EXHIBIT 10.4

 

**FIRST AMENDMENT TO CREDIT AGREEMENT**

            **THISFIRST AMENDMENT TO CREDIT AGREEMENT** (this "Amendment") isexecuted as of March 31, 2003, effective (unless otherwise indicated) as ofMarch 31, 2003, by and among **NUI CORPORATION**, a New Jersey corporation(the "Borrower"); the lenders from time to time partiesthereto (collectively, the "Lenders" and each individually, a"Lender"); **FLEET NATIONAL BANK**, as Agent for theLenders (in such capacity, with its successors and assigns, the "Agent");**CITIZENS BANK OF MASSACHUSETTS** and **CIBC INC.**, as Co-SyndicationAgents; and **PNC BANK, NATIONAL ASSOCIATION**, as Documentation Agent. 

**RECITALS**

            A.            The Borrower, the Lenders and theAgent are parties to that certain Credit Agreement dated as of February 12,2003 (as amended, extended, supplemented or otherwise modified from time totime, the "Credit Agreement").  Capitalized terms used herein without definition have themeanings assigned to them in the Credit Agreement.

            B.            The Borrower has requested certainamendments to the Credit Agreement, all as set forth below.

            C.            The Lenders signing below arewilling to consent to such amendments on the terms and conditions hereinafterset forth.

            **NOW,THEREFORE**, for good and valuable consideration, the receipt and sufficiencyof which is hereby acknowledged, the parties hereto agree as follows:

**I.            CONSENTS AND AGREEMENT**.  

A.            **InterestRate 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 orprepayment of principal of, or interest on, any Indebtedness without theconsent of the Required Lenders.  TheBorrower has requested that the Required Lenders consent to a modification tothat certain Note Purchase Agreement dated as of August 20, 2001, as amended bythat certain First Amendment and Waiver to Note Purchase Agreement dated as ofFebruary 20, 2003 (as the same has been, is as of the date hereof, and mayhereafter be amended from time to time, the "Note Purchase Agreement"),among the Borrower and the senior noteholders party thereto (the "SeniorNoteholders") pursuant to which modification the interest ratesapplicable to the Notes (as defined in the Note Purchase Agreement) areadjusted as follows:  (i) the interestrate applicable to the Series A Notes (as defined in the Note PurchaseAgreement) is increased from 6.60% to 7.10%, and all references to the interestrates of 6.60% and 8.60% appearing therein and in the Note Purchase Agreementare changed to 7.10% and 9.10%, respectively; (ii) the interest rate applicableto the Series B Notes and the Series C Notes (each as defined in the NotePurchase Agreement) is increased from 6.884% to 7.384%, and all references tothe interest rate of 6.884% and 8.884% appearing therein and in the NotePurchase Agreement are changed to 7.384% and 9.384% respectively; and (iii) theinterest rate applicable to the Series D Notes (as defined in the Note PurchaseAgreement) is increased from 7.29% to 7.79%, and all references to the interestrates of 7.29% and 9.29% appearing therein and in the Note Purchase Agreementare changed to 7.79% and 9.79% respectively (all of the foregoing interest rateadjustments, collectively, the "Senior Note Rate Increase").  The Lenders signing below hereby consent tothe Senior Note Rate Increase.

B.            **SubsidiaryGuaranties**.  Section 5.14 of theCredit Agreement prohibits any Subsidiary from guaranteeing, assuming orotherwise remaining liable for the obligations of another Person (other thancertain guaranties in existence on the Closing Date and guarantees made in theordinary course of business) without the consent of the Required Lenders.  The Borrower has requested that the RequiredLenders consent to a guarantee by the Borrower's direct and indirectnon-regulated domestic Subsidiaries of the obligations of the Borrower to theSenior Noteholders (the "Subsidiary Note Guaranty") whichguarantee will be substantially similar in form and substance to the Guarantyof the Guarantors in favor of the Agent. The Lenders signing below hereby consent to the execution by suchSubsidiaries of the Subsidiary Note Guaranty.

C.            **IntercreditorAgreement. **Subject tosatisfaction of the conditions precedent contained in Article V hereof, theLenders signing below hereby agree to enter into an Intercreditor Agreementwith the Senior Noteholders, with respect to the obligations of the Guarantorsto the Lenders and the Senior Noteholders. Such Intercreditor Agreement shall be in form and substance mutuallysatisfactory to the Lenders and the Senior Noteholders. 

**II.            AMENDMENTSTO CREDIT AGREEMENT**.  Subject to the satisfaction of each of theconditions set forth herein, the Credit Agreement is hereby amended as follows:

A.            **Modificationof Debt Instruments**.  Section5.17 of the Credit Agreement is hereby amended to read in its entirety asfollows:

"**5.17  Limitation on Optional Payments andModifications 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 orpurchase of any Indebtedness (other than Indebtedness under this Agreement,Indebtedness under the NUI Utilities Credit Agreement, Indebtedness of anySubsidiary to the Borrower or to any other Guarantor, and if no PotentialDefault 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) itscertificate of incorporation which could reasonably be expected to result in aMaterial Adverse Effect; (ii) the Note Purchase Agreement in any mannermaterially adverse to the Lenders without the Agent's prior written consent; or(iii) without limiting, or being limited by, clause (ii) above, the definitionof "Priority Indebtedness" in the Note Purchase Agreement (except asrequired hereunder) or the covenants relating thereto or any of the termsrelating to the payment or prepayment or principal of or interest on, any suchIndebtedness described in subsection (a) hereof, except for any amendment,modification or change which would extend the maturity or reduce the amount ofany payment of principal thereof or which would reduce the rate or extend thedate for payment of interest thereon."

** **

B.            **Eventsof Default**.  

1.            Section7.2 of the Credit Agreement is amended by deleting the numerals"$15,000,000" contained therein and by substituting"$5,000,000" therefor.

2.            Section7.7 of the Credit Agreement is hereby amended to read in its entirety asfollows:

"**7.7  AdverseJudgments, Etc.**  Entry or filingof any one or more judgments, writs or warrants of attachment or of any similarprocess against any one or more of the Borrower and its Subsidiaries or againstany of their respective properties and failure of the Borrower or itsSubsidiaries to vacate, pay, bond, stay or contest in good faith suchjudgments, writs, warrants of attachment or other process within a period of 60days."

C.            **PricingRevisions. **

1.            ExhibitA to the Credit Agreement isamended by deleting the pricing grid set forth therein and substituting thefollowing 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.            Thedefinitions of "Applicable Base Rate Margin" and "ApplicableEuro-Rate Margin" are deleted in their entirety and the followingdefinitions are substituted therefor:  

"ApplicableBase Rate Margin" means, for each Base Rate Portion, a rate per annumequal to the annualized rates (stated in terms of basis points) indicated onthe pricing grid attached hereto as "Exhibit A" andcorresponding to the ratings established by both S&P and Moody's applicableto the Borrower's Senior Ratings at such date of determination.

For purposes ofdetermining the Applicable Base Rate Margin: (i) if the Senior Ratingsestablished by Moody's and S&P shall differ, the pricing shall be based onthe higher of the two Senior Ratings unless one of the Senior Ratings is two ormore levels lower than the other, in which case the pricing shall be determinedby reference to the level next above that of the lower of the two SeniorRatings, (ii) if any Senior Ratingestablished by Moody's or S&P shall be changed (other than as a result of achange in therating system of either Moody's or S&P), such change shall be effective asof the date on which such change is first announced by the rating agency makingsuch change, (iii) notwithstanding anything herein to the contrary, if at anytime during the term of this Agreement, the Borrower shall not have a SeniorRating 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 heretoas Exhibit A and corresponding to the ratings established by Moody'sapplicable to the Borrower's Senior Ratings at such date of determination, and(iv) notwithstanding anything herein to the contrary, if at any time during theterm of this Agreement, the Borrower shall not have a Senior Rating assigned byMoody's, the "Applicable Base Rate Margin" means, for each Base RatePortion, a rate per annum equal to the annualized rates (stated in terms ofbasis points) indicated on the pricing grid attached hereto as Exhibit Aand corresponding to the ratings established by S&P applicable to theBorrower's Senior Ratings at such date of determination.

"ApplicableEuro-Rate Margin" means, for each Euro-Rate Portion, a rate per annumequal to the annualized rates (stated in terms of basis points) indicated onthe pricing grid attached hereto as "Exhibit A" andcorresponding to the ratings established byboth S&P and Moody's applicable to the Borrower's Senior Ratings at suchdate of determination. 

Forpurposes of determining the Applicable Euro-Rate Margin: (i) if the SeniorRatings established by Moody's and S&P shall differ, the pricing shall bebased on the higher of the two Senior Ratings unless one of the Senior Ratingsis two or more levels lower than the other, in which case the pricing shall bedetermined by reference to the level next above that of the lower of the twoSenior Ratings, (ii) if any Senior Rating established by Moody's or S&Pshall be changed (other than as a result of a change in the rating system ofeither Moody's or S&P), such change shall be effective as of the date onwhich such change is first announced by the rating agency making such change,(iii) notwithstanding anything herein to the contrary, if at any time duringthe term of this Agreement, the Borrower shall not have a Senior Ratingassigned by S&P, the "Applicable Euro-Rate Margin" means, foreach Euro-Rate Portion, a rate per annum equal to the annualized rates (statedin terms of basis points) indicated on the pricing grid attachedhereto as Exhibit A and corresponding to the ratings established byMoody's applicable to the Borrower's Senior Ratings at such date ofdetermination, and (iv) notwithstanding anything herein to the contrary, if atany time during the term of this Agreement, the Borrower shall not have aSenior Rating assigned by Moody's, the "Applicable Euro-Rate Margin"means, for each Euro-Rate Portion, a rate per annum equal to the annualizedrates (stated in terms of basis points) indicated on the pricing grid attachedhereto as Exhibit A and corresponding to the ratings established byS&P applicable to the Borrower's Senior Ratings at such date ofdetermination.  

            D.            **FeeLetter**.** **The definitionof "Fee Letter" in Section 2.4b of the Credit Agreement is revised torefer collectively to the letter agreements dated as of December 3, 2002 andDecember 6, 2002 among the Borrower, NUI Utilities, the Agent and FleetSecurities, Inc.

            E.            **Utilization Fee**.  The following new Section 2.4c is herebyinserted 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 dailyutilization of the aggregate amount of the Commitments is equal to or greaterthan 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 theaggregate amount of the Commitments is equal to or greater than 50% but lessthan 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 theaggregate amount of the Commitments is equal to or greater than 75% of suchaggregate amount.  For the purposeshereof, the Commitments shall be deemed to be utilized by the aggregate amountof Loans and/or Letters of Credit then outstanding.  Such Utilization Fees shall be payable quarterly in arrears onthe last day of each March, June, September and December during the term hereofto and including the Termination Date."

            F.            **NoDefault**.** **Section 3.4 ofthe Credit Agreement is hereby amended by inserting the following immediatelyafter the second sentence thereof:

"Neither the Borrowernor any of its Subsidiaries is in default under or with respect to anyprovision of any security issued by such Person or of any agreement, instrumentor other undertaking to which such Person is a party or by which it or any ofits property is bound which would have a Material Adverse Effect upon theBorrower and its Subsidiaries taken as a whole."

            G.            **Furnishing Information. **Section 4.2(ix) of the Credit Agreementis 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 CreditAgreement after Section 4.2(ix):  

"(x)give notice to the Agent promptly uponBorrower's knowledge of any proposed amendment, waiver or modification to theNote Purchase Agreement, but in no event less than two (2) Business Days' priorto the execution of any amendment, waiver, or other modification to the NotePurchase Agreement; together with prompt delivery to the Agent of a copy of thedocumentation evidencing such amendment, modification or waiver; and"

**III.            REFERENCES IN LOAN DOCUMENTS;CONFIRMATION. **All references to the "Credit Agreement" inany Loan Documents shall, from and after the date hereof, refer to the CreditAgreement as amended by this Amendment. All Loan Documents heretofore executed by the Borrower shall remain infull 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 Borrowerhereby represents and warrants to, and covenants and agrees with, the Agent andthe Lenders that:

            A.            The execution and delivery of thisAmendment has been duly authorized by all requisite corporate action on thepart of the Borrower.

            B.            The representations and warrantiesof 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 allmaterial respects on and as of the date of this Amendment as though made at andas of such date.  Since the ClosingDate, no event or circumstance has occurred or existed which could reasonablybe expected to have Material Adverse Effect. As of the date hereof and after giving effect to this Amendment, noPotential Default or Event of Default has occurred and is continuing.

            C.            Except for the consent of SeniorNoteholders holding at least 51% of the outstanding principal amount of theNotes (as defined in the Note Purchase Agreement) in connection with anamendment to the Note Purchase Agreement to be executed prior to orconcurrently herewith, neither the Borrower, nor any of the Guarantors, isrequired to obtain any consent, approval or authorization from, or to file anydeclaration or statement with, any governmental instrumentality or other agencyor 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 thelegal, valid and binding obligation of the Borrower, enforceable against it inaccordance with its terms, subject to bankruptcy, insolvency, reorganization,moratorium and similar laws affecting the rights and remedies of creditorsgenerally or the application of principles of equity, whether in any action atlaw or proceeding in equity.

            E.            The documents, agreements andinstruments listed on Exhibit A attached hereto constitute all of theagreements for borrowed money (other than capital leases involvingconsideration in the amount of less than $5,000,000), including withoutlimitation, all amendments and waivers in connection with any such agreement,to which the Borrower or any of its Subsidiaries is a party.

            

**V.            CONDITIONS.**   Thewillingness of the Agent and the Lenders to amend the Credit Agreement issubject to the satisfaction of the following conditions precedent:

A.            TheBorrower shall cause the Note Purchase Agreement to be amended; such amendmentto be substantially in the form attached as Annex I hereto.

B.            The Borrower shall have executed anddelivered to the Agent (or shall have caused to be executed and delivered tothe Agent by the appropriate persons) the following:

1.            On or before the date hereof:

(a)            ThisAmendment;

(b)            The Confirmation of Guarantyexecuted by the Guarantors; and

(c)            Trueand complete copies of (i) any required stockholders' and/or directors'consents and (ii) any resolutions required for the due authorization of theexecution, 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 NotePurchase Agreement (which amendment shall be substantially in the form attachedas Annex I hereto), together with any required director consents andresolutions required for the due authorization of the execution, delivery andperformance of such amendment, certified by a duly authorized officer ofBorrower, and an intercreditor agreement among the Lenders and the SeniorNoteholders, in form and substance satisfactory to the Lenders.

(e)          Thefavorable opinion of White & Case LLP, special counsel to the Borrower,which opinion shall be in form and substance reasonably satisfactory to theAgent and its counsel.

2.            Suchother supporting documents and certificates as the Agent, any Lender or theircounsel may reasonably request within the time period(s) reasonably designatedby the Agent, such Lender or their counsel.

C.            All legal matters incident to thetransactions hereby contemplated shall be reasonably satisfactory to theAgent's counsel and to the Lenders' counsel.

D.            The Borrower shall have paid to theAgent a fully-earned non-refundable amendment fee in an amount equal to 0.5% ofthe Commitment amount of each Lender who returns its executed signature page tothe 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 anddisbursements of counsel to the Agent incurred in connection with thepreparation of this Amendment.

B.            This Amendment shall be governed by,and construed in accordance with, the law of the State of New Jersey.

C.                    ThisAmendment may be executed by the parties hereto in several counterparts hereofand by the different parties hereto on separate counterparts hereof, all ofwhich counterparts shall together constitute one and the same agreement.  Delivery of an executed signature page ofthis Amendment by facsimile transmission shall be effective as an in-handdelivery of an original executed counterpart hereof.

*[The nextpages are the signature pages.]*

IN WITNESS WHEREOF, theparties hereto, intending to be legally bound hereby, have caused this FirstAmendment to Credit Agreement to be executed by their respective officersthereunto duly authorized as of the date first written above.

                                                                                    **NUICORPORATION**

                                                                                    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 AdministrativeOfficer,                                                                                             General Counsel & Secretary

**FLEETNATIONAL BANK**,in its capacityas the Agent hereunder

By:  /s/ STEPHEN J. HOFFMANName:  Stephen J. HoffmanTitle:    Director

** **

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

**FLEET NATIONAL BANK**

By:  /s/ STEPHEN J. HOFFMANName: Stephen J. HoffmanTitle:   Director

 

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

###### PNC BANK, NATIONAL ASSOCIATION

By:  /s/ MICHAEL RICHARDSName:  Michael RichardsTitle:    Vice President

 

 

IN WITNESS WHEREOF,intending to be legally bound hereby, the undersigned Lender has caused this FirstAmendment to Credit Agreement by and among NUI CORPORATION, THE LENDERS PARTYHERETO and FLEETNATIONAL BANK,as Agent, to be executed by its duly authorized officers as of the date firstabove written.

**CITIZENS BANK OFMASSACHUSETTS**

By: /s/  MICHAEL OUELLET      Name:  Michael OuelletTitle:    Vice President

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

**CIBCINC.**

By: /s/  MARYBETH ROSS             Name:  MaryBeth RossTitle:    Authorized Signatory

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

**MELLON BANK, N.A.**

By: /s/  ALAN J. KOPOLOW                       Name:  Alan J. KopolowTitle:    First Vice President 

**Annex I**

NUICorporation

___________________________________

SecondAmendment

Dated as ofApril 1, 2003

to

NotePurchase Agreement

Dated as ofAugust 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

SecondAmendment to Note Purchase Agreement

**This Second Amendment** dated as ofApril 1, 2003 (the or this *"SecondAmendment"*) to the Note Purchase Agreement dated as of August 20, 2001is among the undersigned, NUICorporation, a New Jersey corporation (the *"Company"*), and each of the institutions which is a signatory tothis Second Amendment (collectively, the *Noteholders"*).  

Recitals:

            A. The Company and each of the Noteholders haveheretofore 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 NoteAgreement 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) $33,000,000aggregateprincipal amount of its 7.29% Senior Notes, Series D, due August 20,2011 (the *"Series D Notes"*, theSeries A Notes, Series B Notes, Series C Notes and Series DNotes are hereinafter collectively referred to as the *"Notes"*). 

            B. The Company and the Noteholders now desire toamend the Note Agreement in the respects, but only in the respects, hereinafterset forth.

            C. Capitalized terms used herein shall have therespective meanings ascribed thereto in the Note Agreement unless hereindefined or the context shall otherwise require.

            D. All requirements of law have beenfully complied with and all other acts and things necessary to make this SecondAmendment a valid, legal and binding instrument according to its terms for thepurposes herein expressed have been done or performed.

Now, therefore,upon the full and complete satisfaction of the conditions precedent to theeffectiveness of this Second Amendment set forth in Section 3 hereof, andin consideration of good and valuable consideration the receipt and sufficiencyof which is hereby acknowledged, the Company and the Noteholders do herebyagree 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 inits entirety to read as follows:

"*Section 9.9. Subsidiary Guarantors*. Subject to Section  9.10 hereof, the Company will cause eachSubsidiary (whether existing or newly acquired) that delivers a Guaranty, orotherwise becomes obligated in any manner (including, without limitation, as aco-obligor with the Company) (each, a *"BankGuaranty"*), to any Bank Lender with respect to any Indebtedness of theCompany outstanding under the Company Credit Agreement (or under anymodification, amendment, renewal or replacement thereof) (each such Subsidiary,a *"Subsidiary Guarantor"*) toconcurrently enter into a guaranty agreement, in formand substance satisfactory to the Required Holders (each, a *"Subsidiary Note Guaranty"*), pursuant towhich such Subsidiary Guarantor shall guarantee the prompt payment whendue (whether at maturity, by acceleration or otherwise) of the principal of allof the Notes and of the interest and the Make-Whole Amount, if any, thereon andthe full and prompt performance and compliance by the Company with each of itsother obligations under the Note Agreement and the Notes, and, concurrentlytherewith, (except in the case that such Subsidiary Guarantor is co-obligorwith the Company under the Company Credit Agreement (or under any modification,amendment, renewal or replacement thereof)) the Companyshall cause the Bank Lenders to enter into an intercreditor agreement with theholders of the Notes in form and substance reasonably satisfactory to the BankLenders and the Required Holders (the *"Section 9.9Intercreditor Agreement"*) with respect to the obligations of suchSubsidiary Guarantor to the Bank Lenders and the holders of the Notes providingfor, *inter alia,* the pro rata sharingof any proceeds received by the Bank Lenders or the holders of the Notes underany Bank Guaranty or Subsidiary Note Guaranty.  Within three Business Days after entering into the SubsidiaryNote Guaranty and any Section 9.9 Intercreditor Agreement, the Companyshall deliver to each of the holders of the Notes the following items:

(a) an executed counterpart of such Subsidiary NoteGuaranty;

(b) an executed counterpart of any Section 9.9Intercreditor Agreement;

(c) a certificate signed by the President, a VicePresident or another authorized officer of such Subsidiary Guarantor makingrepresentations and warranties to the effect of those contained inSections 5.1, 5.2, 5.6 and 5.7, but with respect to such SubsidiaryGuarantor and the Subsidiary Note Guaranty, as applicable;

(d) such documents and evidence with respect tosuch Subsidiary Guarantor as any holder of the Notes may reasonably request inorder to establish the existence and good standing of such Subsidiary Guarantorand the authorization of the transactions contemplated by the Subsidiary NoteGuaranty; and

(e) an opinion of internal legal counsel to theCompany to the effect that the Subsidiary Note Guaranty has been dulyauthorized, executed and delivered and constitutes the legal, valid and bindingcontract and agreement of such Subsidiary Guarantor enforceable in accordancewith its terms, except as an enforcement of such terms may be limited bybankruptcy, insolvency, reorganization, moratorium and similar laws affectingthe enforcement of creditors' rights generally and by general equitableprinciples.

     *Section 1.2. Amendment to Section 10.6*.  Section 10.6 of the Note Agreementshall be and is hereby amended in its entirety to read as follows:

"*Section 10.6. Guaranties.*  The Companywill not, and will not permit any Restricted Subsidiary to, become or be liablein respect of any Guaranty, except (a) Guaranties by the Company whichconstitute Guaranties of obligations incurred by any Restricted Subsidiary incompliance with the provisions of this Agreement, (b) Guaranties existingon March 31, 2003 by NUI Capital Corp. of obligations of NUI EnergyBrokers under gas purchase and energy‐related contracts, whichobligations do not exceed $20,000,000 in the aggregate, and (c) any BankGuaranties."

     *Section 1.3. Amendment to Definition of "Guaranty".*  The definition of "Guaranty" in Schedule B of the Note Agreementis hereby amended by adding the following sentence at the end of suchdefinition:

For the purposes of all computations made under thisAgreement, a Guaranty in respect of any Indebtedness for borrowed money shallbe deemed to be in an amount equal to the outstanding principal amount of suchIndebtedness for borrowed money which has been guaranteed, and a Guaranty inrespect of any other obligation or liability or any divided shall be deemed tobe in an amount equal to the aggregate amount of such obligation or liabilityoutstanding or dividend declared.

     *Section 1.4. Amendment to Definitions.* The following defined terms as set forth in Schedule B to the NoteAgreement is hereby amended and restated in its entirety to read as follows:

*"IntercreditorAgreement"* means (a) any Section 9.9 Intercreditor Agreement, and(b) any other intercreditor agreement with theholders of the Notes in form and substance reasonably satisfactory to theRequired Holders with respect to any Indebtedness of a Subsidiary Guarantor tothe Bank Lenders and the holders of the Notes providing for, *inter alia,* the pro rata sharing of anyproceeds received by the Bank Lenders and the holders of the Notes from suchSubsidiary Guarantor with respect to such Indebtedness.

*"PriorityIndebtedness"* means the sum of (a) all Indebtedness of the Companysecured by Liens, plus (b) all Indebtedness of Restricted Subsidiaries(except (i) any Indebtedness held by the Company or any other RestrictedSubsidiary, (ii) at any time on or before May 31, 2003, Guarantiesexisting on March 31, 2003 of NUI Capital Corp. of obligations of NUIEnergy Brokers under gas purchase and energy-related contracts, whichobligations do not exceed $20,000,000 in the aggregate, and (iii) anyIndebtedness of any Restricted Subsidiary to the Bank Lenders to the extentthat (1) such Restricted Subsidiary has guaranteed the Notes pursuant to avalid and enforceable Subsidiary Note Guaranty in accordance with the terms andconditions of Section 9.9 hereof and (2) such Bank Lenders and theholders of the Notes have entered into a valid and enforceable IntercreditorAgreement with respect to such Indebtedness of such Restricted Subsidiary tosuch Bank Lenders and such holders).

     *Section 1.5.*       *Additional Definitions. *The following shall be added as newdefinitions in alphabetical order to Schedule B to the Note Agreement: 

*"Bank Lenders"*means the holders of any Indebtedness outstanding under the Company CreditAgreement, and any modification, amendment, renewal or replacement thereof(including any such modification, amendment, renewal or replacement thatresults 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 theCompany.

To induce the Noteholders to execute and deliver thisSecond Amendment (which representations shall survive the execution anddelivery of this Second Amendment), the Company represents and warrants to theNoteholders that:

        (a)       this Second Amendment has been dulyauthorized, executed and delivered by it and this Second Amendment constitutesthe legal, valid and binding obligation, contract and agreement of the Companyenforceable against it in accordance with its terms, except as enforcement maybe limited by bankruptcy, insolvency, reorganization, moratorium or similarlaws or equitable principles relating to or limiting creditors' rightsgenerally;

       (b)       the Note Agreement, as amended by thisSecond Amendment, constitutes the legal, valid and binding obligation, contractand agreement of the Company enforceable against it in accordance with itsterms, except as enforcement may be limited by bankruptcy, insolvency,reorganization, moratorium or similar laws or equitable principles relating toor limiting creditors' rights generally;

        (c)  the execution, delivery and performanceby the Company of this Second Amendment (i) has been duly authorized byall requisite corporate action and, if required, shareholder action,(ii) does not require the consent or approval of any governmental orregulatory body or agency, and (iii) will not (A) violate(1) any provision of law, statute, rule or regulation or its Certificateof Incorporation or bylaws, (2) any order of any court or any rule, regulationor order of any other agency or government binding upon it, or (3) anyprovision of any material indenture, agreement or other instrument to which itis 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 UtilitiesCredit Agreements, or (B) result in a breach or constitute (alone or withdue notice or lapse of time or both) a default under any indenture, agreementor other instrument referred to in clause (iii)(A)(3) of thisSection 2(c);

       (d)   as of the date hereof and after giving effectto this Second Amendment, no Default or Event of Default has occurred which iscontinuing; and

        (e)  all the representations and warrantiescontained in Section 5 of the Note Agreement are true and correct in allmaterial respects with the same force and effect as if made by the Company onand as of the date hereof.

Section 3.        Conditions to Effectiveness of ThisSecond Amendment.

            ThisSecond Amendment shall not become effective until, and shall become effectivewhen, 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 outstandingprincipal amount of the Notes, shall have been delivered to the Noteholders;

       (b) the representations and warranties of theCompany set forth in Section 2 hereof are true and correct on and withrespect to the date hereof;

      (c) the Company shall have paid all reasonablecosts and expenses incurred by the Noteholders in connection with theconsummation of the transactions contemplated by this Second Amendment,including, without limitation, the reasonable fees and expenses of Chapman andCutler, special counsel to the Noteholders, which are reflected in statementsof such counsel rendered on or prior to the effective date of this SecondAmendment;

Upon receipt of all of the foregoing, this SecondAmendment shall become effective.

Section 4.        Miscellaneous.

     *Section 4.1.*  *Construction*.  This Second Amendment shall be construed inconnection with and as part of the Note Agreement, and except as modified andexpressly amended by this Second Amendment, all terms, conditions and covenantscontained in the Note Agreement and the Notes are hereby ratified and shall beand remain in full force and effect.

     *Section 4.2. Notices*.  Any and all notices, requests, certificatesand other instruments executed and delivered after the execution and deliveryof this Second Amendment may refer to the Note Agreement without makingspecific reference to this Second Amendment but nevertheless all suchreferences shall include this Second Amendment unless the context otherwiserequires.

     *Section 4.3. Captions*.  The descriptive headings of the variousSections or parts of this Second Amendment are for convenience only and shallnot affect the meaning or construction of any of the provisions hereof.

     *Section 4.4.* *Governing Law*.  This Second Amendment shall be construed andenforced in accordance with, and the rights of the parties shall be governedby, the law of the State of New York excluding choice-of-lawprinciples of the law of such State that would require the application of thelaws of a jurisdiction other than such State.

     *Section 4.5.Counterparts*.  The execution hereof by you shall constitute a contract betweenus for the uses and purposes hereinabove set forth, and this Second Amendmentmay be executed in any number of counterparts, each executed counterpartconstituting an original, but all together only one agreement.

NUI Corporation

By:

Its:

** **

** **

**Accepted and Agreed to:**

** **AIG Life Insurance Company

By:  AIG Global Investment Corp., investmentadvisor

By:________ 

Name:___ 

Title:____ 

SunAmerica Life Insurance Company

By:  AIG Global Investment Corp., investmentadvisor

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 LifeInsurance Company of America (formerly Provident Mutual Life InsuranceCompany)

By:________ 

Name:___ 

Title:____ 

** **

* *

            

**EXHIBIT A**

**Agreementsfor Borrowed Money**

(1) Credit Agreement, dated as ofFebruary 12, 2003, among the Company, the Financial Institutions PartyThereto, Fleet National Bank as the Administrative Agent, Citizens Bank ofMassachusetts and CIBC Inc., as Co-Syndication Agents and PNC Bank, NationalAssociation, as Documentation Agent.

(2) First Amendment to CreditAgreement dated March 31, 2003 among the Company, the lenders from time to timeparty thereto, Fleet National Bank as Agent for the Lenders, Citizens Bank ofMassachusetts and CIBC Inc., as Co-Syndication Agents and PNC Bank, NationalAssociation, as Documentation Agent.

(3) Guaranty dated February12, 2003, among the direct and indirect non-regulated domestic subsidiaries ofNUI Corporation and Fleet National Bank.

(4) Note dated February 12,2003 made by NUI Corporation in favor of Fleet National Bank in the principalamount of $9,871,794.90.

(5) Note dated February 12,2003 made by NUI Corporation in favor of Citizens Bank of Massachusetts in theprincipal 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 theprincipal 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 principalamount of $2,820,512.80.

(9) Swingline Note datedFebruary 12, 2003 made by NUI Corporation in favor of Fleet National Bank inthe principal amount of $7,500,000.

(10) Note Purchase Agreement between NUI Corporationand the Purchasers Listed Therein dated August 20, 2001, as amended by FirstAmendment and Waiver dated February 20, 2003 and by Second Amendment to NotePurchase Agreement dated April 1, 2003 ((A) $5 million 6.60% Series A SeniorNotes due August 20, 2006, (B) $15 million 6.884% Series B Senior Notes dueAugust 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 PartyThereto, Fleet National Bank as the Administrative Agent, Citizens Bank ofMassachusetts and CIBC Inc., as Co-Syndication Agents and PNC Bank, NationalAssociation, as Documentation Agent, dated as of February 12, 2003.  

(12)Master Equipment Lease Agreement between NUI Corporation and Fleet CapitalCorporation dated October 15, 2001, as amended by Maintenance and ReturnAmendment dated July 8, 2002 and Self Insurance Amendment dated July 8, 2002.

(13)Loan Agreement between New Jersey Economic Development Authority and NUICorporation (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 FirstUnion National Bank dated December 1, 1998.

(15)Loan Agreement between New Jersey Economic Development Authority and NUICorporation (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 Bankof New York dated June 1, 1997.

(17)Loan Agreement between New Jersey Economic Development Authority and NUICorporation (post reorganization, NUI Utilities, Inc.) dated June 1, 1996 ($39million, variable rate bonds, due June 1, 2026).

(18)Trust Indenture between New Jersey Economic Authority and First Union NationalBank 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 andAmendment No. 2 dated June 3, 2002.

(20)Remarketing Agreement between NUI Corporation (post reorganization, NUIUtilities, Inc.) and Morgan Stanley & Co. Incorporated dated June 12, 1996.

(21)Tax Regulatory Agreement between New Jersey Economic Development Authority andNUI Corporation (post reorganization, NUI Utilities, Inc.) dated June 12, 1996.

(22)Bond Purchase Agreement among New Jersey Economic Development Authority, NUICorporation (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 ($50million note due February 1, 2005). 

(24)Loan Agreement between New Jersey Economic Development Authority and NUICorporation (post reorganization, NUI Utilities, Inc.) dated July 15, 1994 ($46.5million, 6.35% bonds due October 1, 2022).

(25)Trust Indenture made by New Jersey Economic Development Authority to FirstFidelity National Association dated July 15, 1994.

(26)Loan Agreement between Brevard County, Florida and NUI Corporation (postreorganization, 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.

**CONFIRMATIONOF GUARANTY**

            Eachof the undersigned Guarantors hereby joins in the execution of the foregoingFirst Amendment to Credit Agreement, dated as of March 31, 2003 and effectiveas of March 31, 2003 (the "Amendment"), to which thisConfirmation of Guaranty is attached (1) to confirm its consent, to the extentrequired, to all of the transactions contemplated by the Amendment and (2) toconfirm 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 infull force and effect.  Capitalizedterms used herein without definition have the meanings assigned to them in theCredit Agreement, as amended.

Each of the undersigned Guarantors hereby agrees thatthe representations and warranties contained in the Credit Agreement and theother Loan Documents with respect to the undersigned are true and correct inall material respects on and as of the date hereof as though made at and as ofsuch date, exceptto the extent that such representations and warranties expressly relate to anearlier date.  Since the Closing Date, no event or circumstance hasoccurred or exists which could reasonably be expected to have Material AdverseEffect.  As of the date hereof and aftergiving effect to the Amendment, no Potential Default or Event of Default hasoccurred and is continuing.

**NUICAPITAL CORP.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**UTILITYBUSINESS SERVICES, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

*(Signature page to Confirmation of Guaranty)*

**NUIENERGY BROKERS, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**NUIENERGY SOLUTIONS, INC.**

By:  /s/ PETER E. MARICONDOTitle:  Treasurer

**NUIENVIRONMENTAL GROUP, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**NUIENERGY, INC.**

By:  /s/ PETER E. MARICONDOTitle:  Treasurer

**NUI INTERNATIONAL, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**NUITELECOM, INC.**

By:  /s/ PETER E. MARICONDOTitle:  Treasurer

* (Signaturepage to Confirmation of Guaranty)*

** **

** **

**NUI SERVICE, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**NUI SALES MANAGEMENT, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**T.I.C.ENTERPRISES, L.L.C.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**NUISTORAGE, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**NUISALTVILLE STORAGE, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**NUIRICHTON STORAGE, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

* (Signaturepage to Confirmation of Guaranty)*

**RICHTONGAS STORAGE CO., LLC**

By:  /s/ A. MARK ABRAMOVICTitle:  Manager

**NUIHUNGARY, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

**NUIUKRAINE, INC.**

By:  /s/ JAMES R. VAN HORNTitle:  Vice President &Secretary

* (Signaturepage to Confirmation of Guaranty)*