FIRST AMENDMENT TO CREDIT AGREEMENT

            **THISFIRST AMENDMENT TO CREDIT AGREEMENT** (this "Amendment") isexecuted as of August 11, 2003 by and among **NUI UTILITIES, INC.**, a New Jersey corporation(the "Borrower"); the lenders from time to time partiesthereto (collectively, the "Lenders" and each individually, a"Lender"); **FLEET NATIONAL BANK**, as Agent for theLenders (in such capacity, with its successors and assigns, the "Agent");**CITIZENS BANK OF MASSACHUSETTS** and **CIBC INC.**, as Co-SyndicationAgents; and **PNC BANK, NATIONAL ASSOCIATION**, as Documentation Agent. 

**RECITALS**

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

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

            C.        The Lenders signing below are willing toconsent to such amendments on the terms and conditions hereinafter set forth.

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

**I.          AMENDMENTSTO CREDIT AGREEMENT.**

** **A.**       **Section 2.10 of the Credit Agreement is hereby deletedand the following is substituted therefor: 

"**2.10    Voluntary Reduction of Availability**.  At any timeand from time to time upon no less than two Business Days prior written noticeto the Agent, provided no Indebtedness permitted under Section 5.13(i)(1) orrelated commitments are outstanding, the Borrower may terminate, in whole or inpart, without penalty, the then unused portion of the Commitments, therebycausing a corresponding abatement of the Facility Fee with respect to the prorata share so reduced, provided that no such termination or reductionshall be permitted if, after giving effect thereto and to any prepayments ofthe Loans made on the effective date thereof, the aggregate principal amount ofthe Loans then outstanding, when added to the then outstanding L/C Obligations,would exceed the Commitments then in effect. Each such reduction shall be in a minimum principal amount of $5,000,000or 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 terms hereof.  The Agent shall promptly notify each Lenderof its pro rata share of such terminated unused portion and the date of eachsuch termination."

B.**        **Clause (xii) of the definition of "PermittedEncumbrance" contained in Section 1.1 of the Credit Agreement is herebydeleted and the following is substituted therefor:  

** **"(xii)      Encumbrancescreated or deemed to exist in connection with any securitization transactionpermitted under Section 5.13(i)(2), provided such Encumbrances relatesolely to the applicable securitization assets actually sold, contributed, financedor otherwise conveyed or pledged pursuant to such securitizationtransaction."

** **C.**       **Section 5.5 of the Credit Agreement is hereby deleted andthe following is substituted therefor: 

** **"**5.5**      **Sales of Assets**.  The Borrower shall not enter into any arrangement,direct or indirect, pursuant to which the Borrower shall sell or otherwisetransfer or dispose of, in a single transaction or a series of transactions,all or any substantial part of its assets; provided, however, a sale ortransfer by the Borrower of securitization assets (which shall consist of (1)receivables, (2) deferred gas recovery costs, or (3) any other specifiedcategory of specific assets of the Borrower) in connection with asecuritization permitted under Section 5.13(i)(2) shall not be prohibitedhereunder."

            D.        Section 5.13(h) of the Credit Agreement is herebydeleted and intentionally omitted.

E.**        **Section 5.13(i) of the Credit Agreement is herebydeleted and the following is substituted therefor:  

                        "(i)        Indebtedness of the Borrower (1) inprincipal amount outstanding not to exceed $50,000,000 in the aggregate underlines of credit offered by lenders (other than Affiliates of the Borrower) tothe Borrower to finance the working capital needs of the Borrower (the "AdditionalLines of Credit"), and (2) under a securitization, private debtplacement or other financing reasonably acceptable to the Agent in a principalamount not to exceed $50,000,000 plus any other amounts paid in connection withand relating to the repayment in full of the Additional Lines of Credit, providedthat (x) all of the net proceeds thereof are used to pay or prepay theAdditional Lines of Credit, together with accrued and unpaid interest thereonand premiums, fees and expenses relating thereto, (y) the commitment(s), ifany, to extend credit under the Additional Lines of Credit is permanentlyreduced in the amount of such payment or prepayment, and (z) the consents ofany third parties required in connection with any such securitization shallhave been obtained in writing or the requirement therefor waived inwriting."

F.**        **Section 5.17 of the Credit Agreement is hereby deletedand the following is substituted therefor: 

"**5.17    Limitation on Optional Payments andModifications 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(i)(1)), or amend, modify or change, or consent or agreeto any amendment, modification or change to its certificate of incorporationwhich could reasonably be expected to result in a Material Adverse Effect or tothe Agency Services Agreement or to any of the terms relating to the payment orprepayment of principal of or interest on, any such Indebtedness, other thanany amendment, modification or change which would extend the maturity or reducethe amount of any payment of principal thereof or which would reduce the rateor extend the date for payment of interest thereon."

**II.        CONSENT AND AGREEMENT**.  TheBorrowers represent and warrant that Appliance Plumbing Services is a divisionof NUI Capital Corp., an unregulated subsidiary of NUI Corporation, and itssole business operations are and will solely be the installation of plumbingequipment for the benefit of the Borrower's customers.  Notwithstanding the provisions of Section4.12 of the Credit Agreement requiring that the cash management functions ofthe Borrower be separate from the cash management functions of NUI Corporationand its other subsidiaries on or before November 12, 2003, the expenses andother payables of Appliance Plumbing Services may continue to be paid by theBorrower in an aggregate amount not to exceed $1,000,000 in any fiscal year. 

**III.       REFERENCES IN LOAN DOCUMENTS;CONFIRMATION. **All references to the "Credit Agreement" inany Loan Documents shall, from and after the date hereof, refer to the CreditAgreement as amended by this Amendment. All Loan Documents heretofore executed by the Borrower shall remain infull force and effect and, by the execution of this Amendment by the Borrower,such Loan Documents are hereby ratified and affirmed.

** IV.       REPRESENTATIONS, WARRANTIES ANDCOVENANTS.**  The Borrowerhereby represents and warrants to, and covenants and agrees with, the Agent andthe Lenders that:

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

            B.         The representations and warranties ofthe Borrower contained in the Credit Agreement, as amended hereby, and theother Loan Documents are true and correct in all material respects on and as ofthe date of this Amendment as though made at and as of such date.  Since the Closing Date, no event orcircumstance has occurred or existed which could reasonably be expected to haveMaterial Adverse Effect.  As of the datehereof and after giving effect to this Amendment, no Potential Default or Eventof Default has occurred and is continuing.

            C.        The Borrower is not required to obtainany consent, approval or authorization from, or to file any declaration orstatement with, any governmental instrumentality or other agency or any otherPerson in connection with, or as a condition to, the execution, delivery orperformance of this Amendment by such party.

            D.        This Amendment constitutes the legal,valid and binding obligation of the Borrower, enforceable against it inaccordance with its terms, subject to bankruptcy, insolvency, reorganization,moratorium and similar laws affecting the rights and remedies of creditorsgenerally or the application of principles of equity, whether in any action atlaw or proceeding in equity.

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

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

            1.         On or before the date hereof:

                        (a)        This Amendment; and

                       (b)        Trueand complete copies of (i) any required stockholders' and/or directors'consents and (ii) any resolutions required for the due authorization of theexecution, delivery and performance by the Borrower of this Amendment,certified by a duly authorized officer of the Borrower.

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

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

**VI.       MISCELLANEOUS.**

            A.        As provided in the Credit Agreement, theBorrower agrees to reimburse the Agent upon demand for all fees anddisbursements of counsel to the Agent incurred in connection with thepreparation of this Amendment.

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

            C.        This Amendment may be executed by theparties hereto in several counterparts hereof and by the different partieshereto on separate counterparts hereof, all of which counterparts shalltogether constitute one and the same agreement.  Delivery of an executed signature page of this Amendment byfacsimile transmission shall be effective as an in-hand delivery of an originalexecuted counterpart hereof.

*[The nextpages are the signature pages.]*

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

                                    **NUIUTILITIES, INC.**

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

                                    By:______________________________                                         Name:_______________________                                         Title:________________________

**                                   **

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

                                  By:         /S/ MARIA DEFARIA MAIA                                        Name:    Maria defaria Maia                                        Title:       Managing Director

IN WITNESS WHEREOF,intending to be legally bound hereby, the undersigned Lender has caused thisFirst Amendment to Credit Agreement by and among NUI UTILITIES, INC., THELENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorizedofficers as of the date first above written.

                                  **FLEET NATIONAL BANK**

                                By:         /S/ MARIA DEFARIA MAIA                                       Name:    Mariadefaria Maia                                       Title:      ManagingDirector

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

**                              PNC BANK, NATIONAL ASSOCIATION**

                             By:____________________________________                                     Name:________________________________                                     Title:_________________________________

 

IN WITNESS WHEREOF,intending to be legally bound hereby, the undersigned Lender has caused thisFirst Amendment to Credit Agreement by and among NUI UTILITIES, INC., THELENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorizedofficers as of the date first above written.

                               **CITIZENS BANK OFMASSACHUSETTS**

                             By:         /S/ MICHAEL OVELLET                                   Name:    MichaelOvellet                                   Title:      VicePresident

IN WITNESS WHEREOF,intending to be legally bound hereby, the undersigned Lender has caused thisFirst Amendment to Credit Agreement by and among NUI UTILITIES, INC., THELENDERS PARTY HERETO and FLEET NATIONAL BANK, as Agent, to be executed by its duly authorizedofficers as of the date first above written.

                               **CIBCINC.**

                             By:         /S/ LINDSAY GORDON                                    Name:    LindsayGordon                                   Title:       CIBC World Markets                                                   Corp as Agent

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

                                **MELLON BANK, N.A.**

                              By:         /S/ ALAN J. KOPOLOW                                   Name:    AlanJ. Kopolow                                   Title:      First Vice President

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

                         **BANKOF TOKYO-MITSUBISHI TRUST                             COMPANY**

**                        **By:____________________________________                             Name:________________________________                             Title:_________________________________

                                                                                                                                      

 

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

**                              SOVEREIGNBANK**

                             By:         /S/ ROBERT D. LANIGAN                                    Name:    RobertD. Lanigan                                    Title:      Senior Vice President

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

**                           ALLIEDIRISH BANKS p.l.c.**

**                         **By:____________________________________                               Name:________________________________                               Title:_________________________________