**EXHIBIT 10.2**

** **

** **

** **

**CREDIT AGREEMENT**

**Dated as of**

**February 12, 2003**

**By and Among**

**NUI UTILITIES, INC.,**

asthe Borrower,

**THE FINANCIAL INSTITUTIONS PARTY HERETO,**

asthe Lenders hereunder,

and

**FLEET NATIONAL BANK,**

asthe Administrative Agent,

**CITIZENSBANK OF MASSACHUSETTS**

and

**CIBCINC.,**

asCo-Syndication Agents,

and

**PNCBANK, NATIONAL ASSOCIATION,**

asDocumentation Agent

                                                                                                                        

**FLEET SECURITIES, INC.,**

asthe Sole Arranger and Syndication Agent

 

TABLEOF CONTENTS

TABLE OFCONTENTS

 

 
| 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

TABLEOF EXHIBITS

Name of Exhibit

Exhibit A                      PricingGrid

Exhibit B                      Formof Note

Exhibit C                      Formof Swingline Note

Exhibit D                      Formof Revolving Loan Request

Exhibit E                       Formof Swingline Loan Request

Exhibit F                       Formof Compliance Certificate

Exhibit G                      Formof Opinion of Counsel

Exhibit H                      Formof Assignment and Assumption Agreement

Exhibit I                        Formof Solvency Certificate

Exhibit J                       Formof Increase Request

 

Schedules

3.8       Plans

5.2       ExistingEncumbrances 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 definedbelow, the "Borrower"), the financial institutions listed onthe signature pages hereto, and each other financial institution which, fromtime to time, becomes a party hereto in accordance with Subsection 9.6a(individually, a "Lender" and collectively, the "Lenders"),**FLEET NATIONAL BANK**, asAdministrative 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**, asDocumentation Agent.

**RECITALS**:

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

WHEREAS, theLenders are willing, on the terms and subject to the conditions hereinafter setforth, to extend such Commitment and make such Loans to, and issue Letters ofCredit for the account of, the Borrower.

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

**ARTICLE 1. DEFINITIONS.**

**1.1**       **DefinedTerms**.  As used herein thefollowing terms shall have the meaning specified unless the context otherwiserequires:

 "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" meansas to any Person, any other Person (other than a Subsidiary) which, directly orindirectly, is in control of, is controlled by, or is under common controlwith, such Person.  For purposes of thisdefinition, "control" of a Person means the power, directly orindirectly, either to vote 10% or more of the securities having ordinary votingpower for the election of directors of such Person or (b) direct use or causethe direction of the management and the policies of such Person, whether bycontract or otherwise.

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

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

 "Agreement" meansthis Credit Agreement, together with the exhibits and schedules hereto and allextensions, renewals, amendments, modifications, substitutions and replacementshereto 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 annualizedrates (stated in terms of basis points) indicated on the pricing grid attachedhereto as "Exhibit A" and corresponding to the ratingsestablished by both S&P and Moody's applicable to the Borrower's SeniorRatings at such date of determination, provided, however, thatthe 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 theCommitments are utilized.  For thepurposes hereof, the Commitments shall be deemed to be utilized by theaggregate amount of Loans and/or Letters of Credit then outstanding.

Forpurposes of determining the Applicable Base 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 Base Rate Margin" means, foreach Base Rate Portion, a rate per annum equal to the annualized rates (statedin terms of basis points) indicated on the pricing grid attached hereto as ExhibitA and corresponding to the ratings established by Moody's applicable to theBorrower's Senior Ratings at such date of determination, and (iv)notwithstanding anything herein to the contrary, if at any time during the termof 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.  

"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 ratingsestablished by both S&P and Moody's applicable to the Borrower's SeniorRatings at such date of determination, provided, however, thatthe 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 theCommitments are utilized.  For thepurposes hereof, the Commitments shall be deemed to be utilized by theaggregate amount of Loans and/or Letters of Credit then outstanding. 

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 attached hereto as ExhibitA and corresponding to the ratings established by Moody's applicable to theBorrower's Senior Ratings at such date of determination, and (iv)notwithstanding anything herein to the contrary, if at any time during the termof this Agreement, the Borrower shall not have a Senior Rating assigned byMoody's, the "Applicable Euro-Rate Margin" means, for each Euro-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.

 "Application" meansan 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 AssumptionAgreement" means an Assignment and Assumption Agreement in the form ofExhibit "H" hereto.

"Authorized Officer"means the President, any Vice President, the Chief Financial Officer, theTreasurer or the principal accounting officer of the Borrower.  The Agent and the Lenders shall be entitledto rely on the incumbency certificate delivered pursuant to Section 6.2 for theinitial designation of each Authorized Officer.  Additions or deletions to the list of Authorized Officers may bemade by the Borrower at any time by delivering to the Agent for redelivery toeach 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 ofCredit then outstanding.

"Bank Indebtedness"means the liability of the Borrower to pay the Loans, the ReimbursementObligations, the Facility Fee, other Fees, any other fees or amountsoutstanding in connection with Letters of Credit, interest on any of theforegoing, and the other amounts, including, without limitation, expenses, duehereunder.

"Base Rate" means,for any day, the higher of (i) the sum of (A) the Federal Funds Effective Ratefor 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 theAdjusted Base Rate.

"Borrower" meansNUI Utilities, Inc., a New Jersey corporation and its successors and permittedassigns.

"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 whichcommercial banks are authorized or required to be closed for business inBoston, Massachusetts or New York, New York and, if the applicable Business Dayrelates to any extension of credit to which the Euro-Rate Option applies, suchday must also be a day on which dealings are carried on in the London interbankmarket.

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

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

"Code" means theInternal Revenue Code of 1986, as amended from time to time, or any successorlegislation thereto, together with all regulations promulgated and rulingsissued thereunder.

"Commitment" means,as to each Lender, the obligation of such Lender to make Loans available to theBorrower pursuant to Section 2.1 and/or issue or participate in Letters ofCredit issued on behalf of the Borrower pursuant to Section 2.14 in anaggregate principal amount and/or face amount at any one time outstanding notto exceed the amount set opposite such Lender's name on the signature pageshereto (as such amount may change from time to time pursuant to the termshereof, or, in the case of a Purchasing Lender, in its Assignment andAssumption Agreement) and, as to all Lenders, the obligation of the Lenders tomake Loans available to the Borrower and/or issue or participate in Letters ofCredit issued on behalf of the Borrower in an aggregate amount equal to theCommitments of all of the Lenders.

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

"Commitment Period"means the period from and including the Closing Date to but not including theTermination Date, or such earlier date on which the Commitment shall terminateas 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 suchPersons in accordance with GAAP.

"Consolidated Fixed Charges"means for any period the sum of (a) Consolidated Interest Expense; (b) requiredamortization of Consolidated Total Indebtedness, determined on a Consolidatedbasis in accordance with GAAP, for the period involved and discount or premiumrelating to any such Consolidated Total Indebtedness for any period involved,whether expensed or capitalized; and (c) Consolidated Lease Expense, determinedwithout duplication of items included in Consolidation Interest Expense, of theBorrower.

"Consolidated InterestExpense" means for any period the amount of interest expense, bothexpensed and capitalized, of the Borrower, determined on a Consolidated basisin accordance with GAAP, for such period on the aggregate principal amount ofits Indebtedness, determined on a Consolidated basis in accordance with GAAP.

"Consolidated Lease Expense"means for any period, the aggregate amount of fixed and contingent rentalspayable by the Borrower, determined on a Consolidated basis in accordance withGAAP, 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 Consolidatedbasis 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. accountingrules and regulations, in each case to the extent reasonably acceptable to theAgent, including without limitation due to the implementation, effective as ofOctober 25, 2002, of EITF 02-03 ("Issues Involved in Accounting forDerivative Contracts Held for Trading Purposes and Contracts Involved in EnergyTrading and Risk Management Activities"), the effects of which EITFimplementation 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 balancesheets determined on a Consolidated basis in accordance with GAAP, consistentlyapplied.

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

"Consolidated TotalIndebtedness" means all Indebtedness of the Borrower, determined on aConsolidated 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 retentionagreement right (including any right under a lease which, in accordance withGAAP, would be treated as a capitalized item) in, upon or against any asset ofany Person.

"EnvironmentalLaw(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, stateor local governmental authority relating to the environment or the release ofany materials into the environment, whether now in existence or hereafterenacted, agreed to, issued or otherwise becoming effective.

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

"ERISAAffiliate" means, as of any date, any member of a controlled group ofcorporations of which the Borrower is a member, which, in any event togetherwith the Borrower are treated as of such date as a single employer underSection 414 of the Code.

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

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

Euro-Rate= Euro Base Rate

                       1.00- Euro-Rate Reserve Percentage 

"Euro-RateOption" means the interest rate option described in item (ii) ofSubsection 2.2b.

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

"Euro-Rate ReservePercentage" means the maximum aggregate reserve requirement (includingbasic supplemental, marginal and other reserves) which is imposed on memberbanks of the Federal Reserve System against Euro currency Liabilities asdefined in Regulation D.  

"ExistingCredit Agreement" means the Credit Agreement, dated as of December 19,2001, among the Borrower, each of the lenders as specified therein, FleetNational Bank, as agent, PNC Bank National Association, as syndication agentand 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 basispoints) indicated on the pricing grid attached hereto as Exhibit "A"and corresponding to the ratings established by both S&P and Moody'sapplicable to the Borrower's Senior Ratings at such date of determination.  For purposes of determining the Facility FeeRate: (i) if the Senior Ratings established by Moody's and S&P shalldiffer, the pricing shall be based on the higher of the two Senior Ratingsunless one of the Senior Ratings is two or more levels lower than the other, inwhich case the pricing shall be determined by reference to the level next abovethat of the lower of the two Senior Ratings, (ii) if any Senior Ratingestablished by Moody's or S&P shall be changed (other than as a result of achange in the rating system of either Moody's or S&P), such change shall beeffective as of the date on which such change is first announced by the ratingagency making such change, (iii) notwithstanding anything herein to thecontrary, if at any time during the term of this Agreement the Borrower shallnot 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 interms of basis points) that correspond 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 "Facility Fee Rate" means a rate per annum equal to theannualized rates referenced above (stated in terms of basis points) thatcorrespond to the ratings established by S&P applicable to the Borrower'sSenior Ratings at such date of determination.

"Federal Funds EffectiveRate" means, for any day, the rate per annum (based on a year of 360days and the actual days elapsed and rounded upward to the nearest 1/100th of1%) announced by the Federal Reserve Bank of New York (or any successor) onsuch day as being the weighted average of the rates on overnight federal fundstransactions arranged by federal funds brokers on the previous trading day, ascomputed and announced by the Federal Reserve Bank of New York (or anysuccessor) in substantially the same manner as such Federal Reserve Bank of NewYork 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 announcesuch rate on any day, the "Federal Funds Effective Rate" for such dayshall be the Federal Funds Effective Rate for the last day for which such ratewas announced.

"Fee Letter" hasthe meaning set forth in Section 2.4b.

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

"FiscalQuarter" means the three-month fiscal period of the Borrower beginningon each October 1, January 1, April 1 and July 1 and ending on the succeedingDecember 31, March 31, June 30 and September 30.

"FiscalYear" means each fiscal period of the Borrower beginning October 1 andending on the succeeding September 30.

"GAAP"means generally accepted accounting principles which shall include, but not belimited to, the official interpretations thereof as defined by the FinancialAccounting Standards Board, its predecessors and its successors consistent withthose utilized in preparing the audited financial statements referred to inSection 4.2.

"GovernmentalAuthority" means the government of the United States or the governmentof any state or locality therein, any political subdivision or anygovernmental, quasi-governmental, judicial, public or statutoryinstrumentality, authority, body or entity, or other regulatory bureau,authority, body or entity of the United States or any state or localitytherein, including the Federal Deposit Insurance Corporation, the Office of theComptroller of the Currency and the Board of Governors of the Federal ReserveSystem, and any central bank of any other country or any comparable authority.

"GovernmentalRule" 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, bywhich a Person undertakes to guaranty, assume or remain liable for the paymentor 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) agreementsto maintain the capital, working capital solvency or general financial conditionof a second Person and (vi) agreements for the purchase or other acquisition ofproducts, materials, supplies or services, if in any case payment therefor isto be made regardless of the non-delivery of such products, materials orsupplies or the non-furnishing of such services.

"HedgingObligations" means, with respect to any Person, all liabilities ofsuch Person under interest rate swap agreements, interest rate cap agreementsand interest rate collar agreements, and all other agreements or arrangementsdesigned to protect such Person against fluctuations in interest rates orcurrency 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 suchPerson for borrowed money (other than trade accounts payable arising in theordinary course of business consistent with past practices), direct orcontingent, whether evidenced by a bond, note, debenture or otherwise, allpreferred equity interests issued by such Person and which by the terms thereofcould be (at the request of the holders thereof or otherwise) subject tomandatory sinking fund payments, redemption or other acceleration at any timeduring the period ending one year after the term of this Agreement, and allobligations and liabilities in the nature of a capitalized lease obligation,deferred purchase price arrangement (other than trade accounts payable in the ordinarycourse of business consistent with past practices), title retention device,letter of credit obligation, Reimbursement Obligation, Hedging Obligation,reimbursement agreement, Guaranty, obligations relating to securitizationtransactions, synthetic lease transactions and sale-leaseback transactions.

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

"IssuingBank" means Fleet National Bank, in its capacity as issuer of anyLetter of Credit.

"L/CCommitment" means $25,000,000.

"L/CFee Payment Date" means the last day of each March, June, Septemberand December.

"L/CObligations" means at any time, an amount equal to the sum of (a) theaggregate undrawn and unexpired face amount of the then outstanding Letters ofCredit and (b) the aggregate amount of drawings under Letters of Credit whichhave not then been reimbursed pursuant to Section 2.14e.

"L/CParticipants" means the collective reference to the Lenders other thanthe 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 Section2.1a or by the Swingline Lender pursuant to Section 2.1f.

"LoanAccount" means the loan account maintained by the Agent as more fullydescribed in Section 2.11.

"LoanDocuments" means collectively this Agreement, the Notes, theApplications and any other documents furnished in connection herewith.

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

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

"MarginStock" is defined herein as defined in Regulation U.

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

"MaterialAdverse Change" means any set of circumstances or events which (a) hasor could reasonably be expected to have any material adverse effect upon thevalidity or enforceability of this Agreement or any of the other LoanDocuments, (b) is or could reasonably be expected to be material and adverse tothe business, properties, assets, financial condition, results of operations orprospects of the Borrower, (c) impairs materially or could reasonably beexpected to impair materially the ability of the Borrower to duly andpunctually pay its Indebtedness, or (d) impairs materially or could reasonablybe expected to impair materially the ability of the Agent or any of the Lendersto enforce their legal remedies pursuant to this Agreement or any other LoanDocument.

"MaterialAdverse Effect" means, with respect to any Person relative to anyoccurrence of whatever nature (including, without limitation, any adversedetermination in any litigation, arbitration or governmental investigation orproceeding), an effect that results in or causes or has a reasonable likelihoodof resulting in or causing a Material Adverse Change.

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

"NegotiatedSwingline Rate" means, as applicable to any Swingline Loan, the rateper annum as determined by the Swingline Lender and the Borrower on anyapplicable interest determination date.

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

"Notes"means any one or all of the several promissory notes of the Borrower evidencingIndebtedness of the Borrower under this Agreement which notes are substantiallyin the form of Exhibit "B" to this Agreement, including theSwingline 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.

"NUICorporation Credit Agreement" means the Credit Agreement, dated as ofthe 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 aParticipation in its Loan.

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

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

"PermittedAcquisition" an acquisition of assets by the Borrower, subject to thefulfillment of the following conditions:

(i)   the Total Purchase Price for such acquisition,together with the aggregate Total Purchase Price paid by the Borrower and NUICorporation and its Subsidiaries (other than the Borrower) for all other suchacquisitions consummated after the date hereof, shall not exceed an amountequal to the lesser of (A) $30,000,000 or (B) 25% of Market Capitalizationdetermined as of the close of business on the day prior to the day on which theapplicable acquisition or other similar agreement is executed and delivered bythe Borrower.  For purposes of thisdefinition, "Market Capitalization" means, on any date ofdetermination, the product of (i) the number of issued and outstanding sharesof the common stock of NUI Corporation on such day times (ii) the closing saleprice of such common stock on such day, as appearing in any regularly publishedreporting or quotation service or, if there is no such closing sale price, themarket value of such common stock as reasonably determined by the Agent;

(ii)  With respect to each acquisition, Target EBITDAattributable to the assets of the Target being acquired for its most recentlyended fiscal year shall not be less than $1.00;

(iii)With respect to each acquisition, after givingeffect 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 proforma basis as of the end of and for theperiod of four Fiscal Quarters most recently ended prior to the date of suchacquisition; 

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

(v) No Potential Default or Event of Default shallhave occurred and be continuing or reasonably be expected to result from suchacquisition, after giving effect thereto and Indebtedness incurred or assumedin connection therewith. 

"PermittedEncumbrance" 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 payableor if they can thereafter be paid without penalty or are being contested ingood faith by appropriate proceedings diligently conducted and with respect towhich adequate reserves are maintained on the books of such Person inconformity with GAAP;

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

(iii) Encumbrances arising out of judgments orawards against such Person but only to the extent that the creation of any suchEncumbrance shall not be an event or condition which, with or without notice orlapse of time or both, would cause the Borrower to be in violation of Section7.7;

(iv) Mechanics', carriers', workers',repairmen's and other similar statutory Encumbrances incurred in the ordinarycourse of such Person's business, so long as the obligation secured is notoverdue or, if overdue, is being contested in good faith by appropriate actionsor proceedings diligently conducted;

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

(vi) Encumbrances listed on Schedule 5.2,securing Indebtedness permitted by Section 5.13(c); provided that nosuch Encumbrance is amended after the date of this Agreement to cover anyadditional property or to secure additional Indebtedness;

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

(viii) Encumbrances securing (a) thenon-delinquent performance of bids, trade contracts (other than for borrowedmoney), leases or statutory obligations, (b) contingent obligations on suretyand appeal bonds, and (c) other non-delinquent obligations of a like nature; ineach case, incurred in the ordinary course of business, provided all suchEncumbrances in the aggregate would not (even if enforced) cause a MaterialAdverse Effect on the Borrower; and

(ix)  Encumbrances securing Indebtedness ofthe Borrower permitted by Section 5.13(b) incurred to finance the purchase ofnew fixed or capital assets (including pursuant to capital leases), providedthat (1) such Encumbrances shall be created substantially simultaneously withthe acquisition of such fixed or capital assets, (2) such Encumbrances do notat any time encumber any property other than the property financed by suchIndebtedness, and (3) the Encumbrances are not modified to secure otherIndebtedness and the amount of Indebtedness secured thereby is not increased.

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

(xi) Existing Encumbrances on the property orassets acquired in a Permitted Acquisition securing Indebtedness of the type permittedby Section 5.13(b), provided that (1) such Encumbrance existed prior tosuch Permitted Acquisition, (2) any such Encumbrances do not by their termscover property or assets other than those acquired in the PermittedAcquisition, and (3) any such Encumbrances do not by their terms secureIndebtedness 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 existin connection with any securitization transaction permitted under Section5.13(h)(2), provided such Encumbrances relate solely to the applicablesecuritization receivables actually sold, contributed, financed or otherwiseconveyed or pledged pursuant to such securitization transaction.

"PermittedInvestments" means

(a)       marketable direct obligations issued orunconditionally guaranteed by the United States of America or issued by anyagency thereof and backed by the full faith and credit of the United States ofAmerica; 

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

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

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

*provided* in each case, that such obligations arepayable in Dollars and such Permitted Investments by the Borrower are inaccordance with Governmental Rules.

"PermittedTransferee" has the meaning given it in Section 7.10.

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

"Plan"means an employee pension benefit plan (other than a multiemployer plan) whichis maintained by the Borrower or any ERISA Affiliate for employees of theBorrower or any ERISA Affiliate and which is covered by Title IV of ERISA orsubject to the minimum funding standards under Section 302 of ERISA and Section412 of the Code.

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

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

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

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

"PurchasingLender" has the meaning given it in Subsection 9.6a.

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

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

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

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

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

"Reimbursement Obligation"means the obligation of the Borrower to reimburse the Issuing Bank pursuant toSection 2.14(e) for amounts drawn under Letters of Credit.

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

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

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

"RevolvingCredit" has the meaning assigned to it in Section 2.1, as the same maybe reduced pursuant to Section 2.10 and 7.11.

"RevolvingExtensions of Credit" means as to any Lender at any time, an amountequal to the sum of (a) all Loans made by such Lender, (b) its SwinglineExposure and (c) such Lender's Commitment Percentage of the L/C Obligationsthen outstanding.

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

"SeniorRatings" means, with respect to any Person, the long term seniorunsecured public debt ratings in effect from time to time as assigned byMoody's and S&P, as the case may be.

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

"Swingline Exposure"means at any time, in respect of any Lender, an amount equal to the aggregateprincipal 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 Loanshereunder, and its successors in such capacity. 

"Swingline Loan"means any Loan that, at any time, bears interest at a rate based upon theNegotiated 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 ofwhich are proposed to be acquired in connection with a Permitted Acquisition.

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

"TerminationDate" means February 11, 2004, unless earlier terminated in accordancewith the terms hereof.

"TerminationProceedings" means any action taken by the PBGC under ERISA toterminate any plan.

"TotalCommitment" means the aggregate amount of the Commitments of allLenders, as in effect from time to time. 

"Total Purchase Price" means the "purchase price" for any acquisitionincluding, without limitation, but without duplication, (a) all cash payable bythe Borrower to the seller or affiliate of the seller at the closing of theacquisition; (b) all Indebtedness incurred by the Borrower in favor of anyseller or affiliate of any seller; (c) all Indebtedness and other liabilitiesof or related to the Target that are assumed by the Borrower, or subject towhich the acquired assets are acquired, or (in the case of an equity securitypurchase or merger) that remain unpaid at the closing of the acquisition; and(d) the maximum amount of all contingent future cash paymentsor other cash consideration payable within the 12 month period following theclosing of the acquisition and not otherwise described in this definition,including without limitation cash "earn-out" payments and cashamounts payable upon disposition of the acquired business (unless the RequiredLenders shall otherwise agree), but specifically excluding any equitysecurities of the Borrower and warrants, options, and other rights to acquireequity securities of the Borrower issued at the closing of theacquisition.  For purposes of clause (d)of the preceding sentence, the maximum amount of any payment or otherconsideration specified therein shall be the maximum amount provided for in therelevant agreement, or, if no maximum amount is so provided, the amountreasonably estimated by Borrower on the basis of assumptions and calculationsprovided in writing to the Agent and approved by it.  Such assumptions shall include reasonable projections of anymeasure of financial or other performance that enters into the calculation ofthe amount of any such payment or other consideration but shall not include anyassumption that any other future event that is a condition to such payment orconsideration (such as the later disposition of the acquired business or apublic or private offering of securities) will not occur. 

"TotalRevolving Extensions of Credit" means, at any time, the aggregateamount of the Revolving Extensions of Credit of the Lenders outstanding at suchtime.

"TransferEffective Date" has the meaning given it in each respective Assignmentand Assumption Agreement.

"TransferorLender" has the meaning given it in Subsection 9.6a.

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

**1.2**       **GAAPDefinitions**.** **Accounting terms used herein but notdefined herein shall have the meanings ascribed to them under GAAP consistent withthose utilized in preparing the audited financial statements referred to inSection 4.2.

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

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

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

**ARTICLE II.  THE****LOANS**

**2.1**       **TheRevolving****Credit**

**2.1a**     **Loans**.  

(i)         Subject to the terms and conditionshereof and relying upon the representations and warranties herein set forth,each Lender severally agrees to make Loans to the Borrower at any time fromtime to time on or after the date hereof to, but not including, the TerminationDate, provided that the aggregate principal amount of each Lender'sLoans outstanding hereunder to the Borrower, when added to such Lender'sCommitment Percentage of the then outstanding L/C Obligations, shall not exceedat any one time the amount equal to such Lender's Commitment Percentage of theTotal Commitments then in effect and provided, further, that noLoans shall be made if it would cause the Total Revolving Extensions of Creditto exceed the Total Commitments (the "Revolving Credit").  Within such limits of time and amount andsubject to the other provisions of this Agreement, the Borrower may borrow,repay and reborrow pursuant to this Section 2.1a. The aggregate amount of theCommitments on the Closing Date is $96,923,076.90.  All Loans outstanding on the Termination Date shall become dueand payable in full on such date.  

(ii)        Subject to the terms in this Section2.1(ii), the Borrower may, at its sole expense and effort after consulting withthe Agent, request: (a) one or more Lenders reasonably acceptable to the Agentto increase (in the sole and absolute discretion of each such Lender) theamount of their respective Commitments and/or (b) one or more other lendinginstitutions acceptable to the Agent (each, a "New Lender") tobecome "Lenders" and extend Commitments hereunder (each such Lenderand each New Lender being herein referred to as a "Proposed Lender").  To request an increase pursuant to thisSection 2.1a(ii), the Borrower shall submit to the Agent an Increase Request,in the form annexed hereto as Exhibit "J", signed by theBorrower, which shall be irrevocable and shall specify, as the case maybe:  (A) each such Lender and the amountof the proposed increase in its Commitment, and/or (B) the proposed Commitmentfor such New Lender.  Promptly followingreceipt of an Increase Request, the Agent shall advise each Lender of thedetails thereof.  If one or more of suchProposed Lenders shall have unconditionally agreed to such Increase Request ina writing delivered to the Borrower and the Agent (each such existing Lenderand New Lender being hereinafter referred to as an "Incremental Lender"),then:  (1) each such Incremental Lenderwhich shall then be an existing Lender shall have its Commitment increased bythe amount set forth in such Increase Request, and (2) each such New Lendershall be and become a "Lender" hereunder having a Commitment equal tothe 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 orEvent of Default shall or would exist, (II) each such Incremental Lender shallhave executed and delivered to the Agent, a supplement to this Agreementproviding for its increased Commitment or its Commitment, as applicable, inform approved by the Agent, (III) each such Increase Request shall be in anaggregate minimum amount of $5,000,000 or an integral multiple of $1,000,000 inexcess thereof, (IV) the Commitment extended by any such Incremental Lenderwhich is a New Lender shall be in a minimum amount of $5,000,000 or an integralmultiple of $1,000,00 in excess thereof, (V) the principal amount ofIndebtedness incurred by the Borrower under the Additional Bank Line (and,without duplication, any corresponding commitments to extend credit to theBorrower) pursuant to Section 5.13(h)(1) shall be repaid out of additionalLoans hereunder and permanently reduced by the amount the Total Commitmenthereunder is increased by such Increase Request on the date such IncreaseRequest is effective, (VI) after giving effect to the Increase Request, theTotal Commitment under this Agreement, together with the aggregate principalamount of Indebtedness incurred by the Borrower (and, without duplication, anycorresponding commitments to extend credit to the Borrower) pursuant to Section5.13(h)(1) and 5.13(h)(2), shall not exceed $141,923,076.90, and (VII) immediately after givingeffect to the Increase Request, the Total Commitment of the Borrowerunder this Agreement, together with (a) the "Total Commitment" forNUI Corporation under the NUI Corporation Credit Agreement and (b) theaggregate principal amount of Indebtedness incurred by the Borrower (and,without duplication, any corresponding commitments to extend credit to theBorrower) 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 theaggregate amount of the Commitments under this Section 2.1a(ii), eachIncremental Lender shall, to the extent necessary, purchase from each otherLender, and each other Lender shall sell to each Incremental Lender, in eachcase at par and without representation, warranty, or recourse (in accordancewith and subject to the restrictions contained in Section 9.6), such principalamount of the Revolving Extensions of Credit of such other Lender, togetherwith all accrued and unpaid interest thereon, as will result, after givingeffect to such transaction, in each Lender's Commitment Percentage of RevolvingExtensions of Credit outstanding being equal to such Lender's CommitmentPercentage of all Revolving Extensions of Credit, provided that each suchassignor Lender shall have received (to the extent of the interests, rights andobligations assigned) payment of the outstanding principal amount of its Loans,accrued interest thereon, accrued fees, commissions and all other amountspayable to it under the Loan Documents from the applicable assignee Lenders (tothe extent of such outstanding principal and accrued interest, fees andcommissions) or the Borrower (in the case of all other amounts).

**2.1b**     **Commitmentof Each Lender**.  Each Lenderagrees, for itself only, and subject to the terms and conditions of thisAgreement, to make Loans to the Borrower from time to time not to exceed anaggregate principal amount at any one time outstanding equal to the amount ofits respective Commitment Percentage of the Revolving Credit.  The obligations of each Lender hereunder areseveral.  The failure of any Lender toperform its obligations hereunder shall not affect the obligations of theBorrower, or any other Lender, to any other party nor shall the Borrower, orany other Lender, be liable for the failure of such Lender to perform itsobligations hereunder.  The Lendersshall have no obligation to make Loans hereunder on or after the TerminationDate.

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

**2.1d     LoanRequest**.  Exceptas otherwise provided herein, the Borrower may from time to time prior to theTermination Date request the Lenders to make Loans to the Borrower by thedelivery to the Agent, not later than 12:00 Noon. (eastern time) (i) threeBusiness Days prior to the proposed Borrowing Date with respect to the makingof Loans to which the Euro-Rate Option applies for any Loans and (ii) oneBusiness Day prior to the proposed Borrowing Date with respect to the making ofa Loan to which the Base Rate Option applies of a duly completed requesttherefor substantially in the form of Exhibit "D" hereto or arequest by telephone immediately confirmed in writing by letter, facsimile orelectronic transmission in such form (each, a "Loan Request"),it being understood that the Agent may rely on the authority of any personmaking such a telephonic request without the necessity of receipt of such writtenconfirmation.  Each Loan Request shallbe irrevocable and shall specify (i) the proposed Borrowing Date; (ii) theaggregate amount of the proposed Loans to be made on such Borrowing Date, whichamount, as to Base Rate Portions, shall be in integral multiples of $100,000and not less than $500,000 and, as to Euro-Rate Portions, shall be in integralmultiples of $100,000 and not less than $1,000,000; (iii) whether the Euro-RateOption or the Base Rate Option shall apply to the proposed Loans to be made onsuch Borrowing Date; and (iv) in the case of Loans to which the Euro-RateOption applies, an appropriate Interest Period for each Euro-Rate Portion ofthe Loans to be made on such Borrowing Date.

**2.1e     MakingLoans**.  TheAgent shall, promptly after receipt by it of a Loan Request pursuant to Section2.1d (but not later than 3:00 P.M. (eastern time) one Business Day precedingany Borrowing Date for Loans bearing interest at the Base Rate Option and 2:00P.M. (eastern time) on the third Business Day preceding any Borrowing Date forwhich any Portion of the Loans to be made on such Borrowing Date bears interestat the Euro-Rate Option), notify the Lenders of its receipt of such LoanRequest specifying: (i) the proposed Borrowing Date and the time and method ofdisbursement of such Loan; (ii) the amount and type of such Loan and theapplicable Euro-Rate Portions and Interest Periods (if any); and (iii) theapportionment among the Lenders of the Loans as determined by the Agent inaccordance with Section 2.1b hereof. Each Lender shall remit the principal amount of each Loan to the Agentsuch that the Agent is able to, and the Agent shall, to the extent the Lendershave made funds available to it for such purpose, fund such Loan to theBorrower in Dollars and immediately available funds in an account specified bythe Borrower to the Agent prior to 2:00 P.M. (eastern time) on the BorrowingDate, provided that if any Lender fails to remit such funds to the Agent in atimely manner, or any Lender fails to advise the Agent of its intention not tofund, then the Agent may elect in its sole discretion to fund with its ownfunds the Loan of such Lender on the Borrowing Date, subject to the provisionsof Section 8.3 below.

**2.1f      Swingline Loans**

(i)         During the CommitmentPeriod, the Swingline Lender agrees, on the terms and conditions setforth in this Agreement, to lend to the Borrower from time to time amounts thatwill not result in (x) the aggregate principal amount of outstanding SwinglineLoans at any time exceeding $15,000,000, or (y) the Total Revolving Extensionsof Credit at any time exceeding the Total Commitments.  Interest on such Swingline Loans shallaccrue for each day during the Interest Period applicable thereto at theNegotiated Swingline Rate.  Each SwinglineLoan 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 orupon demand.  Accrued interest on eachSwingline Loan shall be due and payable on the third Business Day following theend 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 than12:00 noon (eastern time) on the date of prepayment.  The Swingline Loans shall be evidenced by a promissory note inthe form of Exhibit "C" hereto (as amended, supplemented ormodified from time to time, the "Swingline Note").

(ii)        In order to request a Swingline Loan, the Borrower shallnotify the Agent of such request not later 12:00 noon, New York City time onthe day of a proposed Swingline Loan, specifying the proposed date (which shallbe a Business Day) and amount of the requested Swingline Loan (which shall bein a minimum amount of $100,000).  Suchrequest for a proposed Swingline Loan shall be made by delivery to the Agent ofa duly completed request therefore substantially in the form of Exhibit"E" hereto or a request by telephone immediately confirmed inwriting by letter, facsimile or electronic transmission in such form, it beingunderstood that the Swingline Lender may rely on the authority of any personmaking such a telephonic request without the necessity of receipt of suchwritten confirmation.  The Agent willpromptly advise the Swingline Lender of any such notice received from theBorrower. The Swingline Lender shall make each Swingline Loan available to theBorrower by means of a credit to a deposit account of the Borrower with theSwingline Lender (or, if so requested by Borrower, by means of wire transfer ofimmediately available funds to such other bank account of the Borrower asBorrower shall designate) by 3:00 p.m. (eastern time) on the requested date ofsuch Swingline Loan.  

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

** 2.2       Interest Rates, Interest Payment andCertain Provisions Relating to Interest and Fees.  **

**2.2a     Payments of Interest**.  The Borrower shall pay interest on the principal amount of theLoans from time to time outstanding hereunder, from the date thereof untilpayment in full, at the rates of interest determined pursuant to this Section2.2. The Borrower shall pay accrued interest on the unpaid principal balance ofthe Loans in arrears: (i) with respect to each Base Rate Portion, at theAdjusted Base Rate on the last Business Day of each Fiscal Quarter during theterm thereof, (ii) with respect to each Euro-Rate Portion, at the AdjustedEuro-Rate on the last day of each Interest Period as provided for in Subsection2.2(b)(ii) (provided, however, if the Interest Period chosen for a Euro-Rate Portionexceeds three  months, interest on thatEuro-Rate Portion shall be due and payable on the day which is (A) three monthsafter the first day of such Interest Period and (B) the last day of suchInterest Period), and (iii) with respect to all such Portions, at theapplicable interest rate (A) when due, at maturity, whether by acceleration orotherwise, 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, foreach day until due, at one or more rates of interest selected by the Borrowerfrom among the Options set forth below; it being understood that, subject tothe provisions of this Agreement, the Borrower may select different Options toapply simultaneously to different Portions of the Loans and may selectdifferent Interest Periods to apply simultaneously to different Portions of theEuro-Rate Portions of the Loans.

(i)         Base Rate Option: A rate of interest per annum (computed upon the basis of a year of 365 or366 days, as the case may be, and the actual number of days elapsed) equal tothe sum of (A) the Base Rate plus (B) the Applicable Base Rate Margin from timeto time in effect (the "Adjusted Base Rate").  The rate of interest per annum under theBase Rate Option shall be adjusted automatically, from time to time, upon eachchange in the Adjusted Base Rate.

(ii)        Euro-Rate Option: A rate of interest per annum (computed on the basis of a year of 360days and the actual number of days elapsed) equal to the sum of (A) theEuro-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 shallbe adjusted automatically, from time to time, effective upon each change in theApplicable Euro-Rate Margin resulting from an increase or decrease inutilization of the Commitments.

**2.2c     Interest Periods; Limitations onElections**.  At any time when the Borrower shall select,convert to or renew at the Euro-Rate Option with respect to all or any Portionof the outstanding Loans, it shall fix one or more Interest Periods duringwhich such Option(s) shall apply.  Allof the foregoing, however, is subject to the following:

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

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

In addition, elections by theBorrower of the Euro-Rate Option shall be subject to the following furtherlimitations:

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

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

**2.2d     Election, Conversion or Renewal ofInterest Rate Options**.  Elections of or conversions tothe Base Rate Option shall continue in effect until converted to the Euro-RateOption as hereinafter provided. Elections of, conversions to or renewals of the Euro-Rate Option shallexpire as to each Euro-Rate Portion at the expiration of the applicableInterest Period.

At any time, with respect toany Base Rate Portion, or at the expiration of the applicable Interest Period,with respect to any Euro-Rate Portion, the Borrower (subject to Subsection2.2c) may cause all or any part of the principal amount of such Portion to beconverted to and/or (in the case of a Euro-Rate Portion) to be renewed underthe Euro-Rate Option by notice to each of the Lenders as hereinafterprovided.  Such notice (i) shall beirrevocable; (ii) shall be given not later than 11:00 A.M. (eastern time) inthe case of a conversion to or renewal of, either in whole or in part, theEuro-Rate Option on the third Business Day prior to the proposed effective datefor the conversion or renewal and (iii) shall set forth:

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

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

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

At the expiration of eachInterest Period, any part (including the whole) of the principal amount of thecorresponding Euro-Rate Portion as to which no notice of conversion or renewalhas been received as provided above, shall automatically be converted to the BaseRate Option.

**2.2e     Notification of Election of an InterestRate Option**.  The Borrower, by an AuthorizedOfficer, shall notify the Agent of (i) each election or renewal of an Optionand each conversion from one Option to another, (ii) the Portion of the Loansthen outstanding to be allocated to each Option and (iii) where relevant, theInterest Periods applicable to each Option, by communication as provided for inthis Agreement.  Any such communicationmay be oral or written and if oral, it shall be followed immediately by writtenconfirmation 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 RatePortions of the Loans shall have become due and payable, whether byacceleration or otherwise and whether or not judgment has been entered againstthe Borrower thereon, all Base Rate Portions shall bear interest at a rate perannum which shall be two hundred (200) basis points (2%) per annum above therate otherwise in effect under the Base Rate Option, such interest rate tochange automatically from time to time, effective as of the effective date ofeach change in the Base Rate.  After theprincipal amount of all or any part of the Euro-Rate Portions of the Loans shallhave become due and payable, whether by acceleration or otherwise and whetheror not judgment has been entered against the Borrower thereon, all suchEuro-Rate Portions shall bear interest (i) until the end of the then currentInterest Period, at a rate per annum which shall be two hundred (200) basispoints (2%) per annum above the rate otherwise in effect under the Euro-RateOption, and (ii) at the end of the then current Interest Period, and thereafterat 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**     **YieldProtection**.  Notwithstandingother provisions of this Section 2.3:

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

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

(B)       change the basis of taxation of anyLender with respect to payments of principal or interest or other amounts duehereunder 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 incomeof such Lender); or

(C)       impose, modify or deem applicable anyreserve, special deposit or similar requirements against assets held by anyLender applicable to the Commitment or Loans made hereunder (other than suchrequirements which are included in the determination of the applicable rate ofinterest hereunder); or

(D)       impose upon any Lender any otherobligation or condition with respect to this Agreement, and the result of anyof the foregoing is to increase the cost to the affected Lender, reduce theincome receivable by the affected Lender, reduce the rate of return on theaffected Lender's capital, or impose any expenses upon the affected Lender, allwith respect to any of the Loans (or any portion thereof) or the issuance of orparticipation in any Letter of Credit by an amount which the affected Lenderreasonably deems material, and if the affected Lender is then demanding similarcompensation for such occurrences from other borrowers who are similarlysituated and who have a similar relationship with the affected Lender and fromwhich the affected Lender has the right to demand such compensation, then andin any such case:

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

(2)        the Borrower shall pay to the affectedLender, within 10 days following demand, such amount as will compensate theaffected Lender for such reduction in its rate of return; and

(3)        the Borrower may pay the affectedportion of the affected Lender's Loans in full without the payment of anyadditional amount, including prepayment penalties, other than amounts payableon account of the affected Lender's out-of-pocket losses (including fundingloss, if any, as provided in Section 2.9) which are not otherwise provided forin subparagraph (2) immediately above.

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

**2.3b     CapitalAdequacy**.  If,after the date hereof, (i) any adoption of or any change in or in theinterpretation of any Governmental Rule, or (ii) compliance with anyGovernmental Rule of any Governmental Authority exercising control over banksor financial institutions generally or any court of competent jurisdiction,requires that the Commitment (including, without limitation, obligations inrespect of any Loans) hereunder be treated as an asset or otherwise be includedfor purposes of calculating the appropriate amount of capital to be maintainedby any Lender or any corporation controlling any Lender (a "CapitalAdequacy Event"), the result of which is to reduce the rate of returnon a Lender's capital as a consequence of its Commitment to a level below thatwhich the affected Lender could have achieved but for such Capital AdequacyEvent, taking into consideration the Lender's policies with respect to capitaladequacy, by an amount which the affected Lender reasonably deems to bematerial, the affected Lender shall promptly deliver to the Borrower astatement (in reasonable detail) of the amount necessary to compensate theaffected Lender or the reduction in the rate of return on its capitalattributable to its Commitment (the "Capital Compensation Amount").  The affected Lender shall determine theCapital Compensation Amount in good faith, using reasonable attribution andaveraging methods.  Each affected Lendershall from time to time notify the Borrower of the amount so determined.  Each such notification shall be prima facieevidence of the amount of the Capital Compensation Amount set forth therein,and such Capital Compensation Amount shall be due and payable by the Borrowerto the affected Lender 30 days after such notice is given.  As soon as practicable after any CapitalAdequacy Event, the affected Lender shall submit to the Borrower estimates ofthe Capital Compensation Amounts that would be payable as a function of the affectedLender's Commitment hereunder.

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

**2.3d     Illegality**.** **Ifa Lender shall determine in good faith (which determination shall be final andconclusive) that compliance by such Lender with any applicable law, treaty orother Governmental Rule (whether or not having the force of law), or theinterpretation or application thereof by any Governmental Authority, has madeit unlawful for such Lender to make or maintain the Loans under the Euro-RateOption (including but not limited to acquiring Eurodollar liabilities to fundsuch Loans), such Lender shall give notice of such determination to theBorrower and the other Lenders. Notwithstanding any provision of this Agreement to the contrary, unlessand until the affected Lender shall have given notice to the Borrower and the otherLenders that the circumstances giving rise to such determination no longerapply:

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

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

**2.3e     Changeof Lending Office**. Each Lender agrees that, upon the occurrence of any event giving rise tothe operation of Section 2.3a, 2.3b or 2.3d with respect to such Lender, itwill, if requested by the Borrower, use reasonable efforts (subject to overallpolicy considerations of such Lender) to designate another lending office forany Loans affected by such event with the object of avoiding the consequencesof such event; provided, that such designation is made on terms that, in thesole judgment of such Lender, cause such Lender and its lending office(s) tosuffer no economic, legal or regulatory disadvantage, and provided, further,that nothing in this Section shall affect or postpone any of the obligations ofthe Borrower or the rights of any Lender pursuant to Section 2.3a, 2.3b or2.3d.  In determining whetherdesignating another lending office would cause such Lender or its lendingoffice(s) to suffer economic disadvantage, such Lender may disregard anyeconomic disadvantage that the Borrower agrees in form and substancesatisfactory to such Lender to indemnify and hold such Lender harmlesstherefrom.

**2.4       Fees**.

**2.4a     FacilityFee**.  TheBorrower agrees to pay to the Lenders, on a pro rata basis, beginning on March31, 2003, and continuing quarterly in arrears thereafter on the last day ofeach June, September, December and March during the term hereof to andincluding 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 thequarter then ending; provided, however, the first payment under thisSubsection 2.4b shall be only for the actual number of days elapsed between theClosing Date and March 31, 2003, and the last payment under this Subsection2.4b shall be only for the actual number of days elapsed between the lastquarterly payment date and the Termination Date.  If there isany changein the Facility Fee Rate applicable during the quarter, the Facility Fee shallbe calculated with respect to each period that the Facility Fee Rate was ineffect during such quarter.

**2.4b**     **CertainOther Fees**.  The Borrower agrees(i) to pay to the Agent for the account of the Agent or the Lenders, asapplicable, the fees set forth in that certain letter agreement among theBorrower, the Agent, NUI Corporation and Fleet Securities Inc. (the "FeeLetter") dated as of December 3, 2002, as the same may be amended fromtime 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 oramounts and on the date or dates agreed to in writing among the ProposedLender, the Agent and the Borrower in connection with any Increase Request.

**2.5       Calculationof Interest and Facility Fee**. The calculation ofthe amount of interest due and owing to each Lender shall be made by the Agentand shall be evidenced by the Agent posting the amount of interest due undereach Lender's Loans to the Loan Account established by the Agent pursuant toSection 2.11. The Facility Fee shall be calculated on the basis of a 360 dayyear and actual number of days elapsed. The calculation of the amount of the Facility Fee due and owing to eachLender shall be made by the Agent and shall be evidenced by posting such amountdue under the Loan Account pursuant to Section 2.11.

** 2.6       Extensionof Termination Date** The Termination Date may be extended, in the manner set forth in thisSection 2.6, on February 11, 2004 and on each anniversary of such date (an"Extension Date") for successive periods of 364 dayseach.  If the Borrower wishes to requestan extension of the Termination Date on any Extension Date, it shall givewritten notice to that effect to the Agent not less than 45 nor more than 60days prior to such Extension Date.  EachLender will use its best efforts to respond to such request, whetheraffirmatively or negatively, within 30 days after receipt of such notice fromthe Agent.  If the Borrower shall havereceived affirmative responses from all the Lenders, such response to be in thesole and absolute discretion of each Lender, then, subject to receipt by theBorrower of counterparts of an agreement duly completed and signed by theBorrower and each such Lender (an "Extension Agreement"), theTermination Date shall be extended, effective on such Extension Date, for aperiod of 364 days to the date stated in such Extension Agreement.  If the Borrower shall not have receivedaffirmative responses from all Lenders the Termination Date shall not beextended.  For purposes of this Section2.6, the failure of any Lender to respond shall be deemed to be a negativeresponse from such Lender.

**2.7**       **Substitutionor Replacement of a Lender**.  TheBorrower shall have the right (provided that at such time, no Event of Defaultand no Potential Default has occurred and is continuing), in its solediscretion, to either:

(i)         repay, (A) at any time if Loans bearinginterest 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 outstandinginclude Loans bearing interest under the Euro-Rate Option, the outstandingLoans of any Lender in whole, together with interest thereon and any otheramount due such Lender pursuant to the terms of this Agreement, and toterminate the Commitment of such Lender; or

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

if any of thefollowing conditions occur with respect to such Lender:

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

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

** **(iii)       such Lender has responded negatively to arequest for extension of the Termination Date pursuant to Section 2.6; providedRequired Lenders have responded positively to such request;

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

**2.8       LoanRepayment**.  Eachrepayment of the Loans (other than Swingline Loans) shall be in the minimumamount of $1,000,000, in the aggregate, or an integral multiple of $100,000thereof, or such lesser amount as is actually outstanding thereunder.  The Borrower, upon (i) oral or writtennotice to Agent by 11:00 A.M. (eastern time) on the day of the proposedrepayment, 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 thecase of Loans bearing interest at the Adjusted Euro-Rate, followed immediatelythereafter by the Borrower's written confirmation to the Agent of any oralnotice, may repay the outstanding amount of the Loans in whole or in part withaccrued interest, fees and other amounts then due and payable on the amountrepaid to the date of such repayment, subject to the payment of any additionalamounts under Section 2.9 below.  TheBorrower may prepay any Portion of the Loans bearing interest at the AdjustedBase Rate without premium or penalty.

Anyrepayment of the Loans shall increase, by the amount of that repayment, theunborrowed balance of the Commitment; it being contemplated that the Borrowermay repay and reborrow from time-to-time under the Commitment until theTermination Date.  All Loans outstandingon the Termination Date shall become due and payable in full on such date.

**2.9**       **AdditionalPayments by the Borrower**.  If(i) the Borrower shall fail to make any payment due hereunder on the due datethereof, (ii) the Borrower shall make a payment, prepayment or conversion ofany Euro-Rate Portion of the Loans on a day other than the last day of theapplicable Interest Period, (iii) the Borrower shall convert any Portion to theBase Rate Option from another Option pursuant to Subsection 2.2d on a day otherthan the last day of the relevant Interest Period, or (iv) the Borrower shallfail on the date specified therefor to consummate any borrowing, conversion orrenewal after giving a request for an extension of credit or notice ofconversion or renewal, and, as a result of any such action or inaction, aLender reasonably incurs any losses and expenses which it would not haveincurred but for such action or inaction, the Borrower shall pay suchadditional amounts as will compensate the affected Lender for such losses andexpenses, including the cost of reemployment of any funds prepaid at rateslower than the cost to the affected Lender of such funds.  Such losses and expenses, which the affectedLender shall exercise reasonable efforts to minimize, shall be specified inwriting (setting forth, in reasonable detail, the basis of calculation) to theBorrower by the affected Lender, which writing shall be prima facie evidence ofthe amounts set forth therein, and such amounts shall be payable within 30 daysof demand therefor.

**2.10     VoluntaryReduction of Availability**.  At any time and from time to time upon noless than two Business Days prior written notice to the Agent, provided noIndebtedness permitted under Section 5.13(h)(1) or related commitments areoutstanding, the Borrower may terminate, in whole or in part, without penalty,the then unused portion of the Commitments, thereby causing a correspondingabatement of the Facility Fee with respect to the pro rata share so reduced, providedthat no such termination or reduction shall be permitted if, after givingeffect thereto and to any prepayments of the Loans made on the effective datethereof, the aggregate principal amount of the Loans then outstanding, whenadded to the then outstanding L/C Obligations, would exceed the Commitmentsthen in effect.  Each such reductionshall be in a minimum principal amount of $5,000,000 or in integral multiplesthereof.  The Facility Fee shall ceaseto accrue with respect to any unused portion of the commitments so terminatedon date of such termination.  Notice oftermination once given shall be irrevocable and the portion of the Commitmentsso terminated shall not be available for borrowing once such notice has beengiven under the terms hereof.  The Agentshall promptly notify each Lender of its pro rata share of such terminatedunused portion and the date of each such termination.

**2.11**     **LoanAccount**.** **The Agent shall open and maintain on itsbooks a Loan Account in the name of the Borrower with respect to extensions ofcredit made, repayments, prepayments, the computation and payment of interestand the Facility Fee and the computation of other amounts due and sums paid andpayable to each Lender pursuant to this Article II.  Such Loan Account shall be conclusive evidence barring manifesterror as to the amount at any time due to any Lender from the Borrower pursuantto this Article II, provided, however, that the failure to makenotations, or to make accurate notations, on the Loan Account including withoutlimitation notations with respect to interest and Facility Fees pursuant toSection 2.5 shall not limit, expand or otherwise affect any obligations of theBorrower hereunder.

**2.12**     **Paymentfrom Accounts Maintained by Borrower**. In the event that any payment of principal, interest, Facility Fee orany other amount due to the Lenders or the Agent under this Agreement, theNotes or the other Loan Documents is not paid when due, the Agent is herebyauthorized to effect such payment by debiting any demand deposit account of theBorrower maintained with the Agent (excluding however any special purposefiduciary accounts, which are designated as such at the time of their creation,and mandated by applicable statutes, regulations or rules) and distributingsuch payment to the party to whom such amounts are due.  This right of debiting accounts of the Borroweris in addition to any right of set-off accorded the Lenders or the Agenthereunder or by operation of law.

**2.13     Time,Place and Manner of Payments**.** **All payments to be made bythe Borrower under the Notes (other than those provided for in Sections 2.3 and2.9 hereof), and of all fees and any other amounts due hereunder (excepting theFees owed to the Agent for its sole account) shall be made at the principaloffice of the Agent for the ratable account of the Lenders.  The Agent will promptly pay each suchpayment received to each Lender or its order in accordance with Section 8.9hereof.  All payments due a Lender byreason of Sections 2.3 or 2.9 hereof shall be paid at the principal office ofthe Lender which invoices the Borrower for such payment.  All payments to be made by the Borrower underthis Agreement shall be paid in Dollars and in immediately available funds nolater than 3:00 P.M. (eastern time) on the date such payment is due, withoutpresentment, demand, protest or notice of any kind, all of which are herebyexpressly waived by the Borrower, and without setoff, counterclaim or otherdeduction of any nature.

**2.14     Lettersof Credit**

**2.14a   L/C Commitment.**

            (i)         Subjectto the terms and conditions hereof, the Issuing Bank, in reliance on theagreements of the other Lenders set forth in Subsection 2.14d(i), agrees toissue letters of credit ("Letters of Credit") for the accountof the Borrower on any Business Day during the Commitment Period in such formas may be approved from time to time by the Issuing Bank; provided that theIssuing Bank shall have no obligation to issue any Letter of Credit if, aftergiving effect to such issuance, (1) the L/C Obligations would exceed the L/CCommitment or (2) the Available Commitment of the Issuing Bank would be lessthan zero.

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

            (iii)       Each Letter of Credit shall be subject to the Uniform Customsand, to the extent not inconsistent therewith, the laws of the State of NewJersey.

** **           (iv)       TheIssuing Bank shall not at any time be obligated to issue any Letter of Credithereunder if such issuance would conflict with, or cause the Issuing Bank orany L/C Participant to exceed any limits imposed by, any applicableGovernmental Rule.

**2.14b   Procedurefor Issuance of Letters of Credit**.  The Borrower may from time to time requestthat the Issuing Bank issue a Letter of Credit by delivering to the IssuingBank at its address for notices specified herein an Application therefor,completed to the reasonable satisfaction of the Issuing Bank, and such othercertificates, documents and other papers and information as the Issuing Bankmay reasonably request.  Upon receipt ofany Application, the Issuing Bank will process such Application and thecertificates, documents and other papers and information delivered to it inconnection therewith in accordance with its customary procedures and shallpromptly issue the Letter of Credit requested thereby (but in no event shallthe Issuing Bank be required to issue any Letter of Credit earlier than two BusinessDays after its receipt of the Application therefor and all such othercertificates, documents and other papers and information relating thereto) byissuing the original of such Letter of Credit to the beneficiary thereof or asotherwise may be agreed by the Issuing Bank and the Borrower.  The Issuing Bank shall furnish a copy ofsuch Letter of Credit to the Borrower promptly following the issuance thereof.

**2.14c   Fees,Commissions and Other Charges**.

            (i)         TheBorrower shall pay to the Agent, for the account of the Issuing Bank, afronting 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 ofeach Letter of Credit and shall be nonrefundable.

            (ii)        TheBorrower shall pay to the Agent, for the account of the Issuing Bank and theL/C Participants, a letter of credit commission with respect to each Letter ofCredit, computed for the period from the date of such payment to the date uponwhich the next such payment is due hereunder at the Applicable Euro-RateMargin, 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 Crediton the date on which such fee is calculated. Such commissions shall be payable in arrears on each L/C Fee PaymentDate after the issuance of the respective Letter of Credit and shall benonrefundable.

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

            (iv)       TheAgent shall, promptly following its receipt thereof, distribute to the IssuingBank and the L/C Participants all fees and commissions received by the Agentfor their respective accounts pursuant to this Section 2.14.

**2.14d   L/CParticipations**.

            (i)         TheIssuing Bank irrevocably agrees to grant and hereby grants to each L/CParticipant, and, to induce the Issuing Bank to issue Letters of Credithereunder, each L/C Participant irrevocably agrees to accept and purchase andhereby accepts and purchases from the Issuing Bank, on the terms and conditionshereinafter stated, for such L/C Participant's own account and risk anundivided interest equal to such L/C Participant's Commitment Percentage in theIssuing Bank's obligations and rights under each Letter of Credit issuedhereunder and the amount of each draft paid by the Issuing Bankthereunder.  Each L/C Participantunconditionally and irrevocably agrees with the Issuing Bank that, if a draftis paid under any Letter of Credit for which the Issuing Bank is not reimbursedin full by the Borrower in accordance with the terms of this Agreement, suchL/C Participant shall pay to the Issuing Bank upon demand at the Issuing Bank'saddress for notices specified herein an amount equal to such L/C Participant'sCommitment Percentage of the amount of such draft, or any part thereof, whichis not so reimbursed.

            (ii)        Ifany amount required to be paid by any L/C Participant to the Issuing Bankpursuant to Section 2.14d(i) in respect of any unreimbursed portion of anypayment made by the Issuing Bank under any Letter of Credit is not paid to theIssuing 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 tothe product of (1) such amount, times (2) the daily average Federal FundsEffective Rate, as quoted by the Issuing Bank, during the period from andincluding the date such payment is required to the date on which such paymentis immediately available to the Issuing Bank, times (3) a fraction thenumerator of which is the number of days that elapse during such period and thedenominator of which is 360.  If anysuch amount required to be paid by any L/C Participant pursuant to Subsection2.14d(i) is not in fact made available to the Issuing Bank by such L/CParticipant within three Business Days after the date such payment is due, theIssuing 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 perannum applicable to Loans to which the Base Rate Option applies.  A certificate of the Issuing Bank submittedto any L/C Participant with respect to any amounts owing under this subsectionshall be conclusive in the absence of manifest error.

            (iii)       Whenever, at any time after the Issuing Bank has made paymentunder any Letter of Credit and has received from any L/C Participant its prorata share of such payment in accordance with Subsection 2.14d(i), the IssuingBank receives any payment related to such Letter of Credit (whether directlyfrom 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 sharethereof; provided, however, that in the event that any such payment received bythe Issuing Bank shall be required to be returned by the Issuing Bank, such L/CParticipant shall return to the Issuing Bank the portion thereof previouslydistributed by the Issuing Bank to it.

**2.14e   ReimbursementObligation of the Borrower**.

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

            (ii)        Interestshall be payable on any and all amounts remaining unpaid by the Borrower underthis subsection from the date such amounts become payable (whether at statedmaturity, by acceleration or otherwise) until payment in full at the rate whichwould be payable on any outstanding Loans bearing interest based on the BaseRate Option which were then overdue.

            (iii)       Each drawing under any Letter of Credit shall constitute arequest by the Borrower to the Agent for a borrowing pursuant to Subsection2.1d of Loans to which the Base Rate Option applies in the amount of suchdrawing.  The Borrowing Date withrespect to such borrowing shall be the date of such drawing.

**2.14f    ObligationsAbsolute**.

            (i)         TheBorrower's obligations under this Section 2.14 shall be absolute andunconditional under any and all circumstances and irrespective of any set-off,counterclaim or defense to payment which the Borrower may have or have hadagainst the Issuing Bank or any beneficiary of a Letter of Credit.

            (ii)        TheBorrower also agrees with the Issuing Bank that the Issuing Bank shall not beresponsible for, and the Borrower's Reimbursement Obligations under Subsection2.14e shall not be affected by, among other things, (1) the validity orgenuineness of documents or of any endorsements thereon, even though suchdocuments shall in fact prove to be invalid, fraudulent or forged, (2) anydispute between or among the Borrower and any beneficiary of any Letter ofCredit 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 suchLetter 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 oradvice, however transmitted, in connection with any Letter of Credit, exceptfor errors or omissions caused by the Issuing Bank's gross negligence orwillful misconduct.

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

**2.14g   Letterof 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 amountthereof.  The responsibility of theIssuing Bank to the Borrower in connection with any draft presented for paymentunder any Letter of Credit shall, in addition to any payment obligationexpressly provided for in such Letters of Credit, be limited to determiningthat the documents (including each draft) delivered under such Letter of Creditin connection with such presentment are in conformity with such Letter ofCredit.

**2.14h   Application**.  To the extent that any provision of anyApplication related to any Letter of Credit is inconsistent with the provisionsof this Section 2.14, the provisions of this Section 2.14 shall apply.

**ARTICLE III. REPRESENTATIONS AND WARRANTIES.**

Toinduce the Lenders to enter into this Agreement and to make the Loans and issueor participate in the Letters of Credit herein provided for, the Borrowerrepresents and warrants to the Lenders that:

** 3.1       CorporateExistence**.  TheBorrower is a corporation duly organized, validly existing and in good standingunder the laws of its state of incorporation and it is duly qualified and ingood standing as a foreign corporation authorized to do business in eachjurisdiction where, because of the nature of its properties or businesses, suchqualification is required or, if not so qualified or in good standing in anystate, the lack of such qualification or good standing will not materiallyaffect the Agent's or the Lenders' ability to enforce this Agreement, the Notesor the other Loan Documents or will not have a Material Adverse Effect on theBorrower's ability to carry on its business or the Borrower's ability to complywith this Agreement, the Notes or the other Loan Documents.

**3.2       CorporateAuthority**.  TheBorrower is duly authorized to execute and deliver this Agreement, the Notesand the other Loan Documents to which it is or will become a party; allnecessary corporate action to authorize the execution and delivery of thisAgreement, the Notes and the other Loan Documents to which it is or will becomea party has been properly taken; and it is and will continue to be dulyauthorized to borrow hereunder and to perform all of the other terms andprovisions of this Agreement, the Notes and the other Loan Documents to whichit 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 andvalidly executed and delivered by the Borrower and each constitutes or willconstitute a valid and legally binding agreement of the Borrower enforceable inaccordance with its terms.

**3.4       NoRestrictions, No Default**.  Neither the execution and delivery of thisAgreement, the Notes and the other Loan Documents to which it is or will becomea party, the consummation of the transactions herein contemplated norcompliance with the terms and provisions hereof or of the Notes, will conflictwith or result in a breach of any of the terms, conditions or provisions of thecertificate of incorporation or the by-laws of the Borrower or of any law or ofany regulation, order, writ, injunction or decree of any court or governmentalagency or of any agreement, indenture or other instrument to which the Borroweris a party or by which it is bound or to which it is subject, or constitute adefault thereunder or result in the creation or imposition of any Encumbranceof any nature whatsoever upon any of the property or assets of the Borrowerpursuant to the terms of any agreement, indenture or other instrument, exceptthose restrictions which, individually or in the aggregate, would not have aMaterial Adverse Effect upon the Borrower. Except as would not have a Material Adverse Effect, the Borrower hasgood record and marketable title in fee simple to, or a valid leaseholdinterest in, all its real property, and good title to, or a valid leaseholdinterest in, all of its other property, and none of such property is subject toany Encumbrance except as permitted by Section 5.2.  No event has occurred and is continuing and no condition existsor will exist after giving effect to the borrowings hereunder to be made on theClosing Date which constitutes an Event of Default or Potential Default.

**3.5       FinancialStatements**.  TheBorrower has furnished to the Lenders and the Agent the consolidated balancesheets and the related consolidated statements of income, shareholders' equityand changes in financialposition ofthe Borrower for the Fiscal Years ending September 30, 2001 and September 30,2002.  All such financialstatements, including the relatednotes, have been prepared in accordance with GAAP, except as expressly notedtherein and, in the case of the aforementioned quarterly financial statements,subject to changes resulting from year-end adjustments, and fairly present thefinancial position and consolidated financial positions of the Borrower as atthe dates thereof and the results and consolidated results of their operationsand the changes in their financial position and in their consolidated financialposition for the periods ended on such dates. There were no material liabilities of the Borrower, contingent orotherwise, not reflected in such financial statements.  Except as has otherwise been fully disclosedin NUI Corporation's Form 10-K filed on December 31, 2002 with the Securitiesand Exchange Commission, there has been no Material Adverse Change in thebusiness, condition or operations (financial or otherwise) of the Borrower fromSeptember 30, 2002 to the Closing Date.

**3.6**       **Absenceof Litigation**.  There are noactions, suits, investigations, litigation or governmental proceedings pendingor, to the Borrower's knowledge, threatened against the Borrower or any of itsproperties, which would have a Material Adverse Effect on the Borrower, orwhich purport to affect the legality, validity or enforceability of thisAgreement or the Notes.

**3.7       TaxReturns and Payments**. As of the date hereof, the Borrower has filed all Federal and othermaterial tax returns required by law to be filed and have paid all materialtaxes, material assessments and other material governmental charges levied uponthe Borrower, or any of its properties, assets, income or franchises of theBorrower, which are due and payable, other than those currently payable ordeferrable without penalty or interest or those which are being contested ingood faith and by appropriate proceedings diligently conducted for whichreserves in accord with GAAP have been provided.  As of the date hereof, the charges, accruals and reserves on thebooks of the Borrower in respect of Federal, state and local income taxes forall fiscal periods are adequate, and the Borrower knows of no unpaidassessments for additional Federal, state or local income taxes for any suchfiscal period or any basis therefor.

**3.8**       **PensionPlans**.  Except as otherwisenoted on Schedule 3.8, (i) each Plan has been and will be maintained andfunded, in all material respects, in accordance with its terms and with allprovisions of ERISA and the Code applicable thereto; (ii) no Reportable Eventhas occurred and is continuing with respect to any Plan; (iii) no liability toPBGC has been incurred with respect to any Plan, other than for premiums dueand payable; (iv) no Plan has been terminated, no proceedings have beeninstituted to terminate any Plan, and there exists no intent to terminate orinstitute proceedings to terminate any Plan, which has caused or would causethe Borrower or any ERISA Affiliate to incur any liability to the PBGC under TitleIV of ERISA; (v) no withdrawal, either complete or partial, has occurred orcommenced with respect to any multiemployer Plan, and there exists no intent towithdraw either completely or partially from any multiemployer Plan and (vi)the Borrower is not subject to any liability for unpaid penalties or taxesimposed under Section 502(i) of ERISA or Section 4975 of the Code and has notengaged in a prohibited transaction as defined in Section 406 of ERISA andSection 4975 of the Code.

**3.9**       **Compliancewith Applicable Laws**.  TheBorrower (i) is not in default with respect to any order, writ, injunction ordecree of any court or of any Federal, state, municipal or other GovernmentalAuthority; and (ii) is substantially complying with all applicable statutes andregulations of each Governmental Authority having jurisdiction over itsactivities; except for those orders, writs, injunctions, decrees, statutes andregulations, non-compliance with which would not have a Material Adverse Effectupon the Borrower.

**3.10**     **EnvironmentalMatters**.  Except to the extentdescribed in NUI Corporation's most recently filed Form 10-K, Form 10-Q or Form8-K, the Borrower is in compliance with all applicable Environmental Laws,except for matters which do not have a Material Adverse Effect on the financialcondition of the Borrower.

**3.11     GovernmentalApproval**.  Noorder, authorization, consent, license, validation or approval of, or noticeto, filing, recording, or registration with, any Governmental Authority, orexemption by any Governmental Authority, is required to authorize, or isrequired in connection with, (i) the execution, delivery and performance ofthis 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, theNotes or the other Loan Documents to which it is a party.

**3.12     RegulationsT, U and X**.** **The Borrower is not engaged in thebusiness of purchasing or selling Margin Stock or extending credit to othersfor the purpose of purchasing or carrying Margin Stock and no part of theproceeds of the Loans will be used to purchase or carry any Margin Stock or forany other purpose which would violate or be inconsistent with Regulations T, Uor X.

**3.13**     **InvestmentCompany Act**.  The Borrower isnot an "investment company", or a company "controlled" byan "investment company", within the meaning of the Investment CompanyAct of 1940, as amended.

**3.14     PublicUtility Holding Company Act. **TheBorrower is a utility subject to regulation under the Public Utility HoldingCompany Act of 1935, as amended.

** 3.15**     **Disclosure**.** **Neitherthis Agreement nor any other document, certificate or statement furnished tothe Lenders or the Agent by or on behalf of the Borrower pursuant to thisAgreement contains any untrue statement of a material fact.  There is no fact known to the Borrower whichmaterially and adversely affects or in the future may (so far as the Borrowernow foresees) have a Material Adverse Effect on the business, operations,affairs, condition, prospects, properties or assets of the Borrower, which hasnot been set forth in this Agreement or in the other documents, certificatesand statements (financial or otherwise) furnished to the Lenders or the Agentor otherwise disclosed in writing to the Lenders or the Agent by or on behalfof the Borrower prior to or on the date hereof.

**3.16**     **NoSubsidiaries**.  The Borrower hasno Subsidiaries.

**ARTICLE IV.            AFFIRMATIVECOVENANTS.**

Fromthe date hereof and thereafter until the termination of the Commitments anduntil all of the Bank Indebtedness (including, without limitation, any Lettersof Credit which remain outstanding and unpaid) is paid in full, the Borroweragrees that:

**4.1**       **Useof Proceeds**.  The proceeds ofthe Loans will be used by the Borrower solely (i) for general corporatepurposes of the Borrower, (ii) for working capital purposes in the ordinarycourse of business of the Borrower, (iii) to pay fees and expenses incurred inconnection with the execution and delivery of the Loan Documents, and (iv) torepay amounts due and payable under the Existing Credit Agreement as requiredby Section 6.2(xi).

**4.2       Furnishing Information**.  The Borrower shall:

(i)         deliverto the Agent (with copies for each Lender which Agent shall distribute) within55 days after the end of each of the first three Fiscal Quarters in each FiscalYear of the Borrower, (A) balance sheets as at the end of such period for theBorrower, and (B) statements of income for such period for the Borrower and, inthe case of the second and third quarterly periods, for the period from thebeginning of the current Fiscal Year to the end of such quarterly period; andeach such statement shall set forth, in comparative form, corresponding figuresfor the corresponding period in the immediately preceding Fiscal Year and allsuch statements shall be prepared in reasonable detail in accordance with GAAPand certified, subject to changes resulting from year-end adjustments, by thechief financial officer or treasurer of the Borrower;

(ii)        deliver to the Agent (with copies foreach Lender which Agent shall distribute) within 100 days after the end of eachFiscal Year of the Borrower, (A) balance sheets as at the end of such year forthe Borrower, and (B) statements of income for such year for the Borrower; andeach such statement shall set forth, in comparative form, corresponding figuresfor the immediately preceding Fiscal Year; and all such financial statementsshall present fairly in all material respects the financial position of theBorrower, as at the dates indicated and the results of its operations and itscash flow for the periods indicated, in conformity with GAAP; and the Borrowershall furnish to the Agent (with copies for each Lender which the Agent shalldistribute) the audited consolidated financial statements of NUI Corporation(of which the Borrower is a Subsidiary in its consolidated group) for suchFiscal Year furnished under the NUI Corporation Credit Agreement;

(iii)       deliver to the Agent (with copies foreach Lender which Agent shall distribute), together with each delivery offinancial statements pursuant to items (i) and (ii) above, a ComplianceCertificate of the Borrower substantially in the form of Exhibit"F" hereto, properly completed and signed by an AuthorizedOfficer of the Borrower, (A) stating (1) that such officer has reviewed theterms of the Loan Documents and has made, or caused to be made under hissupervision, a review of the transactions and condition of the Borrower duringthe accounting period covered by such financial statements and that such reviewhas not disclosed any failure by the Borrower during such period to observe orperform all of its covenants and other agreements, nor any failure to satisfyevery condition contained in this Agreement, the Notes and the other LoanDocuments to which it is a party during such accounting period, and (2) thatthe Borrower does not have knowledge of the existence, as at the date of suchCompliance Certificate, of any condition or event which constitutes an Event ofDefault or a Potential Default, or, if any such condition or event existed orexists, specifying the nature and period of existence thereof and what actionthe 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 suchaccounting period with the covenants contained in Sections 5.3a and 5.3bhereof;

(iv)       promptly give written notice to the Agentof any pending or, to the knowledge of the Borrower, overtly threatened claimin writing, litigation or threat of litigation which arises between theBorrower and any other party or parties (including, without limitation, anyGovernmental Authority, which claim, litigation or threat of litigation,individually or in the aggregate, is reasonably likely to cause a MaterialAdverse Change, any such notice to be given not later than five Business Daysafter the Borrower becomes aware of the occurrence of any such claim,litigation or threat of litigation;

(v)        deliver to the Agent (with copies foreach Lender which Agent shall distribute) promptly upon their becomingavailable, copies of all financial statements, reports, notices and informationstatements sent or made available generally by the Borrower to its securityholders (including, without limitation, proxy materials) and copies of allother regular and periodic reports (including, without limitation, Form 8-K)filed by NUI Corporation with the Securities and Exchange Commission or anyGovernmental Authority succeeding to any of its functions, and of all pressreleases and other statements made available generally by the Borrower to thepublic concerning material developments in the business of the Borrower;

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

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

(viii)      promptly and in any event within 30 daysafter the Borrower or the administrator of any Plan knows or has reason to knowthat any Reportable Event has occurred which would cause the PBGC to instituteTermination Proceedings give notice thereof to the Agent;

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

(x)        promptly, deliver to the Lenders suchother information and data with respect to the Borrower as from time to timemay be reasonably requested by any Lender.

**4.3**       **Visitation**.  The Borrower will keep complete and properbooks of record and account in accordance with GAAP and permit the Lenders andeach Lender's designated employees and agents to have access, from time totime, upon reasonable notice (except no such notice shall be required after theoccurrence and during the continuance of an Event of Default) and during normalbusiness hours at any reasonable time, to visit any of the properties of theBorrower, to examine and make copies of any of its books of record and accountand such reports and returns as the Borrower may file with any GovernmentalAuthority and discuss the Borrower's affairs and accounts with, and be advisedabout them, by any Authorized Officer.

**4.4       Preservationof Existence; Qualification.** At its own cost and expense, the Borrowerwill continue to engage in business of the same general type as now conductedby it and will do all things necessary to preserve and keep in full force andeffect its corporate existence and qualification under the laws of its state ofincorporation and each state where, due to the nature of its activities or theownership of its properties, qualification to do business is required exceptwhere the failure to be so qualified would not have a Material Adverse Effectupon the Borrower.

**4.5**       **Compliancewith Laws and Contracts**.  TheBorrower shall comply with all applicable Governmental Rules (including, butnot limited to, Environmental Laws), except where failure to comply would nothave a Material Adverse Effect on the Borrower.

**4.6       Paymentof Taxes and Other Liabilities**.  The Borrower shall promptly pay anddischarge all obligations, accounts and liabilities to which it is subject orwhich are asserted against it at or before maturity or before they becomedelinquent, as the case may be, and which obligations, accounts and liabilitiesare material, including but not limited to all taxes, assessments andgovernmental charges and levies upon it or upon any of its income, profits, orproperty prior to the date on which penalties attach thereto to the extent thatthe non-payment of which would in the aggregate have a Material Adverse Effectupon the Borrower; provided, however, that for purposes of thisAgreement, the Borrower shall not be required to pay any item (i) the paymentof which is being contested in good faith by appropriate and lawful proceedingsdiligently conducted and (ii) as to which the Borrower shall have set aside onits books reserves for such claims as are determined to be adequate pursuant tothe accounting procedures employed by the Borrower.

** 4.7       Insurance**.  The Borrower will keep and maintaininsurance with financially sound and reputable insurance companies on each ofits properties, in such amounts and against such risks as is customarilymaintained by similar businesses similarly situated and owning, leasing oroperating similar properties.  TheBorrower may satisfy the requirements of the preceding sentence with selfinsurance and deductibles consistent with customary and prudent industrystandards.  The Borrower will furnish tothe Agent at the Closing and together with the annual reports deliveredpursuant to Subsection 4.2(ii) hereof, a certificate of an Authorized Officerof the Borrower certifying that such insurance is in force, provides coverageconsistent with the preceding sentence and complies with the Borrower's obligationsunder this Section 4.7.

**4.8**       **Maintenanceof Properties**.  The Borrowershall maintain, preserve, protect and keep its properties in good repair,working order and condition (ordinary wear and tear excepted), and make allnecessary and proper repairs, renewals and replacements so that its businesscarried on in connection therewith may be properly and advantageously conductedat all times, except where the failure to maintain, preserve, protect or keepsuch properties would not have a Material Adverse Effect upon the Borrower.

**4.9**       **Plansand Benefit Arrangement**.  TheBorrower shall, and shall cause each ERISA Affiliate to, comply with ERISA, theCode and all other applicable laws which are applicable to Plans, except wherethe 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     SeniorDebt Status**. The Bank Indebtedness will rank at least pari passu in priorityof payment with all other Indebtedness of the Borrower, except Indebtedness ofthe Borrower which may be secured by Encumbrances permitted pursuant to Section5.2.

**4.11     Ownership**.  The Borrower shall at all times during theterm hereof be a direct 100% wholly owned Subsidiary of NUI Corporation.

**4.12     CashManagement**.  On orbefore November 12, 2003, the Borrower shall cause all of its receivables andother revenues to be collected and deposited into and maintained in asegregated account or accounts of the Borrower (the "New CollectionSystem") and the proceeds of such receivables and other revenues shallnot be commingled with funds of NUI Corporation or its other Subsidiaries andshall only be used to pay out of such account or accounts obligations of theBorrower and to make dividends and for other uses to the extent expresslypermitted hereunder.  At all times untilsuch New Collection System is in place, the Agency Services Agreement is andwill remain in full force and effect and the Borrower's receivables and otherrevenues shall be collected by NUI Corporation, but title thereto shall remainwith the Borrower, and expenses and other payables of or on behalf of theBorrower shall be paid by NUI Corporation on behalf of the Borrower, all inaccordance with the provisions of the Agency Services Agreement and GovernmentalRules.  The Borrower shall ensure thatthe use of such receivables and revenues by NUI Corporation at all timescomplies with this Agreement.

**ARTICLE V.  NEGATIVECOVENANTS.**

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

**5.1**       **Dividends,Etc.**  The Borrower will notdeclare or make any dividend payment or other distribution of assets,properties, cash, rights, obligations or securities on account of any shares ofany class of equity interests of the Borrower, or purchase, redeem or otherwiseacquire for value any shares of any class of equity interests of the Borroweror any warrants, rights or options to acquire any such shares, now or hereafteroutstanding (such declarations, payments, other distributions, purchases,redemptions, or other acquisitions being herein called "RestrictedPayments"), except that the Borrower may (a) declare and make anydividend payment or other distribution payable solely in common equityinterests of the Borrower, and (b) purchase, redeem or otherwise acquire sharesof its common equity interests or warrants, rights or options to acquire anysuch shares with the proceeds received from substantially concurrent issue of newshares of its common equity interests and (c) declare or pay cash dividends toNUI Corporation and purchase, redeem or otherwise acquire shares of its equityinterests or warrants, rights or options to acquire for consideration of anysuch shares, so long as the aggregate of such Restricted Payments made, paid ordeclared since the Closing Date would not exceed the lesser of $100,000,000 orretained earnings of the Borrower on the date of such Restricted Payment; provided,that (x) immediately after giving effect to any such proposed RestrictedPayments, no Potential Default or Event of Default would exist and (y) no suchpayment shall violate any Governmental Rule. 

**5.2       Encumbrances**.  The Borrower will not create or suffer toexist any Encumbrance or any other type of preferential arrangement, upon orwith 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 forthe payment of any Indebtedness of any Person, other than PermittedEncumbrances.

**5.3a     LeverageRatio**.  At notime shall its ratio of Consolidated Total Indebtedness to its ConsolidatedTotal Capitalization exceed the amount set forth below for each relevant periodset forth below:

                        Period                                                                             Ratio

                        March 1 of each year toand                        including August 31 ofsuch year:                                   .65:1.00

                      September 1 of each year to and                      including February 28 (or 29, if applicable)                      ofthe following year:                                                     .70:1.00

**5.3b     FixedCharge Coverage Ratio**. At no time shall the Borrower permit, for any period of four consecutiveFiscal Quarters ending on or after September 30, 2002, the ratio of (i) the sumof (A) Consolidated Net Income for such period plus (B) income taxes deductedin determining such Net Income plus (C) Consolidated Fixed Charges for suchperiod; to (ii) Consolidated Fixed Charges for such period, to be less than1.75 to 1.00.

**5.4**       **Acquisitions**.** **Unlessotherwise consented to by the Required Lenders (such consent not to beunreasonably withheld), the Borrower will not acquire the assets of any Personor any shares of capital stock of, or other equity interest in, any Person,except for Permitted Acquisitions.

**5.5**       **Salesof Assets**.  The Borrower shallnot enter into any arrangement, direct or indirect, pursuant to which theBorrower shall sell or otherwise transfer or dispose of, in a singletransaction or a series of transactions, all or any substantial part of itsassets; provided, however, a sale or transfer by the Borrower of securitizationreceivables in connection with a securitization permitted under Section5.13(h)(2) shall not be prohibited hereunder.

**5.6**       **Merger**.  The Borrower shall not merge or consolidatewith any other Person.

**5.7**       **RegulationT, U and X Compliance**.  TheBorrower shall not use the proceeds of a Loan to purchase or carry Margin Stockor otherwise act so as to cause any Lender, in extending credit hereunder, tobe in contravention of Regulations T, U or X.

**5.8**       **ERISA**.** **TheBorrower shall not and shall not permit any ERISA Affiliate to permit any Planto:

(i)         engage in any "prohibitedtransaction", as such term is defined in Section 406 of ERISA and Section4975 of the Code;

(ii)        incur any "accumulated fundingdeficiency", as such term is defined in Section 302 of ERISA, whether ornot waived;

(iii)       be terminated in a manner which couldresult in liability to the PBGC under Title IV of ERISA or the imposition of alien on the property of the Borrower or any ERISA Affiliate pursuant to Section4068 of ERISA; or

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

subject the Borroweror any ERISA Affiliatetomultiemployer withdrawal liability pursuant to Section 4201 of ERISA.

**5.9**       **RestrictiveAgreements**.  The Borrower shallnot enter into or otherwise be bound by any agreement not to pay dividends ormake distributions to NUI Corporation, except for such agreements existing onthe date hereof which have been fully disclosed in writing to Agent andreplacements of such agreements (provided that copies of such replacementagreements are provided to the Agent and are no more restrictive than thoseagreements being replaced).

**5.10     [IntentionallyOmitted].**

**5.11     Subsidiaries**.  The Borrower shall not create, nor permit toexist, any Subsidiary.

**            5.12     Limitation on Capital Expenditures**.  The Borrower shall not make or commit tomake (by way of the acquisition of securities of a Person or otherwise) anyexpenditure in respect of the purchase or other acquisition of fixed or capitalassets (other than those expenditures in connection with PermittedAcquisitions), except for expenditures, when added to such expenditures made byNUI Corporation and its other Subsidiaries, not exceeding during any of itsFiscal Years ending after the Closing Date, the amount of $75,000,000.

**5.13     Limitation on Indebtedness**.  The Borrower shall not, directly orindirectly, 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 incurredsolely in order to finance the purchase of new fixed or capital assets(including pursuant to capital leases) in an aggregate principal amount notexceeding $10,000,000 at any time outstanding;

 (c)        Indebtedness listed on Schedule 5.13 andrenewals, extensions and modifications thereof which do not increase theprincipal amount thereof; 

 (d)        Indebtedness incurred in connection withHedging Obligations, provided that such Hedging Obligations shall be in theordinary course of business consistent with past practices;

 (e)        Indebtedness incurred in connection withsale-leaseback transactions permitted by Section 5.19 hereof; 

 (f)         Indebtedness with respect to standbyletters of credit issued by a bank other than the Issuing Bank for the benefitof the Borrower in an aggregate face amount not to exceed $10,000,000, whichletters of credit expire by their terms after the Termination Date;

 (g)        Indebtednessto third party sellers in connection with Permitted Acquisitions, providedthat (1) both before and after giving effect to the incurrence of suchIndebtedness, no Potential Default or Event of Default shall occur and becontinuing, and (2) the payment of such Indebtedness shall be subordinated toall Bank Indebtedness, with the terms and conditions of such subordinationreasonably acceptable to the Agent;

(h)        Indebtedness of the Borrower(1) under a revolving line of credit in a principal amount andcorresponding commitments not to exceed $45,000,000 from a financialinstitution or institutions reasonably acceptable to the Agent (the "AdditionalBank Line"), and (2) under a securitization, private debt placement orother financing reasonably acceptable to the Agent in a principal amount not toexceed $45,000,000, provided that (x) all of the proceeds thereof areused to pay or prepay such Additional Bank Line, together with accrued andunpaid interest thereon, and (y) the commitment, if any, to extend credit underthe Additional Bank Line is permanently reduced in the amount of such paymentor prepayment; and further provided after giving effect to Indebtednessincurred pursuant to clauses (1) and (2) above, the Total Commitment, plus theaggregate commitments pursuant to clause (1), plus the principal amount of allIndebtedness incurred pursuant to clause (2), will not at any time exceed theaggregate amount of $141,923,076.90; and

(i)         Indebtednessin principal amount outstanding not to exceed $15,000,000 in the aggregate forthe Borrower under lines of credit offered by commercial banks to the Borrowerto finance the working capital needs of the Borrower.

**5.14     Limitation on Contingent Obligations**.  The Borrower shall not create, incur, assumeor suffer to exist any Guarantee. 

**5.15     [Intentionally Omitted].**

**5.16     Limitationon Investments, Loans and Advances**.  The Borrower shall not purchase, hold oracquire beneficially any stock, other securities or evidences of Indebtednessof, make or permit to exist any loans or advances to, or make or permit toexist any investment or acquire any interest whatsoever in, any other Person,except:

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

(b)        Permitted Investments; 

(c)        loans and advances to employees of theBorrower for travel, entertainment and relocation expenses in the ordinarycourse of business; 

(d)        Permitted Acquisitions; and

(e)        securities acquired in connection withthe bankruptcy of any supplier or customer in the ordinary course of businessand consistent with past practices or in connection with the settlement ofdelinquent accounts of any such supplier or customer.

**5.17     Limitationon Optional Payments and Modifications of Debt Instruments**.  The Borrower shall not make any optionalpayment or prepayment on or redemption, defeasance or purchase of anyIndebtedness (other than Indebtedness under this Agreement and Indebtednesspermitted under Section 5.13(h)(1)), or amend, modify or change, or consent oragree to any amendment, modification or change to its certificate ofincorporation which could reasonably be expected to result in a MaterialAdverse Effect or to the Agency Services Agreement or to any of the termsrelating to the payment or prepayment or principal of or interest on, any suchIndebtedness, other than any amendment, modification or change which wouldextend the maturity or reduce the amount of any payment of principal thereof orwhich would reduce the rate or extend the date for payment of interest thereon.

**5.18     Transactionswith Affiliates**. The Borrower shall not enter into any transaction, including, withoutlimitation, any purchase, sale, lease or exchange of property or the renderingof any service, with any Affiliate unless such transaction (a) is permittedunder this Agreement or is in the ordinary course of the Borrower's businessand (b) is upon fair and reasonable terms no less favorable to the Borrowerthan it would obtain in a comparable arm's length transaction with a Personwhich is not an Affiliate.

**5.19     Saleand Leaseback**. The Borrower shall not enter into any arrangement with any Personproviding for the leasing by the Borrower of real or personal property whichhas been or is to be sold or transferred by the Borrower to such Person if sucharrangement(s), individually or in the aggregate and together with all sucharrangements 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       AllExtensions of Credit**. The obligation of the Lenders to make any extension of credit(including, without limitation, its initial extension of credit) is subject tothe satisfaction of each of the following conditions precedent:

**6.1a     NoDefault**.  TheBorrower shall have performed and complied, in all material respects, with allagreements and conditions herein required to be performed or complied with byit prior to any extension of credit and, at the time of such extension ofcredit, no Potential Default or Event of Default shall exist.

**6.1b     RepresentationsCorrect**.  Therepresentations and warranties contained in Article III hereof shall be correctin all material respects (i) when made and (ii) at the time of each extensionof credit except for such representations and warranties which relate solely toan earlier date (in which case such representations and warranties shall havebeen true and correct in all material respects as of such date) and no MaterialAdverse Change has occurred, or will occur, as a result of such extension ofcredit.

**6.1c     Extensionof 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 requestedextension of credit.

Eachrequest for an extension of credit shall constitute, as at the time made, arepresentation and warranty by the Borrower that the matters set forth inSections 6.1a and 6.1b above are true and correct.

**6.2**       **ConditionsPrecedent to the Initial Extensions of Credit Under the Commitments**.  The effectiveness of this Agreement and theobligation of the Lenders to make the initial extensions of credit are subjectto the satisfaction of each of the following conditions precedent in additionto the applicable conditions precedent set forth in Section 6.1 above:

(i)         Receipt by the Agent on behalf of eachLender of a counterpart original of this Agreement executed by the otherLenders and the Borrower.

(ii)        Receipt by the Agent on behalf of eachLender of a Note, substantially in the form of Exhibit "B"attached hereto, made payable to such Lender in the amount of such Lender'sCommitment and otherwise properly completed and executed by the Borrower, and aSwingline 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'sCertificate of Incorporation which certification is dated not more than 30 daysprior to the Closing.

(iv)       Receipt by the Agent of a certificate,duly certified as of the date of the Closing by the secretary or assistantsecretary of the Borrower as to (A) the By-Laws of the Borrower in effect as ofthe Closing, (B) the resolutions of the Borrower's Board of Directorsauthorizing the borrowings hereunder and the execution and delivery of thisAgreement, the Notes, and all documents supplemental hereto, and (C) the namesof the officers of the Borrower authorized to sign this Agreement, the Notesand all supplemental documentation, and which contains a true signature of eachsuch officer.

(v)        Receipt by the Agent of a good standingcertificate for the Borrower from the Secretary of State of the State of NewJersey dated not more than 30 days prior to the date of Closing.

(vi)       Receipt by the Agent of the certificateof the Borrower required pursuant to Section 4.7 of this Agreement and asolvency certificate in the form of Exhibit "I" hereto.

(vii)      Receipt by the Agent of writtendisbursement instructions addressed to the Agent and executed by an AuthorizedOfficer of the Borrower relating to the initial extensions of credit.

(viii)      Receipt by the Agent on behalf of eachLender of a signed favorable opinion of James Van Horn, general counsel to theBorrower, dated as of the Closing Date and in form and substance satisfactoryto Agent and its counsel as to the matters set forth on Exhibit"G" attached hereto.

(ix)       The representations and warranties of theBorrower contained in Article III and in the other Loan Documents executed anddelivered by the Borrower in connection with the Closing shall be true andcorrect in all material respects on and as of the Closing Date with the sameeffect as though such representations and warranties had been made on and as ofsuch date (except representations and warranties which relate solely to anearlier date or time, which representations and warranties shall be true andcorrect on and as of the specific date or times referred to therein), and theBorrower shall have performed, observed and complied with all covenants and conditionshereof and contained in the other Loan Documents; no Event of Default orPotential Default under this Agreement shall have occurred and be continuing orshall exist; except as disclosed in NUI Corporation's Form 10-K filed onDecember 31, 2002 with the Securities and Exchange Commission, no MaterialAdverse 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, toeach such effect.

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

(xi)       The NUI Corporation Credit Agreementshall 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 Lendersunder the "Existing Credit Agreement" as defined in the NUICorporation Credit Agreement shall have been, or shall be concurrently with themaking of the first loans thereunder, repaid in full and all commitments undersuch "Existing Credit Agreement" of NUI Corporation shall have beenterminated.

(xii)      All amounts owing to the lenders under theExisting Credit Agreement shall have been, or shall be concurrently with themaking of the first loans hereunder, repaid in full, and the Existing CreditAgreement shall terminate and be of no further force and effect upon suchrepayment; in each case pursuant to such payout letters and other documents asthe Agent may require, each of which shall be in form and substancesatisfactory to the Agent.

(xiii)      The Borrower shall have entered into a loan agreement providingfor 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 AgencyServices Agreement among NUI Corporation and its Subsidiaries (including the Borrower),effective on or prior to the Closing Date, in form and substance acceptable tothe Agent and its counsel (the "Agency Services Agreement").

**ARTICLE VII.           DEFAULTS**

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

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

**7.2       Nonpaymentof Other Indebtedness**. The Borrower shall fail to pay any Indebtedness of the Borrower otherthan the Bank Indebtedness, in an aggregate amount of $15,000,000 or more, asand when the same shall become due, or the occurrence of any default under anyagreement or instrument under or pursuant to which such Indebtedness isincurred or issued and continuance of such default beyond the period of grace,if any, allowed with respect thereto, if such default permits or causes theacceleration of such Indebtedness or the termination of any commitment to lendwith respect thereto.

**7.3**       **Insolvency.**

**7.3a**     **InvoluntaryProceedings**.  A proceeding shallhave been instituted in a court having jurisdiction seeking a decree or orderfor relief in respect of the Borrower in an involuntary case under the Federalbankruptcy laws, or any other similar applicable Federal or state law, now orhereafter in effect, or for the appointment of a receiver, liquidator, trustee,sequestrator or similar official for the Borrower or for a substantial part ofits property, or for the winding up or liquidation of its affairs, and the sameshall remain undismissed or unstayed and in effect for a period of 60 days.

**7.3b**     **VoluntaryProceedings**.  The Borrower shallinstitute proceedings to be adjudicated a voluntary bankrupt, or shall consentto the filing of a bankruptcy proceeding against it, or shall file a petitionor answer or consent seeking reorganization under the Federal bankruptcy laws,or any other similar applicable Federal or state law now or hereinafter ineffect, or shall consent to the filing of any such petition or shall consent tothe appointment of a receiver, liquidator, trustee, sequestrator or similarofficial for the Borrower or for a substantial part of its property, or shallmake an assignment for the benefit of creditors, or shall admit in writing itsinability to pay its debts generally as they become due, or corporate actionshall be taken by the Borrower in furtherance of any of the aforesaid purposes.

**7.4**       **Terminationof Existence**.** **The Borrower shallterminate its existence or cease to exist.

**7.5       Failure to Comply with Covenants**.

**7.5a**     **Failureto Comply with Certain Article IV Covenants and Article V Covenants**.  The Borrower shall default in the observanceor performance of Section 4.3, Section 4.4, Section 4.10, Section 4.11, Section4.12 or of any covenant contained in Article V.

**7.5b     Failureto Comply with Other Covenants. **TheBorrower shall default in the due performance or observance of any othercovenant, condition or provision set forth herein and such default shall not beremedied (i) with respect to any default under Section 4.2(ix) for a period often days; and (ii) with respect to any other such default for a period of 30days after such default is known to any officer of the Borrower or noticethereof has been given to the Borrower by the Agent (such grace period to beapplicable only in the event such default can be remedied by corrective actionof the Borrower as determined by the Agent in its sole discretion).

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

**7.7**       **AdverseJudgments, Etc **Entry or filingof any one or more judgments, writs or warrants of attachment or of any similarprocess in an aggregate amount of $2,500,000 or more in excess of anythird-party insurance protecting against such liability against the Borrower oragainst 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 orother process within a period of 30 days.

**7.8**       **Invalidityor Unenforceability**.  ThisAgreement, the Notes or any other Loan Document ceases to be valid and bindingon the Borrower or is declared null and void, or the validity or enforceabilitythereof is contested by the Borrower or the Borrower denies it has any orfurther liability under this Agreement, any Note or under the other LoanDocuments to which it is a party.

**7.9**      **ERISA**.** **(i)A trustee shall be appointed by a court of competent jurisdiction to administerany Plan of the Borrower or any ERISA Affiliate; (ii) the PBGC shall terminateany Plan of the Borrower or any ERISA Affiliate or appoint a trustee toadminister any such Plan; or (iii) the Borrower or any ERISA Affiliate shallincur any liability to the PBGC in connection with any Plan, which, in any suchcase, likely would have a Material Adverse Effect.

**7.10     Changeof Control; Change of Beneficial Ownership or Board**.  Any Person or group of Persons (within themeaning of Sections 13 or 14 of the Securities and Exchange Act of 1934), otherthan the then current officers or directors of the Borrower or an underwriterwhich obtains such ownership as a result of effecting a firm committed underwritingof a secondary offering of the Borrower's voting stock on behalf of suchofficers or directors, shall have acquired beneficial ownership of (within themeaning of Rule 13d-3 and 13d-5 promulgated by the Securities and ExchangeCommission under said Act) twenty-five percent (25%) or more of the votingstock of the Borrower on a fully diluted basis with respect to which suchPersons are entitled to vote on the election of directors or, during any periodof up to 24 consecutive months, Persons who at the beginning of such 24-monthperiod were directors of the Borrower (or were appointed, nominated or electedby such Persons) cease for any reason to constitute a majority of the directorsof the Borrowers then in office.  Forpurposes of calculating the acquisition of beneficial ownership, any transferof voting stock of the Borrower by any Person or group of Persons to aPermitted Transferee shall be deemed not to constitute a conveyance andacquisition of such stock.  A "PermittedTransferee" includes any of the following with respect to any thencurrent officer or director of the Borrower: (i) spouse; (ii) linealdescendants of all generations and spouses of such lineal descendants; (iii) acharitable corporation or trust established by such then current officer ordirector or by a person described in (i) or (ii) preceding; (iv) a trust (or inthe case of a minor, a custodial account under a Uniform Gifts or Transfers toMinors Act) of which the beneficiary(ies) are one or more Persons described inthe preceding clauses (i), (ii) or (iii), and (v) an executor or administratorupon the death of such then current officer or director or any Person describedin the preceding clauses (i) or (ii).

**7.11     Consequencesof an Event of Default**. If one or more of the Events of Default occur then (a) if such Event ofDefault is set forth in Sections 7.3 or 7.4, the Commitments shallautomatically terminate and the Notes then outstanding and all other amountsowing under this Agreement (including, without limitation, all amounts of L/CObligations, whether or not the beneficiaries of the then outstanding Lettersof Credit shall have presented the documents required thereunder) shall becomeimmediately due and payable, without necessity of demand, presentation,protest, notice of dishonor or notice of default or (b) if such Event ofDefault is set forth in any of the remaining Sections of this Article VII, thenthe Agent, at the request of the Required Lenders, and upon notice to theBorrower, shall declare the Borrower in default hereunder, and upon suchdeclaration, shall, at the request of the Required Lenders, terminate theCommitment and/or declare the Notes then outstanding and all other amountsowing under this Agreement (including, without limitation, all amounts of L/CObligations, whether or not the beneficiaries of the then outstanding Lettersof Credit shall have presented the documents required thereunder) immediatelydue and payable, without necessity of any further demand, presentation,protest, notice of dishonor or further notice of default, whereupon the sameshall be immediately due and payable.

** **Withrespect to all Letters of Credit with respect to which presentment for honorshall not have occurred at the time of an acceleration pursuant to thepreceding paragraph, the Borrower shall at such time deposit in a cashcollateral account opened by the Agent an amount equal to the aggregate thenundrawn and unexpired amount of such Letters of Credit.  The Borrower hereby grants to the Agent, forthe benefit of the Issuing Bank and the L/C Participants, a security interestin such cash collateral to secure all obligations of the Borrower under thisAgreement and the other Loan Documents. Amounts held in such cash collateral account shall be applied to thepayment of drafts drawn under such Letters of Credit, and the unused portionthereof after all such Letters ofCreditshall have expired or been fully drawn upon, if any, shall be applied to repayother obligations of the Borrower hereunder and under the Notes.  After all such Letters of Credit shall haveexpired or been fully drawn upon, all Reimbursement Obligations shall have beensatisfied and all other obligations of the Borrower hereunder and under theNotes shall have been paid in full, the balance, if any, in such cashcollateral account shall be returned to the Borrower.  The Borrower shall execute and deliver to the Agent, for theaccount of the Issuing Bank and the L/C Participants, such further documentsand instruments as the Agent may request to evidence the creation andperfection of the within security interest in such cash collateral account.

**7.12**     **RemediesUpon Default**.** **Upon thetermination of the Commitments and acceleration of the Notesfollowing the occurrence of an Event of Default, the Lenders shall, unless suchtermination and acceleration subsequently have been rescinded, have the fullpanoply of rights and remedies granted to them under this Agreement and allthose rights and remedies granted by law to creditors, and the Agent, at thedirection of the Required Lenders, shall proceed to protect and enforce theLenders' rights by an action at law, suit in equity or other appropriateproceeding, whether for the specific performance of any agreement containedherein, in the Notes or in any of the other Loan Documents, or for aninjunction against a violation of any of the terms hereof or thereof, or in aidof the exercise of any power granted hereby or thereby or by law.  No right, power or remedy conferred by thisAgreement, in the Notes, or by any other Loan Document, upon the Agent or theLenders shall be exclusive of any other right, power or remedy referred toherein or therein or now or hereafter available at law, in equity, by statuteor otherwise.  No exercise of any oneright or remedy shall be deemed a waiver of other rights or remedies.  The rights and remedies of the Agent and theLenders specified herein are for the sole and exclusive benefit, use andprotection of the Agent and the Lenders, and the Agent and the Lenders shall beentitled, but shall have no duty or obligation, to exercise or to refrain fromexercising any right or remedy reserved to the Agent or the Lenders hereunder.

**ARTICLE VIII.         AGREEMENTAMONG LENDERS.**

**8.1**      **Appointmentand Grant of Authority**.  Each ofthe Lenders hereby appoints Fleet National Bank and Fleet National Bank herebyagrees to act as, the Agent under this Agreement, the Notes and the other LoanDocuments.  As such Agent, FleetNational Bank shall have and may exercise such powers under this Agreement andthe other Loan Documents as are specificallydelegated to the Agent, by the terms hereto or thereof, togetherwith such other powers as are incidental thereto.  Without limiting the foregoing, the Agent, on behalf of theLenders, is authorized to execute all of the Loan Documents (other than thisAgreement) and to accept all of the Loan Documents and all other agreements,documents or instruments reasonably required to carry out the intent of theparties to this Agreement.

**8.2**       **Delegationof Duties**.  The Agent mayperform any of its duties hereunder by or through agents or employees (providedsuch delegation does not constitute a relinquishment of duties as the Agenthereunder) and, subject to Sections 8.7 and 9.2 hereof, shall be entitled toengage and pay for the advice or services of any attorneys, accountants, orother experts concerning all matters pertaining to duties hereunder and to relyupon any advice so obtained.

**8.3**       **Relianceby Agent on Lenders for Funding**. Unless the Agent shall have received notice from a Lender prior to anyBorrowing Date that such Lender will not make available to the Agent suchLender's portion of net disbursements of Loans, the Agent may assume that suchLender has made such portion available to the Agent and the Agent may, inreliance upon such assumption, make Loans to the Borrower.  If and to the extent that such Lender hasnot 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 immediatelyupon demand, in immediately available funds, such unpaid amount, together withinterest thereon for each day from the applicable Borrowing Date until suchamount is repaid to the Agent, at (i) in the case of the Borrower, at the rateof interest then in effect for such Loan and (ii) in the case of such Lender,at the Federal Funds Effective Rate.  Ifsuch Lender shall repay to the Agent such corresponding amount, such amountshall constitute a Loan made by such Lender for purposes of this Agreement.  The failure by any Lender to pay its portionof a Loan made by the Agent shall not relieve any other Lender of theobligation to pay its portion of net disbursements of Loans on any BorrowingDate, but no Lender shall be responsible for the failure of any other Lender tomake its net share of Loans to be made by such other Lender on such BorrowingDate.

**8.4**       **Non-Relianceon Agent**.  Each Lender agreesthat it has, independently and without reliance on the Agent, based on suchdocuments and information as it has deemed appropriate, made its own creditanalysis and evaluation of the Borrower and its operations and decision toenter into this Agreement and that it will, independently and without relianceupon the Agent, and based on such documents and information as it shall deemappropriate at the time, continue to make its own analysis and decisions intaking or not taking action under this Agreement.  Except as otherwise provided herein, the Agent shall have no dutyto keep the Lenders informed as to the performance or observance by theBorrower of this Agreement or any other document or instrument referred to orprovided for herein or to inspect the properties or books of the Borrower.  The Agent, in the absence of grossnegligence or willful misconduct, shall not be liable to any Lender for itsfailure to relay or furnish to the Lender any information.  

**8.5**       **Responsibility of Agent and Other****Matters****.**

**8.5a     MinisterialNature of Duties**. As among the Lenders and the Agent, the Agent shall have no duties orresponsibilities except those expressly set forth in this Agreement, the Notesor in the other Loan Documents, and those duties and responsibilities shall besubject to the limitations and qualifications set forth in this Article VIII.  The duties of the Agent shall be ministerialand administrative in nature.

**8.5b**     **Limitationof Liability**.  As among theLenders 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 ornot such action taken or omitted is within or without the Agent'sresponsibilities and duties expressly set forth in this Agreement) under or inconnection with this Agreement or any other instrument or document inconnection herewith except for gross negligence or willful misconduct.  Without limiting the foregoing, neither theAgent 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, theNotes or any of the other Loan Documents or (B) any other document orinstrument furnished pursuant to or in connection with this Agreement, (ii) thecollectability of any amounts owed by the Borrower to the Lenders, (iii) thetruthfulness of any recitals, statements, representations or warranties made tothe Agent or the Lenders in connection with this Agreement, (iv) any failure ofany party to this Agreement to receive any communication sent, including anytelegram, 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 entrustedto the mails or to a delivery service, or (v) the assets, liabilities,financial condition, results of operations, business or prospects, orcreditworthiness of the Borrower.

**8.5c     Reliance**.  The Agent shall be entitled to act, andshall be fully protected in acting upon, any telegram, teletype, facsimiletransmission 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 correctand to have been signed or sent or made by a proper Person.  The Agent may consult counsel and shall beentitled to act, and shall be fully protected in any action taken in goodfaith, in accordance with advice given by counsel.  The Agent may employ agents and attorneys-in-fact and shall notbe liable for the default or misconduct of any such agents or attorneys-in-factselected by the Agent with reasonable care. The Agent shall not be bound to ascertain or inquire as to theperformance or observance of any of the terms, provisions or conditions of thisAgreement or any of the other Loan Documents on the part of the Borrower or anyother party thereto.

**8.6       Actions inDiscretion of Agent; Instructions from the Lenders.**  The Agent agrees, upon the written requestof the Required Lenders, to take or refrain from taking any action of the typespecified as being within the Agent's rights, powers or discretion herein orunder any Loan Documents, provided that the Agent shall not be required to takeany action which exposes the Agent to personal liability or which is contraryto this Agreement or any other Loan Document or applicable law.  In the absence of a request by the RequiredLenders, the Agent shall have authority, in its sole discretion, to take or notto take any such action, unless this Agreement specifically requires theconsent of the Required Lenders or all of the Lenders.  Any action taken or failure to act pursuantto such instructions or discretion shall be binding on the Lenders, subject to Section8.5b hereof.  Subject to the provisionsof Section 8.5b, no Lender shall have any right of action whatsoever againstthe Agent as a result of the Agent acting or refraining from acting hereunderin accordance with the instructions of the Required Lenders.

**8.7       Indemnification.**  To the extent the Borrower does notreimburse and save harmless the Agent according to the terms hereof for andfrom all costs, expenses and disbursements in connection herewith, such costs,expenses and disbursements shall be borne by the Lenders ratably in accordancewith their respective Commitment Percentages. Each Lender hereby agrees on such basis (i) to reimburse the Agent forsuch Lender's pro rata share of all such reasonable costs, expenses anddisbursements on request and (ii) to the extent of each such Lender's pro ratashare, to indemnify and save harmless the Agent against and from any and alllosses, obligations, penalties, actions, judgments and suits and other costs,expenses and disbursements of any kind or nature whatsoever which may beimposed on, incurred by or asserted against the Agent, other than as aconsequence 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 otherLoan Documents or any other agreement, instrument or document executed ordelivered in connection herewith or therewith, or (ii) any action taken at therequest of the Required Lenders or all of the Lenders hereunder, as the casemay be, including without limitation the reasonable costs, expenses anddisbursements in connection with defending themselves against any claim orliability, or answering any subpoena or other process related to the exerciseor performance of any of their powers or duties under this Agreement, the otherLoan Documents, or any of the other agreements, instruments or documentsexecuted or delivered in connection herewith or the taking or refraining fromany action under or in connection with any of the foregoing.

**8.8       Agent'sRights as a Lender.** With respect to the Commitment of the Agent as a Lender hereunder, anyLoans of the Agent under this Agreement or the other Loan Documents, withrespect to any Letters of Credit issued or participated in by it, and any otheramounts due to the Agent under this Agreement, the Agent shall have the samerights and powers, duties and obligations under this Agreement, the Notes, theother Loan Documents or other agreement, instrument or document as any Lenderand may exercise such rights and powers and shall perform such duties andfulfill such obligations as though it were not the Agent.  The Agent may accept deposits from, lendmoney to, and generally engage, and continue to engage, in any kind of businesswith the Borrower as if it were not the Agent.

**8.9       Paymentto Lenders.** Except as otherwise set forth in Section 8.3 hereof, promptly afterreceipt from the Borrower of any principal repayment of the Loans, interest dueon the Loans, any payment of the Reimbursement Obligations and any FacilityFees 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 Lenderor the Agent), the Agent shall distribute to each Lender that Lender's share ofthe funds so received.   

**8.10     ProRata Sharing**. Except as otherwise set forth in Section 8.3 hereof, all interest andprincipal 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 Lendersin proportion to the extensions of credit outstanding from each Lender or, ifno such Loans or Letters of Credit are then outstanding, in accordance withtheir respective Commitment Percentages. Any sums obtained from the Borrower by any Lender by reason of theexercise of its rights of set-off, banker's lien or in collection shall beshared (net of costs) pro rata among the Lenders on the basis of the principalamount of Loans and/or Letters of Credit outstanding.  Nothing in this Section 8.10 shall be deemed to require thesharing among the Lenders of collections specifically relating to, or of theproceeds of any collateral securing, any other Indebtedness of the Borrower toany Lender.

**8.11**     **SuccessorAgent**.

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

**8.11b**   **Rightsof the Former Agent**.  Upon theappointment of such successor agent or upon the expiration of such 30 dayperiod (or any longer period to which the Agent has agreed), the former Agent'srights, powers and duties as Agent shall be terminated, without any other orfurther act or deed on the part of such former Agent or any of the parties tothis Agreement.  After any retiringAgent's resignation hereunder as Agent hereunder, the provisions of thisArticle VIII shall inure to the benefit of such retiring Agent as to anyactions taken or omitted to be taken by it while it was Agent under thisAgreement.

**8.12     Noticeof Default**.  TheAgent shall not be deemed to have knowledge or notice of the occurrence of anEvent of Default unless the Agent has received written notice from a Lender orthe Borrower referring to this Agreement, describing such Event of Default andstating that such notice is a "notice of default".

**8.13**     **Notices. **The Agent shall promptly send to eachLender a copy of all notices received from the Borrower pursuant to theprovisions of this Agreement or the other Loan Documents promptly upon receiptthereof.  The Agent shall promptly notifythe Borrower and the other Lenders of each change in the Base Rate and theeffective date thereof.

**8.14     Holdersof Notes**.  TheAgent may deem and treat any payee of any Note as the owner thereof for allpurposes hereof unless and until written notice of the assignment or transferthereof shall have been filed with the Agent. Any request, authority or consent of any person who at the time ofmaking such request or giving such authority or consent is the holder of anyNote shall be conclusive and binding on any subsequent holder, transferee orassignee of such Note or of any Note or Notes issued in exchange therefor.

**8.15     Calculations**.  In the absence of gross negligence orwillful misconduct, the Agent shall not be liable for any error in computingthe amount payable to any Lender whether in respect of the Loans, Fees or anyother amounts due to the Lenders under this Agreement.  In the event an error in computing anyamount payable to any Lender is made, the Agent, the Borrower and each affectedPerson shall, forthwith upon discovery of such error, make such adjustments asshall be required to correct such error, and any compensation therefor will becalculated at the Federal Funds Effective Rate.

**8.16     Beneficiaries**.  Except as expressly provided herein, theprovisions of this Article VIII are solely for the benefit of the Agent and theLenders, and the Borrower shall not have any rights to rely on or enforce anyof the provisions hereof.  In performingits functions and duties under this Agreement, the Agent shall act solely asagent of the Lenders and does not assume and shall not be deemed to haveassumed any obligation toward or relationship of agency or trust with or forthe Borrower.

**ARTICLE IX.            GENERALPROVISIONS**

**9.1**       **Amendmentsand Waivers**.** **Subject to the remaining provisions ofthis Section 9.1, the Agent, the Lenders and the Borrower may, from time totime, enter into amendments, extensions, renewals, modifications, supplementsand replacements to and of this Agreement, the Notes or the other LoanDocuments 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 bythe Borrower shall be effective unless it is in writing and is signed by theRequired Lenders (or the Agent with the written consent of the RequiredLenders), and then such waiver or consent shall be effective only for thespecific instance and for the specific purpose for which it is given; provided,however, that no amendment, renewal, modification, waiver or consent, unless inwriting and signed by all of the Lenders (or the Agent with the written consentof all of the Lenders), shall do any of the following:

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

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

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

(D)       decrease the interest rate relating tothe Loans;

(E)       postpone any date fixed for any paymentof principal of or interest on the Loans, the Facility Fee, or any otherobligations 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 Section9.1.

Any such supplementalagreement shall apply equally to the Borrower and each of the Lenders and shallbe binding upon the Borrower, the Lenders, the Agent and all future holders ofthe Notes.  In the case of any waiver,the Borrower, the Lenders and the Agent shall be restored to their formerpositions and rights, and any Event of Default waived shall be deemed to becured and not continuing, but no such waiver shall extend to any subsequent orother Event of Default, or impair any right consequent thereon.

**9.2**       **Expenses**.  The Borrower shall pay:

(i)         Allreasonable costs and expenses of the Agent (including without limitation thereasonable 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 reasonablefees or expenses associated with travel or other costs relating to anyappraisals or examinations conducted in connection with the Loans) incurred inconnection with the preparation, negotiation, execution and delivery of thisAgreement and the other Loan Documents and any and all other documents andinstruments prepared in connection herewith, including but not limited to allamendments, extensions, modifications, replacements, waivers, consents andother documents and instruments prepared or entered into from time to time;

(ii)        All costs and expenses of the Agent andthe Lenders (including without limitation the fees and disbursements of theAgent's and the Lenders' counsels, which may be in house counsel) in connectionwith (A) the enforcement of this Agreement and the other Loan Documents arisingpursuant 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 ofthe Loan Documents.

All of such costs andexpenses shall be payable by the Borrower to the Lenders or the Agent, as thecase may be, upon demand or as otherwise agreed upon by the Lenders or theAgent and the Borrower, and shall constitute Bank Indebtedness under thisAgreement.  The Borrower further agreesto pay, and save the Agent and the Lenders harmless from any and all liabilityfor, any stamp or other taxes which may be payable with respect to theexecution or delivery of this Agreement or the issuance of the Notes.  The Borrower's obligation to pay such costsand expenses shall survive the termination of this Agreement and the repaymentof the Bank Indebtedness.

**9.3       Notices**.  All notices, requests and demands to or uponthe respective parties hereto to be effective shall be in writing (including bytelecopy), and, unless otherwise expressly provided herein, shall be deemed tohave 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, inthe case of telecopy notice, when received, addressed as follows in the case ofthe Borrower and the Agent, and as set forth in an administrative questionnairedelivered to the Agent in the case of the Lenders, or to such other address asmay be hereafter notified by the respective parties hereto:

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

The Agent:                                           FleetNational Bank                                                            100Federal Street                                                            MailStop:  MADE 10008A                                                            Boston,Massachusetts  02110                                                            Attention:   Mr. Stephen J. Hoffman                                                            Telephone:  (617) 434-6520                                                            Telecopier:  (617) 434-3652

**9.4**       **TaxWithholding**.  At least fiveBusiness Days prior to the first date on which interest or fees are payablehereunder for the account of each Lender, each Lender or assignee orparticipant of a Lender that is not incorporated under the laws of the UnitedStates of America or a state thereof agrees that it will deliver to the Agentand the Borrower two duly completed copies of either (i) IRS Form W-9, 1001 or4224 or such other applicable form prescribed by the IRS, certifying in eachcase that such Lender or assignee or participant of a Lender is entitled toreceive payments under this Agreement or its Notes without deduction orwithholding of United States federal income taxes, or is subject to such tax ata reduced rate under an applicable tax treaty or (ii) IRS Form W-8 or suchother applicable form prescribed by the IRS or a certificate of such Lender orassignee or participant of a Lender indicating that no such exemption orreduced rate of taxation is allowable with respect to such payments.  Each Lender or assignee or participant of aLender which delivers an IRS Form W-8, W-9, 4224, 1001 or other such applicableform further undertakes to deliver to the Agent and the Borrower two additionalcopies of any such form (or any successor form) on or before the date on whichthat form expires or becomes obsolete or after the occurrence of any eventrequiring a change in the most recent form so delivered by it, and suchamendments thereto or extensions or renewals thereof as may be reasonablyrequested by the Borrower or the Agent, either certifying that such Lender orassignee or participant of a Lender is entitled to receive payments under thisAgreement or its Notes without deduction or withholding of any United Statesfederal income taxes or is subject to such tax at a reduced rate under anapplicable tax treaty or stating the date on which that no such exemption orreduced rate is allowable.  The Agentshall be entitled to withhold, from each payment hereunder or under the Notespayable to it, United States federal income taxes at the full withholding rateunless each Lender referred to in the first sentence of this Section 9.4establishes an exemption or at the applicable reduced rate established pursuantto the above provisions.

**9.5**       **Successorsand Assigns**.** **This Agreement shall be binding upon theBorrower, the Agent and the Lenders and their respective successors andassigns, and shall inure to the benefit of the Borrower, the Agent and theLenders 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 anyof the other Loan Documents without the prior written consent of the Lenders.

**9.6**       **Assignmentsand Participations**.

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

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

(ii)        During the first 90 days following theClosing Date, each assignment made shall become effective only on a date whichcoincides 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 giveits prior consent to any such assignment which consent shall not beunreasonably withheld; it being agreed that it shall not be deemed unreasonablefor the Borrower to decline to consent to such assignment if (A) suchassignment would result in incurrence of additional costs to the Borrower underArticle II, or (B) the proposed assignee has not provided to the Borrower anytax forms received under Section 9.4; provided, however, noconsent is required for the transfer by a Lender to its Affiliate or to anotherLender so long as the conditions in clauses (A) and (B) immediately above aresatisfied; and

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

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 andduring the continuation of an Event of Default, and providedfurther,that upon the occurrence and during the continuance of an Event of Default theconsent of the Borrower to any assignment is not required.

Uponthe execution, delivery, acceptance and recording of any such Assignment andAssumption Agreement, from and after the Transfer Effective Date determinedpursuant to such Assignment and Assumption Agreement, all parties hereto agreethat (a) the Purchasing Lender thereunder shall be a party hereto as a Lenderand, to the extent provided in such Assignment and Assumption Agreement, shallhave the rights and obligations of a Lender hereunder with a Commitment as setforth therein, and (b) the Transferor Lender thereunder shall, to the extentprovided in such Assignment and Assumption Agreement, be released from itsobligations as a Lender under this Agreement. Such Assignment and Assumption Agreement shall be deemed to amend thisAgreement (without further action) to the extent, and only to the extent,necessary to reflect the addition of such Purchasing Lender as a Lender and theresulting adjustment of Commitment Percentages arising from the purchase bysuch Purchasing Lender of all or a portion of the rights and obligations ofsuch 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 thesurrendered Notes held by the Transferor Lender, new Notes to the order of suchPurchasing Lender in an amount equal to the Commitment or the Loans andReimbursement Obligations assumed by it and purchased by it pursuant to suchAssignment and Assumption Agreement, and new Notes to the order of theTransferor Lender in an amount equal to the Commitment or the Loans retained byit hereunder.

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

**9.6b**     **AssignmentRegister**.  The Agent shallmaintain, at its address referred to in Subsection 9.3, a copy of eachAssignment 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 ofthe Loans and/or the Letters of Credit owing to each Lender from time totime.  The entries in the Register shallbe conclusive, in the absence of manifest error, and the Borrower, the Agentand the Lenders may treat each Person whose name is recorded in the Register asthe owner of the Loans recorded therein for all purposes of thisAgreement.  The Register shall beavailable at the office of the Agent set forth in Subsection 9.3 for inspectionby either Borrower or any Lender at any reasonable time and from time to timeupon reasonable prior notice.

**9.6c**     **Participations**.  Each Lender, in the ordinary course of itscommercial banking business and in accordance with applicable law, may sell toone or more Participants a participating interest in any Loan owing to suchLender, the interest of such Lender in any Notes or the Commitment of suchLender.  In the event of any such saleby a Lender of a participating interest to a Participant, such Lender'sobligations under this Agreement to the other parties to this Agreement shallremain unchanged, such Lender shall remain solely responsible for theperformance thereof, such Lender shall remain the holder of its Notes for allpurposes under this Agreement and the Borrower, the other Lenders and the Agentshall continue to deal solely and directly with such Lender in connection withsuch Lender's rights and obligations under this Agreement or its Notes and theParticipants shall have voting rights only with respect to matters described initems (B), (C), (D), (E) and (F) of Section 9.l.

**9.7**       **Severability**.  Any provision of this Agreement which isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining portions hereof or affecting the validity orenforceability of such provision in any other jurisdiction.  

**9.8**       **Survival**.  All representations, warranties, covenantsand agreements of the Borrower contained herein in the Notes or in the otherLoan Documents or made in writing in connection herewith or therewith shallsurvive the issuance of the Notes and shall continue in full force and effectso long as the Borrower may borrow hereunder and so long thereafter untilpayment in full of all the Notes and the Bank Indebtedness.

**9.9       GoverningLaw**.  **This Agreement, each Note and each otherLoan Document shall be a contract made under, governed by and construed inaccordance with the laws of the State of New Jersey without reference to theprovision thereof regarding conflicts of law except where such law issuperseded by applicable Federal law.**

**9.10     Non-BusinessDays**.  Exceptas otherwise specifically required pursuant to the terms of this Agreement,whenever any payment hereunder or under the Notes is due and payable on a daywhich is not a Business Day, such payment may be made on the next succeedingBusiness Day.

**9.11**     **Integration**.  This Agreement constitutes the entireagreement between the parties relating to this financing transaction and itsupersedes 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 inthis Agreement are intended for convenience only and shall not affect themeaning or construction of this Agreement.

**9.13**     **Set-Off**.  The Borrower hereby gives to the Lenders alien and security interest for the amount of any Bank Indebtedness upon and inany property, credits, securities or money of the Borrower which may at anytime be delivered to, or be in the possession of, or owed by any Lender in anycapacity whatever, including the balance of any deposit account but excludingany trust or fiduciary accounts, in each case maintained by the Borrower withsuch Lender.  The Borrower herebyauthorizes 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 orowed to the Borrower.  Nothing herein shallrestrict any Lender's ability to set off any property, credits, securities ormoney of the Borrower which may at any time be delivered to, or be inpossession or owed to any Lender in any capacity whatever to satisfy anindependent obligation of the Borrower to the Lender.

**9.14     Consentto Forum**.  Theparties hereto each hereby irrevocably consents to the nonexclusivejurisdiction of the Courts of the Commonwealth of Massachusetts or any Federalcourt sitting therein in any action or proceeding arising out of or relating tothis Agreement, the Notes or the other Loan Documents, and each party agreesthat a summons and complaint commencing an action or proceeding in either ofsuch courts shall be properly served and shall confer personal jurisdiction ifserved personally or by certified mail to the party at its respective addressset forth in Section 9.3, or as otherwise provided under the laws of theCommonwealth of Massachusetts.  Further,the parties hereby specifically waive and hereby acknowledge that the partiesare estopped from raising any claim that any such court lacks personaljurisdiction over such party so as to prohibit either such court fromadjudicating any issues raised in a complaint filed with any such court againstthe Borrower or the Lenders concerning this Agreement.

**9.15**     **Waiverof Jury Trial**.  Each of theAgent, the Lenders and the Borrower hereby knowingly, voluntarily andintentionally waive any rights they may have to a trial by jury in respect ofany 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 ofdealing, statements (whether verbal or written) or actions of the Agent, theLenders or the Borrower relating hereto or thereto. Except as prohibited bylaw, the Borrower hereby waives any right it may have to claim or recover inany litigation any special, exemplary, punitive or consequential damages or anydamages other than, or in addition to, actual damages. The Borrower acknowledgesand agrees that it has received full and sufficient consideration for thisprovision (and each other provision of each other Loan Document to which it isa party) and that this provision is a material inducement for the Lenders toenter into this Agreement and each such other Loan Document.

**9.16**     **Indemnity**.  The Borrower hereby agrees to indemnify theAgent, 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 disbursementsreasonably incurred by any such Person in connection with the preparation foror defense of any pending or threatened claim, action or proceeding), sufferedor incurred by any of them under any applicable federal or state law orotherwise caused by, arising out of, resulting from or in any manner connectedwith, the execution, delivery and performance of each of the Loan Documents,the Loans and any and all transactions related to or consummated in connectionwith the Loans.  The indemnity set forthin this Section 9.16 shall be in addition to any other obligations or liabilitiesof the Borrower to the Agents or the Lenders, or at common law orotherwise.  The provisions of thisSection 9.16 shall survive the payment of the Bank Indebtedness and thetermination of this Agreement.  Theforegoing provisions of this Section 9.16 to the contrary notwithstanding, theBorrower shall not be obligated to indemnify the Agent, or any Lender pursuantto this Section 9.16 for (i) any losses, liabilities, damages, claims or costssuffered or incurred by any of them in connection with the administrativetransfer of funds in connection with this Agreement and which arise directlyfrom the Agent's or such Lender's gross negligence or willful misconduct, or(ii) any other losses, liabilities, damages, claims, or costs which arisedirectly from the Agent's, or such Lender's gross negligence or willfulmisconduct.  All amounts owed pursuantto 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 severalcounterparts and by each party on a separate counterpart, each of which, whenso executed and delivered, shall be an original, but all of which togethershall 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 morethan one such counterpart signed by the other party against whom enforcement issought.

**9.18**     **Replacementof Note. **Upon receipt of anaffidavit of an officer of any Lender or the Agent (including anindemnification agreement reasonably satisfactory to the Borrower) as to theloss, theft, destruction or mutilation of any Note or any other Loan Documentwhich is not of public record, and, in the case of any such loss, theft,destruction or mutilation, upon surrender and cancellation of such Note orother Loan Document, the Borrower will issue, in lieu thereof, a replacementNote or other Loan Document in the same principal amount thereof and otherwiseof like tenor.

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

have caused thisCredit Agreement to be executed by their respective officers thereunto dulyauthorized 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 ManiTitle:    VicePresident

**IN WITNESS WHEREOF**,intending to be legally bound hereby, the undersigned Lender has caused thisCredit Agreement by and among **NUIUTILITIES, INC., THE LENDERS PARTY HERETO** and **FLEET NATIONAL BANK**, as Agent, to be executed by its dulyauthorized 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 thisCredit Agreement by and among **NUIUTILITIES, INC., THE LENDERS PARTY HERETO** and **FLEET NATIONAL BANK**, as Agent, to be executed by its dulyauthorized 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 thisCredit Agreement by and among **NUIUTILITIES, INC., THE LENDERS PARTY HERETO** and **FLEET NATIONAL BANK**, as Agent, to be executed by its dulyauthorized 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 thisCredit Agreement by and among **NUIUTILITIES, INC., THE LENDERS PARTY HERETO** and **FLEET NATIONAL BANK**, as Agent, to be executed by its dulyauthorized 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 thisCredit Agreement by and among **NUIUTILITIES, INC., THE LENDERS PARTY HERETO** and **FLEET NATIONAL BANK**, as Agent, to be executed by its dulyauthorized 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 |