**EXHIBIT 10.3**

** **

** **

** **

**CREDIT AGREEMENT**

**Dated as of**

**February 12, 2003**

 

**By and Among**

 

**NUI UTILITIES, INC.,**

asthe Borrower,

 

**THE FINANCIAL INSTITUTIONS PARTY HERETO,**

asthe Lenders hereunder,

**FLEET NATIONAL BANK,**

asthe Agent,

and

**FLEETSECURITIES, INC.,**

asthe Arranger

 

TABLE OFCONTENTS

 

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

9.1

Amendments  and Waivers

49

9.2

Expenses

50

9.3

Notices

50

9.4

Tax  Withholding

51

9.5

Successors  and Assigns

51

9.6

Assignments  and Participations

51

9.6a

Assignments

51

9.6b

Assignment  Register

53

9.6c

Participations

53

9.7

Severability

53

9.8

Survival

53

9.9

Governing  Law

54

9.10

Non-Business  Days

54

9.11

Integration

54

9.12

Headings

54

9.13

Set-Off

54

9.14

Consent  to Forum

54

9.15

Waiver  of Jury Trial

55

9.16

Indemnity

55

9.17

Counterparts

55

9.18

Replacement  of Note

55

 

TABLEOF EXHIBITS

Exhibit

Exhibit A                      Pricing Grid

Exhibit B                      Form of Note

Exhibit C                      Form of Loan Request

Exhibit D                      Form of Compliance Certificate

Exhibit E                       Form of Opinion of Counsel

Exhibit F                       Form of Assignment and AssumptionAgreement

Exhibit G                      Form of Solvency Certificate

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"), each 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**, as Agent forthe Lenders (in such capacity the "Agent"), and **FLEETSECURITIES, INC.**, as Arranger (the "Arranger").

**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 theBorrower from time to time prior 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 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 the following terms shallhave the meaning specified unless the context otherwise requires:

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

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

            "Affiliate" 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(xiii).

            "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 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 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 by Moody's,the "Applicable Euro-Rate Margin" means, for each Euro-Rate Portion,a rate per annum equal to the annualized rates (stated in terms of basispoints) indicated on the pricing grid attached hereto as Exhibit A andcorresponding to the ratings established by S&P applicable to theBorrower's Senior Ratings at such date of determination.

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

            "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 Facility Fee, otherFees, interest on any of the foregoing, and the other amounts, including,without limitation, expenses, due hereunder.

            "Base Rate" means,for any day, the higher of (i) the sum of (A) the Federal Funds Effective 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 in an aggregate principal amount at any onetime outstanding not to exceed the amount set opposite such Lender's name onthe signature pages hereto (as such amount may change from time to timepursuant to the terms hereof, or, in the case of a Purchasing Lender, in itsAssignment and Assumption Agreement) and, as to all Lenders, the obligation ofthe Lenders to make Loans available to the Borrower in an aggregate amountequal to the Commitments of all of the Lenders.

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

            "Commitment Period"means the period from and including the Closing Date to but not including 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"D".

            "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.

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

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

"Encumbrance"means any encumbrance, mortgage, lien, charge, pledge, security interest,priority payment, conditional sales agreement right, or other title 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" that rate per annum (rounded upward, if necessary, to thenearest 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 interestdetermination date, then the Euro Base Rate for any Interest Period will bedetermined on the basis of the offered rates for deposits in Dollars for aperiod of time comparable to such Interest Period which are offered by fourmajor banks in the London interbank market at approximately 11:00 a.m. (Londontime) on that day that is two London Business Days preceding the first day ofsuch Interest Period, as selected by the Agent.  The principal London office of each of four major London bankswill be requested to provide a quotation of its Dollar deposit offeredrate.  If at least two such quotationsare provided, 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.

            "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 (statedin terms 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 "FederalFunds 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 financialcondition of a second Person and (vi) agreements for the purchase or otheracquisition of products, materials, supplies or services, if in any casepayment therefor is to be made regardless of the non-delivery of such products,materials or supplies 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.

"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 theordinary course of business consistent with past practices), title retentiondevice, letter of credit obligation, Hedging Obligation, reimbursementagreement and reimbursement obligations arising thereunder, Guaranty,obligations relating to securitization transactions, synthetic leasetransactions and sale-leaseback transactions.

"InterestPeriod" means, subject to the provisions of Subsection 2.2c, any Loansbearing interest at the Euro-Rate Option, any individual period of one, two,three or six months selected by the Borrower commencing on the Borrowing Date,conversion date or renewal date of a Euro-Rate Portion to which such periodshall apply.

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

"Loans"means each advance of funds by a Lender to the Borrower pursuant toSection 2.1a.

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

"LoanDocuments" means collectively this Agreement, the Notes, and any otherdocuments 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"C" hereto.

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

"MarketCapitalization" has the meaning given it in the definition of "PermittedAcquisition" 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.

"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, together withall extensions, renewals, amendments, modifications, substitutions andreplacements 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 by theBorrower.  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 securepayment of workers' compensation obligations, unemployment insurance, depositsor indemnities to secure public or statutory obligations or for similarpurposes;

(iii)            Encumbrances arising out ofjudgments or awards against such Person but only to the extent that thecreation of any such Encumbrance shall not be an event or condition which, withor without notice or lapse of time or both, would cause the Borrower to be inviolation of Section 7.7;

(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 not overdueor, if overdue, is being contested in good faith by appropriate actions orproceedings diligently conducted;

(v)            Security interests in favor oflessors of personal property, which property is the subject of a true leasebetween such 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 Encumbrancescreated in the ordinary course of business which Encumbrances do not interferein any material respect 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 Indebtednessof the Borrower permitted by Section 5.13(b) incurred to finance the purchaseof new 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 Indebtednessof the 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 theproperty or assets acquired in a Permitted Acquisition securing Indebtedness ofthe type permitted by Section 5.13(b), provided that (1) suchEncumbrance existed prior to such Permitted Acquisition, (2) any such Encumbrancesdo not by their terms cover property or assets other than those acquired in thePermitted Acquisition, and (3) any such Encumbrances do not by their termssecure Indebtedness other than Indebtedness of the type permitted by Section5.13(b) existing prior to such Permitted Acquisition; and

(xii)            Encumbrances created or deemed toexist in connection with any securitization transaction permitted under Section5.13(i), 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 issuedor unconditionally 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 obligationsissued by any state of the United States of America or any politicalsubdivision of any such state or any public instrumentality thereof and, at thetime of acquisition, having one of the two highest ratings generally obtainablefrom either 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 whichare primarily 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.

"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.

"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%) ofthe aggregate principal amount of the Loans at the particular 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, theaggregate amount of all Loans made by such Lender.

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

"SeniorCredit Agreement" means the Credit Agreement, dated as of the datehereof among the Borrower, each of the lenders as specified therein, FleetNational Bank, as the agent and as swingline lender.

"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.

"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 the acquisition.  For purposes of clause (d) of the precedingsentence, the maximum amount of any payment or other consideration specifiedtherein shall be the maximum amount provided for in the relevant agreement, or,if no maximum amount is so provided, the amount reasonably estimated by Borroweron the basis of assumptions and calculations provided in writing to the Agentand approved by it.  Such assumptionsshall include reasonable projections of any measure of financial or otherperformance that enters into the calculation of the amount of any such paymentor other consideration but shall not include any assumption that any otherfuture event that is a condition to such payment or consideration (such as thelater disposition of the acquired business or a public or private offering ofsecurities) 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 DocumentaryCredits (1993 Revision), International Chamber of Commerce Publication No. 500,as may be amended from time to time.

**1.2**            **GAAPDefinitions******.** **Accountingterms used herein but not defined herein shall have the meanings ascribed tothem under GAAP consistent with those utilized in preparing the auditedfinancial statements referred to in Section 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 Agreementin the singular shall have comparable meanings when used in plural, and viceversa, unless otherwise specified.

(iii)            The word "or" as usedherein shall mean and connote nonexclusive alternatives, unless expresslystated or the context clearly requires otherwise.

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

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

**2.1a**            **Loans******.  Subject to the terms and conditions hereofand relying upon the representations and warranties herein set forth, eachLender severally agrees to make Loans to the Borrower at any time from time totime on or after the date hereof to, but not including, the Termination Date, providedthat the aggregate principal amount of each Lender's Loans outstandinghereunder to the Borrower shall not exceed at any one time the amount equal tosuch Lender's Commitment Percentage of the Total Commitments then in effect andprovided, further, that no Loans shall be made if it would causethe Total Revolving Extensions of Credit to exceed the Total Commitments (the"Revolving Credit"). Within such limits of time and amount and subject to the otherprovisions of this Agreement, the Borrower may borrow, repay and reborrowpursuant to this Section 2.1a. The aggregate amount of the Commitments on theClosing Date is $45,000,000.  All Loansoutstanding on the Termination Date shall become due and payable in full on suchdate.  

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

**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******.  Except as otherwise provided herein, theBorrower may from time to time prior to the Termination Date request theLenders to make Loans to the Borrower by the delivery to the Agent, not laterthan 12:00 Noon. (eastern time) (i) three Business Days prior to the proposedBorrowing Date with respect to the making of Loans to which the Euro-RateOption applies for any Loans and (ii) one Business Day prior to the proposedBorrowing Date with respect to the making of a Loan to which the Base RateOption applies of a duly completed request therefor substantially in the formof Exhibit "C" hereto or a request by telephone immediatelyconfirmed in writing by letter, facsimile or electronic transmission in suchform (each, a "Loan Request"), it being understood that theAgent may rely on the authority of any person making such a telephonic requestwithout the necessity of receipt of such written confirmation.  Each Loan Request shall be irrevocable and shallspecify (i) the proposed Borrowing Date; (ii) the aggregate amount of theproposed Loans to be made on such Borrowing Date, which amount, as to Base RatePortions, shall be in integral multiples of $100,000 and not less than $500,000and, as to Euro-Rate Portions, shall be in integral multiples of $100,000 andnot less than $1,000,000; (iii) whether the Euro-Rate Option or the Base RateOption shall apply to the proposed Loans to be made on such Borrowing Date; and(iv) in the case of Loans to which the Euro-Rate Option applies, an appropriateInterest Period for each Euro-Rate Portion of the Loans to be made on suchBorrowing Date.

**2.1e            MakingLoans******.  The Agent shall, promptly after receipt byit of a Loan Request pursuant to Section 2.1d (but not later than noon (easterntime) on the Borrowing Date for same day funding and 2:00 P.M. (eastern time)on the third Business Day preceding any Borrowing Date for which any Portion ofthe Loans to be made on such Borrowing Date bears interest at the Euro-RateOption), notify the Lenders of its receipt of such Loan Request specifying: (i)the proposed Borrowing Date and the time and method of disbursement of suchLoan; (ii) the amount and type of such Loan and the applicable Euro-RatePortions and Interest Periods (if any); and (iii) the apportionment among theLenders of the Loans as determined by the Agent in accordance with Section 2.1bhereof.  Each Lender shall remit theprincipal amount of each Loan to the Agent such that the Agent is able to, andthe Agent shall, to the extent the Lenders have made funds available to it forsuch purpose, fund such Loan to the Borrower in Dollars and immediatelyavailable funds in an account specified by the Borrower to the Agent prior to2:00 P.M. (eastern time) on the Borrowing Date, provided that if any Lenderfails to remit such funds to the Agent in a timely manner, or any Lender failsto advise the Agent of its intention not to fund, then the Agent may elect inits sole discretion to fund with its own funds the Loan of such Lender on theBorrowing Date, subject to the provisions of Section 8.3 below.

**2.2            Interest Rates, Interest Paymentand Certain Provisions Relating to Interest and Fees********.  **

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

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

(i)            Base Rate Option: A rate of interest per annum (computed upon the basis of a year of 365or 366 days, as the case may be, and the actual number of days elapsed) equalto the sum of (A) the Base Rate plus (B) the Applicable Base Rate Margin fromtime to 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 Borrowershall select, convert to or renew at the Euro-Rate Option with respect to allor any Portion of the outstanding Loans, it shall fix one or more InterestPeriods during which such Option(s) shall apply.  All of the foregoing, however, is subject to the following:

(i)            any Interest Period which would otherwise end on a daywhich is not a Business Day shall be extended to the next Business Day unlesssuch Business Day falls in the succeeding calendar month in which case suchInterest Period 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 Renewalof Interest 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, whichshall be 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 anInterest Rate 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 ofall or any part of the Base Rate Portions of the Loans shall have become dueand payable, whether by acceleration or otherwise and whether or not judgmenthas been entered against the Borrower thereon, all Base Rate Portions shallbear interest at a rate per annum which shall be two hundred (200) basis points(2%) per annum above the rate otherwise in effect under the Base Rate Option,such interest rate to change automatically from time to time, effective as ofthe effective date of each change in the Base Rate.  After the principal amount of all or any part of the Euro-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 such Euro-Rate Portions shall bear interest (i) untilthe end of the then current Interest Period, at a rate per annum which shall betwo hundred (200) basis points (2%) per annum above the rate otherwise ineffect under the Euro-Rate Option, and (ii) at the end of the then currentInterest Period, and thereafter at the sum of (A) the Adjusted Base Rate plus(B) two hundred (200) basis points (2%) per annum.

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

**2.3a**            **YieldProtection******.  Notwithstanding other provisions of thisSection 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 (other than any tax imposedor based upon the income of a Lender and payable to any Governmental Authorityin the United States of America or any state thereof); or

(B)change the basis of taxation of any Lender withrespect to payments of principal or interest or other amounts due hereunder orpursuant to any Note (other than any change which affects, and only to theextent that it affects, the taxation by the United States or any state thereofof the total net income of such Lender); or

(C)impose, modify or deem applicable any reserve,special deposit or similar requirements against assets held by any Lenderapplicable 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 other obligation orcondition with respect to this Agreement, and the result of any of theforegoing is to increase the cost to the affected Lender, reduce the incomereceivable by the affected Lender, reduce the rate of return on the affectedLender's capital, or impose any expenses upon the affected Lender, all withrespect to any of the Loans (or any portion thereof) by an amount which theaffected Lender reasonably deems material, and if the affected Lender is thendemanding similar compensation for such occurrences from other borrowers whoare similarly situated and who have a similar relationship with the affectedLender and from which the affected Lender has the right to demand suchcompensation, then and in any such case:

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

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

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

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

**2.3b            CapitalAdequacy******.  If, after the date hereof, (i) any adoptionof or any change in or in the interpretation of any Governmental Rule, or (ii)compliance with any Governmental Rule of any Governmental Authority exercisingcontrol over banks or financial institutions generally or any court ofcompetent jurisdiction, requires that the Commitment (including, withoutlimitation, obligations in respect of any Loans) hereunder be treated as anasset or otherwise be included for purposes of calculating the appropriateamount of capital to be maintained by any Lender or any corporation controllingany Lender (a "Capital Adequacy Event"), the result of whichis to reduce the rate of return on a Lender's capital as a consequence of itsCommitment to a level below that which the affected Lender could have achievedbut for such Capital Adequacy Event, taking into consideration the Lender'spolicies with respect to capital adequacy, by an amount which the affectedLender reasonably deems to be material, the affected Lender shall promptlydeliver to the Borrower a statement (in reasonable detail) of the amountnecessary to compensate the affected Lender or the reduction in the rate ofreturn on its capital attributable to its Commitment (the "CapitalCompensation Amount").  Theaffected Lender shall determine the Capital Compensation Amount in good faith,using reasonable attribution and averaging methods.  Each affected Lender shall from time to time notify the Borrowerof the amount so determined.  Each suchnotification shall be prima facie evidence of the amount of the CapitalCompensation Amount set forth therein, and such Capital Compensation Amountshall be due and payable by the Borrower to the affected Lender 30 days aftersuch notice is given.  As soon aspracticable after any Capital Adequacy Event, the affected Lender shall submitto the Borrower estimates of the Capital Compensation Amounts that would bepayable as a function of the affected Lender's Commitment hereunder.

**2.3c**            **Euro-RateUnascertainable******.  If, on any date on which the AdjustedEuro-Rate would otherwise be set, the Agent reasonably shall have determined(which determination shall be final and conclusive) that by reason ofcircumstances affecting the interbank Eurodollar market, adequate andreasonable means do not exist for ascertaining the Euro-Rate, the Agent shallgive prompt notice of such determination to the Borrower and the Lenders and,until the Agent notifies the Borrower and the Lenders that the circumstancesgiving rise to such determination no longer exist, the right of the Borrower toborrow under, convert to or renew the Euro-Rate Option shall be suspended.  Any notice of borrowing under, conversion toor renewal of the Euro-Rate Option which was to become effective during theperiod of such suspension shall be treated as a request to borrow under,convert to or renew at the Base Rate Option with respect to the principalamount 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 theother Lenders that the circumstances giving rise to such determination nolonger apply:

(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 occurrenceof any event giving rise to the operation of Section 2.3a, 2.3b or 2.3d withrespect to such Lender, it will, if requested by the Borrower, use reasonableefforts (subject to overall policy considerations of such Lender) to designateanother lending office for any Loans affected by such event with the object ofavoiding the consequences of such event; provided, that such designation ismade on terms that, in the sole judgment of such Lender, cause such Lender andits lending office(s) to suffer no economic, legal or regulatory disadvantage,and provided, further, that nothing in this Section shall affect or postponeany of the obligations of the Borrower or the rights of any Lender pursuant toSection 2.3a, 2.3b or 2.3d.  Indetermining whether designating another lending office would cause such Lenderor its lending office(s) to suffer economic disadvantage, such Lender maydisregard any economic disadvantage that the Borrower agrees in form andsubstance satisfactory to such Lender to indemnify and hold such Lenderharmless therefrom.

**2.4            Fees******.

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

**2.4b**            **CertainOther Fees******.  The Borrower agrees to pay to the Agent forthe account of the Agent or any of the Lenders, as applicable, the fees setforth in that certain letter agreement among the Borrower, the Agent, NUICorporation and Fleet Securities Inc. dated as of December 3, 2002, and thefees set forth in that certain letter agreement among the Borrower, the Agentand Fleet Securities, Inc. dated as of February 6, 2003 (collectively, the"Fee Letter"), each as the same may be amended from time totime, as and when payment of such fees is due as set forth therein.

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

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**2.6            NotUsed**.****  

**2.7**            **Substitutionor Replacement of a Lender******.  The Borrower shall have the right (providedthat at such time, no Event of Default and no Potential Default has occurredand is continuing), in its sole discretion, to either:

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

(ii)            seek a substitute lendinginstitution or institutions (which may be one or more of the other Lenders) topurchase the Notes and assume the Loans, the Commitment and the otherobligations of such Lender 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; or

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

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

**2.8            LoanRepayment******.  Each repayment of the Loans shall be in theminimum amount of $1,000,000, in the aggregate, or an integral multiple of$100,000 thereof, or such lesser amount as is actually outstandingthereunder.  The Borrower, upon (i) oralor written notice to Agent by 11:00 A.M. (eastern time) on the day of theproposed repayment, in the case of Loans bearing interest at the Adjusted BaseRate or (ii) three Business Days' prior oral or written notice to the Agent, inthe case of Loans bearing interest at the Adjusted Euro-Rate, followedimmediately thereafter by the Borrower's written confirmation to the Agent ofany oral notice, may repay the outstanding amount of the Loans in whole or inpart with accrued interest, fees and other amounts then due and payable on theamount repaid to the date of such repayment, subject to the payment of anyadditional amounts under Section 2.9 below. The Borrower may prepay any Portion of the Loans bearing interest at theAdjusted Base 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 anypayment due hereunder on the due date thereof, (ii) the Borrower shall make apayment, prepayment or conversion of any Euro-Rate Portion of the Loans on aday other than the last day of the applicable Interest Period, (iii) theBorrower shall convert any Portion to the Base Rate Option from another Optionpursuant to Subsection 2.2d on a day other than the last day of the relevantInterest Period, or (iv) the Borrower shall fail on the date specified thereforto consummate any borrowing, conversion or renewal after giving a request foran extension of credit or notice of conversion or renewal, and, as a result ofany such action or inaction, a Lender reasonably incurs any losses and expenseswhich it would not have incurred but for such action or inaction, the Borrowershall pay such additional amounts as will compensate the affected Lender forsuch losses and expenses, including the cost of reemployment of any fundsprepaid at rates lower 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 wouldexceed the Commitments then in effect. Each such reduction shall be in a minimum principal amount of $5,000,000or in integral multiples thereof.  TheFacility Fee shall cease to accrue with respect to any unused portion of thecommitments so terminated on date of such termination.  Notice of termination once given shall beirrevocable and the portion of the Commitments so terminated shall not beavailable for borrowing once such notice has been given under the termshereof.  The Agent shall promptly notifyeach Lender of its pro rata share of such terminated unused portion and thedate of each such termination.

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

**2.12**            **Paymentfrom Accounts Maintained by Borrower******.  In the event that any payment of principal,interest, Facility Fee or any other amount due to the Lenders or the Agentunder this Agreement, the Notes or the other Loan Documents is not paid whendue, the Agent is hereby authorized to effect such payment by debiting anydemand deposit account of the Borrower maintained with the Agent (excludinghowever any special purpose fiduciary accounts, which are designated as such atthe time of their creation, and mandated by applicable statutes, regulations orrules) and distributing such payment to the party to whom such amounts aredue.  This right of debiting accounts ofthe Borrower is in addition to any right of set-off accorded the Lenders or theAgent hereunder or by operation of law.

**2.13            Time,Place and Manner of Payments******.** **Allpayments to be made by the Borrower under the Notes (other than those providedfor in Sections 2.3 and 2.9 hereof), and of all fees and any other amounts duehereunder (excepting the Fees owed to the Agent for its sole account) shall bemade at the principal office of the Agent for the ratable account of theLenders.  The Agent will promptly payeach such payment received to each Lender or its order in accordance withSection 8.9 hereof.  All payments due aLender by reason of Sections 2.3 or 2.9 hereof shall be paid at the principaloffice of the Lender which invoices the Borrower for such payment.  All payments to be made by the Borrowerunder this Agreement shall be paid in Dollars and in immediately availablefunds no later than 3:00 P.M. (eastern time) on the date such payment is due,without presentment, demand, protest or notice of any kind, all of which arehereby expressly waived by the Borrower, and without setoff, counterclaim orother deduction of any nature.

** **

            **2.14            MandatoryPrepayments******.  Unless theRequired Lenders otherwise agree, the Borrower shall prepay the Loans andreduce the Commitments in an amount equal to 100% of the net proceeds of anyDebt Issuance on the date of incurrence thereof, together with accrued interestto such date on the amount prepaid. Nothing in this Section 2.14 shall be construed to derogate anyrestriction or limitation contained in any Loan Document imposed on any transactionof the type described in this Section 2.14.

**ARTICLE III. REPRESENTATIONS AND WARRANTIES********.**

Toinduce the Lenders to enter into this Agreement and to make the Loans hereinprovided for, the Borrower represents and warrants to the Lenders that:

** **

**3.1            CorporateExistence******.  The Borrower is a corporation dulyorganized, validly existing and in good standing under the laws of its state ofincorporation and it is duly qualified and in good standing as a foreigncorporation authorized to do business in each jurisdiction where, because ofthe nature of its properties or businesses, such qualification is required or,if not so qualified or in good standing in any state, the lack of suchqualification or good standing will not materially affect the Agent's or theLenders' ability to enforce this Agreement, the Notes or the other LoanDocuments or will not have a Material Adverse Effect on the Borrower's abilityto carry on its business or the Borrower's ability to comply with thisAgreement, the Notes or the other Loan Documents.

**3.2            CorporateAuthority******.  The Borrower is duly authorized to executeand deliver this Agreement, the Notes and the other Loan Documents to which itis or will become a party; all necessary corporate action to authorize theexecution and delivery of this Agreement, the Notes and the other LoanDocuments to which it is or will become a party has been properly taken; and itis and will continue to be duly authorized to borrow hereunder and to performall of the other terms and provisions of this Agreement, the Notes and theother Loan Documents to which it is or will become a party.

**3.3            Enforceability******.  This Agreement and the Notes have each been,and each other Loan Document to which it will become a party will be, duly andvalidly executed and delivered by the Borrower and each constitutes or will constitutea valid and legally binding agreement of the Borrower enforceable in accordancewith 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******.  The Borrower has furnished to the Lendersand the Agent the consolidated balance sheets and the related consolidatedstatements of income, shareholders' equity and changes in financialposition of the Borrower for theFiscal Years ending September 30, 2001 and September 30, 2002.  All such financialstatements, including the related notes, have been prepared inaccordance with GAAP, except as expressly noted therein and, in the case of theaforementioned quarterly financial statements, subject to changes resultingfrom year-end adjustments, and fairly present the financial position andconsolidated financial positions of the Borrower as at the dates thereof andthe results and consolidated results of their operations and the changes intheir financial position and in their consolidated financial position for theperiods ended on such dates.  There wereno material liabilities of the Borrower, contingent or otherwise, not reflectedin such financial statements.  Except ashas otherwise been fully disclosed in NUI Corporation's Form 10-K filed onDecember 31, 2002 with the Securities and Exchange Commission, there has beenno Material Adverse Change in the business, condition or operations (financialor otherwise) of the Borrower from September 30, 2002 to the Closing Date.

**3.6**            **Absenceof Litigation******.  There are no actions, suits, investigations,litigation or governmental proceedings pending or, to the Borrower's knowledge,threatened against the Borrower or any of its properties, which would have aMaterial Adverse Effect on the Borrower, or which purport to affect thelegality, validity or enforceability of this Agreement or the Notes.

**3.7            TaxReturns and Payments******.  As of the date hereof, the Borrower hasfiled all Federal and other material tax returns required by law to be filedand have paid all material taxes, material assessments and other material governmentalcharges levied upon the Borrower, or any of its properties, assets, income orfranchises of the Borrower, which are due and payable, other than thosecurrently payable or deferrable without penalty or interest or those which arebeing contested in good faith and by appropriate proceedings diligentlyconducted for which reserves in accord with GAAP have been provided.  As of the date hereof, the charges, accrualsand reserves on the books of the Borrower in respect of Federal, state andlocal income taxes for all fiscal periods are adequate, and the Borrower knowsof no unpaid assessments for additional Federal, state or local income taxesfor any such fiscal period or any basis therefor.

**3.8**            **PensionPlans******.  Except as otherwise noted on Schedule 3.8,(i) each Plan has been and will be maintained and funded, in all materialrespects, in accordance with its terms and with all provisions of ERISA and theCode applicable thereto; (ii) no Reportable Event has occurred and iscontinuing with respect to any Plan; (iii) no liability to PBGC has beenincurred with respect to any Plan, other than for premiums due and payable;(iv) no Plan has been terminated, no proceedings have been instituted toterminate any Plan, and there exists no intent to terminate or instituteproceedings to terminate any Plan, which has caused or would cause the Borroweror any ERISA Affiliate to incur any liability to the PBGC under Title IV ofERISA; (v) no withdrawal, either complete or partial, has occurred or commencedwith respect to any multiemployer Plan, and there exists no intent to withdraweither completely or partially from any multiemployer Plan and (vi) theBorrower is not subject to any liability for unpaid penalties or taxes imposedunder Section 502(i) of ERISA or Section 4975 of the Code and has not engagedin a prohibited transaction as defined in Section 406 of ERISA and Section 4975of the Code.

**3.9**            **Compliancewith Applicable Laws******.  The Borrower (i) is not in default withrespect to any order, writ, injunction or decree of any court or of anyFederal, state, municipal or other Governmental Authority; and (ii) issubstantially complying with all applicable statutes and regulations of eachGovernmental Authority having jurisdiction over its activities; except forthose orders, writs, injunctions, decrees, statutes and regulations,non-compliance with which would not have a Material Adverse Effect upon theBorrower.

**3.10**            **EnvironmentalMatters******.  Except to the extent described in NUICorporation's most recently filed Form 10-K, Form 10-Q or Form 8-K, theBorrower is in compliance with all applicable Environmental Laws, except for matterswhich do not have a Material Adverse Effect on the financial condition of theBorrower.

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

**3.12            RegulationsT, U and X******.** **TheBorrower is not engaged in the business of purchasing or selling Margin Stockor extending credit to others for the purpose of purchasing or carrying MarginStock and no part of the proceeds of the Loans will be used to purchase orcarry any Margin Stock or for any other purpose which would violate or beinconsistent with Regulations T, U or X.

**3.13**            **InvestmentCompany Act******.  The Borrower is not an "investmentcompany", or a company "controlled" by an "investmentcompany", within the meaning of the Investment Company Act of 1940, asamended.

**3.14            PublicUtility Holding Company Act********. **The Borrower is a utility subject to regulationunder the Public Utility Holding Company 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 has no Subsidiaries.

**ARTICLE IV.            AFFIRMATIVECOVENANTS********.**

Fromthe date hereof and thereafter until the termination of the Commitments anduntil all of the Bank Indebtedness is paid in full, the Borrower agrees that:

**4.1**            **Useof Proceeds******.  The proceeds of the Loans will be used bythe Borrower solely (i) for general corporate purposes of the Borrower, (ii)for working capital purposes in the ordinary course of business of theBorrower, (iii) to pay fees and expenses incurred in connection with theexecution and delivery of the Loan Documents, and (iv) to repay amounts due andpayable under the Existing Credit Agreement as required by 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 copiesfor each Lender which Agent shall distribute) within 100 days after the end ofeach Fiscal Year of the Borrower, (A) balance sheets as at the end of such yearfor the Borrower, and (B) statements of income for such year for the Borrower;and each such statement shall set forth, in comparative form, correspondingfigures for the immediately preceding Fiscal Year; and all such financialstatements shall present fairly in all material respects the financial positionof the Borrower, as at the dates indicated and the results of its operationsand its cash 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 copiesfor each 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"D" 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 theAgent of any pending or, to the knowledge of the Borrower, overtly threatenedclaim in 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 copiesfor each 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) filedby 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, bythe Borrower or the administrator of any Plan, deliver to the Lenders a copy ofany notice from the PBGC that the PBGC is instituting Termination Proceedings;

(vii)            deliver to the Agent within twoBusiness Days after S&P or Moody's announces a change in the Borrower'sSenior Ratings, or the withdrawal of any Senior Ratings, notice of such changeor withdrawal, 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 30days after the Borrower or the administrator of any Plan knows or has reason toknow that any Reportable Event has occurred which would cause the PBGC toinstitute Termination 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 Lenderssuch other information and data with respect to the Borrower as from time totime may 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 will permit the Lendersand each 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******. The Borrower shall comply with allapplicable Governmental Rules (including, but not limited to, EnvironmentalLaws), except where failure to comply would not have a Material Adverse Effecton 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 self insuranceand deductibles consistent with customary and prudent industry standards.  The Borrower will furnish to the Agent atthe Closing and together with the annual reports delivered pursuant toSubsection 4.2(ii) hereof, a certificate of an Authorized Officer of theBorrower certifying that such insurance is in force, provides coverageconsistent with the preceding sentence and complies with the Borrower'sobligations under this Section 4.7.

**4.8**            **Maintenanceof Properties******.  The Borrower shall maintain, preserve,protect and keep its properties in good repair, working order and condition(ordinary wear and tear excepted), and make all necessary and proper repairs,renewals and replacements so that its business carried on in connectiontherewith may be properly and advantageously conducted at all times, exceptwhere the failure to maintain, preserve, protect or keep such properties wouldnot have a Material Adverse Effect upon the Borrower.

**4.9**            **Plansand Benefit Arrangement******.  The Borrower shall, and shall cause eachERISA Affiliate to, comply with ERISA, the Code and all other applicable lawswhich are applicable to Plans, except where the failure to do so, alone or inconjunction with any other failure to do so, would not have a Material AdverseEffect upon the Borrower.

**4.10            SeniorDebt Status******.  The Bank Indebtedness will rank at least paripassu in priority of payment with all other Indebtedness of the Borrower,except Indebtedness of the Borrower which may be secured by Encumbrancespermitted pursuant to Section 5.2.

**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 or before November 12, 2003, the Borrowershall cause all of its receivables and other revenues to be collected anddeposited into and maintained in a segregated account or accounts of theBorrower (the "New Collection System") and the proceeds ofsuch receivables and other revenues shall not be commingled with funds of NUICorporation or its other Subsidiaries and shall only be used to pay out of suchaccount or accounts obligations of the Borrower and to make dividends and forother uses to the extent expressly permitted hereunder.  At all times until such New CollectionSystem is in place, the Agency Services Agreement is and will remain in fullforce and effect and the Borrower's receivables and other revenues shall becollected by NUI Corporation, but title thereto shall remain with the Borrower,and expenses and other payables of or on behalf of the Borrower shall be paidby NUI Corporation on behalf of the Borrower, all in accordance with theprovisions of the Agency Services Agreement and Governmental Rules.  The Borrower shall ensure that the use ofsuch receivables and revenues by NUI Corporation at all times complies withthis 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 not declare or make anydividend payment or other distribution of assets, properties, cash, rights,obligations or securities on account of any shares of any class of equityinterests of the Borrower, or purchase, redeem or otherwise acquire for valueany shares of any class of equity interests of the Borrower or any warrants,rights or options to acquire any such shares, now or hereafter outstanding(such declarations, payments, other distributions, purchases, redemptions, orother acquisitions being herein called "Restricted Payments"),except that the Borrower may (a) declare and make any dividend payment or otherdistribution payable solely in common equity interests of the Borrower, and (b)purchase, redeem or otherwise acquire shares of its common equity interests orwarrants, rights or options to acquire any such shares with the proceedsreceived from substantially concurrent issue of new shares of its common equityinterests and (c) declare or pay cash dividends to NUI Corporation andpurchase, redeem or otherwise acquire shares of its equity interests orwarrants, rights or options to acquire for consideration of any such shares, solong as the aggregate of such Restricted Payments made, paid or declared sincethe Closing Date would not exceed the lesser of $100,000,000 or retainedearnings 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 no time shall its ratio of ConsolidatedTotal Indebtedness to its Consolidated Total Capitalization exceed the amountset forth below for each relevant period set forth below:

                        Period                                                                            Ratio

                        March1 of each year to and

                        includingAugust 31 of such 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, forany period of four consecutive Fiscal Quarters ending on or after September 30,2002, the ratio of (i) the sum of (A) Consolidated Net Income for such periodplus (B) income taxes deducted in determining such Net Income plus (C)Consolidated Fixed Charges for such period; to (ii) Consolidated Fixed Chargesfor such period, to be less than 1.75 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 shall not enter into anyarrangement, direct or indirect, pursuant to which the Borrower shall sell orotherwise transfer or dispose of, in a single transaction or a series oftransactions, all or any substantial part of its assets; provided, however, asale or transfer by the Borrower of securitization receivables in connectionwith a securitization permitted under Section 5.13(i) shall not be prohibitedhereunder.

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

**5.7**            **RegulationT, U and X Compliance******.  The Borrower shall not use the proceeds of aLoan to purchase or carry Margin Stock or otherwise act so as to cause anyLender, in extending credit hereunder, to be 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 whichcould result in liability to the PBGC under Title IV of ERISA or the impositionof a lien on the property of the Borrower or any ERISA Affiliate pursuant toSection 4068 of ERISA; or

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

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

**5.9**            **RestrictiveAgreements******.  The Borrower shall not enter into orotherwise be bound by any agreement not to pay dividends or make distributionsto NUI Corporation, except for such agreements existing on the date hereofwhich have been fully disclosed in writing to Agent and replacements of suchagreements (provided that copies of such replacement agreements are provided tothe Agent and are no more restrictive than those agreements being replaced).

**5.10            [IntentionallyOmitted.]******

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

**            5.12            Limitation on CapitalExpenditures******.  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 theLoans, the Notes and the other obligations of the Borrower under thisAgreement;

                        (b)            Indebtedness of the Borrowerincurred solely 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 5.13and renewals, extensions and modifications thereof which do not increase theprincipal amount thereof; 

                        (d)            Indebtedness incurred in connectionwith Hedging Obligations, provided that such Hedging Obligations shall be inthe ordinary course of business consistent with past practices;

                        (e)            Indebtedness incurred in connectionwith sale-leaseback transactions permitted by Section 5.19 hereof; 

                        (f)            Indebtedness with respect to standbyletters of credit issued by a bank for the benefit of the Borrower in anaggregate face amount not to exceed $10,000,000, which letters of credit expireby 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)            Indebtednessof the Borrower under the Senior Credit Agreement to the extent of the"Total Commitment" thereunder in effect on the date hereof; andadditional Indebtedness with respect to increases in the "TotalCommitment" relating to "Increase Requests" thereunder; providedthat (1) all of the proceeds of such increases are used to pay or prepay BankIndebtedness hereunder, together with accrued and unpaid interest thereon, and(2) the Total Commitment hereunder is permanently reduced in the amount of suchpayment or prepayment, all pursuant to Section 2.14; and further provided thatthe sum of (A) the Total Commitment of the Borrower under this Agreement, (B)the "Total Commitment" of the Borrower under and as defined in theSenior Credit Agreement, (C) the "Total Commitment" of NUICorporation under and as defined in the NUI Corporation Credit Agreement, and(D) the aggregate principal amount of Indebtedness incurred by the Borrowerand, without duplication, any corresponding commitments to extend credit to theBorrower pursuant to Section 5.13(i) of this Agreement shall not exceed$195,000,000 in aggregate principal at any time;

            (i)            Indebtednessof the Borrower relating to a securitization, private debt placement or otherfinancing reasonably acceptable to the Agent in a principal amount not toexceed $45,000,000; provided that (1) all of the proceeds thereof are used topay or prepay Bank Indebtedness hereunder, together with accrued and unpaidinterest thereon, and (2) the Total Commitment hereunder is permanently reducedin the amount of such payment or prepayment, all pursuant to Section 2.14; andfurther provided that the sum of (A) the Total Commitment of the Borrower underthis Agreement, (B) the "Total Commitment" of the Borrower under andas defined in the Senior Credit Agreement, (C) the "Total Commitment"of NUI Corporation under and as defined in the NUI Corporation CreditAgreement, and (D) the aggregate principal amount of Indebtedness incurred bythe Borrower and, without duplication, any corresponding commitments to extendcredit to the Borrower pursuant to this Section 5.13(i) shall not exceed$195,000,000 in aggregate principal at any time;

            (j)            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 ContingentObligations******.  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 tocustomers in the ordinary course of business;

(b)            Permitted Investments; 

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

(d)            Permitted Acquisitions; and

(e)            securities acquired in connectionwith the bankruptcy of any supplier or customer in the ordinary course ofbusiness and consistent with past practices or in connection with thesettlement of delinquent 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)), 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 anytransaction, including, without limitation, any purchase, sale, lease orexchange of property or the rendering of any service, with any Affiliate unlesssuch transaction (a) is permitted under this Agreement or is in the ordinarycourse of the Borrower's business and (b) is upon fair and reasonable terms noless favorable to the Borrower than it would obtain in a comparable arm'slength transaction with a Person which is not an Affiliate.

**5.19            Saleand Leaseback******.  The Borrower shall not enter into anyarrangement with any Person providing for the leasing by the Borrower of realor personal property which has been or is to be sold or transferred by theBorrower to such Person if such arrangement(s), individually or in theaggregate and together with all such arrangements entered into by NUICorporation and its other Subsidiaries, involve(s) aggregate considerationexceeding $70,000,000.

            

**ARTICLE VI. CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT******

**6.1            AllExtensions of Credit******.  The obligation of the Lenders to make anyextension of credit (including, without limitation, its initial extension ofcredit) is subject to the satisfaction of each of the following conditionsprecedent:

**6.1a            NoDefault******.  The Borrower shall have performed andcomplied, in all material respects, with all agreements and conditions hereinrequired to be performed or complied with by it prior to any extension ofcredit and, at the time of such extension of credit, no Potential Default orEvent of Default shall exist.

**6.1b            RepresentationsCorrect******.  The representations and warranties containedin Article III hereof shall be correct in all material respects (i) when madeand (ii) at the time of each extension of credit except for suchrepresentations and warranties which relate solely to an earlier date (in whichcase such representations and warranties shall have been true and correct inall material respects as of such date) and no Material Adverse Change hasoccurred, or will occur, as a result of such extension of credit.

**6.1c            Extensionof Credit Requirements******.  The Borrower shall have complied with therequirements of Section 2.1 with respect to the requested extension 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 ofeach Lender of a counterpart original of this Agreement executed by the otherLenders and the Borrower.

(ii)            Receipt by the Agent on behalf ofeach Lender 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.

(iii)            Receipt by the Agent of a certifiedcopy (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 acertificate, duly certified as of the date of the Closing by the secretary orassistant secretary of the Borrower as to (A) the By-Laws of the Borrower ineffect as of the Closing, (B) the resolutions of the Borrower's Board ofDirectors authorizing the borrowings hereunder and the execution and deliveryof this Agreement, the Notes, and all documents supplemental hereto, and (C)the names of the officers of the Borrower authorized to sign this Agreement,the Notes and all supplemental documentation, and which contains a truesignature of each such officer.

(v)            Receipt by the Agent of a goodstanding certificate for the Borrower from the Secretary of State of the Stateof New Jersey dated not more than 30 days prior to the date of Closing.

(vi)            Receipt by the Agent of thecertificate of the Borrower required pursuant to Section 4.7 of this Agreementand a solvency certificate in the form of Exhibit "G" 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 ofeach Lender of a signed favorable opinion of James Van Horn, general counsel tothe Borrower, dated as of the Closing Date and in form and substancesatisfactory to Agent and its counsel as to the matters set forth on Exhibit"E" attached hereto.

(ix)            The representations and warrantiesof the Borrower contained in Article III and in the other Loan Documentsexecuted and delivered by the Borrower in connection with the Closing shall betrue and correct in all material respects on and as of the Closing Date withthe same effect as though such representations and warranties had been made onand as of such date (except representations and warranties which relate solelyto an earlier date or time, which representations and warranties shall be trueand correct on and as of the specific date or times referred to therein), andthe Borrower shall have performed, observed and complied with all covenants andconditions hereof and contained in the other Loan Documents; no Event ofDefault or Potential Default under this Agreement shall have occurred and becontinuing or shall exist; except as disclosed in NUI Corporation's Form 10-Kfiled on December 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 ownbehalf and on behalf of the Lenders of all Fees due and payable on or prior tothe Closing Date and all invoiced reimbursable expenses incurred on or prior tothe Closing 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)            The Senior Credit Agreement shall bein full force and effect, providing for a "Total Commitment"thereunder of not less than $96,923,076.90; and all amounts owing to thelenders under the Existing Credit Agreement shall have been, or shall beconcurrently with the making of the first Loans hereunder, repaid in full, andthe Existing Credit Agreement shall terminate and be of no further force andeffect upon such repayment; in each case pursuant to such payout letters andother documents as the Agent may require, each of which shall be in form andsubstance satisfactory to the Agent.

            (xiii)            Receipt by the Agent of a copy of the fully executedAgency Services 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 onany Loan, 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 when due.

**7.2            Nonpaymentof Other Indebtedness******.  The Borrower shall fail to pay anyIndebtedness of the Borrower other than the Bank Indebtedness, in an aggregateamount of $15,000,000 or more, as and when the same shall become due, or theoccurrence of any default under any agreement or instrument under or pursuantto which such Indebtedness is incurred or issued and continuance of suchdefault beyond the period of grace, if any, allowed with respect thereto, ifsuch default permits or causes the acceleration of such Indebtedness or thetermination of any commitment to lend with respect thereto.

**7.3**            **Insolvency********.**

**7.3a**            **InvoluntaryProceedings******.  A proceeding shall have been instituted in acourt having jurisdiction seeking a decree or order for relief in respect ofthe Borrower in an involuntary case under the Federal bankruptcy laws, or anyother similar applicable Federal or state law, now or hereafter in effect, orfor the appointment of a receiver, liquidator, trustee, sequestrator or similarofficial for the Borrower or for a substantial part of its property, or for thewinding up or liquidation of its affairs, and the same shall remain undismissedor unstayed and in effect for a period of 60 days.

**7.3b**            **VoluntaryProceedings******.  The Borrower shall institute proceedings tobe adjudicated a voluntary bankrupt, or shall consent to the filing of abankruptcy proceeding against it, or shall file a petition or answer or consentseeking reorganization under the Federal bankruptcy laws, or any other similarapplicable Federal or state law now or hereinafter in effect, or shall consentto the filing of any such petition or shall consent to the appointment of areceiver, liquidator, trustee, sequestrator or similar official for the Borroweror for a substantial part of its property, or shall make an assignment for thebenefit of creditors, or shall admit in writing its inability to pay its debtsgenerally as they become due, or corporate action shall be taken by theBorrower in furtherance of any of the aforesaid purposes.

**7.4**            **Terminationof Existence******.** **TheBorrower shall terminate 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********. **The Borrower shall default in the dueperformance or observance of any other covenant, condition or provision setforth herein and such default shall not be remedied (i) with respect to anydefault under Section 4.2(ix) for a period of ten days; and (ii) with respectto any other such default for a period of 30 days after such default is knownto any officer of the Borrower or notice thereof has been given to the Borrowerby the Agent (such grace period to be applicable only in the event such defaultcan be remedied by corrective action of the Borrower as determined by the Agentin 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.********  **Entryor filing of any one or more judgments, writs or warrants of attachment or ofany similar process in an aggregate amount of $2,500,000 or more in excess ofany third-party insurance protecting against such liability against theBorrower or against any of its properties and failure of the Borrower tovacate, pay, bond, stay or contest in good faith such judgments, writs,warrants of attachment or other process within a period of 30 days.

**7.8**            **Invalidityor Unenforceability******.  This Agreement, the Notes or any other LoanDocument ceases to be valid and binding on the Borrower or is declared null andvoid, or the validity or enforceability thereof is contested by the Borrower orthe Borrower denies it has any or further liability under this Agreement, anyNote or under the other Loan Documents to which it is a party.

**7.9**            **ERISA******.** **(i)A trustee shall be appointed by a court of competent jurisdiction to 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 committedunderwriting of a secondary offering of the Borrower's voting stock on behalfof such officers or directors, shall have acquired beneficial ownership of (withinthe meaning 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 Defaultoccur then (a) if such Event of Default is set forth in Sections 7.3 or 7.4,the Commitments shall automatically terminate and the Notes then outstandingand all other amounts owing under this Agreement shall become immediately dueand payable, without necessity of demand, presentation, protest, notice ofdishonor or notice of default or (b) if such Event of Default is set forth inany of the remaining Sections of this Article VII, then the Agent, at therequest of the Required Lenders, and upon notice to the Borrower, shall declarethe Borrower in default hereunder, and upon such declaration, shall, at therequest of the Required Lenders, terminate the Commitment and/or declare theNotes then outstanding and all other amounts owing under this Agreementimmediately due 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.

**7.12**            **RemediesUpon Default******.** **Uponthetermination of the Commitmentsand acceleration of the Notes following the occurrence of an Event of Default,the Lenders shall, unless such termination and acceleration subsequently havebeen rescinded, have the full panoply of rights and remedies granted to themunder this Agreement and all those rights and remedies granted by law tocreditors, and the Agent, at the direction of the Required Lenders, shallproceed to protect and enforce the Lenders' rights by an action at law, suit inequity or other appropriate proceeding, whether for the specific performance ofany agreement contained herein, in the Notes or in any of the other LoanDocuments, or for an injunction against a violation of any of the terms hereofor thereof, or in aid of the exercise of any power granted hereby or thereby orby law.  No right, power or remedyconferred by this Agreement, in the Notes, or by any other Loan Document, uponthe Agent or the Lenders shall be exclusive of any other right, power or remedyreferred to herein or therein or now or hereafter available at law, in equity,by statute or otherwise.  No exercise ofany one right or remedy shall be deemed a waiver of other rights orremedies.  The rights and remedies ofthe Agent and the Lenders specified herein are for the sole and exclusivebenefit, use and protection of the Agent and the Lenders, and the Agent and theLenders shall be entitled, but shall have no duty or obligation, to exercise orto refrain from exercising any right or remedy reserved to the Agent or theLenders hereunder.

**ARTICLE VIII.            AGREEMENTAMONG LENDERS********.**

**8.1**            **Appointmentand Grant of Authority******.  Each of the Lenders hereby appoints FleetNational Bank and Fleet National Bank hereby agrees to act as, the Agent underthis Agreement, the Notes and the other Loan Documents.  As such Agent, Fleet National Bank shallhave and may exercise such powers under this Agreement and the other LoanDocuments as are specificallydelegatedto the Agent, by the terms hereto or thereof, together with such other powersas are incidental thereto.  Withoutlimiting the foregoing, the Agent, on behalf of the Lenders, is authorized toexecute all of the Loan Documents (other than this Agreement) and to accept allof the Loan Documents and all other agreements, documents or instrumentsreasonably required to carry out the intent of the parties to this Agreement.

**8.2**            **Delegationof Duties******.  The Agent may perform any of its dutieshereunder by or through agents or employees (provided such delegation does notconstitute a relinquishment of duties as the Agent hereunder) and, subject toSections 8.7 and 9.2 hereof, shall be entitled to engage and pay for the adviceor services of any attorneys, accountants, or other experts concerning allmatters pertaining to duties hereunder and to rely upon any advice so obtained.

**8.3**            **Relianceby Agent on Lenders for Funding******.  Unless the Agent shall have received noticefrom a Lender prior to any Borrowing Date that such Lender will not makeavailable to the Agent such Lender's portion of net disbursements of Loans, theAgent may assume that such Lender has made such portion available to the Agentand the Agent may, in reliance upon such assumption, make Loans to theBorrower.  If and to the extent thatsuch Lender has not made such portion available to the Agent on or prior to anyBorrowing Date, such Lender and the Borrower severally agree to repay to theAgent immediately upon demand, in immediately available funds, such unpaidamount, together with interest thereon for each day from the applicableBorrowing Date until such amount is repaid to the Agent, at (i) in the case ofthe Borrower, at the rate of interest then in effect for such Loan and (ii) inthe case of such Lender, at the Federal Funds Effective Rate.  If such Lender shall repay to the Agent suchcorresponding amount, such amount shall constitute a Loan made by such Lenderfor purposes of this Agreement.  Thefailure by any Lender to pay its portion of a Loan made by the Agent shall notrelieve any other Lender of the obligation to pay its portion of netdisbursements of Loans on any Borrowing Date, but no Lender shall beresponsible for the failure of any other Lender to make its net share of Loansto be made by such other Lender on such Borrowing Date.

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

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

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

**8.5b**            **Limitationof Liability******.  As among the Lenders and the Agent, neitherthe Agent nor any of its directors, officers, employees or agents shall beliable for any action taken or omitted (whether or not such action taken oromitted is within or without the Agent's responsibilities and duties expresslyset forth in this Agreement) under or in connection with this Agreement or anyother instrument or document in connection herewith except for gross negligenceor willful misconduct.  Without limitingthe foregoing, neither the Agent nor any of its directors, officers oremployees shall be responsible for, or have any duty to examine (i) thegenuineness, execution, validity, effectiveness, enforceability, value orsufficiency of (A) this Agreement, the Notes or any of the other Loan Documentsor (B) any other document or instrument furnished pursuant to or in connectionwith this Agreement, (ii) the collectibility of any amounts owed by theBorrower to the Lenders, (iii) the truthfulness of any recitals, statements,representations or warranties made to the Agent or the Lenders in connectionwith this Agreement, (iv) any failure of any party to this Agreement to receiveany communication sent, including any telegram, teletype, facsimiletransmission or telephone message or any writing, application, notice, report,statement, certificate, resolution, request, order, consent letter or otherinstrument or paper or communication entrusted to the mails or to a deliveryservice, or (v) the assets, liabilities, financial condition, results ofoperations, business or prospects, or creditworthiness 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 andcorrect and 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            Actionsin Discretion 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 toSection 8.5b hereof.  Subject to theprovisions of Section 8.5b, no Lender shall have any right of action whatsoeveragainst the Agent as a result of the Agent acting or refraining from actinghereunder in 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 Agentas a Lender hereunder, any Loans of the Agent under this Agreement or the otherLoan Documents, and any other amounts due to the Agent under this Agreement,the Agent shall have the same rights and powers, duties and obligations under thisAgreement, the Notes, the other Loan Documents or other agreement, instrumentor document as any Lender and may exercise such rights and powers and shallperform such duties and fulfill such obligations as though it were not theAgent.  The Agent may accept depositsfrom, lend money to, and generally engage, and continue to engage, in any kindof business with the Borrower as if it were not the Agent.

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

**8.10            ProRata Sharing******.  Except as otherwise set forth in Section 8.3hereof, all interest and principal payments on the Loans, and all payments ofFacility Fees are to be divided pro rata among the Lenders in proportion to theextensions of credit outstanding from each Lender or, if no such Loans are thenoutstanding, in accordance with their respective Commitment Percentages.  Any sums obtained from the Borrower by anyLender by reason of the exercise of its rights of set-off, banker's lien or incollection shall be shared (net of costs) pro rata among the Lenders on thebasis of the principal amount of Loans 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 the appointment of such successor agentor upon the expiration of such 30 day period (or any longer period to which theAgent has agreed), the former Agent's rights, powers and duties as Agent shallbe terminated, without any other or further act or deed on the part of suchformer Agent or any of the parties to this Agreement.  After any retiring Agent's resignation hereunder as Agenthereunder, the provisions of this Article VIII shall inure to the benefit ofsuch retiring Agent as to any actions taken or omitted to be taken by it whileit was Agent under this Agreement.

**8.12            Noticeof Default******.  The Agent shall not be deemed to haveknowledge or notice of the occurrence of an Event of Default unless the Agenthas received written notice from a Lender or the Borrower referring to thisAgreement, describing such Event of Default and stating that such notice is a"notice of default".

**8.13**            **Notices********. **The Agent shall promptly send to each Lender acopy of all notices received from the Borrower pursuant to the provisions ofthis Agreement or the other Loan Documents promptly upon receipt thereof.  The Agent shall promptly notify the Borrowerand the other Lenders of each change in the Base Rate and the effective datethereof.

**8.14            Holdersof Notes******.  The Agent may deem and treat any payee ofany Note as the owner thereof for all purposes hereof unless and until writtennotice of the assignment or transfer thereof shall have been filed with theAgent.  Any request, authority orconsent of any person who at the time of making such request or giving suchauthority or consent is the holder of any Note shall be conclusive and bindingon any subsequent holder, transferee or assignee of such Note or of any Note orNotes 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******.** **Subjectto the remaining provisions of this Section 9.1, the Agent, the Lenders and theBorrower may, from time to time, enter into amendments, extensions, renewals,modifications, supplements and replacements to and of this Agreement, the Notesor the other Loan Documents and the Lenders or the Required Lenders, as thecase may be, may, from time to time, waive compliance with a provisionthereof.  No amendment, renewal,modification, extension, supplement, replacement or waiver of any provision ofthis Agreement, the Notes or the other Loan Documents or consent to any departuretherefrom by the Borrower shall be effective unless it is in writing and issigned by the Required Lenders (or the Agent with the written consent of theRequired Lenders), and then such waiver or consent shall be effective only forthe specific 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 anyLender or subject 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 thepayment of principal and/or interest due hereunder and under any of the Notes;

(D)            decrease the interest rate relatingto the Loans;

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

(F)            reduce the Facility Fee; or

(G)            amend the definition of the term"Required Lenders" or amend or waive the provisions of this 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 Agentand the 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:                                            NUI Utilities, Inc.

            550 Route 202-206

            P. 0. Box 760 

            Bedminster, NJ 07921

            Attention:    Treasurer

            Telecopier:   (908) 781-0718

                        Telephone:  (908) 781-0500

The Agent:            Fleet National Bank

            100 Federal Street 

            Mail Stop:  MADE 10008A

            Boston, Massachusetts  02110

            Attention:   Mr. Stephen J. Hoffman

            Telephone:  (617) 434-6520

            Telecopier:  (617) 434-3652

**9.4**            **TaxWithholding******.  At least five Business Days prior to thefirst date on which interest or fees are payable hereunder for the account ofeach Lender, each Lender or assignee or participant of a Lender that is notincorporated under the laws of the United States of America or a state thereofagrees that it will deliver to the Agent and the Borrower two duly completedcopies of either (i) IRS Form W-9, 1001 or 4224 or such other applicable formprescribed by the IRS, certifying in each case that such Lender or assignee orparticipant of a Lender is entitled to receive payments under this Agreement orits Notes without deduction or withholding of United States federal incometaxes, or is subject to such tax at a reduced rate under an applicable taxtreaty or (ii) IRS Form W-8 or such other applicable form prescribed by the IRSor a certificate of such Lender or assignee or participant of a Lenderindicating that no such exemption or reduced rate of taxation is allowable withrespect to such payments.  Each Lenderor assignee or participant of a Lender which delivers an IRS Form W-8, W-9,4224, 1001 or other such applicable form further undertakes to deliver to theAgent and the Borrower two additional copies of any such form (or any successorform) on or before the date on which that form expires or becomes obsolete orafter the occurrence of any event requiring a change in the most recent form sodelivered by it, and such amendments thereto or extensions or renewals thereofas may be reasonably requested by the Borrower or the Agent, either certifyingthat such Lender or assignee or participant of a Lender is entitled to receivepayments under this Agreement or its Notes without deduction or withholding ofany United States federal income taxes or is subject to such tax at a reducedrate under an applicable tax treaty or stating the date on which that no suchexemption or reduced rate is allowable. The Agent shall be entitled to withhold, from each payment hereunder orunder the Notes payable to it, United States federal income taxes at the fullwithholding rate unless each Lender referred to in the first sentence of this Section9.4 establishes an exemption or at the applicable reduced rate establishedpursuant to the above provisions.

**9.5**            **Successorsand Assigns******.** **ThisAgreement shall be binding upon the Borrower, the Agent and the Lenders andtheir respective successors and assigns, and shall inure to the benefit of theBorrower, the Agent and the Lenders and the successors and assigns of the Agentand the Lenders; provided, that the Borrower shall not assign its rightsor duties hereunder or under any of the other Loan Documents without the priorwritten 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 inaccordance with 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 "F" 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 followingthe Closing Date, each assignment made shall become effective only on a datewhich coincides with the expiration date of any Interest Period then in effect,unless the Agent agrees to waive this provision;

(iii)            The Agent and the Borrower must eachgive its 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 tothe Agent 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 assumed byit and purchased by it pursuant to such Assignment and Assumption Agreement,and new Notes to the order of the Transferor Lender in an amount equal to theCommitment or the Loans retained by it 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 ReserveBank.  No such assignment shall releasethe assigning Lender from its obligations and duties hereunder.

**9.6b**            **AssignmentRegister******.  The Agent shall maintain, at its addressreferred to in Subsection 9.3, a copy of each Assignment and AssumptionAgreement delivered to it and a register (the "Register") forthe recordation of the names and addresses of the Lenders and the amount of theLoans owing to each Lender from time to time. The entries in the Register shall be conclusive, in the absence ofmanifest error, and the Borrower, the Agent and the Lenders may treat eachPerson whose name is recorded in the Register as the owner of the Loansrecorded therein for all purposes of this Agreement.  The Register shall be available at the office of the Agent setforth in Subsection 9.3 for inspection by either Borrower or any Lender at anyreasonable time and from time to time upon reasonable prior notice.

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

**9.7**            **Severability******.  Any provision of this Agreement which 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******.  **ThisAgreement, each Note and each other Loan Document shall be a contract madeunder, governed by and construed in accordance with the laws of the State ofNew Jersey without reference to the provision thereof regarding conflicts oflaw except where such law is superseded by applicable Federal law.**

**9.10            Non-BusinessDays******.  Except as otherwise specifically requiredpursuant to the terms of this Agreement, whenever any payment hereunder orunder the Notes is due and payable on a day which is not a Business Day, suchpayment may be made on the next succeeding Business 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 hereinshall restrict any Lender's ability to set off any property, credits,securities or money of the Borrower which may at any time be delivered to, orbe in possession or owed to any Lender in any capacity whatever to satisfy anindependent obligation of the Borrower to the Lender.

**9.14            Consentto Forum******.  The parties hereto each hereby irrevocablyconsents to the nonexclusive jurisdiction of the Courts of the Commonwealth ofMassachusetts or any Federal court sitting therein in any action or proceedingarising out of or relating to this Agreement, the Notes or the other LoanDocuments, and each party agrees that a summons and complaint commencing anaction or proceeding in either of such courts shall be properly served andshall confer personal jurisdiction if served personally or by certified mail tothe party at its respective address set forth in Section 9.3, or as otherwiseprovided under the laws of the Commonwealth of Massachusetts.  Further, the parties hereby specificallywaive and hereby acknowledge that the parties are estopped from raising anyclaim that any such court lacks personal jurisdiction over such party so as toprohibit either such court from adjudicating any issues raised in a complaintfiled with any such court against the Borrower or the Lenders concerning thisAgreement.

**9.15**            **Waiverof Jury Trial******.  Each of the Agent, the Lenders and theBorrower hereby knowingly, voluntarily and intentionally waive any rights theymay have to a trial by jury in respect of any litigation based hereon, orarising out of, under, or in connection with, this Agreement or any other LoanDocument, or any course of conduct, course of dealing, statements (whetherverbal or written) or actions of the Agent, the Lenders or the Borrower relatinghereto or thereto. Except as prohibited by law, the Borrower hereby waives anyright it may have to claim or recover in any litigation any special, exemplary,punitive or consequential damages or any damages other than, or in addition to,actual damages. The Borrower acknowledges and agrees that ithas received full and sufficient consideration for this provision (and eachother provision of each other Loan Document to which it is a party) and thatthis provision is a material inducement for the Lenders to enter into thisAgreement 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 orliabilities of 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 the terminationof this Agreement.  The foregoingprovisions of this Section 9.16 to the contrary notwithstanding, the Borrowershall not be obligated to indemnify the Agent, or any Lender pursuant to thisSection 9.16 for (i) any losses, liabilities, damages, claims or costs sufferedor incurred by any of them in connection with the administrative transfer offunds in connection with this Agreement and which arise directly from theAgent's or such Lender's negligence or willful misconduct, or (ii) any otherlosses, liabilities, damages, claims, or costs which arise directly from theAgent's, or such Lender's gross negligence or willful misconduct.  All amounts owed pursuant to this Section9.16 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 together shallconstitute but one and the same instrument. In proving this Agreement or any amendment, modification, extension orrenewal, it shall not be necessary to produce or account for more than one suchcounterpart signed by the other party against whom enforcement is sought.

**9.18**            **Replacementof Note********. **Upon receipt of an affidavit of an officer ofany Lender or the Agent (including an indemnification agreement reasonablysatisfactory to the Borrower) as to the loss, theft, destruction or mutilationof any Note or any other Loan Document which is not of public record, and, inthe case of any such loss, theft, destruction or mutilation, upon surrender andcancellation of such Note or other Loan Document, the Borrower will issue, inlieu thereof, a replacement Note or other Loan Document in the same principalamount thereof and otherwise of 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

**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**, **FLEET NATIONAL BANK**,as Agent, and **FLEET SECURITIES, INC.**, as Arranger, to be executed by itsduly authorized officers as of the date first above written.

Commitment:**FLEET NATIONAL BANK**

$45,000,000

CommitmentPercentage:                        By:    /s/ CHARU MANI             

            100%

                        Name:      Charu Mani

            Title:         Vice President

**FLEET SECURITIES, INC.,**

as Arranger

                        By:   /s/ JEFFREY BLOOMQUIST                      

            

                        Name:      Jeffrey Bloomquist

 

            Title:         Vice President |