have executed this Waiver.

          Section 3.2.     Expiration of Waiver.  The parties hereto hereby agree that (a) this Waiver shall expire (the "Waiver Expiration Date") and be of no further force or effect on the first to occur of (i) February 24, 2003 and (ii) the occurrence of any Event of Default, other than the Specified Defaults herein described and waived hereby, and (b) absent a further waiver by the Noteholders or an amendment to the Note Agreement, on the Waiver Expiration Date the waiver contained herein shall terminate, the failure of the Company to be in compliance with Sections 7.1, 10.2, 10.7, 10.9 and 10.10 of the Note Agreement shall constitute a Default and each Noteholder may avail itself of any of the remedies provided in the Note Agreement.

          Section 3.3.     Effect of Waiver.  This Waiver shall not extend to or affect any obligation not expressly waived hereby and the failure of any Noteholder to exercise any right with respect to any Specified Default shall operate as a waiver only to the extent expressly set forth herein.  This Waiver shall not impair any right consequent to any Default or Event of Default (including, without limitation, those Specified Defaults referred to in Section 1 above) which shall exist and continue upon the expiration hereof.

Section 4.        Representation and Warranty of the Company.

To induce each Noteholder to execute and deliver this Waiver, the Company represents and warrants to each Noteholder that, as of the date hereof and after giving effect to this Waiver, no Default or Event of Default has occurred or is continuing.

Section 5.        Miscellaneous.

          Section 5.1.     Counterparts.  This Waiver may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one Waiver.

          Section 5.2.     Headings.  The headings of the sections of this Waiver are for purposes of convenience only and shall not be construed to affect the meaning or construction of any of the provisions hereof.

          Section 5.3.     Governing Law.  This Waiver shall be governed by and construed in accordance with the laws of the State of New York.

          Section 5.4.     References to Note Agreements.  Any and all notices, requests, certificates and other instruments executed and delivered concurrently with or after the execution of the Waiver may refer to the Note Agreement without making specific reference to this Waiver, but nevertheless all such references shall be deemed to include this Waiver unless the context shall otherwise require.

          Section 5.5.     Ratification.  Except to the extent hereby modified, amended or waived, the Note Agreement is in all respects hereby ratified, confirmed and approved by the parties hereto.

In Witness Whereof, the parties hereto have caused this Waiver to be executed all as of the day and year first written above.

NUI Corporation

By:  /s/ CHARLES N. GARBER
                Vice President - Finance & Treasurer

Accepted as of the date first above written.

AIG Life Insurance Company

By:  /S/ VICTORIA Y. CHIN
                 Vice President

SunAmerica Life Insurance Company

By:  /S/ VICTORIA Y. CHIN
                 Vice President

United of Omaha Life Insurance Company

By:  /S/ CURTIS R. CALDWELL
                  Vice President

Pacific Life and Annuity Company

By:  /S/ ELAINE M. HAVEN
              Vice President

By:  /S/ CATHY L. SCHWARTZ
            Assistant Secretary

Pacific Life Insurance company

By:  /S/ ELAINE M. HAVENS
             Vice President

By:  /S/ CATHY L. SCHWARTZ
               Assistant Secretary

Nationwide Life Insurance Company of America (formerly Provident Mutual Life Insurance Company)

By:  /S/ THOMAS S. LEGGETT
             Associate Vice President

EX-10

EXHIBIT 10.7

NUI Corporation

___________________________________

Second Amendment

Dated as of April 1, 2003

to

Note Purchase Agreement

Dated as of August 20, 2001

___________________________________

Re: $5,000,000 6.60% Senior Notes, Series A,
due August 20, 2006

$15,000,000 6.884% Senior Notes, Series B,
due August 20, 2008

$7,000,000 6.884% Senior Notes, Series C,
due August 20, 2011

and

$33,000,000 7.29% Senior Notes, Series D,
due August 20, 2011

Second Amendment to Note Purchase Agreement

This Second Amendment dated as of April 1, 2003 (the or this "Second Amendment") to the Note Purchase Agreement dated as of August 20, 2001 is among the undersigned, NUI Corporation, a New Jersey corporation (the "Company"), and each of the institutions which is a signatory to this Second Amendment (collectively, the Noteholders"). 

Recitals:

            A.     The Company and each of the Noteholders have heretofore entered into the Note Purchase Agreement dated as of August 20, 2001 (the "Original Note Agreement") and the First Amendment and Waiver dated as of February 20, 2003 (the "First Amendment"; the Original Note Agreement as amended by the First Amendment is hereinafter referred to as the "Note Agreement").  The Company has heretofore issued (i) $5,000,000 aggregate principal amount of its 6.60% Senior Notes, Series A, due August 20, 2006 (the "Series A Notes"), (ii) $15,000,000 aggregate principal amount of its 6.884% Senior Notes, Series B, due August 20, 2008 (the "Series B Notes"), (iii) $7,000,000 aggregate principal amount of its 6.884% Senior Notes, Series C, due August 20, 2011 (the "Series C Notes")and(iv) $33,000,000aggregate principal amount of its 7.29% Senior Notes, Series D, due August 20, 2011 (the "Series D Notes", the Series A Notes, Series B Notes, Series C Notes and Series D Notes are hereinafter collectively referred to as the "Notes").

            B.     The Company and the Noteholders now desire to amend the Note Agreement in the respects, but only in the respects, hereinafter set forth.

            C.     Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require.

            D.     All requirements of law have been fully complied with and all other acts and things necessary to make this Second Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

Now, therefore, upon the full and complete satisfaction of the conditions precedent to the effectiveness of this Second Amendment set forth in Section 3 hereof, and in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:

Section 1.        Amendments.

          Section 1.1.     Amendment to Section 9.9.  Section 9.9 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

        "Section 9.9.     Subsidiary Guarantors.  Subject to Section  9.10 hereof, the Company will cause each Subsidiary (whether existing or newly acquired) that delivers a Guaranty, or otherwise becomes obligated in any manner (including, without limitation, as a co‑obligor with the Company) (each, a "Bank Guaranty"), to any Bank Lender with respect to any Indebtedness of the Company outstanding under the Company Credit Agreement (or under any modification, amendment, renewal or replacement thereof) (each such Subsidiary, a "Subsidiary Guarantor") to concurrently enter into a guaranty agreement, in form and substance satisfactory to the Required Holders (each, a "Subsidiary Note Guaranty"), pursuant to which such Subsidiary Guarantor shall guarantee the prompt payment when due (whether at maturity, by acceleration or otherwise) of the principal of all of the Notes and of the interest and the Make-Whole Amount, if any, thereon and the full and prompt performance and compliance by the Company with each of its other obligations under the Note Agreement and the Notes, and, concurrently therewith, (except in the case that such Subsidiary Guarantor is co‑obligor with the Company under the Company Credit Agreement (or under any modification, amendment, renewal or replacement thereof)) the Company shall cause the Bank Lenders to enter into an intercreditor agreement with the holders of the Notes in form and substance reasonably satisfactory to the Bank Lenders and the Required Holders (the "Section 9.9 Intercreditor Agreement") with respect to the obligations of such Subsidiary Guarantor to the Bank Lenders and the holders of the Notes providing for, inter alia, the pro rata sharing of any proceeds received by the Bank Lenders or the holders of the Notes under any Bank Guaranty or Subsidiary Note Guaranty.  Within three Business Days after entering into the Subsidiary Note Guaranty and any Section 9.9 Intercreditor Agreement, the Company shall deliver to each of the holders of the Notes the following items:

              (a)      an executed counterpart of such Subsidiary Note Guaranty;

              (b)      an executed counterpart of any Section 9.9 Intercreditor Agreement;

              (c)      a certificate signed by the President, a Vice President or another authorized officer of such Subsidiary Guarantor making representations and warranties to the effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7, but with respect to such Subsidiary Guarantor and the Subsidiary Note Guaranty, as applicable;

              (d)      such documents and evidence with respect to such Subsidiary Guarantor as any holder of the Notes may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated by the Subsidiary Note Guaranty; and

              (e)      an opinion of internal legal counsel to the Company to the effect that the Subsidiary Note Guaranty has been duly authorized, executed and delivered and constitutes the legal, valid and binding contract and agreement of such Subsidiary Guarantor enforceable in accordance with its terms, except as an enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles.

          Section 1.2.     Amendment to Section 10.6.  Section 10.6 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

      "Section 10.6.     Guaranties.  The Company will not, and will not permit any Restricted Subsidiary to, become or be liable in respect of any Guaranty, except (a) Guaranties by the Company which constitute Guaranties of obligations incurred by any Restricted Subsidiary in compliance with the provisions of this Agreement, (b) Guaranties existing on March 31, 2003 by NUI Capital Corp. of obligations of NUI Energy Brokers under gas purchase and energy‑related contracts, which obligations do not exceed $20,000,000 in the aggregate, and (c) any Bank Guaranties."

          Section 1.3.     Amendment to Definition of "Guaranty".  The definition of "Guaranty" in Schedule B of the Note Agreement is hereby amended by adding the following sentence at the end of such definition:

For the purposes of all computations made under this Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be in an amount equal to the outstanding principal amount of such Indebtedness for borrowed money which has been guaranteed, and a Guaranty in respect of any other obligation or liability or any divided shall be deemed to be in an amount equal to the aggregate amount of such obligation or liability outstanding or dividend declared.

          Section 1.4.     Amendment to Definitions.  The following defined terms as set forth in Schedule B to the Note Agreement is hereby amended and restated in its entirety to read as follows:

"Intercreditor Agreement" means (a) any Section 9.9 Intercreditor Agreement, and (b) any other intercreditor agreement with the holders of the Notes in form and substance reasonably satisfactory to the Required Holders with respect to any Indebtedness of a Subsidiary Guarantor to the Bank Lenders and the holders of the Notes providing for, inter alia, the pro rata sharing of any proceeds received by the Bank Lenders and the holders of the Notes from such Subsidiary Guarantor with respect to such Indebtedness.

"Priority Indebtedness" means the sum of (a) all Indebtedness of the Company secured by Liens, plus (b) all Indebtedness of Restricted Subsidiaries (except (i) any Indebtedness held by the Company or any other Restricted Subsidiary, (ii) at any time on or before May 31, 2003, Guaranties existing on March 31, 2003 of NUI Capital Corp. of obligations of NUI Energy Brokers under gas purchase and energy‑related contracts, which obligations do not exceed $20,000,000 in the aggregate, and (iii) any Indebtedness of any Restricted Subsidiary to the Bank Lenders to the extent that (1) such Restricted Subsidiary has guaranteed the Notes pursuant to a valid and enforceable Subsidiary Note Guaranty in accordance with the terms and conditions of Section 9.9 hereof and (2) such Bank Lenders and the holders of the Notes have entered into a valid and enforceable Intercreditor Agreement with respect to such Indebtedness of such Restricted Subsidiary to such Bank Lenders and such holders).

          Section 1.5.     Additional Definitions.  The following shall be added as new definitions in alphabetical order to Schedule B to the Note Agreement:

"Bank Lenders" means the holders of any Indebtedness outstanding under the Company Credit Agreement, and any modification, amendment, renewal or replacement thereof (including any such modification, amendment, renewal or replacement that results in any increase in the Indebtedness permitted thereunder).

"Section 9.9 Intercreditor Agreement" is defined in Section 9.9.

Section 2.        Representations and Warranties of the Company.

To induce the Noteholders to execute and deliver this Second Amendment (which representations shall survive the execution and delivery of this Second Amendment), the Company represents and warrants to the Noteholders that:

              (a)      this Second Amendment has been duly authorized, executed and delivered by it and this Second Amendment constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally;

              (b)      the Note Agreement, as amended by this Second Amendment, constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally;

              (c)      the execution, delivery and performance by the Company of this Second Amendment (i) has been duly authorized by all requisite corporate action and, if required, shareholder action, (ii) does not require the consent or approval of any governmental or regulatory body or agency, and (iii) will not (A) violate (1) any provision of law, statute, rule or regulation or its Certificate of Incorporation or bylaws, (2) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (3) any provision of any material indenture, agreement or other instrument to which it is a party or by which its properties or assets are or may be bound, including, without limitation, the Company Credit Agreement and each of the NUI Utilities Credit Agreements, or (B) result in a breach or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause (iii)(A)(3) of this Section 2(c);

              (d)      as of the date hereof and after giving effect to this Second Amendment, no Default or Event of Default has occurred which is continuing; and

              (e)      all the representations and warranties contained in Section 5 of the Note Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof.

Section 3.        Conditions to Effectiveness of This Second Amendment.

            This Second Amendment shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:

              (a)      executed counterparts of this Second Amendment, duly executed by the Company and the holders of at least 51% of the outstanding principal amount of the Notes, shall have been delivered to the Noteholders;

              (b)      the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof;

              (c)      the Company shall have paid all reasonable costs and expenses incurred by the Noteholders in connection with the consummation of the transactions contemplated by this Second Amendment, including, without limitation, the reasonable fees and expenses of Chapman and Cutler, special counsel to the Noteholders, which are reflected in statements of such counsel rendered on or prior to the effective date of this Second Amendment;

Upon receipt of all of the foregoing, this Second Amendment shall become effective.

Section 4.        Miscellaneous.

          Section 4.1.     Construction.  This Second Amendment shall be construed in connection with and as part of the Note Agreement, and except as modified and expressly amended by this Second Amendment, all terms, conditions and covenants contained in the Note Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.

          Section 4.2.     Notices.  Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Second Amendment may refer to the Note Agreement without making specific reference to this Second Amendment but nevertheless all such references shall include this Second Amendment unless the context otherwise requires.

          Section 4.3.     Captions.  The descriptive headings of the various Sections or parts of this Second Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

          Section 4.4.     Governing Law.  This Second Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‑of‑law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

          Section 4.5.     Counterparts.  The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Second Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

In Witness Whereof, the Company and the Noteholders have caused this Second Amendment to be executed, all as of the day and the year first above-written.

NUI Corporation

By:/s/ A. MARK ABRAMOVIC
Sr. Vice President, Chief Operating &
      Chief Financial Officer

Accepted and Agreed to:

AIG Life Insurance Company

SunAmerica Life Insurance Company

By:  AIG Global Investment Corp., investment advisor

By:  /s/ VICTORIA Y. CHIN
            Vice President

United of Omaha Life Insurance Company

By:   /S/ EDWIN H. GARRISON, JR.
               First Vice President

Pacific Life and Annuity Company

By:  /s/ Elaine M. Havens
           Vice President

By:  /s/ Cathy L. Schwartz
            Vice President

Pacific Life Insurance company

By:  /s/ Elaine M. Havens
           Vice President

By:  /s/ Cathy L. Schwartz
            Vice President

Nationwide Life Insurance Company of America (formerly Provident Mutual Life Insurance Company)

By: /s/ JOSEPH P. YOUNG
             Credit Officer

EX-99

Exhibit 99.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of NUI Corporation (the "company") for the period ended March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "report"), I, John Kean, Jr., Chief Executive Officer of the company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1)       the report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2)       the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the company.

/s/  John Kean, Jr.
John Kean, Jr.
President and
Chief Executive Officer
May 15, 2003

A signed copy of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to the company.

EX-10

EXHIBIT 10.2

CREDIT AGREEMENT

Dated as of

February 12, 2003

By and Among

NUI UTILITIES, INC.,

as the Borrower,

THE FINANCIAL INSTITUTIONS PARTY HERETO,

as the Lenders hereunder,

and

FLEET NATIONAL BANK,

as the Administrative Agent,

CITIZENS BANK OF MASSACHUSETTS

and

CIBC INC.,

as Co-Syndication Agents,

and

PNC BANK, NATIONAL ASSOCIATION,

as Documentation Agent

FLEET SECURITIES, INC.,

as the Sole Arranger and Syndication Agent

TABLE OF CONTENTS

TABLE OF CONTENTS

ARTICLE I					DEFINITIONS		1
1.1	Defined Terms						18
1.2	GAAP Definitions						18
1.3	Other Definitional Conventions and Rules of Construction						18
ARTICLE II					THE LOANS		18
2.1			The Revolving Credit				18
2.1a			Loans				18
2.1b			Commitment of Each Lender				20
2.1c			Notes				20
2.1d			Loan Request				20
2.1e			Making Loans				21
2.1f			Swing Loans				21
2.2			Interest Rates, Interest Payment and Certain Provisions Relating to Interest and Fees				22
2.2a			Payments of Interest				22
2.2b			Interest Rate Options				23
2.2c			Interest Periods; Limitations on Elections				23
2.2d			Election, Conversion or Renewal of Interest Rate Options				24
2.2e			Notification of Election of an Interest Rate Option				24
2.2f			Interest After Maturity				24
2.3			Yield-Protection, Capital Adequacy and Miscellaneous Provisions Relating to Euro-Rate				25
2.3a			Yield Protection				25
2.3b			Capital Adequacy				26
2.3c			Euro-Rate Unascertainable				26
2.3d			Illegality				27
2.3e			Change of Lending Office				27
2.4			Fees				28
2.4a			Facility Fee				28
2.4b			Certain Other Fees				28
2.5			Calculation of Interest and Facility Fee				28
2.6			Extension of Termination Date				28
2.7			Substitution or Replacement of a Lender				29
2.8			Loan Repayment				29
2.9			Additional Payments by the Borrower				30
2.10			Voluntary Reduction of Availability				30
2.11			Loan Account				30
2.12			Payment from Accounts Maintained by Borrower				31
2.13			Time, Place and Manner of Payments				31
2.14			Letters of Credit				31
2.14a			L/C Commitment				31
2.14b			Procedure for Issuance of Letters of Credit				32
2.14c			Fees, Commissions and Other Charges				32
2.14d			L/C Participations				33
2.14e			Reimbursement Obligation of the Borrower				34
2.14f			Obligations Absolute				34
2.14g			Letter of Credit Payments				35
2.14h			Application				35
ARTICLE III					REPRESENTATIONS AND WARRANTIES		35
3.1	Corporate Existence, Subsidiaries						35
3.2	Corporate Authority						35
3.3	Enforceability						35
3.4	No Restrictions, No Default						36
3.5	Financial Statements						36
3.6	Absence of Litigation						36
3.7	Tax Returns and Payments						36
3.8	Pension Plans						37
3.9	Compliance with Applicable Laws						37
3.10	Environmental Matters						37
3.11	Governmental approval						37
3.12	Regulations T, U and X						37
3.13	Investment Company Act						38
3.14	Public Utility Holding Company Act						38
3.15	Disclosure						38
3.16	No Subsidiaries						38
ARTICLE IV					AFFIRMATIVE COVENANTS		38
4.1	Use of Proceeds						38
4.2	Furnishing Information						38
4.3	Visitation						40
4.4	Preservation of Existence; Qualification						40
4.5	Compliance with Laws and Contracts						41
4.6	Payment of Taxes and Other Liabilities						41
4.7	Insurance						41
4.8	Maintenance of Properties						41
4.9	Plans and Benefit Arrangement						41
4.10	Senior Debt Status						41
4.11	Ownership						42
4.12	Cash Management						42
ARTICLE V					NEGATIVE COVENANTS		42
5.1	Dividends, Etc.						42
5.2	Encumbrances						42
5.3a	Leverage Ratio						43
5.3b	Fixed Charge Coverage Ratio						43
5.4	Acquisitions						43
5.5	Sales of Assets						43
5.6	Merger						43
5.7	Regulation T, U and X Compliance						43
5.8	ERISA						43
5.9	Restrictive Agreements						44
5.10	[Intentionally Omitted.]						44
5.11	Subsidiaries						44
5.12	Limitation on Capital Expenditures						44
5.13	Limitation on Indebtedness						44
5.14	Limitation on Contingent Obligations						45
5.15	[Intentionally Omitted.]						45
5.16	Limitation on Investments, Loans and Advances						45
5.17	Limitation on Optional Payments and Modifications of Debt Instruments						46
5.18	Transactions with Affiliates						46
5.19	Sale and Leaseback						46
ARTICLE VI					CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT		46
6.1	All Extensions of Credit						46
6.1a	No Default						46
6.1b	Representations Correct						47
6.1c	Extension of Credit Requirements						47
6.2	Conditions Precedent to the Initial Extensions of Credit Under the Commitments						47
ARTICLE VII					DEFAULTS		49
7.1	Payment Default						49
7.2	Nonpayment of Other Indebtedness						49
7.3	Insolvency						49
7.3a	Involuntary Proceedings						49
7.3b	Voluntary Proceedings						49
7.4	Termination of Existence						50
7.5	Failure to Comply with Covenants						50
7.5a	Failure to Comply with Certain Article IV Covenants and Article V Covenants						50
7.5b	Failure to Comply with Other Covenants						50
7.6	Misrepresentation						50
7.7	Adverse Judgments, Etc.						50
7.8	Invalidity or Unenforceability						50
7.9	ERISA						50
7.10	Change of Control; Change of Beneficial Ownership or Board						51
7.11	Consequences of an Event of Default						51
7.12	Remedies Upon Default						52
ARTICLE VIII					AGREEMENT AMONG LENDERS		52
8.1		Appointment and Grant of Authority					52
8.2		Delegation of Duties					52
8.3		Reliance by Agent on Lenders for Funding					53
8.4		Non-Reliance on Agent					53
8.5		Responsibility of Agent and Other Matters					53
8.5a		Ministerial Nature of Duties					53
8.5b		Limitation of Liability					53
8.5c		Reliance					54
8.6		Actions in Discretion of Agent; Instructions from the Lenders					54
8.7		Indemnification					54
8.8		Agent's Rights as a Lender					55
8.9		Payment to Lenders					55
8.10		Pro Rata Sharing					55
8.11		Successor Agent					56
8.11a		Resignation of Agent					56
8.11b		Rights of the Former Agent					56
8.12		Notice of Default					56
8.13		Notices					56
8.14		Holders of Notes					56
8.15		Calculations					56
8.16		Beneficiaries					57
ARTICLE IX				GENERAL PROVISIONS		57
9.1	Amendments and Waivers						57
9.2	Expenses						58
9.3	Notices						58
9.4	Tax Withholding						59
9.5	Successors and Assigns						59
9.6	Assignments and Participations						60
9.6a	Assignments						60
9.6b	Assignment Register						61
9.6c	Participations						61
9.7	Severability						61
9.8	Survival						62
9.9	Governing Law						62
9.10	Non-Business Days						62
9.11	Integration						62
9.12	Headings						62
9.13	Set-Off						62
9.14	Consent to Forum						62
9.15	Waiver of Jury Trial						63
9.16	Indemnity						63
9.17	Counterparts						63
9.18	Replacement of Note						66

TABLE OF EXHIBITS

Name of Exhibit

Exhibit A                      Pricing Grid

Exhibit B                      Form of Note

Exhibit C                      Form of Swingline Note

Exhibit D                      Form of Revolving Loan Request

Exhibit E                       Form of Swingline Loan Request

Exhibit F                       Form of Compliance Certificate

Exhibit G                      Form of Opinion of Counsel

Exhibit H                      Form of Assignment and Assumption Agreement

Exhibit I                        Form of Solvency Certificate

Exhibit J                       Form of Increase Request

Schedules

3.8       Plans

5.2       Existing Encumbrances Securing Indebtedness

5.13     Indebtedness

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of February 12, 2003, by and among NUI UTILITIES, INC., a New Jersey corporation (as further defined below, the "Borrower"), the financial institutions listed on the signature pages hereto, and each other financial institution which, from time to time, becomes a party hereto in accordance with Subsection 9.6a (individually, a "Lender" and collectively, the "Lenders"), FLEET NATIONAL BANK, as Administrative Agent for the Lenders (in such capacity the "Agent") and as Swingline Lender, CITIZENS BANK OF MASSACHUSETTS and CIBC INC., as Co-Syndication Agents and PNC BANK, NATIONAL ASSOCIATION, as Documentation Agent.

RECITALS:

WHEREAS, the Borrower desires to obtain a Commitment (as defined below) from each of the Lenders pursuant to which Loans, (as defined below) will be made to, and Letters of Credit will be issued for the account of, the Borrower from time to time prior to the Termination Date (as defined below); and

WHEREAS, the Lenders are willing, on the terms and subject to the conditions hereinafter set forth, to extend such Commitment and make such Loans to, and issue Letters of Credit for the account of, the Borrower.

            NOW THEREFORE, the parties hereto, intending to be legally bound, and in consideration of the foregoing and the mutual covenants contained herein, hereby agree as follows:

ARTICLE 1. DEFINITIONS.

1.1       Defined Terms.  As used herein the following terms shall have the meaning specified unless the context otherwise requires:

"Adjusted Base Rate" means the interest rate relating to the Base Rate Option as described in item (i) of subsection 2.2(b).

"Adjusted Euro-Rate" means the interest rate relating to the Euro-Rate Option as described in item (ii) of Subsection 2.2b.

"Affiliate" means as to any Person, any other Person (other than a Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct use or cause the direction of the management and the policies of such Person, whether by contract or otherwise.

"Agency Services Agreement" has the meaning set forth in Section 6.2(xi).

"Agent" has the meaning set forth in the preamble to this Agreement.

 "Agreement" means this Credit Agreement, together with the exhibits and schedules hereto and all extensions, renewals, amendments, modifications, substitutions and replacements hereto and hereof, as amended, supplemented or modified from time to time.

"Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination, provided, however, that the Applicable Base Rate Margin will be increased by twelve and one-half (12.5) basis points (0.125%) during the period in which more than 50% of the Commitments are utilized.  For the purposes hereof, the Commitments shall be deemed to be utilized by the aggregate amount of Loans and/or Letters of Credit then outstanding.

For purposes of determining the Applicable Base Rate Margin: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by S&P, the "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by Moody's, the "Applicable Base Rate Margin" means, for each Base Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination. 

"Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as "Exhibit A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination, provided, however, that the Applicable Euro-Rate Margin will be increased by twelve and one-half (12.5) basis points (0.125%) during the period in which more than 50% of the Commitments are utilized.  For the purposes hereof, the Commitments shall be deemed to be utilized by the aggregate amount of Loans and/or Letters of Credit then outstanding.

For purposes of determining the Applicable Euro-Rate Margin: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by S&P, the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement, the Borrower shall not have a Senior Rating assigned by Moody's, the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion, a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit A and corresponding to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination.

"Application" means an application, in such form as the Issuing Bank may specify from time to time, requesting the Issuing Bank to issue a Letter of Credit.

"Assignment and Assumption Agreement" means an Assignment and Assumption Agreement in the form of Exhibit "H" hereto.

"Authorized Officer" means the President, any Vice President, the Chief Financial Officer, the Treasurer or the principal accounting officer of the Borrower.  The Agent and the Lenders shall be entitled to rely on the incumbency certificate delivered pursuant to Section 6.2 for the initial designation of each Authorized Officer.  Additions or deletions to the list of Authorized Officers may be made by the Borrower at any time by delivering to the Agent for redelivery to each Lender a revised incumbency certificate.

"Available Commitment" means as to any Lender, at any time, an amount equal to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's Revolving Extensions of Credit then outstanding.

"Bank Indebtedness" means the liability of the Borrower to pay the Loans, the Reimbursement Obligations, the Facility Fee, other Fees, any other fees or amounts outstanding in connection with Letters of Credit, interest on any of the foregoing, and the other amounts, including, without limitation, expenses, due hereunder.

"Base Rate" means, for any day, the higher of (i) the sum of (A) the Federal Funds Effective Rate for such day plus (B) fifty (50) basis points (.50%) per annum and (ii) the Prime Rate, as of such day.

"Base Rate Option" means the interest rate option described in item (i) of Subsection 2.2b.

"Base Rate Portion" means a Loan or a portion thereof which bears, or is to bear, interest at the Adjusted Base Rate.

"Borrower" means NUI Utilities, Inc., a New Jersey corporation and its successors and permitted assigns.

"Borrowing Date" means the date on which any extensions of credit are to be made hereunder.

"Business Day" means, 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 Boston, Massachusetts or New York, New York and, if the applicable Business Day relates to any extension of credit 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.

"Capital Adequacy Event" shall have the meaning given it in Subsection 2.3b.

"Capital Compensation Amount" shall have the meaning given it in Subsection 2.3b.

"Closing" means the execution and delivery of this Agreement which execution and delivery shall occur at the offices of Edwards & Angell, LLP in Boston, Massachusetts, at 10:00 A.M. (eastern time) on February 12, 2003, or such other location, date and time as is mutually agreeable to the parties hereto.

"Closing Date" means the day on which the Closing occurs.

"Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation thereto, together with all regulations promulgated and rulings issued thereunder.

"Commitment" means, as to each Lender, the obligation of such Lender to make Loans available to the Borrower pursuant to Section 2.1 and/or issue or participate in Letters of Credit issued on behalf of the Borrower pursuant to Section 2.14 in an aggregate principal amount and/or face amount at any one time outstanding not to exceed the amount set opposite such Lender's name on the signature pages hereto (as such amount may change from time to time pursuant to the terms hereof, or, in the case of a Purchasing Lender, in its Assignment and Assumption Agreement) and, as to all Lenders, the obligation of the Lenders to make Loans available to the Borrower and/or issue or participate in Letters of Credit issued on behalf of the Borrower in an aggregate amount equal to the Commitments of all of the Lenders.

"Commitment Percentage" means, as to each Lender, the percentage its Commitment bears to the Total Commitment, as such Lender's Commitment and the Total Commitment may be adjusted from time to time in accordance with this Agreement.

"Commitment Period" means the period from and including the Closing Date to but not including the Termination Date, or such earlier date on which the Commitment shall terminate as provided in this Agreement.

"Compliance Certificate" means a Compliance Certificate substantially in the form of Exhibit "F".

"Consolidated" means, as to any two or more Persons, the consolidation of the accounts of such Persons in accordance with GAAP.

"Consolidated Fixed Charges" means for any period the sum of (a) Consolidated Interest Expense; (b) required amortization of Consolidated Total Indebtedness, determined on a Consolidated basis in accordance with GAAP, for the period involved and discount or premium relating to any such Consolidated Total Indebtedness for any period involved, whether expensed or capitalized; and (c) Consolidated Lease Expense, determined without duplication of items included in Consolidation Interest Expense, of the Borrower.

"Consolidated Interest Expense" means for any period the amount of interest expense, both expensed and capitalized, of the Borrower, determined on a Consolidated basis in accordance with GAAP, for such period on the aggregate principal amount of its Indebtedness, determined on a Consolidated basis in accordance with GAAP.

"Consolidated Lease Expense" means for any period, the aggregate amount of fixed and contingent rentals payable by the Borrower, determined on a Consolidated basis in accordance with GAAP, for such period with respect to leases of real and personal property.

"Consolidated Net Income" means for any period, net income of the Borrower, determined on a Consolidated basis in accordance with GAAP, without giving effect to any non-cash gain, any non-cash loss or any reversals or adjustments to, or failure to recognize, revenue due to changes in applicable U.S. accounting rules and regulations, in each case to the extent reasonably acceptable to the Agent, including without limitation due to the implementation, effective as of October 25, 2002, of EITF 02-03 ("Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities"), the effects of which EITF implementation are hereby deemed acceptable to the Agent.

"Consolidated Shareholders' Equity" means the total of those items enumerated under the heading "Common Shareholders' Equity" in the Borrower's relevant balance sheets determined on a Consolidated basis in accordance with GAAP, consistently applied.

"Consolidated Total Capitalization" means, as of any date of determination, the sum of (i) Consolidated Total Indebtedness plus (ii) Consolidated Shareholders' Equity.

"Consolidated Total Indebtedness" means all Indebtedness of the Borrower, determined on a Consolidated basis in accordance with GAAP, consistently applied.

"Dollars" or "$" means the legal tender of the United States of America.

"Encumbrance" means any encumbrance, mortgage, lien, charge, pledge, security interest, priority payment, conditional sales agreement right, or other title retention agreement right (including any right under a lease which, in accordance with GAAP, would be treated as a capitalized item) in, upon or against any asset of any Person.

"Environmental Law(s)" means any and all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions of any Federal, state or local governmental authority relating to the environment or the release of any materials into the environment, whether now in existence or hereafter enacted, agreed to, issued or otherwise becoming effective.

"ERISA" means the Employee Retirement Income Security Act of 1974, together with the regulations thereunder, as now in effect and as hereafter from time to time amended or any successor statute.

"ERISA Affiliate" means, as of any date, any member of a controlled group of corporations of which the Borrower is a member, which, in any event together with the Borrower are treated as of such date as a single employer under Section 414 of the Code.

"Euro Base Rate" means that rate per annum (rounded upward, if necessary, to the nearest one hundred-thousandth of a percentage point) which represents the offered rate for deposits in Dollars, for a period of time comparable to such Interest Period, which appears on the British Bankers' Association Interest Settlement Rate Page, as displayed as Dow Jones Market, Page 3750, as of 11:00 a.m. (London time) on that day that is two Business Days preceding the first day of such Interest Period; provided, however, that if the rate described above does not appear on the Telerate System on any applicable interest determination date, then the Euro Base Rate for any Interest Period will be determined on the basis of the offered rates for deposits in Dollars for a period of time comparable to such Interest Period which are offered by four major banks in the London interbank market at approximately 11:00 a.m. (London time) on that day that is two London Business Days preceding the first day of such Interest Period, as selected by the Agent.  The principal London office of each of four major London banks will be requested to provide a quotation of its Dollar deposit offered rate.  If at least two such quotations are provided, the rate for that date will be the arithmetic mean of the quotations.  If fewer than two quotations are provided as requested, the rate for that date will be determined on the basis of the rates quoted for loans in Dollars to leading European banks for a period of time comparable to such Interest Period offered by major banks in New York City at approximately 11:00 a.m. (New York City time) on that day that is two London Business Days preceding the first day of such Interest Period.  In the event that the Agent is unable to obtain any such quotation as provided above, it will be deemed that the Euro-Rate for the proposed Interest Period cannot be determined. 

"Euro-Rate" means, with respect to each day during each Interest Period pertaining to a Loan to which the Euro-Rate Option applies, rate per annum determined for such day in accordance with the following formula:

Euro-Rate = Euro Base Rate

                       1.00 - - Euro-Rate Reserve Percentage

"Euro-Rate Option" means the interest rate option described in item (ii) of Subsection 2.2b.

"Euro-Rate Portion" means a Loan, or portion thereof, which bears, or is to bear, interest at the Adjusted Euro-Rate.

"Euro-Rate Reserve Percentage" means the maximum aggregate reserve requirement (including basic supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve System against Euro currency Liabilities as defined in Regulation D. 

"Existing Credit Agreement" means the Credit Agreement, dated as of December 19, 2001, among the Borrower, each of the lenders as specified therein, Fleet National Bank, as agent, PNC Bank National Association, as syndication agent and First Union National Bank, as documentation agent.

"Extension Agreement" has the meaning given it in Section 2.6.

"Extension Date" has the meaning given it in Section 2.6.

"Event of Default" has the meaning given it in Article VII.

"Facility Fee" means the fee described in Subsection 2.4a.

"Facility Fee Rate" means a rate per annum equal to the annualized rates (stated in terms of basis points) indicated on the pricing grid attached hereto as Exhibit "A" and corresponding to the ratings established by both S&P and Moody's applicable to the Borrower's Senior Ratings at such date of determination.  For purposes of determining the Facility Fee Rate: (i) if the Senior Ratings established by Moody's and S&P shall differ, the pricing shall be based on the higher of the two Senior Ratings unless one of the Senior Ratings is two or more levels lower than the other, in which case the pricing shall be determined by reference to the level next above that of the lower of the two Senior Ratings, (ii) if any Senior Rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change, (iii) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement the Borrower shall not have a Senior Rating assigned by S&P, the "Facility Fee Rate" means a rate per annum equal to the annualized rates referenced above (stated in terms of basis points) that correspond to the ratings established by Moody's applicable to the Borrower's Senior Ratings at such date of determination, and (iv) notwithstanding anything herein to the contrary, if at any time during the term of this Agreement the Borrower shall not have a Senior Rating assigned by Moody's, the "Facility Fee Rate" means a rate per annum equal to the annualized rates referenced above (stated in terms of basis points) that correspond to the ratings established by S&P applicable to the Borrower's Senior Ratings at such date of determination.

"Federal Funds Effective Rate" means, for any day, the rate per annum (based on a year of 360 days and the actual days elapsed and rounded upward to the nearest 1/100th of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by the Federal Reserve Bank of New York (or any successor) in substantially the same manner as such Federal Reserve Bank of New York computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, if such Federal Reserve Bank of New York (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day for which such rate was announced.

"Fee Letter" has the meaning set forth in Section 2.4b.

"Fees" means collectively the fees referenced in Section 2.4.

"Fiscal Quarter" means the three-month fiscal period of the Borrower beginning on each October 1, January 1, April 1 and July 1 and ending on the succeeding December 31, March 31, June 30 and September 30.

"Fiscal Year" means each fiscal period of the Borrower beginning October 1 and ending on the succeeding September 30.

"GAAP" means generally accepted accounting principles which shall include, but not be limited to, the official interpretations thereof as defined by the Financial Accounting Standards Board, its predecessors and its successors consistent with those utilized in preparing the audited financial statements referred to in Section 4.2.

"Governmental Authority" means the government of the United States or the government of any state or locality therein, any political subdivision or any governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body or entity, or other regulatory bureau, authority, body or entity of the United States or any state or locality therein, including the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, and any central bank of any other country or any comparable authority.

"Governmental Rule" means any law, statute, rule, regulation, ordinance, order, judgment, guideline or decision of any Governmental Authority.

"Guaranty" or "Guarantee" means any obligation, direct or indirect, by which a Person undertakes to guaranty, assume or remain liable for the payment or performance of another Person's obligations, including but not limited to (i) endorsements of negotiable instruments, (ii) discounts with recourse, (iii) agreements to pay or perform upon a second Person's failure to pay or perform, (iv) remaining liable on obligations assumed by a second Person, (v) agreements to maintain the capital, working capital solvency or general financial condition of a second Person and (vi) agreements for the purchase or other acquisition of products, materials, supplies or services, if in any case payment therefor is to be made regardless of the non-delivery of such products, materials or supplies or the non-furnishing of such services.

"Hedging Obligations" means, with respect to any Person, all liabilities of such Person under interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

"Increase Request" has the meaning given it in Section 2.1a(ii).

"Incremental Lender" has the meaning given it in Section 2.1a(ii).

"Indebtedness" as applied to any Person means, without duplication, all liabilities of such Person for borrowed money (other than trade accounts payable arising in the ordinary course of business consistent with past practices), direct or contingent, whether evidenced by a bond, note, debenture or otherwise, all preferred equity interests issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration at any time during the period ending one year after the term of this Agreement, and all obligations and liabilities in the nature of a capitalized lease obligation, deferred purchase price arrangement (other than trade accounts payable in the ordinary course of business consistent with past practices), title retention device, letter of credit obligation, Reimbursement Obligation, Hedging Obligation, reimbursement agreement, Guaranty, obligations relating to securitization transactions, synthetic lease transactions and sale-leaseback transactions.

"Interest Period" means, subject to the provisions of Subsection 2.2c, (i) as to any Swingline Loans, the period commencing on the date of the Swingline Loan and ending on the earlier of (a) 30 days thereafter, (b) on demand or (c) on the Termination Date and (ii) as to any Loans bearing interest at the Euro-Rate Option, any individual period of one, two, three or six months selected by the Borrower commencing on the Borrowing Date, conversion date or renewal date of a Euro-Rate Portion to which such period shall apply.

"Issuing Bank" means Fleet National Bank, in its capacity as issuer of any Letter of Credit.

"L/C Commitment" means $25,000,000.

"L/C Fee Payment Date" means the last day of each March, June, September and December.

"L/C Obligations" means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired face amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 2.14e.

"L/C Participants" means the collective reference to the Lenders other than the Issuing Bank.

"Lender" has the meaning given in the preamble to this Agreement.

"Letters of Credit" has the meaning given it in Section 2.14a(i).

"Loans" means each advance of funds by a Lender to the Borrower pursuant to Section 2.1a or by the Swingline Lender pursuant to Section 2.1f.

"Loan Account" means the loan account maintained by the Agent as more fully described in Section 2.11.

"Loan Documents" means collectively this Agreement, the Notes, the Applications and any other documents furnished in connection herewith.

"Loan Request" means a written request for Loans made in accordance with Section 2.1d hereof which request shall be substantially in the form of Exhibit "D" hereto.

"Mandatory Borrowing" has the meaning given it in Section 2.1f(iii).

"Margin Stock" is defined herein as defined in Regulation U.

"Market Capitalization" has the meaning given it in the definition of "Permitted Acquisitions" hereunder.

"Material Adverse Change" means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect upon the validity or enforceability of this Agreement or any of the other Loan Documents, (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 Borrower, (c) impairs materially or could reasonably be expected to impair materially the ability of the Borrower to duly and punctually pay its Indebtedness, or (d) impairs materially or could reasonably be expected to impair materially the ability of the Agent or any of the Lenders to enforce their legal remedies pursuant to this Agreement or any other Loan Document.

"Material Adverse Effect" means, with respect to any Person relative to any occurrence of whatever nature (including, without limitation, any adverse determination in any litigation, arbitration or governmental investigation or proceeding), an effect that results in or causes or has a reasonable likelihood of resulting in or causing a Material Adverse Change.

"Moody's" means Moody's Investors Service, Inc. and its successors.

"Negotiated Swingline Rate" means, as applicable to any Swingline Loan, the rate per annum as determined by the Swingline Lender and the Borrower on any applicable interest determination date.

"New Lender" has the meaning given it in Section 2.1a(ii).

"Notes" means any one or all of the several promissory notes of the Borrower evidencing Indebtedness of the Borrower under this Agreement which notes are substantially in the form of Exhibit "B" to this Agreement, including the Swingline Note, which note is substantially in the form of Exhibit "C" to this Agreement, together with all extensions, renewals, amendments, modifications, substitutions and replacements thereto and thereof.

"NUI Corporation Credit Agreement" means the Credit Agreement, dated as of the date hereof, among NUI Corporation, each of the lenders specified therein, and Fleet National Bank, as the agent.

"Option" means any one or both of the Base Rate Option or the Euro-Rate Option.

"Participant" means any financial institution or other Person to which a Lender sells a Participation in its Loan.

"Participation" means the sale by a Lender to any Participant of an undivided interest in all or any part of such Lender's Loan.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor Person.

"Permitted Acquisition" an acquisition of assets by the Borrower, subject to the fulfillment of the following conditions:

(i)   the Total Purchase Price for such acquisition, together with the aggregate Total Purchase Price paid by the Borrower and NUI Corporation and its Subsidiaries (other than the Borrower) for all other such acquisitions consummated after the date hereof, shall not exceed an amount equal to the lesser of (A) $30,000,000 or (B) 25% of Market Capitalization determined as of the close of business on the day prior to the day on which the applicable acquisition or other similar agreement is executed and delivered by the Borrower.  For purposes of this definition, "Market Capitalization" means, on any date of determination, the product of (i) the number of issued and outstanding shares of the common stock of NUI Corporation on such day times (ii) the closing sale price of such common stock on such day, as appearing in any regularly published reporting or quotation service or, if there is no such closing sale price, the market value of such common stock as reasonably determined by the Agent;

(ii)  With respect to each acquisition, Target EBITDA attributable to the assets of the Target being acquired for its most recently ended fiscal year shall not be less than $1.00;

(iii) With respect to each acquisition, after giving effect thereto and to Indebtedness incurred or assumed in connection therewith, the Borrower shall be in compliance with the provisions of Section 5.3, calculated on a pro forma basis as of the end of and for the period of four Fiscal Quarters most recently ended prior to the date of such acquisition;

(iv) If such acquisition or any series of related acquisitions involves a Total Purchase Price of more than $5,000,000 in the aggregate, then no later than (A) 5 Business Days prior to the consummation of each such Acquisition, the Borrower shall have delivered to the Agent (1) a certificate of Borrower setting forth the calculations referred to in clause (iii) and (2) copies of executed counterparts of the applicable acquisition or similar agreements, (B) promptly following a request therefor, copies of such other information or documents relating to such acquisition as the Agent shall have reasonably requested, and (C) if requested by the Agent, promptly following the consummation of such acquisition, certified copies of the agreements, instruments and documents referred to above, to the extent the same have been executed and delivered at the closing of the acquisition; and

(v) No Potential Default or Event of Default shall have occurred and be continuing or reasonably be expected to result from such acquisition, after giving effect thereto and Indebtedness incurred or assumed in connection therewith.

"Permitted Encumbrance" means, as to any Person, any of the followings

(i)  Encumbrances for taxes, assessments, governmental charges or levies on any of such Person's properties, which taxes, assessments, governmental charges or levies are at the time not due and payable or if they can thereafter be paid without penalty or are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are maintained on the books of such Person in conformity with GAAP;

(ii)  Pledges or deposits to secure payment of workers' compensation obligations, unemployment insurance, deposits or indemnities to secure public or statutory obligations or for similar purposes;

(iii) Encumbrances arising out of judgments or awards against such Person but only to the extent that the creation of any such Encumbrance shall not be an event or condition which, with or without notice or lapse of time or both, would cause the Borrower to be in violation of Section 7.7;

(iv) Mechanics', carriers', workers', repairmen's and other similar statutory Encumbrances incurred in the ordinary course of such Person's business, so long as the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings diligently conducted;

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

(vi) Encumbrances listed on Schedule 5.2, securing Indebtedness permitted by Section 5.13(c); provided that no such Encumbrance is amended after the date of this Agreement to cover any additional property or to secure additional Indebtedness;

(vii) Easements, rights-of-way, restrictions, leases or subleases to others or other similar Encumbrances created in the ordinary course of business which Encumbrances do not interfere in any material respect with the ordinary conduct of the business of the Borrower;

(viii) Encumbrances securing (a) the non-delinquent performance of bids, trade contracts (other than for borrowed money), leases or statutory obligations, (b) contingent obligations on surety and appeal bonds, and (c) other non-delinquent obligations of a like nature; in each case, incurred in the ordinary course of business, provided all such Encumbrances in the aggregate would not (even if enforced) cause a Material Adverse Effect on the Borrower; and

(ix)  Encumbrances securing Indebtedness of the Borrower permitted by Section 5.13(b) incurred to finance the purchase of new fixed or capital assets (including pursuant to capital leases), provided that (1) such Encumbrances shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (2) such Encumbrances do not at any time encumber any property other than the property financed by such Indebtedness, and (3) the Encumbrances are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased.

(x) Encumbrances securing Indebtedness of the Borrower permitted by Section 5.19 incurred in connection with sale/leaseback transactions, provided that (1) such Encumbrances shall be created substantially simultaneously with such sale/leaseback transaction, (2) such Encumbrances do not at any time encumber any property other than the property leased, and (3) the Encumbrances are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased;

(xi) Existing Encumbrances on the property or assets acquired in a Permitted Acquisition securing Indebtedness of the type permitted by Section 5.13(b), provided that (1) such Encumbrance existed prior to such Permitted Acquisition, (2) any such Encumbrances do not by their terms cover property or assets other than those acquired in the Permitted Acquisition, and (3) any such Encumbrances do not by their terms secure Indebtedness other than Indebtedness of the type permitted by Section 5.13(b) existing prior to such Permitted Acquisition; and

(xii) Encumbrances created or deemed to exist in connection with any securitization transaction permitted under Section 5.13(h)(2), provided such Encumbrances relate solely to the applicable securitization receivables actually sold, contributed, financed or otherwise conveyed or pledged pursuant to such securitization transaction.

"Permitted Investments" means

(a)       marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any agency thereof and backed by the full faith and credit of the United States of America;

(b)       marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof and, at the time of acquisition, having one of the two highest ratings generally obtainable from either S&P or Moody's;

(c)       commercial paper, at the time of acquisition, having a rating of A-1 (or the equivalent) or higher from S&P and P-1 (or the equivalent) or higher from Moody's; or

(d)       mutual funds, the assets of which are primarily invested in items of the kind described in clauses (a), (b) and (c) of this definition;

provided in each case, that such obligations are payable in Dollars and such Permitted Investments by the Borrower are in accordance with Governmental Rules.

"Permitted Transferee" has the meaning given it in Section 7.10.

"Person" means any individual, partnership, corporation, trust, joint venture, banking association, unincorporated organization or any other entity or enterprise or government or department or agency thereof.

"Plan" means an employee pension benefit plan (other than a multiemployer plan) which is maintained by the Borrower or any ERISA Affiliate for employees of the Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 302 of ERISA and Section 412 of the Code.

"Portion" means, with respect to any outstanding Loans, either the Base Rate Portion thereof, the Euro-Rate Portion thereof, or both, as the case may be.

"Potential Default" means an event which, with the passage of time or the giving of notice or both, shall be an Event of Default.

"Prime Rate" means the variable interest rate per annum announced from time to time by Fleet National Bank as its prime rate, which rate is a reference rate and may not be the lowest rate of interest then being charged by Fleet National Bank to its commercial borrowers.

"Proposed Lender" has the meaning given it in Section 2.1a(ii).

"Purchasing Lender" has the meaning given it in Subsection 9.6a.

"Register" has the meaning given it in Subsection 9.6b.

"Regulation D" means Regulation D promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 204 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation T" means Regulation T promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 220 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation U" means Regulation U promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Regulation X" means Regulation X promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. Part 224 et seq.) as such regulation is now in effect and as may hereafter be amended.

"Reimbursement Obligation" means the obligation of the Borrower to reimburse the Issuing Bank pursuant to Section 2.14(e) for amounts drawn under Letters of Credit.

"Reportable Event" means any one or more events, defined in Section 4043(b) of ERISA and in 29 C.F.R. Part 2615, other than an event for which the requirement for the 30 day notice to the PBGC is waived.

"Required Lenders" means as of a particular date (i) prior to the termination of the Commitments, the Lenders whose Commitment Percentages aggregate at least fifty-one percent (51%) of the aggregate Commitment Percentages of all the Lenders and (ii) after the termination of the Commitments, fifty-one (51%) of the aggregate principal amount of the Revolving Extensions of Credit at the particular time outstanding.

"Restricted Payments" has the meaning given to it in Section 5.1.

"Revolving Credit" has the meaning assigned to it in Section 2.1, as the same may be reduced pursuant to Section 2.10 and 7.11.

"Revolving Extensions of Credit" means as to any Lender at any time, an amount equal to the sum of (a) all Loans made by such Lender, (b) its Swingline Exposure and (c) such Lender's Commitment Percentage of the L/C Obligations then outstanding.

"S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill, Inc. and its successors.

"Senior Ratings" means, with respect to any Person, the long term senior unsecured public debt ratings in effect from time to time as assigned by Moody's and S&P, as the case may be.

"Subsidiary" means, as to any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the outstanding stock or other applicable ownership interest having by the terms thereof ordinary voting power to elect a majority of the Board of Directors or other managers of such corporation, partnership, limited liability company, or other entity is at the time directly or indirectly owned or controlled by such Person and/or by one or more Subsidiaries of such Person.

"Swingline Exposure" means at any time, in respect of any Lender, an amount equal to the aggregate principal balance of Swingline Loans at such time  multiplied by such Lender's Commitment Percentage at such time.

"Swingline Lender" means Fleet National Bank, in its capacity as lender of Swingline Loans hereunder, and its successors in such capacity.

"Swingline Loan" means any Loan that, at any time, bears interest at a rate based upon the Negotiated Swingline Rate.

"Swingline Note" has the meaning specified inSection 2.1f(i).

"Target" any Person or any division of a Person whose equity interests or assets of which are proposed to be acquired in connection with a Permitted Acquisition.

"Target EBITDA" for any period, as to the Target in the case of an acquisition of all assets of a Target, or attributable to assets being purchased from the Target in the case of an acquisition of less than all of the assets of a Target, net income for such period plus, without duplication and to the extent reflected as a charge in the statement of such net income for such period, the sum of (a) income tax expense, (b) interest expense, and (c) depreciation and amortization expense, all calculated in accordance with GAAP consistently applied and as may be adjusted to give effect to cost savings as a result of the acquisition to the extent agreed to in writing by the Agent.  For the purposes of this definition, net income shall be calculated without giving effect to any non-cash gain, any non-cash loss or any reversals or adjustments to, or failure to recognize, revenue due to changes in applicable U.S. accounting rules and regulations, in each case to the extent reasonably acceptable to the Agent, including without limitation due to the implementation, effective as of October 25, 2002, of EITF 02-03 ("Issues Involved in Accounting for Derivative Contracts Held for Trade Purposes and Contracts Involved in Energy Trading and Risk Management Activities"), the effects of which EITF implementation are hereby deemed acceptable to the Agent.

"Termination Date" means February 11, 2004, unless earlier terminated in accordance with the terms hereof.

"Termination Proceedings" means any action taken by the PBGC under ERISA to terminate any plan.

"Total Commitment" means the aggregate amount of the Commitments of all Lenders, as in effect from time to time. 

"Total Purchase Price" means the "purchase price" for any acquisition including, without limitation, but without duplication, (a) all cash payable by the Borrower to the seller or affiliate of the seller at the closing of the acquisition; (b) all Indebtedness incurred by the Borrower in favor of any seller or affiliate of any seller; (c) all Indebtedness and other liabilities of or related to the Target that are assumed by the Borrower, or subject to which the acquired assets are acquired, or (in the case of an equity security purchase or merger) that remain unpaid at the closing of the acquisition; and (d) the maximum amount of all contingent future cash payments or other cash consideration payable within the 12 month period following the closing of the acquisition and not otherwise described in this definition, including without limitation cash "earn-out" payments and cash amounts payable upon disposition of the acquired business (unless the Required Lenders shall otherwise agree), but specifically excluding any equity securities of the Borrower and warrants, options, and other rights to acquire equity securities of the Borrower issued at the closing of the acquisition.  For purposes of clause (d) of the preceding sentence, the maximum amount of any payment or other consideration specified therein shall be the maximum amount provided for in the relevant agreement, or, if no maximum amount is so provided, the amount reasonably estimated by Borrower on the basis of assumptions and calculations provided in writing to the Agent and approved by it.  Such assumptions shall include reasonable projections of any measure of financial or other performance that enters into the calculation of the amount of any such payment or other consideration but shall not include any assumption that any other future event that is a condition to such payment or consideration (such as the later disposition of the acquired business or a public or private offering of securities) will not occur.

"Total Revolving Extensions of Credit" means, at any time, the aggregate amount of the Revolving Extensions of Credit of the Lenders outstanding at such time.

"Transfer Effective Date" has the meaning given it in each respective Assignment and Assumption Agreement.

"Transferor Lender" has the meaning given it in Subsection 9.6a.

"Uniform Customs" means the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, as may be amended from time to time.

1.2       GAAP Definitions.  Accounting terms used herein but not defined herein shall have the meanings ascribed to them under GAAP consistent with those utilized in preparing the audited financial statements referred to in Section 4.2.

1.3       Other Definitional Conventions and Rules of Construction.  (i) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall, unless otherwise expressly specified, refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section and Subsection references are to this Agreement unless otherwise expressly specified. 

(ii)        All terms defined in this Agreement in the singular shall have comparable meanings when used in plural, and vice versa, unless otherwise specified.

(iii)       The word "or" as used herein shall mean and connote nonexclusive alternatives, unless expressly stated or the context clearly requires otherwise.

ARTICLE II.  THE LOANS

2.1       The Revolving Credit

2.1a     Loans. 

(i)         Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender severally agrees to make Loans to the Borrower at any time from time to time on or after the date hereof to, but not including, the Termination Date, provided that the aggregate principal amount of each Lender's Loans outstanding hereunder to the Borrower, when added to such Lender's Commitment Percentage of the then outstanding L/C Obligations, shall not exceed at any one time the amount equal to such Lender's Commitment Percentage of the Total Commitments then in effect and provided, further, that no Loans shall be made if it would cause the Total Revolving Extensions of Credit to exceed the Total Commitments (the "Revolving Credit").  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 2.1a. The aggregate amount of the Commitments on the Closing Date is $96,923,076.90.  All Loans outstanding on the Termination Date shall become due and payable in full on such date. 

(ii)        Subject to the terms in this Section 2.1(ii), the Borrower may, at its sole expense and effort after consulting with the Agent, request: (a) one or more Lenders reasonably acceptable to the Agent to increase (in the sole and absolute discretion of each such Lender) the amount of their respective Commitments and/or (b) one or more other lending institutions acceptable to the Agent (each, a "New Lender") to become "Lenders" and extend Commitments hereunder (each such Lender and each New Lender being herein referred to as a "Proposed Lender").  To request an increase pursuant to this Section 2.1a(ii), the Borrower shall submit to the Agent an Increase Request, in the form annexed hereto as Exhibit "J", signed by the Borrower, which shall be irrevocable and shall specify, as the case may be:  (A) each such Lender and the amount of the proposed increase in its Commitment, and/or (B) the proposed Commitment for such New Lender.  Promptly following receipt of an Increase Request, the Agent shall advise each Lender of the details thereof.  If one or more of such Proposed Lenders shall have unconditionally agreed to such Increase Request in a writing delivered to the Borrower and the Agent (each such existing Lender and New Lender being hereinafter referred to as an "Incremental Lender"), then:  (1) each such Incremental Lender which shall then be an existing Lender shall have its Commitment increased by the amount set forth in such Increase Request, and (2) each such New Lender shall be and become a "Lender" hereunder having a Commitment equal to the amount set forth therefor in such Increase Request, provided, however, that in each such case:  (I) immediately before and after giving effect thereto, no Potential Default or Event of Default shall or would exist, (II) each such Incremental Lender shall have executed and delivered to the Agent, a supplement to this Agreement providing for its increased Commitment or its Commitment, as applicable, in form approved by the Agent, (III) each such Increase Request shall be in an aggregate minimum amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (IV) the Commitment extended by any such Incremental Lender which is a New Lender shall be in a minimum amount of $5,000,000 or an integral multiple of $1,000,00 in excess thereof, (V) the principal amount of Indebtedness incurred by the Borrower under the Additional Bank Line (and, without duplication, any corresponding commitments to extend credit to the Borrower) pursuant to Section 5.13(h)(1) shall be repaid out of additional Loans hereunder and permanently reduced by the amount the Total Commitment hereunder is increased by such Increase Request on the date such Increase Request is effective, (VI) after giving effect to the Increase Request, the Total Commitment under this Agreement, together with the aggregate principal amount of Indebtedness incurred by the Borrower (and, without duplication, any corresponding commitments to extend credit to the Borrower) pursuant to Section 5.13(h)(1) and 5.13(h)(2), shall not exceed $141,923,076.90, and (VII) immediately after giving effect to the Increase Request, the Total Commitment of the Borrower under this Agreement, together with (a) the "Total Commitment" for NUI Corporation under the NUI Corporation Credit Agreement and (b) the aggregate principal amount of Indebtedness incurred by the Borrower (and, without duplication, any corresponding commitments to extend credit to the Borrower) pursuant to Section 5.13(h)(1) and 5.13(h)(2), shall not exceed $195,000,000 at any time.

(iii)        Simultaneously with each increase in the aggregate amount of the Commitments under this Section 2.1a(ii), each Incremental Lender shall, to the extent necessary, purchase from each other Lender, and each other Lender shall sell to each Incremental Lender, in each case at par and without representation, warranty, or recourse (in accordance with and subject to the restrictions contained in Section 9.6), such principal amount of the Revolving Extensions of Credit of such other Lender, together with all accrued and unpaid interest thereon, as will result, after giving effect to such transaction, in each Lender's Commitment Percentage of Revolving Extensions of Credit outstanding being equal to such Lender's Commitment Percentage of all Revolving Extensions of Credit, provided that each such assignor Lender shall have received (to the extent of the interests, rights and obligations assigned) payment of the outstanding principal amount of its Loans, accrued interest thereon, accrued fees, commissions and all other amounts payable to it under the Loan Documents from the applicable assignee Lenders (to the extent of such outstanding principal and accrued interest, fees and commissions) or the Borrower (in the case of all other amounts).

2.1b     Commitment of Each Lender.  Each Lender agrees, for itself only, and subject to the terms and conditions of this Agreement, to make Loans to the Borrower from time to time not to exceed an aggregate principal amount at any one time outstanding equal to the amount of its respective Commitment Percentage of the Revolving Credit.  The obligations of each Lender hereunder are several.  The failure of any Lender to perform its obligations hereunder shall not affect the obligations of the Borrower, or any other Lender, to any other party nor shall the Borrower, or any other Lender, be liable for the failure of such Lender to perform its obligations hereunder.  The Lenders shall have no obligation to make Loans hereunder on or after the Termination Date.

2.1c     Notes.  The obligation of the Borrower to repay, on or before the Termination Date, the aggregate unpaid principal amount of all Loans shall be evidenced by the several Notes, each substantially in the form of Exhibit "B" hereto, drawn by the Borrower to the order of a Lender in the maximum amount of such Lender's Commitment.  The principal amount actually due and owing to a Lender at any time shall be the then aggregate unpaid principal amount of all Loans made by such Lender as shown on the Loan Account established and maintained by the Agent in accordance with Section 2.11.  Each Note shall be dated the date hereof and shall be delivered to the Lenders on such date.

2.1d     Loan Request.  Except as otherwise provided herein, the Borrower may from time to time prior to the Termination Date request the Lenders to make Loans to the Borrower by the delivery to the Agent, not later than 12:00 Noon. (eastern time) (i) three Business Days prior to the proposed Borrowing Date with respect to the making of Loans to which the Euro-Rate Option applies for any Loans and (ii) one Business Day prior to the proposed Borrowing Date with respect to the making of a Loan to which the Base Rate Option applies of a duly completed request therefor substantially in the form of Exhibit "D" hereto or a request by telephone immediately confirmed in writing by letter, facsimile or electronic transmission in such form (each, a "Loan Request"), it being understood that the Agent may rely on the authority of any person 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 Loans to be made on such Borrowing Date, which amount, as to Base Rate Portions, shall be in integral multiples of $100,000 and not less than $500,000 and, as to Euro-Rate Portions, shall be in integral multiples of $100,000 and not less than $1,000,000; (iii) whether the Euro-Rate Option or the Base Rate Option shall apply to the proposed Loans to be made on such Borrowing Date; and (iv) in the case of Loans to which the Euro-Rate Option applies, an appropriate Interest Period for each Euro-Rate Portion of the Loans to be made on such Borrowing Date.

2.1e     Making Loans.  The Agent shall, promptly after receipt by it of a Loan Request pursuant to Section 2.1d (but not later than 3:00 P.M. (eastern time) one Business Day preceding any Borrowing Date for Loans bearing interest at the Base Rate Option and 2:00 P.M. (eastern time) on the third Business Day preceding any Borrowing Date for which any Portion of the Loans to be made on such Borrowing Date bears interest at the Euro-Rate Option), notify the Lenders of its receipt of such Loan Request specifying: (i) the proposed Borrowing Date and the time and method of disbursement of such Loan; (ii) the amount and type of such Loan and the applicable Euro-Rate Portions and Interest Periods (if any); and (iii) the apportionment among the Lenders of the Loans as determined by the Agent in accordance with Section 2.1b hereof.  Each Lender shall remit the principal amount of each Loan to the Agent such that the Agent is able to, and the Agent shall, to the extent the Lenders have made funds available to it for such purpose, fund such Loan to the Borrower in Dollars and immediately available funds in an account specified by the Borrower to the Agent prior to 2:00 P.M. (eastern time) on the Borrowing Date, provided that if any Lender fails to remit such funds to the Agent in a timely manner, or any Lender fails to advise the Agent of its intention not to fund, then the Agent may elect in its sole discretion to fund with its own funds the Loan of such Lender on the Borrowing Date, subject to the provisions of Section 8.3 below.

2.1f      Swingline Loans

(i)         During the Commitment Period, the Swingline Lender agrees, on the terms and conditions set forth in this Agreement, to lend to the Borrower from time to time amounts that will not result in (x) the aggregate principal amount of outstanding Swingline Loans at any time exceeding $15,000,000, or (y) the Total Revolving Extensions of Credit at any time exceeding the Total Commitments.  Interest on such Swingline Loans shall accrue for each day during the Interest Period applicable thereto at the Negotiated Swingline Rate.  Each Swingline Loan shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Swingline Loan or upon demand.  Accrued interest on each Swingline Loan shall be due and payable on the third Business Day following the end of each calendar month, at maturity or on demand.  Swingline Loans may be repaid and reborrowed.  Swingline Loans may be prepaid at any time, without premium or penalty, provided that notice shall be given not later than 12:00 noon (eastern time) on the date of prepayment.  The Swingline Loans shall be evidenced by a promissory note in the form of Exhibit "C" hereto (as amended, supplemented or modified from time to time, the "Swingline Note").

(ii)        In order to request a Swingline Loan, the Borrower shall notify the Agent of such request not later 12:00 noon, New York City time on the day of a proposed Swingline Loan, specifying the proposed date (which shall be a Business Day) and amount of the requested Swingline Loan (which shall be in a minimum amount of $100,000).  Such request for a proposed Swingline Loan shall be made by delivery to the Agent of a duly completed request therefore substantially in the form of Exhibit "E" hereto or a request by telephone immediately confirmed in writing by letter, facsimile or electronic transmission in such form, it being understood that the Swingline Lender may rely on the authority of any person making such a telephonic request without the necessity of receipt of such written confirmation.  The Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to a deposit account of the Borrower with the Swingline Lender (or, if so requested by Borrower, by means of wire transfer of immediately available funds to such other bank account of the Borrower as Borrower shall designate) by 3:00 p.m. (eastern time) on the requested date of such Swingline Loan. 

(iii)       On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the Lenders that its outstanding Swingline Loans shall be repaid with a borrowing of Loans (provided that each such notice shall be deemed to have been automatically given upon the occurrence of an Event of Default under Section 7.3 or upon the exercise of any of the remedies provided in Section 7.12), in which case a borrowing of Loans bearing interest at the Adjusted Base Rate (each such borrowing, a "Mandatory Borrowing") shall be made on the immediately succeeding Business Day by all Lenders pro rata based on each Lender's Commitment Percentage, and the proceeds thereof shall be applied directly to repay the Swingline Lender for such outstanding Swingline Loans.  Each Lender hereby irrevocably agrees to make Loans bearing interest at the Adjusted Base Rate upon one Business Day's notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Swingline Lender notwithstanding: (a) that the amount of the Mandatory Borrowing may not comply with the minimum borrowing amount otherwise required hereunder, (b) whether any conditions specified in Section 6.1 are then satisfied, (c) whether a Potential Default or an Event of Default has occurred and is continuing, and (d) the date of such Mandatory Borrowing.  In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code in respect of the Borrower), each Lender (other than the Swingline Lender) shall forthwith purchase from the Swingline Lender (without recourse or warranty) such assignment of the outstanding Swingline Loans as shall be necessary to cause such Lenders to share in such Swingline Loans ratably based upon their respective Commitment Percentages, provided that all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date the respective assignment is purchased and, to the extent attributable to the purchased assignment, shall be payable to the Lender purchasing same from and after such date of purchase.

 2.2       Interest Rates, Interest Payment and Certain Provisions Relating to Interest and Fees.  

2.2a     Payments of Interest.  The Borrower shall pay interest on the principal amount of the Loans from time to time outstanding hereunder, from the date thereof until payment in full, at the rates of interest determined pursuant to this Section 2.2. The Borrower shall pay accrued interest on the unpaid principal balance of the Loans in arrears: (i) with respect to each Base Rate Portion, at the Adjusted Base Rate on the last Business Day of each Fiscal Quarter during the term thereof, (ii) with respect to each Euro-Rate Portion, at the Adjusted Euro-Rate on the last day of each Interest Period as provided for in Subsection 2.2(b)(ii) (provided, however, if the Interest Period chosen for a Euro-Rate Portion exceeds three  months, interest on that Euro-Rate Portion shall be due and payable on the day which is (A) three months after the first day of such Interest Period and (B) the last day of such Interest Period), and (iii) with respect to all such Portions, at the applicable interest rate (A) when due, at maturity, whether by acceleration or otherwise, and (B) after maturity, on demand until paid in full.

2.2b     Interest Rate Options.  The unpaid principal amount of the Loans shall bear interest, for each day until due, at one or more rates of interest selected by the Borrower from among the Options set forth below; it being understood that, subject to the provisions of this Agreement, the Borrower may select different Options to apply simultaneously to different Portions of the Loans and may select different Interest Periods to apply simultaneously to different Portions of the Euro-Rate Portions of the Loans.

(i)         Base Rate Option:  A rate of interest per annum (computed upon the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed) equal to the sum of (A) the Base Rate plus (B) the Applicable Base Rate Margin from time to time in effect (the "Adjusted Base Rate").  The rate of interest per annum under the Base Rate Option shall be adjusted automatically, from time to time, upon each change in the Adjusted Base Rate.

(ii)        Euro-Rate Option:  A rate of interest per annum (computed on the basis of a year of 360 days and the actual number of days elapsed) equal to the sum of (A) the Euro-Rate plus (B) the Applicable Euro-Rate Margin from time to time in effect (the "Adjusted Euro-Rate").  The Adjusted Euro-Rate for each Euro-Rate Portion then outstanding shall be adjusted automatically, from time to time, effective upon each change in the Applicable Euro-Rate Margin resulting from an increase or decrease in utilization of the Commitments.

2.2c     Interest Periods; Limitations on Elections.  At any time when the Borrower shall select, convert to or renew at the Euro-Rate Option with respect to all or any Portion of the outstanding Loans, it shall fix one or more Interest Periods during which such Option(s) shall apply.  All of the foregoing, however, is subject to the following:

(i)         any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next Business Day unless such Business Day falls in the succeeding calendar month in which case such Interest Period shall end on the next preceding Business Day; and

(ii)        any Interest Period which begins on the last day of a calendar month or on a day for which there is no numerically corresponding day in the subsequent calendar month during which such Interest Period is to end shall end on the last Business Day of such subsequent month.

In addition, elections by the Borrower of the Euro-Rate Option shall be subject to the following further limitations:

(i)         If an Interest Period is elected with regard to amounts outstanding under the Revolving Credit and such Interest Period would end after the Termination Date, such Interest Period shall end on the Termination Date; and

(ii)        At no time may there be more than ten Interest Periods in effect relating to Loans.

2.2d     Election, Conversion or Renewal of Interest Rate Options.  Elections of or conversions to the Base Rate Option shall continue in effect until converted to the Euro-Rate Option as hereinafter provided.  Elections of, conversions to or renewals of the Euro-Rate Option shall expire as to each Euro-Rate Portion at the expiration of the applicable Interest Period.

At any time, with respect to any Base Rate Portion, or at the expiration of the applicable Interest Period, with respect to any Euro-Rate Portion, the Borrower (subject to Subsection 2.2c) may cause all or any part of the principal amount of such Portion to be converted to and/or (in the case of a Euro-Rate Portion) to be renewed under the Euro-Rate Option by notice to each of the Lenders as hereinafter provided.  Such notice (i) shall be irrevocable; (ii) shall be given not later than 11:00 A.M. (eastern time) in the case of a conversion to or renewal of, either in whole or in part, the Euro-Rate Option on the third Business Day prior to the proposed effective date for the conversion or renewal and (iii) shall set forth:

(A)       the effective date of such conversion or renewal, which shall be a Business Day;

(B)       the new Interest Period(s) selected; and

(C)       with respect to each such Interest Period, the aggregate principal amount of the corresponding Euro-Rate Portion.

At the expiration of each Interest Period, any part (including the whole) of the principal amount of the corresponding Euro-Rate Portion as to which no notice of conversion or renewal has been received as provided above, shall automatically be converted to the Base Rate Option.

2.2e     Notification of Election of an Interest Rate Option.  The Borrower, by an Authorized Officer, shall notify the Agent of (i) each election or renewal of an Option and each conversion from one Option to another, (ii) the Portion of the Loans then outstanding to be allocated to each Option and (iii) where relevant, the Interest Periods applicable to each Option, by communication as provided for in this Agreement.  Any such communication may be oral or written and if oral, it shall be followed immediately by written confirmation of such Option election executed by an Authorized Officer.

2.2f      Interest After Maturity.  After the principal amount of all or any part of the Base Rate Portions of the Loans shall have become due and payable, whether by acceleration or otherwise and whether or not judgment has been entered against the Borrower thereon, all Base Rate Portions shall bear interest at a rate per annum which shall be two hundred (200) basis points (2%) per annum above the rate otherwise in effect under the Base Rate Option, such interest rate to change automatically from time to time, effective as of the effective date of each change in the Base Rate.  After the principal amount of all or any part of the Euro-Rate Portions of the Loans shall have become due and payable, whether by acceleration or otherwise and whether or not judgment has been entered against the Borrower thereon, all such Euro-Rate Portions shall bear interest (i) until the end of the then current Interest Period, at a rate per annum which shall be two hundred (200) basis points (2%) per annum above the rate otherwise in effect under the Euro-Rate Option, and (ii) at the end of the then current Interest Period, and thereafter at the sum of (A) the Adjusted Base Rate plus (B) two hundred (200) basis points (2%) per annum.

2.3       Yield-Protection, Capital Adequacy and Miscellaneous Provisions Relating to Euro-Rate.

2.3a     Yield Protection.  Notwithstanding other provisions of this Section 2.3:

(i)         If any Governmental Rule (including, without limitation, Regulation D), or if any change therein on or after the date hereof, or in the interpretation thereof by any Governmental Authority charged with the administration thereof, shall:

(A) subject any Lender to any tax, levy, impost, charge, fee, duty, deduction or withholding of any kind with respect to payments of principal or interest or other amounts due hereunder or pursuant to any Note, any Letter of Credit or any Application (other than any tax imposed or based upon the income of a Lender and payable to any Governmental Authority in the United States of America or any state thereof); or

(B)       change the basis of taxation of any Lender with respect to payments of principal or interest or other amounts due hereunder or pursuant to any Note, any Letter of Credit or any Application (other than any change which affects, and only to the extent that it affects, the taxation by the United States or any state thereof of the total net income of such Lender); or

(C)       impose, modify or deem applicable any reserve, special deposit or similar requirements against assets held by any Lender applicable to the Commitment or Loans made hereunder (other than such requirements which are included in the determination of the applicable rate of interest hereunder); or

(D)       impose upon any Lender any other obligation or condition with respect to this Agreement, and the result of any of the foregoing is to increase the cost to the affected Lender, reduce the income receivable by the affected Lender, reduce the rate of return on the affected Lender's capital, or impose any expenses upon the affected Lender, all with respect to any of the Loans (or any portion thereof) or the issuance of or participation in any Letter of Credit by an amount which the affected Lender reasonably deems material, and if the affected Lender is then demanding similar compensation for such occurrences from other borrowers who are similarly situated and who have a similar relationship with the affected Lender and from which the affected Lender has the right to demand such compensation, then and in any such case:

(1)        the affected Lender shall promptly notify the Borrower of the happening of such event;

(2)        the Borrower shall pay to the affected Lender, within 10 days following demand, such amount as will compensate the affected Lender for such reduction in its rate of return; and

(3)        the Borrower may pay the affected portion of the affected Lender's Loans in full without the payment of any additional amount, including prepayment penalties, other than amounts payable on account of the affected Lender's out-of-pocket losses (including funding loss, if any, as provided in Section 2.9) which are not otherwise provided for in subparagraph (2) immediately above.

(ii)        A certificate (in reasonable detail) as to the increased cost or reduced amount as a result of any event mentioned in this Subsection 2.3a shall be promptly submitted by the affected Lender to the Borrower in accordance with the provisions hereof.  Such certificate shall be prima facie evidence as to the amount of such increased cost or reduced amount.

2.3b     Capital Adequacy.  If, after the date hereof, (i) any adoption of or any change in or in the interpretation of any Governmental Rule, or (ii) compliance with any Governmental Rule of any Governmental Authority exercising control over banks or financial institutions generally or any court of competent jurisdiction, requires that the Commitment (including, without limitation, obligations in respect of any Loans) hereunder be treated as an asset or otherwise be included for purposes of calculating the appropriate amount of capital to be maintained by any Lender or any corporation controlling any Lender (a "Capital Adequacy Event"), the result of which is to reduce the rate of return on a Lender's capital as a consequence of its Commitment to a level below that which the affected Lender could have achieved but for such Capital Adequacy Event, taking into consideration the Lender's policies with respect to capital adequacy, by an amount which the affected Lender reasonably deems to be material, the affected Lender shall promptly deliver to the Borrower a statement (in reasonable detail) of the amount necessary to compensate the affected Lender or the reduction in the rate of return on its capital attributable to its Commitment (the "Capital Compensation Amount").  The affected Lender shall determine the Capital Compensation Amount in good faith, using reasonable attribution and averaging methods.  Each affected Lender shall from time to time notify the Borrower of the amount so determined.  Each such notification shall be prima facie evidence of the amount of the Capital Compensation Amount set forth therein, and such Capital Compensation Amount shall be due and payable by the Borrower to the affected Lender 30 days after such notice is given.  As soon as practicable after any Capital Adequacy Event, the affected Lender shall submit to the Borrower estimates of the Capital Compensation Amounts that would be payable as a function of the affected Lender's Commitment hereunder.

2.3c     Euro-Rate Unascertainable.  If, on any date on which the Adjusted Euro-Rate would otherwise be set, the Agent reasonably shall have determined (which determination shall be final and conclusive) that by reason of circumstances affecting the interbank Eurodollar market, adequate and reasonable means do not exist for ascertaining the Euro-Rate, the Agent shall give prompt notice of such determination to the Borrower and the Lenders and, until the Agent notifies the Borrower and the Lenders that the circumstances giving rise to such determination no longer exist, the right of the Borrower to borrow under, convert to or renew the Euro-Rate Option shall be suspended.  Any notice of borrowing under, conversion to or renewal of the Euro-Rate Option which was to become effective during the period of such suspension shall be treated as a request to borrow under, convert to or renew at the Base Rate Option with respect to the principal amount therein specified.

2.3d     Illegality.  If a Lender shall determine in good faith (which determination shall be final and conclusive) that compliance by such Lender with any applicable law, treaty or other Governmental Rule (whether or not having the force of law), or the interpretation or application thereof by any Governmental Authority, has made it unlawful for such Lender to make or maintain the Loans under the Euro-Rate Option (including but not limited to acquiring Eurodollar liabilities to fund such Loans), such Lender shall give notice of such determination to the Borrower and the other Lenders.  Notwithstanding any provision of this Agreement to the contrary, unless and until the affected Lender shall have given notice to the Borrower and the other Lenders that the circumstances giving rise to such determination no longer apply:

(i)         with respect to any Interest Periods thereafter commencing, interest on the Loans bearing interest at the Adjusted Euro-Rate (whichever one or more have been determined by the affected Lender to be unlawful) shall, unless the Borrower shall have selected a different Option which is then available, be computed and payable under the Base Rate Option; and

(ii)        on such date, if any, as shall be required by law, any Loans bearing interest at the Adjusted Euro-Rate then outstanding shall be automatically converted to the Base Rate Option, and the Borrower shall pay to the affected Lender the accrued and unpaid interest on such Loans to (but not including) the date of such conversion at the applicable interest rate or rates in effect for such Loans prior to such conversion.

2.3e     Change of Lending Office.  Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.3a, 2.3b or 2.3d with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.3a, 2.3b or 2.3d.  In determining whether designating another lending office would cause such Lender or its lending office(s) to suffer economic disadvantage, such Lender may disregard any economic disadvantage that the Borrower agrees in form and substance satisfactory to such Lender to indemnify and hold such Lender harmless therefrom.

2.4       Fees.

2.4a     Facility Fee.  The Borrower agrees to pay to the Lenders, on a pro rata basis, beginning on March 31, 2003, and continuing quarterly in arrears thereafter on the last day of each June, September, December and March during the term hereof to and including the Termination Date, a facility fee (the "Facility Fee") calculated at a rate per annum equal to the Facility Fee Rate on the daily (computed at the opening of business) average amount of the Commitment for the quarter then ending; provided, however, the first payment under this Subsection 2.4b shall be only for the actual number of days elapsed between the Closing Date and March 31, 2003, and the last payment under this Subsection 2.4b shall be only for the actual number of days elapsed between the last quarterly payment date and the Termination Date.  If there isany change in the Facility Fee Rate applicable during the quarter, the Facility Fee shall be calculated with respect to each period that the Facility Fee Rate was in effect during such quarter.

2.4b     Certain Other Fees.  The Borrower agrees (i) to pay to the Agent for the account of the Agent or the Lenders, as applicable, the fees set forth in that certain letter agreement among the Borrower, the Agent, NUI Corporation and Fleet Securities Inc. (the "Fee Letter") dated as of December 3, 2002, as the same may be amended from time to time, as and when payment of such fees is due as set forth therein, and (ii) to pay to the Agent for the account of the Agent and the Proposed Lender, as applicable, fees arranged to be paid to a Proposed Lender in the amount or amounts and on the date or dates agreed to in writing among the Proposed Lender, the Agent and the Borrower in connection with any Increase Request.

2.5       Calculation of Interest and Facility Fee. The calculation of the amount of interest due and owing to each Lender shall be made by the Agent and shall be evidenced by the Agent posting the amount of interest due under each Lender's Loans to the Loan Account established by the Agent pursuant to Section 2.11. The Facility Fee shall be calculated on the basis of a 360 day year and actual number of days elapsed.  The calculation of the amount of the Facility Fee due and owing to each Lender shall be made by the Agent and shall be evidenced by posting such amount due under the Loan Account pursuant to Section 2.11.

 2.6       Extension of Termination Date  The Termination Date may be extended, in the manner set forth in this Section 2.6, on February 11, 2004 and on each anniversary of such date (an "Extension Date") for successive periods of 364 days each.  If the Borrower wishes to request an extension of the Termination Date on any Extension Date, it shall give written notice to that effect to the Agent not less than 45 nor more than 60 days prior to such Extension Date.  Each Lender will use its best efforts to respond to such request, whether affirmatively or negatively, within 30 days after receipt of such notice from the Agent.  If the Borrower shall have received affirmative responses from all the Lenders, such response to be in the sole and absolute discretion of each Lender, then, subject to receipt by the Borrower of counterparts of an agreement duly completed and signed by the Borrower and each such Lender (an "Extension Agreement"), the Termination Date shall be extended, effective on such Extension Date, for a period of 364 days to the date stated in such Extension Agreement.  If the Borrower shall not have received affirmative responses from all Lenders the Termination Date shall not be extended.  For purposes of this Section 2.6, the failure of any Lender to respond shall be deemed to be a negative response from such Lender.

2.7       Substitution or Replacement of a Lender.  The Borrower shall have the right (provided that at such time, no Event of Default and no Potential Default has occurred and is continuing), in its sole discretion, to either:

(i)         repay, (A) at any time if Loans bearing interest under the Base Rate Option are the only Loans outstanding, or (B) subject to Section 2.9, upon three days prior notice if the Loans outstanding include Loans bearing interest under the Euro-Rate Option, the outstanding Loans of any Lender in whole, together with interest thereon and any other amount due such Lender pursuant to the terms of this Agreement, and to terminate the Commitment of such Lender; or

(ii)        seek a substitute lending institution or institutions (which may be one or more of the other Lenders) to purchase the Notes and assume the Loans, the Commitment and the other obligations of such Lender under this Agreement,

if any of the following conditions occur with respect to such Lender:

(i)         such Lender shall have delivered a notice or certificate pursuant to Section 2.3a or 2.3b;

(ii)        the obligation of such Lender to make Loans which bear or are to bear interest under the Euro-Rate Option has been suspended pursuant to Subsection 2.3d; or

 (iii)       such Lender has responded negatively to a request for extension of the Termination Date pursuant to Section 2.6; provided Required Lenders have responded positively to such request;

and provided, any proposed substitute lending institution, which is not a Lender prior to the Borrower's selection thereof, must be acceptable to the Agent, whose consent shall not be unreasonably withheld or delayed, and provided, further that all of the provisions of Section 9.6 (with respect to any Lender) and Section 8.11 (if the affected Lender is the Agent) must be complied with.

2.8       Loan Repayment.  Each repayment of the Loans (other than Swingline Loans) shall be in the minimum amount of $1,000,000, in the aggregate, or an integral multiple of $100,000 thereof, or such lesser amount as is actually outstanding thereunder.  The Borrower, upon (i) oral or written notice to Agent by 11:00 A.M. (eastern time) on the day of the proposed repayment, in the case of Loans bearing interest at the Adjusted Base Rate or (ii) three Business Days' prior oral or written notice to the Agent, in the case of Loans bearing interest at the Adjusted Euro-Rate, followed immediately thereafter by the Borrower's written confirmation to the Agent of any oral notice, may repay the outstanding amount of the Loans in whole or in part with accrued interest, fees and other amounts then due and payable on the amount repaid to the date of such repayment, subject to the payment of any additional amounts under Section 2.9 below.  The Borrower may prepay any Portion of the Loans bearing interest at the Adjusted Base Rate without premium or penalty.

Any repayment of the Loans shall increase, by the amount of that repayment, the unborrowed balance of the Commitment; it being contemplated that the Borrower may repay and reborrow from time-to-time under the Commitment until the Termination Date.  All Loans outstanding on the Termination Date shall become due and payable in full on such date.

2.9       Additional Payments by the Borrower.  If (i) the Borrower shall fail to make any payment due hereunder on the due date thereof, (ii) the Borrower shall make a payment, prepayment or conversion of any Euro-Rate Portion of the Loans on a day other than the last day of the applicable Interest Period, (iii) the Borrower shall convert any Portion to the Base Rate Option from another Option pursuant to Subsection 2.2d on a day other than the last day of the relevant Interest Period, or (iv) the Borrower shall fail on the date specified therefor to consummate any borrowing, conversion or renewal after giving a request for an extension of credit or notice of conversion or renewal, and, as a result of any such action or inaction, a Lender reasonably incurs any losses and expenses which it would not have incurred but for such action or inaction, the Borrower shall pay such additional amounts as will compensate the affected Lender for such losses and expenses, including the cost of reemployment of any funds prepaid at rates lower than the cost to the affected Lender of such funds.  Such losses and expenses, which the affected Lender shall exercise reasonable efforts to minimize, shall be specified in writing (setting forth, in reasonable detail, the basis of calculation) to the Borrower by the affected Lender, which writing shall be prima facie evidence of the amounts set forth therein, and such amounts shall be payable within 30 days of demand therefor.

2.10     Voluntary Reduction of Availability.  At any time and from time to time upon no less than two Business Days prior written notice to the Agent, provided no Indebtedness permitted under Section 5.13(h)(1) or related commitments are outstanding, the Borrower may terminate, in whole or in part, without penalty, the then unused portion of the Commitments, thereby causing a corresponding abatement of the Facility Fee with respect to the pro rata share so reduced, provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the aggregate principal amount of the Loans then outstanding, when added to the then outstanding L/C Obligations, would exceed the Commitments then in effect.  Each such reduction shall be in a minimum principal amount of $5,000,000 or in integral multiples thereof.  The Facility Fee shall cease to accrue with respect to any unused portion of the commitments so terminated on date of such termination.  Notice of termination once given shall be irrevocable and the portion of the Commitments so terminated shall not be available for borrowing once such notice has been given under the terms hereof.  The Agent shall promptly notify each Lender of its pro rata share of such terminated unused portion and the date of each such termination.

2.11     Loan Account.  The Agent shall open and maintain on its books a Loan Account in the name of the Borrower with respect to extensions of credit made, repayments, prepayments, the computation and payment of interest and the Facility Fee and the computation of other amounts due and sums paid and payable to each Lender pursuant to this Article II.  Such Loan Account shall be conclusive evidence barring manifest error as to the amount at any time due to any Lender from the Borrower pursuant to this Article II, provided, however, that the failure to make notations, or to make accurate notations, on the Loan Account including without limitation notations with respect to interest and Facility Fees pursuant to Section 2.5 shall not limit, expand or otherwise affect any obligations of the Borrower hereunder.

2.12     Payment from Accounts Maintained by Borrower.  In the event that any payment of principal, interest, Facility Fee or any other amount due to the Lenders or the Agent under this Agreement, the Notes or the other Loan Documents is not paid when due, the Agent is hereby authorized to effect such payment by debiting any demand deposit account of the Borrower maintained with the Agent (excluding however any special purpose fiduciary accounts, which are designated as such at the time of their creation, and mandated by applicable statutes, regulations or rules) and distributing such payment to the party to whom such amounts are due.  This right of debiting accounts of the Borrower is in addition to any right of set-off accorded the Lenders or the Agent hereunder or by operation of law.

2.13     Time, Place and Manner of Payments.  All payments to be made by the Borrower under the Notes (other than those provided for in Sections 2.3 and 2.9 hereof), and of all fees and any other amounts due hereunder (excepting the Fees owed to the Agent for its sole account) shall be made at the principal office of the Agent for the ratable account of the Lenders.  The Agent will promptly pay each such payment received to each Lender or its order in accordance with Section 8.9 hereof.  All payments due a Lender by reason of Sections 2.3 or 2.9 hereof shall be paid at the principal office of the Lender which invoices the Borrower for such payment.  All payments to be made by the Borrower under this Agreement shall be paid in Dollars and in immediately available funds no later than 3:00 P.M. (eastern time) on the date such payment is due, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature.

2.14     Letters of Credit

2.14a   L/C Commitment.

            (i)         Subject to the terms and conditions hereof, the Issuing Bank, in reliance on the agreements of the other Lenders set forth in Subsection 2.14d(i), agrees to issue letters of credit ("Letters of Credit") for the account of the Borrower on any Business Day during the Commitment Period in such form as may be approved from time to time by the Issuing Bank; provided that the Issuing Bank shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (1) the L/C Obligations would exceed the L/C Commitment or (2) the Available Commitment of the Issuing Bank would be less than zero.

(ii)        Each Letter of Credit shall be denominated in Dollars and shall (1) be a standby Letter of Credit issued to support obligations of the Borrower, contingent or otherwise, as may be approved by the Issuing Bank and the Agent (such consent not to be unreasonably withheld) and (2) expire no later than the Termination Date.

            (iii)       Each Letter of Credit shall be subject to the Uniform Customs and, to the extent not inconsistent therewith, the laws of the State of New Jersey.

            (iv)       The Issuing Bank shall not at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or cause the Issuing Bank or any L/C Participant to exceed any limits imposed by, any applicable Governmental Rule.

2.14b   Procedure for Issuance of Letters of Credit.  The Borrower may from time to time request that the Issuing Bank issue a Letter of Credit by delivering to the Issuing Bank at its address for notices specified herein an Application therefor, completed to the reasonable satisfaction of the Issuing Bank, and such other certificates, documents and other papers and information as the Issuing Bank may reasonably request.  Upon receipt of any Application, the Issuing Bank will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Bank be required to issue any Letter of Credit earlier than two Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Bank and the Borrower.  The Issuing Bank shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof.

2.14c   Fees, Commissions and Other Charges.

            (i)         The Borrower shall pay to the Agent, for the account of the Issuing Bank, a fronting fee with respect to each Letter of Credit in an amount equal to .125% of the face amount of such Letter of Credit.  Such fronting fee shall be payable in advance on the date of issuance of each Letter of Credit and shall be nonrefundable.

            (ii)        The Borrower shall pay to the Agent, for the account of the Issuing Bank and the L/C Participants, a letter of credit commission with respect to each Letter of Credit, computed for the period from the date of such payment to the date upon which the next such payment is due hereunder at the Applicable Euro-Rate Margin, calculated on the basis of a 365-day (or 366-day, as the case may be) year, of the aggregate amount available to be drawn under such Letter of Credit on the date on which such fee is calculated.  Such commissions shall be payable in arrears on each L/C Fee Payment Date after the issuance of the respective Letter of Credit and shall be nonrefundable.

            (iii)       In addition to the foregoing fees and commissions, the Borrower shall pay or reimburse the Issuing Bank for such normal and customary costs and expenses as are incurred or charged by the Issuing Bank in issuing, effecting payment under, amending or otherwise administering any Letter of Credit.

            (iv)       The Agent shall, promptly following its receipt thereof, distribute to the Issuing Bank and the L/C Participants all fees and commissions received by the Agent for their respective accounts pursuant to this Section 2.14.

2.14d   L/C Participations.

            (i)         The Issuing Bank irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Bank to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Bank, on the terms and conditions hereinafter stated, for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Commitment Percentage in the Issuing Bank's obligations and rights under each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Bank thereunder.  Each L/C Participant unconditionally and irrevocably agrees with the Issuing Bank that, if a draft is paid under any Letter of Credit for which the Issuing Bank is not reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to the Issuing Bank upon demand at the Issuing Bank's address for notices specified herein an amount equal to such L/C Participant's Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed.

            (ii)        If any amount required to be paid by any L/C Participant to the Issuing Bank pursuant to Section 2.14d(i) in respect of any unreimbursed portion of any payment made by the Issuing Bank under any Letter of Credit is not paid to the Issuing Bank within three Business Days after the date such payment is due, such L/C Participant shall pay to the Issuing Bank on demand an amount equal to the product of (1) such amount, times (2) the daily average Federal Funds Effective Rate, as quoted by the Issuing Bank, during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Bank, times (3) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360.  If any such amount required to be paid by any L/C Participant pursuant to Subsection 2.14d(i) is not in fact made available to the Issuing Bank by such L/C Participant within three Business Days after the date such payment is due, the Issuing Bank shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to Loans to which the Base Rate Option applies.  A certificate of the Issuing Bank submitted to any L/C Participant with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error.

            (iii)       Whenever, at any time after the Issuing Bank has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Subsection 2.14d(i), the Issuing Bank receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise), or any payment of interest on account thereof, the Issuing Bank will distribute to such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by the Issuing Bank shall be required to be returned by the Issuing Bank, such L/C Participant shall return to the Issuing Bank the portion thereof previously distributed by the Issuing Bank to it.

2.14e   Reimbursement Obligation of the Borrower.

            (i)         The Borrower agrees to reimburse the Issuing Bank on each date on which the Issuing Bank notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the Issuing Bank for the amount of (1) such draft so paid and (2) any taxes, fees, charges or other costs or expenses incurred by the Issuing Bank in connection with such payment.  Each such payment shall be made to the Issuing Bank at its address for notices specified herein in lawful money of the United States of America and in immediately available funds.

            (ii)        Interest shall be payable on any and all amounts remaining unpaid by the Borrower under this subsection from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full at the rate which would be payable on any outstanding Loans bearing interest based on the Base Rate Option which were then overdue.

            (iii)       Each drawing under any Letter of Credit shall constitute a request by the Borrower to the Agent for a borrowing pursuant to Subsection 2.1d of Loans to which the Base Rate Option applies in the amount of such drawing.  The Borrowing Date with respect to such borrowing shall be the date of such drawing.

2.14f    Obligations Absolute.

            (i)         The Borrower's obligations under this Section 2.14 shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the Borrower may have or have had against the Issuing Bank or any beneficiary of a Letter of Credit.

            (ii)        The Borrower also agrees with the Issuing Bank that the Issuing Bank shall not be responsible for, and the Borrower's Reimbursement Obligations under Subsection 2.14e shall not be affected by, among other things, (1) the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, (2) any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or (3) any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee.

            (iii)       The Issuing Bank shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the Issuing Bank's gross negligence or willful misconduct.

            (iv)       The Borrower agrees that any action taken or omitted by the Issuing Bank under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New Jersey, shall be binding on the Borrower and shall not result in any liability of the Issuing Bank to the Borrower.

2.14g   Letter of Credit Payments.  If any draft shall be presented for payment under any Letter of Credit, the Issuing Bank shall promptly notify the Borrower of the date and amount thereof.  The responsibility of the Issuing Bank to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letters of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit.

2.14h   Application.  To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 2.14, the provisions of this Section 2.14 shall apply.

ARTICLE III.  REPRESENTATIONS AND WARRANTIES.

To induce the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit herein provided for, the Borrower represents and warrants to the Lenders that:

 3.1       Corporate Existence.  The Borrower is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and it is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction where, because of the nature of its properties or businesses, such qualification is required or, if not so qualified or in good standing in any state, the lack of such qualification or good standing will not materially affect the Agent's or the Lenders' ability to enforce this Agreement, the Notes or the other Loan Documents or will not have a Material Adverse Effect on the Borrower's ability to carry on its business or the Borrower's ability to comply with this Agreement, the Notes or the other Loan Documents.

3.2       Corporate Authority.  The Borrower is duly authorized to execute and deliver this Agreement, the Notes and the other Loan Documents to which it is or will become a party; all necessary corporate action to authorize the execution and delivery of this Agreement, the Notes and the other Loan Documents to which it is or will become a party has been properly taken; and it is and will continue to be duly authorized to borrow hereunder and to perform all of the other terms and provisions of this Agreement, the Notes and the other Loan Documents to which it is or will become a party.

3.3       Enforceability.  This Agreement and the Notes have each been, and each other Loan Document to which it will become a party will be, duly and validly executed and delivered by the Borrower and each constitutes or will constitute a valid and legally binding agreement of the Borrower enforceable in accordance with its terms.

3.4       No Restrictions, No Default.  Neither the execution and delivery of this Agreement, the Notes and the other Loan Documents to which it is or will become a party, the consummation of the transactions herein contemplated nor compliance with the terms and provisions hereof or of the Notes, will conflict with or result in a breach of any of the terms, conditions or provisions of the certificate of incorporation or the by-laws of the Borrower or of any law or of any regulation, order, writ, injunction or decree of any court or governmental agency or of any agreement, indenture or other instrument to which the Borrower is a party or by which it is bound or to which it is subject, or constitute a default thereunder or result in the creation or imposition of any Encumbrance of any nature whatsoever upon any of the property or assets of the Borrower pursuant to the terms of any agreement, indenture or other instrument, except those restrictions which, individually or in the aggregate, would not have a Material Adverse Effect upon the Borrower.  Except as would not have a Material Adverse Effect, the Borrower has good record and marketable title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all of its other property, and none of such property is subject to any Encumbrance except as permitted by Section 5.2.  No event has occurred and is continuing and no condition exists or will exist after giving effect to the borrowings hereunder to be made on the Closing Date which constitutes an Event of Default or Potential Default.

3.5       Financial Statements.  The Borrower has furnished to the Lenders and the Agent the consolidated balance sheets and the related consolidated statements of income, shareholders' equity and changes in financialposition of the Borrower for the Fiscal Years ending September 30, 2001 and September 30, 2002.  All such financialstatements, including the related notes, have been prepared in accordance with GAAP, except as expressly noted therein and, in the case of the aforementioned quarterly financial statements, subject to changes resulting from year-end adjustments, and fairly present the financial position and consolidated financial positions of the Borrower as at the dates thereof and the results and consolidated results of their operations and the changes in their financial position and in their consolidated financial position for the periods ended on such dates.  There were no material liabilities of the Borrower, contingent or otherwise, not reflected in such financial statements.  Except as has otherwise been fully disclosed in NUI Corporation's Form 10-K filed on December 31, 2002 with the Securities and Exchange Commission, there has been no Material Adverse Change in the business, condition or operations (financial or otherwise) of the Borrower from September 30, 2002 to the Closing Date.

3.6       Absence of Litigation.  There are no actions, suits, investigations, litigation or governmental proceedings pending or, to the Borrower's knowledge, threatened against the Borrower or any of its properties, which would have a Material Adverse Effect on the Borrower, or which purport to affect the legality, validity or enforceability of this Agreement or the Notes.

3.7       Tax Returns and Payments.  As of the date hereof, the Borrower has filed all Federal and other material tax returns required by law to be filed and have paid all material taxes, material assessments and other material governmental charges levied upon the Borrower, or any of its properties, assets, income or franchises of the Borrower, which are due and payable, other than those currently payable or deferrable without penalty or interest or those which are being contested in good faith and by appropriate proceedings diligently conducted for which reserves in accord with GAAP have been provided.  As of the date hereof, the charges, accruals and reserves on the books of the Borrower in respect of Federal, state and local income taxes for all fiscal periods are adequate, and the Borrower knows of no unpaid assessments for additional Federal, state or local income taxes for any such fiscal period or any basis therefor.

3.8       Pension Plans.  Except as otherwise noted on Schedule 3.8, (i) each Plan has been and will be maintained and funded, in all material respects, in accordance with its terms and with all provisions of ERISA and the Code applicable thereto; (ii) no Reportable Event has occurred and is continuing with respect to any Plan; (iii) no liability to PBGC has been incurred with respect to any Plan, other than for premiums due and payable; (iv) no Plan has been terminated, no proceedings have been instituted to terminate any Plan, and there exists no intent to terminate or institute proceedings to terminate any Plan, which has caused or would cause the Borrower or any ERISA Affiliate to incur any liability to the PBGC under Title IV of ERISA; (v) no withdrawal, either complete or partial, has occurred or commenced with respect to any multiemployer Plan, and there exists no intent to withdraw either completely or partially from any multiemployer Plan and (vi) the Borrower is not subject to any liability for unpaid penalties or taxes imposed under Section 502(i) of ERISA or Section 4975 of the Code and has not engaged in a prohibited transaction as defined in Section 406 of ERISA and Section 4975 of the Code.

3.9       Compliance with Applicable Laws.  The Borrower (i) is not in default with respect to any order, writ, injunction or decree of any court or of any Federal, state, municipal or other Governmental Authority; and (ii) is substantially complying with all applicable statutes and regulations of each Governmental Authority having jurisdiction over its activities; except for those orders, writs, injunctions, decrees, statutes and regulations, non-compliance with which would not have a Material Adverse Effect upon the Borrower.

3.10     Environmental Matters.  Except to the extent described in NUI Corporation's most recently filed Form 10-K, Form 10-Q or Form 8-K, the Borrower is in compliance with all applicable Environmental Laws, except for matters which do not have a Material Adverse Effect on the financial condition of the Borrower.

3.11     Governmental Approval.  No order, authorization, consent, license, validation or approval of, or notice to, filing, recording, or registration with, any Governmental Authority, or exemption by any Governmental Authority, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Agreement, the Notes or the other Loan Documents to which it is a party or (ii) the legality, binding effect or enforceability of this Agreement, the Notes or the other Loan Documents to which it is a party.

3.12     Regulations T, U and X.  The Borrower is not engaged in the business of purchasing or selling Margin Stock or extending credit to others for the purpose of purchasing or carrying Margin Stock and no part of the proceeds of the Loans will be used to purchase or carry any Margin Stock or for any other purpose which would violate or be inconsistent with Regulations T, U or X.

3.13     Investment Company Act.  The Borrower is not an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended.

3.14     Public Utility Holding Company Act.  The Borrower is a utility subject to regulation under the Public Utility Holding Company Act of 1935, as amended.

 3.15     Disclosure.  Neither this Agreement nor any other document, certificate or statement furnished to the Lenders or the Agent by or on behalf of the Borrower pursuant to this Agreement contains any untrue statement of a material fact.  There is no fact known to the Borrower which materially and adversely affects or in the future may (so far as the Borrower now foresees) have a Material Adverse Effect on the business, operations, affairs, condition, prospects, properties or assets of the Borrower, which has not been set forth in this Agreement or in the other documents, certificates and statements (financial or otherwise) furnished to the Lenders or the Agent or otherwise disclosed in writing to the Lenders or the Agent by or on behalf of the Borrower prior to or on the date hereof.

3.16     No Subsidiaries.  The Borrower has no Subsidiaries.

ARTICLE IV.            AFFIRMATIVE COVENANTS.

From the date hereof and thereafter until the termination of the Commitments and until all of the Bank Indebtedness (including, without limitation, any Letters of Credit which remain outstanding and unpaid) is paid in full, the Borrower agrees that:

4.1       Use of Proceeds.  The proceeds of the Loans will be used by the Borrower solely (i) for general corporate purposes of the Borrower, (ii) for working capital purposes in the ordinary course of business of the Borrower, (iii) to pay fees and expenses incurred in connection with the execution and delivery of the Loan Documents, and (iv) to repay amounts due and payable under the Existing Credit Agreement as required by Section 6.2(xi).

4.2       Furnishing Information.  The Borrower shall:

(i)         deliver to the Agent (with copies for each Lender which Agent shall distribute) within 55 days after the end of each of the first three Fiscal Quarters in each Fiscal Year of the Borrower, (A) balance sheets as at the end of such period for the Borrower, and (B) statements of income for such period for the Borrower and, in the case of the second and third quarterly periods, for the period from the beginning of the current Fiscal Year to the end of such quarterly period; and each such statement shall set forth, in comparative form, corresponding figures for the corresponding period in the immediately preceding Fiscal Year and all such statements shall be prepared in reasonable detail in accordance with GAAP and certified, subject to changes resulting from year-end adjustments, by the chief financial officer or treasurer of the Borrower;

(ii)        deliver to the Agent (with copies for each Lender which Agent shall distribute) within 100 days after the end of each Fiscal Year of the Borrower, (A) balance sheets as at the end of such year for the Borrower, and (B) statements of income for such year for the Borrower; and each such statement shall set forth, in comparative form, corresponding figures for the immediately preceding Fiscal Year; and all such financial statements shall present fairly in all material respects the financial position of the Borrower, as at the dates indicated and the results of its operations and its cash flow for the periods indicated, in conformity with GAAP; and the Borrower shall furnish to the Agent (with copies for each Lender which the Agent shall distribute) the audited consolidated financial statements of NUI Corporation (of which the Borrower is a Subsidiary in its consolidated group) for such Fiscal Year furnished under the NUI Corporation Credit Agreement;

(iii)       deliver to the Agent (with copies for each Lender which Agent shall distribute), together with each delivery of financial statements pursuant to items (i) and (ii) above, a Compliance Certificate of the Borrower substantially in the form of Exhibit "F" hereto, properly completed and signed by an Authorized Officer of the Borrower, (A) stating (1) that such officer has reviewed the terms of the Loan Documents and has made, or caused to be made under his supervision, a review of the transactions and condition of the Borrower during the accounting period covered by such financial statements and that such review has not disclosed any failure by the Borrower during such period to observe or perform all of its covenants and other agreements, nor any failure to satisfy every condition contained in this Agreement, the Notes and the other Loan Documents to which it is a party during such accounting period, and (2) that the Borrower does not have knowledge of the existence, as at the date of such Compliance Certificate, of any condition or event which constitutes an Event of Default or a Potential Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken or is taking or proposes to take with respect thereto, and (B) demonstrating in reasonable detail compliance as at the end of such accounting period with the covenants contained in Sections 5.3a and 5.3b hereof;

(iv)       promptly give written notice to the Agent of any pending or, to the knowledge of the Borrower, overtly threatened claim in writing, litigation or threat of litigation which arises between the Borrower and any other party or parties (including, without limitation, any Governmental Authority, which claim, litigation or threat of litigation, individually or in the aggregate, is reasonably likely to cause a Material Adverse Change, any such notice to be given not later than five Business Days after the Borrower becomes aware of the occurrence of any such claim, litigation or threat of litigation;

(v)        deliver to the Agent (with copies for each Lender which Agent shall distribute) promptly upon their becoming available, copies of all financial statements, reports, notices and information statements sent or made available generally by the Borrower to its security holders (including, without limitation, proxy materials) and copies of all other regular and periodic reports (including, without limitation, Form 8-K) filed by NUI Corporation with the Securities and Exchange Commission or any Governmental Authority succeeding to any of its functions, and of all press releases and other statements made available generally by the Borrower to the public concerning material developments in the business of the Borrower;

(vi)       promptly after receipt thereof, by the Borrower or the administrator of any Plan, deliver to the Lenders a copy of any notice from the PBGC that the PBGC is instituting Termination Proceedings;

(vii)      deliver to the Agent within two Business Days after S&P or Moody's announces a change in the Borrower's Senior Ratings, or the withdrawal of any Senior Ratings, notice of such change or withdrawal, together with a copy of any written notification which Borrower received from the applicable rating agencies regarding such change or withdrawal of Senior Ratings;

(viii)      promptly and in any event within 30 days after the Borrower or the administrator of any Plan knows or has reason to know that any Reportable Event has occurred which would cause the PBGC to institute Termination Proceedings give notice thereof to the Agent;

(ix)       promptly, but not later than five Business Days, after any officer obtains knowledge of the happening of any event having a Material Adverse Effect or which constitutes an Event of Default or a Potential Default, give written notice thereof to the Agent; and

(x)        promptly, deliver to the Lenders such other information and data with respect to the Borrower as from time to time may be reasonably requested by any Lender.

4.3       Visitation.  The Borrower will keep complete and proper books of record and account in accordance with GAAP and permit the Lenders and each Lender's designated employees and agents to have access, from time to time, upon reasonable notice (except no such notice shall be required after the occurrence and during the continuance of an Event of Default) and during normal business hours at any reasonable time, to visit any of the properties of the Borrower, to examine and make copies of any of its books of record and account and such reports and returns as the Borrower may file with any Governmental Authority and discuss the Borrower's affairs and accounts with, and be advised about them, by any Authorized Officer.

4.4       Preservation of Existence; Qualification.  At its own cost and expense, the Borrower will continue to engage in business of the same general type as now conducted by it and will do all things necessary to preserve and keep in full force and effect its corporate existence and qualification under the laws of its state of incorporation and each state where, due to the nature of its activities or the ownership of its properties, qualification to do business is required except where the failure to be so qualified would not have a Material Adverse Effect upon the Borrower.

4.5       Compliance with Laws and Contracts.  The Borrower shall comply with all applicable Governmental Rules (including, but not limited to, Environmental Laws), except where failure to comply would not have a Material Adverse Effect on the Borrower.

4.6       Payment of Taxes and Other Liabilities.  The Borrower shall promptly pay and discharge all obligations, accounts and liabilities to which it is subject or which are asserted against it at or before maturity or before they become delinquent, as the case may be, and which obligations, accounts and liabilities are material, including but not limited to all taxes, assessments and governmental charges and levies upon it or upon any of its income, profits, or property prior to the date on which penalties attach thereto to the extent that the non-payment of which would in the aggregate have a Material Adverse Effect upon the Borrower; provided, however, that for purposes of this Agreement, the Borrower shall not be required to pay any item (i) the payment of which is being contested in good faith by appropriate and lawful proceedings diligently conducted and (ii) as to which the Borrower shall have set aside on its books reserves for such claims as are determined to be adequate pursuant to the accounting procedures employed by the Borrower.

 4.7       Insurance.  The Borrower will keep and maintain insurance with financially sound and reputable insurance companies on each of its properties, in such amounts and against such risks as is customarily maintained by similar businesses similarly situated and owning, leasing or operating similar properties.  The Borrower may satisfy the requirements of the preceding sentence with self insurance and deductibles consistent with customary and prudent industry standards.  The Borrower will furnish to the Agent at the Closing and together with the annual reports delivered pursuant to Subsection 4.2(ii) hereof, a certificate of an Authorized Officer of the Borrower certifying that such insurance is in force, provides coverage consistent with the preceding sentence and complies with the Borrower's obligations under this Section 4.7.

4.8       Maintenance of Properties.  The Borrower shall maintain, preserve, protect and keep its properties in good repair, working order and condition (ordinary wear and tear excepted), and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly and advantageously conducted at all times, except where the failure to maintain, preserve, protect or keep such properties would not have a Material Adverse Effect upon the Borrower.

4.9       Plans and Benefit Arrangement.  The Borrower shall, and shall cause each ERISA Affiliate to, comply with ERISA, the Code and all other applicable laws which are applicable to Plans, except where the failure to do so, alone or in conjunction with any other failure to do so, would not have a Material Adverse Effect upon the Borrower.

4.10     Senior Debt Status.  The Bank Indebtedness will rank at least pari passu in priority of payment with all other Indebtedness of the Borrower, except Indebtedness of the Borrower which may be secured by Encumbrances permitted pursuant to Section 5.2.

4.11     Ownership.  The Borrower shall at all times during the term hereof be a direct 100% wholly owned Subsidiary of NUI Corporation.

4.12     Cash Management.  On or before November 12, 2003, the Borrower shall cause all of its receivables and other revenues to be collected and deposited into and maintained in a segregated account or accounts of the Borrower (the "New Collection System") and the proceeds of such receivables and other revenues shall not be commingled with funds of NUI Corporation or its other Subsidiaries and shall only be used to pay out of such account or accounts obligations of the Borrower and to make dividends and for other uses to the extent expressly permitted hereunder.  At all times until such New Collection System is in place, the Agency Services Agreement is and will remain in full force and effect and the Borrower's receivables and other revenues shall be collected by NUI Corporation, but title thereto shall remain with the Borrower, and expenses and other payables of or on behalf of the Borrower shall be paid by NUI Corporation on behalf of the Borrower, all in accordance with the provisions of the Agency Services Agreement and Governmental Rules.  The Borrower shall ensure that the use of such receivables and revenues by NUI Corporation at all times complies with this Agreement.

ARTICLE V.  NEGATIVE COVENANTS.

From the date hereof and thereafter until the Commitments are terminated and until the Bank Indebtedness is paid in full, the Borrower agrees that:

5.1       Dividends, Etc.  The Borrower will not 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 equity interests of the Borrower, or purchase, redeem or otherwise acquire for value any shares of any class of equity interests of the Borrower or any warrants, rights or options to acquire any such shares, now or hereafter outstanding (such declarations, payments, other distributions, purchases, redemptions, or other acquisitions being herein called "Restricted Payments"), except that the Borrower may (a) declare and make any dividend payment or other distribution payable solely in common equity interests of the Borrower, and (b) purchase, redeem or otherwise acquire shares of its common equity interests or warrants, rights or options to acquire any such shares with the proceeds received from substantially concurrent issue of new shares of its common equity interests and (c) declare or pay cash dividends to NUI Corporation and purchase, redeem or otherwise acquire shares of its equity interests or warrants, rights or options to acquire for consideration of any such shares, so long as the aggregate of such Restricted Payments made, paid or declared since the Closing Date would not exceed the lesser of $100,000,000 or retained earnings of the Borrower on the date of such Restricted Payment; provided, that (x) immediately after giving effect to any such proposed Restricted Payments, no Potential Default or Event of Default would exist and (y) no such payment shall violate any Governmental Rule. 

5.2       Encumbrances.  The Borrower will not create or suffer to exist any Encumbrance or any other type of preferential arrangement, upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign any right to receive income, in each case to secure or provide for the payment of any Indebtedness of any Person, other than Permitted Encumbrances.

5.3a     Leverage Ratio.  At no time shall its ratio of Consolidated Total Indebtedness to its Consolidated Total Capitalization exceed the amount set forth below for each relevant period set forth below:

                        Period                                                                             Ratio

                        March 1 of each year to and
                        including August 31 of such year:                                   .65:1.00

                       September 1 of each year to and
                       including February 28 (or 29, if applicable)
                       of the following year:                                                     .70:1.00

5.3b     Fixed Charge Coverage Ratio.  At no time shall the Borrower permit, for any period of four consecutive Fiscal Quarters ending on or after September 30, 2002, the ratio of (i) the sum of (A) Consolidated Net Income for such period plus (B) income taxes deducted in determining such Net Income plus (C) Consolidated Fixed Charges for such period; to (ii) Consolidated Fixed Charges for such period, to be less than 1.75 to 1.00.

5.4       Acquisitions.  Unless otherwise consented to by the Required Lenders (such consent not to be unreasonably withheld), the Borrower will not acquire the assets of any Person or any shares of capital stock of, or other equity interest in, any Person, except for Permitted Acquisitions.

5.5       Sales of Assets.  The Borrower shall not enter into any arrangement, direct or indirect, pursuant to which the Borrower shall sell or otherwise transfer or dispose of, in a single transaction or a series of transactions, all or any substantial part of its assets; provided, however, a sale or transfer by the Borrower of securitization receivables in connection with a securitization permitted under Section 5.13(h)(2) shall not be prohibited hereunder.

5.6       Merger.  The Borrower shall not merge or consolidate with any other Person.

5.7       Regulation T, U and X Compliance.  The Borrower shall not use the proceeds of a Loan to purchase or carry Margin Stock or otherwise act so as to cause any Lender, in extending credit hereunder, to be in contravention of Regulations T, U or X.

5.8       ERISA.  The Borrower shall not and shall not permit any ERISA Affiliate to permit any Plan to:

(i)         engage in any "prohibited transaction", as such term is defined in Section 406 of ERISA and Section 4975 of the Code;

(ii)        incur any "accumulated funding deficiency", as such term is defined in Section 302 of ERISA, whether or not waived;

(iii)       be terminated in a manner which could result in liability to the PBGC under Title IV of ERISA or the imposition of a lien on the property of the Borrower or any ERISA Affiliate pursuant to Section 4068 of ERISA; or

(iv)       partially or completely withdraw from any Plan, which withdrawal shall

subject the Borrower or any ERISA Affiliateto multiemployer withdrawal liability pursuant to Section 4201 of ERISA.

5.9       Restrictive Agreements.  The Borrower shall not enter into or otherwise be bound by any agreement not to pay dividends or make distributions to NUI Corporation, except for such agreements existing on the date hereof which have been fully disclosed in writing to Agent and replacements of such agreements (provided that copies of such replacement agreements are provided to the Agent and are no more restrictive than those agreements being replaced).

5.10     [Intentionally Omitted].

5.11     Subsidiaries.  The Borrower shall not create, nor permit to exist, any Subsidiary.

            5.12     Limitation on Capital Expenditures.  The Borrower shall not make or commit to make (by way of the acquisition of securities of a Person or otherwise) any expenditure in respect of the purchase or other acquisition of fixed or capital assets (other than those expenditures in connection with Permitted Acquisitions), except for expenditures, when added to such expenditures made by NUI Corporation and its other Subsidiaries, not exceeding during any of its Fiscal Years ending after the Closing Date, the amount of $75,000,000.

5.13     Limitation on Indebtedness.  The Borrower shall not, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:

(a)        Indebtedness in respect of the Loans, the Notes and the other obligations of the Borrower under this Agreement;

(b)        Indebtedness of the Borrower incurred solely in order to finance the purchase of new fixed or capital assets (including pursuant to capital leases) in an aggregate principal amount not exceeding $10,000,000 at any time outstanding;

(c)        Indebtedness listed on Schedule 5.13 and renewals, extensions and modifications thereof which do not increase the principal amount thereof;

(d)        Indebtedness incurred in connection with Hedging Obligations, provided that such Hedging Obligations shall be in the ordinary course of business consistent with past practices;

(e)        Indebtedness incurred in connection with sale-leaseback transactions permitted by Section 5.19 hereof;

(f)         Indebtedness with respect to standby letters of credit issued by a bank other than the Issuing Bank for the benefit of the Borrower in an aggregate face amount not to exceed $10,000,000, which letters of credit expire by their terms after the Termination Date;

(g)        Indebtedness to third party sellers in connection with Permitted Acquisitions, provided that (1) both before and after giving effect to the incurrence of such Indebtedness, no Potential Default or Event of Default shall occur and be continuing, and (2) the payment of such Indebtedness shall be subordinated to all Bank Indebtedness, with the terms and conditions of such subordination reasonably acceptable to the Agent;

(h)        Indebtedness of the Borrower (1) under a revolving line of credit in a principal amount and corresponding commitments not to exceed $45,000,000 from a financial institution or institutions reasonably acceptable to the Agent (the "Additional Bank Line"), and (2) under a securitization, private debt placement or other financing reasonably acceptable to the Agent in a principal amount not to exceed $45,000,000, provided that (x) all of the proceeds thereof are used to pay or prepay such Additional Bank Line, together with accrued and unpaid interest thereon, and (y) the commitment, if any, to extend credit under the Additional Bank Line is permanently reduced in the amount of such payment or prepayment; and further provided after giving effect to Indebtedness incurred pursuant to clauses (1) and (2) above, the Total Commitment, plus the aggregate commitments pursuant to clause (1), plus the principal amount of all Indebtedness incurred pursuant to clause (2), will not at any time exceed the aggregate amount of $141,923,076.90; and

(i)         Indebtedness in principal amount outstanding not to exceed $15,000,000 in the aggregate for the Borrower under lines of credit offered by commercial banks to the Borrower to finance the working capital needs of the Borrower.

5.14     Limitation on Contingent Obligations.  The Borrower shall not create, incur, assume or suffer to exist any Guarantee.

5.15     [Intentionally Omitted].

5.16     Limitation on Investments, Loans and Advances.  The Borrower shall not purchase, hold or acquire beneficially any stock, other securities or evidences of Indebtedness of, make or permit to exist any loans or advances to, or make or permit to exist any investment or acquire any interest whatsoever in, any other Person, except:

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

(b)        Permitted Investments;

(c)        loans and advances to employees of the Borrower for travel, entertainment and relocation expenses in the ordinary course of business;

(d)        Permitted Acquisitions; and

(e)        securities acquired in connection with the bankruptcy of any supplier or customer in the ordinary course of business and consistent with past practices or in connection with the settlement of delinquent accounts of any such supplier or customer.

5.17     Limitation on Optional Payments and Modifications of Debt Instruments.  The Borrower shall not make any optional payment or prepayment on or redemption, defeasance or purchase of any Indebtedness (other than Indebtedness under this Agreement and Indebtedness permitted under Section 5.13(h)(1)), or amend, modify or change, or consent or agree to any amendment, modification or change to its certificate of incorporation which could reasonably be expected to result in a Material Adverse Effect or to the Agency Services Agreement or to any of the terms relating to the payment or prepayment or principal of or interest on, any such Indebtedness, other than any amendment, modification or change which would extend the maturity or reduce the amount of any payment of principal thereof or which would reduce the rate or extend the date for payment of interest thereon.

5.18     Transactions with Affiliates.  The Borrower shall not enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction (a) is permitted under this Agreement or is in the ordinary course of the Borrower's business and (b) is upon fair and reasonable terms no less favorable to the Borrower than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate.

5.19     Sale and Leaseback.  The Borrower shall not enter into any arrangement with any Person providing for the leasing by the Borrower of real or personal property which has been or is to be sold or transferred by the Borrower to such Person if such arrangement(s), individually or in the aggregate and together with all such arrangements entered into by NUI Corporation and its other Subsidiaries, involve(s) aggregate consideration exceeding $70,000,000.

           ARTICLE VI.      CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT

6.1       All Extensions of Credit.  The obligation of the Lenders to make any extension of credit (including, without limitation, its initial extension of credit) is subject to the satisfaction of each of the following conditions precedent:

6.1a     No Default.  The Borrower shall have performed and complied, in all material respects, with all agreements and conditions herein required to be performed or complied with by it prior to any extension of credit and, at the time of such extension of credit, no Potential Default or Event of Default shall exist.

6.1b     Representations Correct.  The representations and warranties contained in Article III hereof shall be correct in all material respects (i) when made and (ii) at the time of each extension of credit except for such representations and warranties which relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects as of such date) and no Material Adverse Change has occurred, or will occur, as a result of such extension of credit.

6.1c     Extension of Credit Requirements.  The Borrower shall have complied with the requirements of Section 2.1, Section 2.2 or Section 2.14, as appropriate, with respect to the requested extension of credit.

Each request for an extension of credit shall constitute, as at the time made, a representation and warranty by the Borrower that the matters set forth in Sections 6.1a and 6.1b above are true and correct.

6.2       Conditions Precedent to the Initial Extensions of Credit Under the Commitments.  The effectiveness of this Agreement and the obligation of the Lenders to make the initial extensions of credit are subject to the satisfaction of each of the following conditions precedent in addition to the applicable conditions precedent set forth in Section 6.1 above:

(i)         Receipt by the Agent on behalf of each Lender of a counterpart original of this Agreement executed by the other Lenders and the Borrower.

(ii)        Receipt by the Agent on behalf of each Lender of a Note, substantially in the form of Exhibit "B" attached hereto, made payable to such Lender in the amount of such Lender's Commitment and otherwise properly completed and executed by the Borrower, and a Swingline Note properly completed and executed by the Borrower.

(iii)       Receipt by the Agent of a certified copy (certified by the appropriate governmental official) of the Borrower's Certificate of Incorporation which certification is dated not more than 30 days prior to the Closing.

(iv)       Receipt by the Agent of a certificate, duly certified as of the date of the Closing by the secretary or assistant secretary of the Borrower as to (A) the By-Laws of the Borrower in effect as of the Closing, (B) the resolutions of the Borrower's Board of Directors authorizing the borrowings hereunder and the execution and delivery of this Agreement, the Notes, and all documents supplemental hereto, and (C) the names of the officers of the Borrower authorized to sign this Agreement, the Notes and all supplemental documentation, and which contains a true signature of each such officer.

(v)        Receipt by the Agent of a good standing certificate for the Borrower from the Secretary of State of the State of New Jersey dated not more than 30 days prior to the date of Closing.

(vi)       Receipt by the Agent of the certificate of the Borrower required pursuant to Section 4.7 of this Agreement and a solvency certificate in the form of Exhibit "I" hereto.

(vii)      Receipt by the Agent of written disbursement instructions addressed to the Agent and executed by an Authorized Officer of the Borrower relating to the initial extensions of credit.

(viii)      Receipt by the Agent on behalf of each Lender of a signed favorable opinion of James Van Horn, general counsel to the Borrower, dated as of the Closing Date and in form and substance satisfactory to Agent and its counsel as to the matters set forth on Exhibit "G" attached hereto.

(ix)       The representations and warranties of the Borrower contained in Article III and in the other Loan Documents executed and delivered by the Borrower in connection with the Closing shall be true and correct in all material respects on and as of the Closing 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 date or times referred to therein), and the Borrower shall have performed, observed and complied with all covenants and conditions hereof and contained in the other Loan Documents; no Event of Default or Potential Default under this Agreement shall have occurred and be continuing or shall exist; except as disclosed in NUI Corporation's Form 10-K filed on December 31, 2002 with the Securities and Exchange Commission, no Material Adverse Change shall have occurred; and there shall be delivered to the Agent, for the benefit of each Lender and the Agent, a certificate of the Borrower, dated the Closing Date and signed by an Authorized Officer of the Borrower, to each such effect.

(x)        Receipt by the Agent on its own behalf and on behalf of the Lenders of all Fees due and payable on or prior to the Closing Date and all invoiced reimbursable expenses incurred on or prior to the Closing Date.

(xi)       The NUI Corporation Credit Agreement shall be in full force and effect, providing for a "Total Commitment" thereunder of not less than $38,076,923.10 and all amounts owing to the Lenders under the "Existing Credit Agreement" as defined in the NUI Corporation Credit Agreement shall have been, or shall be concurrently with the making of the first loans thereunder, repaid in full and all commitments under such "Existing Credit Agreement" of NUI Corporation shall have been terminated.

(xii)      All amounts owing to the lenders under the Existing Credit Agreement shall have been, or shall be concurrently with the making of the first loans hereunder, repaid in full, and the Existing Credit Agreement shall terminate and be of no further force and effect upon such repayment; in each case pursuant to such payout letters and other documents as the Agent may require, each of which shall be in form and substance satisfactory to the Agent.

(xiii)      The Borrower shall have entered into a loan agreement providing for the Additional Bank Line available to the Borrower in a principal amount of $45,000,000, and such loan agreement shall be in full force and effect.

(xiv)     Receipt by the Agent of a copy of the fully executed Agency Services Agreement among NUI Corporation and its Subsidiaries (including the Borrower), effective on or prior to the Closing Date, in form and substance acceptable to the Agent and its counsel (the "Agency Services Agreement").

ARTICLE VII.           DEFAULTS

Each of the events or occurrences described in Sections 7.1 to and including 7.10 below shall constitute an "Event of Default" hereunder.

7.1       Payment Default.  Default in the payment of (i) interest on any Loan, any Reimbursement Obligation, any other Bank Indebtedness, the Facility Fee, or any other amount due hereunder, and continuance of any such nonpayment of such interest, Facility Fee or other amount for five Business Days or (ii) principal of any Loan or any Reimbursement Obligation when due.

7.2       Nonpayment of Other Indebtedness.  The Borrower shall fail to pay any Indebtedness of the Borrower other than the Bank Indebtedness, in an aggregate amount of $15,000,000 or more, as and when the same shall become due, or the occurrence of any default under any agreement or instrument under or pursuant to which such Indebtedness is incurred or issued and continuance of such default beyond the period of grace, if any, allowed with respect thereto, if such default permits or causes the acceleration of such Indebtedness or the termination of any commitment to lend with respect thereto.

7.3       Insolvency.

7.3a     Involuntary Proceedings.  A proceeding shall have been instituted in a court having jurisdiction seeking a decree or order for relief in respect of the Borrower in an involuntary case under the Federal bankruptcy laws, or any other similar applicable Federal or state law, now or hereafter in effect, or for the appointment of a receiver, liquidator, trustee, sequestrator or similar official for the Borrower or for a substantial part of its property, or for the winding up or liquidation of its affairs, and the same shall remain undismissed or unstayed and in effect for a period of 60 days.

7.3b     Voluntary Proceedings.  The Borrower shall institute proceedings to be adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization under the Federal bankruptcy laws, or any other similar applicable Federal or state law now or hereinafter in effect, or shall consent to the filing of any such petition or shall consent to the appointment of a receiver, liquidator, trustee, sequestrator or similar official for the Borrower or for a substantial part of its property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or corporate action shall be taken by the Borrower in furtherance of any of the aforesaid purposes.

7.4       Termination of Existence.  The Borrower shall terminate its existence or cease to exist.

7.5       Failure to Comply with Covenants.

7.5a     Failure to Comply with Certain Article IV Covenants and Article V Covenants.  The Borrower shall default in the observance or performance of Section 4.3, Section 4.4, Section 4.10, Section 4.11, Section 4.12 or of any covenant contained in Article V.

7.5b     Failure to Comply with Other Covenants.  The Borrower shall default in the due performance or observance of any other covenant, condition or provision set forth herein and such default shall not be remedied (i) with respect to any default under Section 4.2(ix) for a period of ten days; and (ii) with respect to any other such default for a period of 30 days after such default is known to any officer of the Borrower or notice thereof has been given to the Borrower by the Agent (such grace period to be applicable only in the event such default can be remedied by corrective action of the Borrower as determined by the Agent in its sole discretion).

 7.6       Misrepresentation.  Any representation or warranty made by the Borrower herein proves to have been untrue in any material respect as of the date when made, or any certificate or other document furnished by the Borrower to the Agent or any Lender pursuant to the provisions hereof proves to have been untrue in any material respect on the date as of which the facts set forth therein are stated or certified.

7.7       Adverse Judgments, Etc  Entry or filing of any one or more judgments, writs or warrants of attachment or of any similar process in an aggregate amount of $2,500,000 or more in excess of any third-party insurance protecting against such liability against the Borrower or against any of its properties and failure of the Borrower to vacate, pay, bond, stay or contest in good faith such judgments, writs, warrants of attachment or other process within a period of 30 days.

7.8       Invalidity or Unenforceability.  This Agreement, the Notes or any other Loan Document ceases to be valid and binding on the Borrower or is declared null and void, or the validity or enforceability thereof is contested by the Borrower or the Borrower denies it has any or further liability under this Agreement, any Note or under the other Loan Documents to which it is a party.

7.9      ERISA.  (i) A trustee shall be appointed by a court of competent jurisdiction to administer any Plan of the Borrower or any ERISA Affiliate; (ii) the PBGC shall terminate any Plan of the Borrower or any ERISA Affiliate or appoint a trustee to administer any such Plan; or (iii) the Borrower or any ERISA Affiliate shall incur any liability to the PBGC in connection with any Plan, which, in any such case, likely would have a Material Adverse Effect.

7.10     Change of Control; Change of Beneficial Ownership or Board.  Any Person or group of Persons (within the meaning of Sections 13 or 14 of the Securities and Exchange Act of 1934), other than the then current officers or directors of the Borrower or an underwriter which obtains such ownership as a result of effecting a firm committed underwriting of a secondary offering of the Borrower's voting stock on behalf of such officers or directors, shall have acquired beneficial ownership of (within the meaning of Rule 13d-3 and 13d-5 promulgated by the Securities and Exchange Commission under said Act) twenty-five percent (25%) or more of the voting stock of the Borrower on a fully diluted basis with respect to which such Persons are entitled to vote on the election of directors or, during any period of up to 24 consecutive months, Persons who at the beginning of such 24-month period were directors of the Borrower (or were appointed, nominated or elected by such Persons) cease for any reason to constitute a majority of the directors of the Borrowers then in office.  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.  A "Permitted Transferee" includes any of the following with respect to any then current officer or director of the Borrower: (i) spouse; (ii) lineal descendants of all generations and spouses of such lineal descendants; (iii) a charitable corporation or trust established by such then current officer or director or by a person described in (i) or (ii) preceding; (iv) a trust (or in the case of a minor, a custodial account under a Uniform Gifts or Transfers to Minors Act) of which the beneficiary(ies) are one or more Persons described in the preceding clauses (i), (ii) or (iii), and (v) an executor or administrator upon the death of such then current officer or director or any Person described in the preceding clauses (i) or (ii).

7.11     Consequences of an Event of Default.  If one or more of the Events of Default occur then (a) if such Event of Default is set forth in Sections 7.3 or 7.4, the Commitments shall automatically terminate and the Notes then outstanding and all other amounts owing under this Agreement (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall become immediately due and payable, without necessity of demand, presentation, protest, notice of dishonor or notice of default or (b) if such Event of Default is set forth in any of the remaining Sections of this Article VII, then the Agent, at the request of the Required Lenders, and upon notice to the Borrower, shall declare the Borrower in default hereunder, and upon such declaration, shall, at the request of the Required Lenders, terminate the Commitment and/or declare the Notes then outstanding and all other amounts owing under this Agreement (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) immediately due and payable, without necessity of any further demand, presentation, protest, notice of dishonor or further notice of default, whereupon the same shall be immediately due and payable.

 With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit.  The Borrower hereby grants to the Agent, for the benefit of the Issuing Bank and the L/C Participants, a security interest in such cash collateral to secure all obligations of the Borrower under this Agreement and the other Loan Documents.  Amounts held in such cash collateral account shall be applied to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters ofCredit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the Notes.  After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrower hereunder and under the Notes shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower.  The Borrower shall execute and deliver to the Agent, for the account of the Issuing Bank and the L/C Participants, such further documents and instruments as the Agent may request to evidence the creation and perfection of the within security interest in such cash collateral account.

7.12     Remedies Upon Default.  Upon thetermination of the Commitments and acceleration of the Notes following the occurrence of an Event of Default, the Lenders shall, unless such termination and acceleration subsequently have been rescinded, have the full panoply of rights and remedies granted to them under this Agreement and all those rights and remedies granted by law to creditors, and the Agent, at the direction of the Required Lenders, shall proceed to protect and enforce the Lenders' rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, in the Notes or in any of the other Loan Documents, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law.  No right, power or remedy conferred by this Agreement, in the Notes, or by any other Loan Document, upon the Agent or the Lenders shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  No exercise of any one right or remedy shall be deemed a waiver of other rights or remedies.  The rights and remedies of the Agent and the Lenders specified herein are for the sole and exclusive benefit, use and protection of the Agent and the Lenders, and the Agent and the Lenders shall be entitled, but shall have no duty or obligation, to exercise or to refrain from exercising any right or remedy reserved to the Agent or the Lenders hereunder.

ARTICLE VIII.         AGREEMENT AMONG LENDERS.

8.1      Appointment and Grant of Authority.  Each of the Lenders hereby appoints Fleet National Bank and Fleet National Bank hereby agrees to act as, the Agent under this Agreement, the Notes and the other Loan Documents.  As such Agent, Fleet National Bank shall have and may exercise such powers under this Agreement and the other Loan Documents as are specificallydelegated to the Agent, by the terms hereto or thereof, together with such other powers as are incidental thereto.  Without limiting the foregoing, the Agent, on behalf of the Lenders, is authorized to execute all of the Loan Documents (other than this Agreement) and to accept all of the Loan Documents and all other agreements, documents or instruments reasonably required to carry out the intent of the parties to this Agreement.

8.2       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 duties as the Agent hereunder) and, subject to Sections 8.7 and 9.2 hereof, shall be entitled to engage and pay for the advice or services of any attorneys, accountants, or other experts concerning all matters pertaining to duties hereunder and to rely upon any advice so obtained.

8.3       Reliance by Agent on Lenders for Funding.  Unless the Agent shall have received notice from a Lender prior to any Borrowing Date that such Lender will not make available to the Agent such Lender's portion of net disbursements of Loans, the Agent may assume that such Lender has made such portion available to the Agent and the Agent may, in reliance upon such assumption, make Loans to the Borrower.  If and to the extent that such Lender has not made such portion available to the Agent on or prior to any Borrowing Date, such Lender and the Borrower severally agree to repay to the Agent immediately upon demand, in immediately available funds, such unpaid amount, together with interest thereon for each day from the applicable Borrowing Date until such amount is repaid to the Agent, at (i) in the case of the Borrower, at the rate of interest then in effect for such Loan and (ii) in the case of such Lender, at the Federal Funds Effective Rate.  If such Lender shall repay to the Agent such corresponding amount, such amount shall constitute a Loan made by such Lender for purposes of this Agreement.  The failure by any Lender to pay its portion of a Loan made by the Agent shall not relieve any other Lender of the obligation to pay its portion of net disbursements of Loans on any Borrowing Date, but no Lender shall be responsible for the failure of any other Lender to make its net share of Loans to be made by such other Lender on such Borrowing Date.

8.4       Non-Reliance on Agent.  Each Lender agrees that it has, independently and without reliance on the Agent, based on such documents and information as it has deemed appropriate, made its own credit analysis and evaluation of the Borrower and its operations and decision to enter into this Agreement and that it will, independently and without reliance upon the Agent, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement.  Except as otherwise provided herein, the Agent shall have no duty to keep the Lenders informed as to the performance or observance by the Borrower of this Agreement or any other document or instrument referred to or provided for herein or to inspect the properties or books of the Borrower.  The Agent, in the absence of gross negligence or willful misconduct, shall not be liable to any Lender for its failure to relay or furnish to the Lender any information. 

8.5       Responsibility of Agent and Other Matters.

8.5a     Ministerial Nature of Duties.  As among the Lenders and the Agent, the Agent shall have no duties or responsibilities except those expressly set forth in this Agreement, the Notes or in the other Loan Documents, and those duties and responsibilities shall be subject to the limitations and qualifications set forth in this Article VIII.  The duties of the Agent shall be ministerial and administrative in nature.

8.5b     Limitation of Liability.  As among the Lenders and the Agent, neither the Agent nor any of its directors, officers, employees or agents shall be liable for any action taken or omitted (whether or not such action taken or omitted is within or without the Agent's responsibilities and duties expressly set forth in this Agreement) under or in connection with this Agreement or any other instrument or document in connection herewith except for gross negligence or willful misconduct.  Without limiting the foregoing, neither the Agent nor any of its directors, officers or employees shall be responsible for, or have any duty to examine (i) the genuineness, execution, validity, effectiveness, enforceability, value or sufficiency of (A) this Agreement, the Notes or any of the other Loan Documents or (B) any other document or instrument furnished pursuant to or in connection with this Agreement, (ii) the collectability of any amounts owed by the Borrower to the Lenders, (iii) the truthfulness of any recitals, statements, representations or warranties made to the Agent or the Lenders in connection with this Agreement, (iv) any failure of any party to this Agreement to receive any communication sent, including any telegram, teletype, facsimile transmission or telephone message or any writing, application, notice, report, statement, certificate, resolution, request, order, consent letter or other instrument or paper or communication entrusted to the mails or to a delivery service, or (v) the assets, liabilities, financial condition, results of operations, business or prospects, or creditworthiness of the Borrower.

8.5c     Reliance.  The Agent shall be entitled to act, and shall be fully protected in acting upon, any telegram, teletype, facsimile transmission or any writing, application, notice, report, statement, certificate, resolution, request, order, consent, letter or other instrument, paper or communication believed by the Agent in good faith to be genuine and correct and to have been signed or sent or made by a proper Person.  The Agent may consult counsel and shall be entitled to act, and shall be fully protected in any action taken in good faith, in accordance with advice given by counsel.  The Agent may employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact selected by the Agent with reasonable care.  The Agent shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, provisions or conditions of this Agreement or any of the other Loan Documents on the part of the Borrower or any other party thereto.

8.6       Actions in Discretion of Agent; Instructions from the Lenders.  The Agent agrees, upon the written request of the Required Lenders, to take or refrain from taking any action of the type specified as being within the Agent's rights, powers or discretion herein or under any Loan Documents, 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 Lenders, 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 Lenders or all of the Lenders.  Any action taken or failure to act pursuant to such instructions or discretion shall be binding on the Lenders, subject to Section 8.5b hereof.  Subject to the provisions of Section 8.5b, no Lender 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 Lenders.

8.7       Indemnification.  To the extent the Borrower does not reimburse and save harmless the Agent according to the terms hereof for and from all costs, expenses and disbursements in connection herewith, such costs, expenses and disbursements shall be borne by the Lenders ratably in accordance with their respective Commitment Percentages.  Each Lender hereby agrees on such basis (i) to reimburse the Agent for such Lender's pro rata share of all such reasonable costs, expenses and disbursements on request and (ii) to the extent of each such Lender's pro rata share, to indemnify and save harmless the Agent against and from any and all losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent, other than as a consequence of gross negligence or willful misconduct on the part of the Agent, arising out of or in connection with (i) this Agreement, the Notes, the other Loan Documents or any other agreement, instrument or document executed or delivered in connection herewith or therewith, or (ii) any action taken at the request of the Required Lenders or all of the Lenders hereunder, as the case may be, including without limitation the reasonable costs, expenses and disbursements in connection with defending themselves against any claim or liability, or answering any subpoena or other process related to the exercise or performance of any of their powers or duties under this Agreement, the other Loan Documents, or any of the other agreements, instruments or documents executed or delivered in connection herewith or the taking or refraining from any action under or in connection with any of the foregoing.

8.8       Agent's Rights as a Lender.  With respect to the Commitment of the Agent as a Lender hereunder, any Loans of the Agent under this Agreement or the other Loan Documents, with respect to any Letters of Credit issued or participated in by it, and any other amounts due to the Agent under this Agreement, the Agent shall have the same rights and powers, duties and obligations under this Agreement, the Notes, the other Loan Documents or other agreement, instrument or document as any Lender and may exercise such rights and powers and shall perform such duties and fulfill such obligations as though it were not the Agent.  The Agent may accept deposits from, lend money to, and generally engage, and continue to engage, in any kind of business with the Borrower as if it were not the Agent.

8.9       Payment to Lenders.  Except as otherwise set forth in Section 8.3 hereof, promptly after receipt from the Borrower of any principal repayment of the Loans, interest due on the Loans, any payment of the Reimbursement Obligations and any Facility Fees owing to the Lenders or other amounts due under any of the Loan Documents (except for such amounts which are payable for the sole account of any Lender or the Agent), the Agent shall distribute to each Lender that Lender's share of the funds so received.  

8.10     Pro Rata Sharing.  Except as otherwise set forth in Section 8.3 hereof, all interest and principal payments on the Loans, all payments of the Reimbursement Obligations, all payments of letter of credit commissions referred to in Section 2.14(c)(ii), and all payments of Facility Fees are to be divided pro rata among the Lenders in proportion to the extensions of credit outstanding from each Lender or, if no such Loans or Letters of Credit are then outstanding, in accordance with their respective Commitment Percentages.  Any sums obtained from the Borrower by any Lender by reason of the exercise of its rights of set-off, banker's lien or in collection shall be shared (net of costs) pro rata among the Lenders on the basis of the principal amount of Loans and/or Letters of Credit outstanding.  Nothing in this Section 8.10 shall be deemed to require the sharing among the Lenders of collections specifically relating to, or of the proceeds of any collateral securing, any other Indebtedness of the Borrower to any Lender.

8.11     Successor Agent.

8.11a   Resignation of Agent.  The Agent may resign as Agent hereunder by giving 30 days' prior written notice to the Lenders and the Borrower.  If such notice shall be given, the Lenders shall appoint a successor agent for the Lenders, during such 30 day period, which successor agent shall be reasonably satisfactory to the Borrower, to serve as agent hereunder and under the several Loan Documents.  If at the end of such 30 day period, the Lenders have not appointed such a successor, the Agent shall use reasonable commercial efforts to procure a successor reasonably satisfactory to the Lenders and the Borrower, to serve as agent for the Lenders hereunder and under the several Loan Documents.  Any such successor agent shall succeed to the rights, powers and duties of the Agent.

8.11b   Rights of the Former Agent.  Upon the appointment of such successor agent or upon the expiration of such 30 day period (or any longer period to which the Agent has agreed), 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 any retiring Agent's resignation hereunder as Agent hereunder, the provisions of this Article VIII shall inure to the benefit of such retiring Agent as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

8.12     Notice of Default.  The Agent shall not be deemed to have knowledge or notice of the occurrence of an Event of Default unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement, describing such Event of Default and stating that such notice is a "notice of default".

8.13     Notices.  The Agent shall promptly send to each Lender 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 Lenders of each change in the Base Rate and the effective date thereof.

8.14     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.

8.15     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 Lender whether in respect of the Loans, Fees or any other amounts due to the Lenders under this Agreement.  In the event an error in computing any amount payable to any Lender is made, the Agent, the Borrower and each affected Person 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 Effective Rate.

8.16     Beneficiaries.  Except as expressly provided herein, the provisions of this Article VIII are solely for the benefit of the Agent and the Lenders, and the Borrower 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 Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for the Borrower.

ARTICLE IX.            GENERAL PROVISIONS

9.1       Amendments and Waivers.  Subject to the remaining provisions of this Section 9.1, the Agent, the Lenders and the Borrower may, from time to time, enter into amendments, extensions, renewals, modifications, supplements and replacements to and of this Agreement, the Notes or the other Loan Documents and the Lenders or the Required Lenders, as the case may be, may, from time to time, waive compliance with a provision thereof.  No amendment, renewal, modification, extension, supplement, replacement or waiver of any provision of this Agreement, the Notes or the other Loan Documents or consent to any departure therefrom by the Borrower shall be effective unless it is in writing and is signed by the Required Lenders (or the Agent with the written consent of the Required Lenders), and then such waiver or consent shall be effective only for the specific instance and for the specific purpose for which it is given; provided, however, that no amendment, renewal, modification, waiver or consent, unless in writing and signed by all of the Lenders (or the Agent with the written consent of all of the Lenders), shall do any of the following:

(A)       increase the Commitment of any Lender or subject any Lender to any additional obligations hereunder;

(B)       increase any Lender's Commitment Percentage or decrease the aggregate or individual unpaid principal amount of the Notes, or forgive the payment of the principal or interest payable on the Notes;

(C)       waive an Event of Default in the payment of principal and/or interest due hereunder and under any of the Notes;

(D)       decrease the interest rate relating to the Loans;

(E)       postpone any date fixed for any payment of principal of or interest on the Loans, the Facility Fee, or any other obligations of the Borrower set forth in Article II;

(F)       reduce the Facility Fee; or

(G)       amend the definition of the term "Required Lenders" or amend or waive the provisions of this Section 9.1.

Any such supplemental agreement shall apply equally to the Borrower and each of the Lenders and shall be binding upon the Borrower, the Lenders, the Agent and all future holders of the Notes.  In the case of any waiver, the Borrower, the Lenders and the Agent shall be restored to their former positions and rights, and any Event of Default waived shall be deemed to be cured and not continuing, but no such waiver shall extend to any subsequent or other Event of Default, or impair any right consequent thereon.

9.2       Expenses.  The Borrower shall pay:

(i)         All reasonable costs and expenses of the Agent (including without limitation the reasonable fees and disbursements of the Agent's special counsel, Edwards & Angell, LLP and any reasonable accounting, consulting, brokerage or other similar professional fees or expenses, and any reasonable fees or expenses associated with travel or other costs relating to any appraisals or examinations conducted in connection with the Loans) incurred in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents and any and all other documents and instruments prepared in connection herewith, including but not limited to all amendments, extensions, modifications, replacements, waivers, consents and other documents and instruments prepared or entered into from time to time;

(ii)        All costs and expenses of the Agent and the Lenders (including without limitation the fees and disbursements of the Agent's and the Lenders' counsels, which may be in house counsel) in connection with (A) the enforcement of this Agreement and the other Loan Documents arising pursuant to a breach by the Borrower of any of the terms, conditions, representations, warranties or covenants of any Loan Document, and (B) defending or prosecuting any actions, suits or proceedings relating to any of the Loan Documents.

All of such costs and expenses shall be payable by the Borrower to the Lenders or the Agent, as the case may be, upon demand or as otherwise agreed upon by the Lenders or the Agent and the Borrower, and shall constitute Bank Indebtedness under this Agreement.  The Borrower further agrees to pay, and save the Agent and the Lenders harmless from any and all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of this Agreement or the issuance of the Notes.  The Borrower's obligation to pay such costs and expenses shall survive the termination of this Agreement and the repayment of the Bank Indebtedness.

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

Borrower:                                            NUI Utilities, Inc.
                                                            550 Route 202-206
                                                            P. 0. Box 760
                                                            Bedminster, NJ 07921
                                                            Attention:    Treasurer
                                                            Telecopier:   (908) 781-0718
                                                            Telephone:  (908) 781-0500

The Agent:                                           Fleet National Bank
                                                            100 Federal Street
                                                            Mail Stop:  MADE 10008A
                                                            Boston, Massachusetts  02110
                                                            Attention:   Mr. Stephen J. Hoffman
                                                            Telephone:  (617) 434-6520
                                                            Telecopier:  (617) 434-3652

9.4       Tax Withholding.  At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of each Lender, each Lender or assignee or participant of a Lender that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to the Agent and the Borrower two duly completed copies of either (i) IRS Form W-9, 1001 or 4224 or such other applicable form prescribed by the IRS, certifying in each case that such Lender or assignee or participant of a Lender is entitled to receive payments under this Agreement or its Notes without deduction or withholding of United States federal income taxes, or is subject to such tax at a reduced rate under an applicable tax treaty or (ii) IRS Form W-8 or such other applicable form prescribed by the IRS or a certificate of such Lender or assignee or participant of a Lender indicating that no such exemption or reduced rate of taxation is allowable with respect to such payments.  Each Lender or assignee or participant of a Lender which delivers an IRS Form W-8, W-9, 4224, 1001 or other such applicable form further undertakes to deliver to the Agent and the Borrower two additional copies of any such form (or any successor form) on or before the date on which that form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Borrower or the Agent, either certifying that such Lender or assignee or participant of a Lender is entitled to receive payments under this Agreement or its Notes without deduction or withholding of any United States federal income taxes or is subject to such tax at a reduced rate under an applicable tax treaty or stating the date on which that no such exemption or reduced rate is allowable.  The Agent shall be entitled to withhold, from each payment hereunder or under the Notes payable to it, United States federal income taxes at the full withholding rate unless each Lender referred to in the first sentence of this Section 9.4 establishes an exemption or at the applicable reduced rate established pursuant to the above provisions.

9.5       Successors and Assigns.  This Agreement shall be binding upon the Borrower, the Agent and the Lenders and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Agent and the Lenders and the successors and assigns of the Agent and the Lenders; provided, that the Borrower shall not assign its rights or duties hereunder or under any of the other Loan Documents without the prior written consent of the Lenders.

9.6       Assignments and Participations.

9.6a     Assignments.  Subject to the remaining provisions of this Subsection 9.6a, any Lender (a "Transferor Lender"), at any time, in the ordinary course of its commercial banking business and in accordance with applicable law, may sell to one or more financial institutions (individually a "Purchasing Lender"), a portion or all of its rights and obligations under this Agreement and the Notes then held by it, pursuant to an Assignment and Assumption Agreement substantially in the form of Exhibit "H" executed by the Transferor Lender, such Purchasing Lender, the Borrower (if applicable) and the Agent; subject, however to the following requirements:

(i)         Each such assignment must be in a minimum amount of $5,000,000, or, if in excess thereof, in integral multiples of $1,000,000, unless such assignment shall be in the full amount of such Lender's Commitment;

(ii)        During the first 90 days following the Closing Date, each assignment made shall become effective only on a date which coincides with the expiration date of any Interest Period then in effect, unless the Agent agrees to waive this provision;

(iii)       The Agent and the Borrower must each give its prior consent to any such assignment which consent shall not be unreasonably withheld; it being agreed that it shall not be deemed unreasonable for the Borrower to decline to consent to such assignment if (A) such assignment would result in incurrence of additional costs to the Borrower under Article II, or (B) the proposed assignee has not provided to the Borrower any tax forms received under Section 9.4; provided, however, no consent is required for the transfer by a Lender to its Affiliate or to another Lender so long as the conditions in clauses (A) and (B) immediately above are satisfied; and

(iv)       The Transferor Lender shall pay to the Agent a $3,500 service fee for each such transfer at the time of each such transfer;

provided, however the restrictions set forth in item (i) above shall not apply (x) in the case of an assignment by a Lender to an Affiliate of such Lender or (y) in the case of any assignment by any Transferor Lender upon the occurrence and during the continuation of an Event of Default, and provided further, that upon the occurrence and during the continuance of an Event of Default the consent of the Borrower to any assignment is not required.

Upon the execution, delivery, acceptance and recording of any such Assignment and Assumption Agreement, from and after the Transfer Effective Date determined pursuant to such Assignment and Assumption Agreement, all parties hereto agree that (a) the Purchasing Lender thereunder shall be a party hereto as a Lender and, to the extent provided in such Assignment and Assumption Agreement, shall have the rights and obligations of a Lender hereunder with a Commitment as set forth therein, and (b) the Transferor Lender thereunder shall, to the extent provided in such Assignment and Assumption Agreement, be released from its obligations as a Lender under this Agreement.  Such Assignment and Assumption Agreement shall be deemed to amend this Agreement (without further action) to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender as a Lender and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such Transferor Lender under this Agreement and its Notes.  On or prior to the Transfer Effective Date, the Borrower shall execute and deliver to the Agent, in exchange for the surrendered Notes held by the Transferor Lender, new Notes to the order of such Purchasing Lender in an amount equal to the Commitment or the Loans and Reimbursement Obligations assumed by it and purchased by it pursuant to such Assignment and Assumption Agreement, and new Notes to the order of the Transferor Lender in an amount equal to the Commitment or the Loans retained by it hereunder.

In addition to the assignments permitted above, any Lender may assign and pledge all or any portion of its Loans and Notes to any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank.  No such assignment shall release the assigning Lender from its obligations and duties hereunder.

9.6b     Assignment Register.  The Agent shall maintain, at its address referred to in Subsection 9.3, a copy of each Assignment and Assumption Agreement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the amount of the Loans and/or the Letters of Credit owing to each Lender from time to time.  The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Loans recorded therein for all purposes of this Agreement.  The Register shall be available at the office of the Agent set forth in Subsection 9.3 for inspection by either Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

9.6c     Participations.  Each Lender, in the ordinary course of its commercial banking business and in accordance with applicable law, may sell to one or more Participants a participating interest in any Loan owing to such Lender, the interest of such Lender in any Notes or the Commitment of such Lender.  In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of its Notes for all purposes under this Agreement and the Borrower, the other Lenders and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement or its Notes and the Participants shall have voting rights only with respect to matters described in items (B), (C), (D), (E) and (F) of Section 9.l.

9.7       Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 

9.8       Survival.  All representations, warranties, covenants and agreements of the Borrower contained herein in the Notes or in the other Loan Documents or made in writing in connection herewith or therewith shall survive the issuance of the Notes and shall continue in full force and effect so long as the Borrower may borrow hereunder and so long thereafter until payment in full of all the Notes and the Bank Indebtedness.

9.9       Governing Law.  This Agreement, each Note and each other Loan Document shall be a contract made under, governed by and construed in accordance with the laws of the State of New Jersey without reference to the provision thereof regarding conflicts of law except where such law is superseded by applicable Federal law.

9.10     Non-Business Days.  Except as otherwise specifically required pursuant to the terms of this Agreement, whenever any payment hereunder or under the Notes is due and payable on a day which is not a Business Day, such payment may be made on the next succeeding Business Day.

9.11     Integration.  This Agreement constitutes the entire agreement between the parties relating to this financing transaction and it supersedes all prior understandings and agreements, whether written or oral, between the parties hereto concerning the subject matter of this Agreement.

9.12     Headings.  Article, Section and other headings used in this Agreement are intended for convenience only and shall not affect the meaning or construction of this Agreement.

9.13     Set-Off.  The Borrower hereby gives to the Lenders a lien and security interest for the amount of any Bank Indebtedness upon and in any property, credits, securities or money of the Borrower which may at any time be delivered to, or be in the possession of, or owed by any Lender in any capacity whatever, including the balance of any deposit account but excluding any trust or fiduciary accounts, in each case maintained by the Borrower with such Lender.  The Borrower hereby authorizes each Lender in case of an Event of Default, at such Lender's option, at any time and from time to time, to apply, at the discretion of such Lender, to the payment of Bank Indebtedness, any and all such property, credits, securities or money now or hereafter in the hands of such Lender belonging or owed to the Borrower.  Nothing herein shall restrict any Lender's ability to set off any property, credits, securities or money of the Borrower which may at any time be delivered to, or be in possession or owed to any Lender in any capacity whatever to satisfy an independent obligation of the Borrower to the Lender.

9.14     Consent to Forum.  The parties hereto each hereby irrevocably consents to the nonexclusive jurisdiction of the Courts of the Commonwealth of Massachusetts or any Federal court sitting therein in any action or proceeding arising out of or relating to this Agreement, the Notes or the other Loan Documents, and each party agrees that a summons and complaint commencing an action or proceeding in either of such courts shall be properly served and shall confer personal jurisdiction if served personally or by certified mail to the party at its respective address set forth in Section 9.3, or as otherwise provided under the laws of the Commonwealth of Massachusetts.  Further, the parties hereby specifically waive and hereby acknowledge that the parties are estopped from raising any claim that any such court lacks personal jurisdiction over such party so as to prohibit either such court from adjudicating any issues raised in a complaint filed with any such court against the Borrower or the Lenders concerning this Agreement.

9.15     Waiver of Jury Trial.  Each of the Agent, the Lenders and the Borrower hereby knowingly, voluntarily and intentionally waive any rights they may have to a trial by jury in respect of any litigation based hereon, or arising out of, under, or in connection with, this Agreement or any other Loan Document, or any course of conduct, course of dealing, statements (whether verbal or written) or actions of the Agent, the Lenders or the Borrower relating hereto or thereto. Except as prohibited by law, the Borrower hereby waives any right it may have to claim or recover in any litigation any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. The Borrower acknowledges and agrees that it has received full and sufficient consideration for this provision (and each other provision of each other Loan Document to which it is a party) and that this provision is a material inducement for the Lenders to enter into this Agreement and each such other Loan Document.

9.16     Indemnity.  The Borrower hereby agrees to indemnify the Agent, the Lenders and each of their respective directors, officers, employees, attorneys, agents and Affiliates against, and hold each of them harmless from, any loss, liabilities, damages, claims, and reasonable costs and expenses, joint or several (including reasonable attorneys' fees and disbursements reasonably incurred by any such Person in connection with the preparation for or defense of any pending or threatened claim, action or proceeding), suffered or incurred by any of them under any applicable federal or state law or otherwise caused by, arising out of, resulting from or in any manner connected with, the execution, delivery and performance of each of the Loan Documents, the Loans and any and all transactions related to or consummated in connection with the Loans.  The indemnity set forth in this Section 9.16 shall be in addition to any other obligations or liabilities of the Borrower to the Agents or the Lenders, or at common law or otherwise.  The provisions of this Section 9.16 shall survive the payment of the Bank Indebtedness and the termination of this Agreement.  The foregoing provisions of this Section 9.16 to the contrary notwithstanding, the Borrower shall not be obligated to indemnify the Agent, or any Lender pursuant to this Section 9.16 for (i) any losses, liabilities, damages, claims or costs suffered or incurred by any of them in connection with the administrative transfer of funds in connection with this Agreement and which arise directly from the Agent's or such Lender's gross negligence or willful misconduct, or (ii) any other losses, liabilities, damages, claims, or costs which arise directly from the Agent's, or such Lender's gross negligence or willful misconduct.  All amounts owed pursuant to this Section 9.16 shall be part of the Bank Indebtedness.

9.17     Counterparts.  This Agreement and any amendment, modification, extension or renewal hereto or hereof may be executed in several counterparts and by each party on a separate counterpart, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute but one and the same instrument.  In proving this Agreement or any amendment, modification, extension or renewal, it shall not be necessary to produce or account for more than one such counterpart signed by the other party against whom enforcement is sought.

9.18     Replacement of Note.  Upon receipt of an affidavit of an officer of any Lender or the Agent (including an indemnification agreement reasonably satisfactory to the Borrower) as to the loss, theft, destruction or mutilation of any Note or any other Loan Document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such Note or other Loan Document, the Borrower will issue, in lieu thereof, a replacement Note or other Loan Document in the same principal amount thereof and otherwise of like tenor.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,

have caused this Credit Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

NUI UTILITIES, INC.

By:  /s/  A. MARK ABRAMOVIC                 
Name:  A. Mark Abramovic
Title:    Vice President

By:  /s/  CHARLES N. GARBER                    
Name:   Charles N. Garber
Title:     Treasurer

FLEET NATIONAL BANK,
in its capacity as the Agent hereunder

By:  /s/  CHARU MANI                                 
Name:  Charu Mani
Title:    Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI UTILITIES, INC., THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                                     FLEET NATIONAL BANK

$25,128,205.10

                                                                        By:  /s/  CHARU MANI         
                                                                        Name:   Charu Mani
                                                                        Title:     Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI UTILITIES, INC., THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                           PNC BANK, NATIONAL ASSOCIATION

$21,538,461.50

                                                               By:  /s/  MICHAEL RICHARDS   
                                                               Name:  Michael Richards
                                                               Title:    Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI UTILITIES, INC., THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                          CITIZENS BANK OF MASSACHUSETTS

$21,538,461.50
                                                                        By:  /s/  MICHAEL OUELLETTE  
                                                                        Name:  Michael Ouellette
                                                                        Title:    Vice President

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI UTILITIES, INC., THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                                     CIBC INC.

$21,538,461.50                                              
                                                                        By:  /s/  MARYBETH ROSS   
                                                                        Name:   MaryBeth Ross
                                                                        Title:     Authorized Signatory

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Lender has caused this Credit Agreement by and among NUI UTILITIES, INC., THE LENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorized officers as of the date first above written.

Commitment:                                                     MELLON BANK, N.A.

$7,179,487.20
                                                                        By:  /s/  ROGER STANIER     
                                                                        Name:  Roger Stanier
                                                                        Title:    Vice President