exhibit_4-8.htm


     

    


    
      Conformed
        Copy

    

    


    
      

      

    

     

    New
      Jersey Resources Corporation

     

    


     

    $50,000,000
      6.05% Senior Notes due September 24, 2017

     

    


     

    


     

    ______________

     

    Note
      Purchase Agreement

     

    


     

    _____________

     

    


     

    


     

    Dated
      as
      of September 24, 2007

     

    


    
      


    

    


    


    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      TABLE
        OF CONTENTS



    (Not
      a
      part of the Agreement)

     

    

      
        	
                Section

              	 	
                HEADING

              	
                PAGE

              
	 	 	 	 
	
                SECTION
                  1.

              	 	
                AUTHORIZATION
                  OF NOTES

              	
                6

              
	 	
                Section 1.1.

              	
                Authorization
                  of Notes

              	
                6

              
	 	 	 	 
	
                SECTION 2.

              	 	
                SALE
                  AND PURCHASE OF NOTES; GUARANTY

              	
                6

              
	 	
                Section 2.1.

              	
                Sale
                  and Purchase of Notes

              	
                6

              
	 	
                Section 2.2.

              	
                Guaranty
                  Agreement

              	
                6

              
	 	 	 	 
	
                SECTION 3.

              	 	
                CLOSING

              	
                6

              
	 	 	 	 
	
                SECTION
                  4.

              	 	
                CONDITIONS
                  TO CLOSING

              	
                7

              
	 	
                Section
                  4.1

              	
                Representations
                  and Warranties

              	
                7

              
	 	
                Section
                  4.2

              	
                Performance;
                  No Default

              	
                7

              
	 	
                Section
                  4.3

              	
                Compliance
                  Certificates

              	
                7

              
	 	
                Section
                  4.4

              	
                Guaranty
                  Agreement

              	
                7

              
	 	
                Section
                  4.5

              	
                Opinions
                  of Counsel

              	
                7

              
	 	
                Section
                  4.6

              	
                Purchase
                  Permitted by Applicable Law, Etc

              	
                7

              
	 	
                Section
                  4.7

              	
                Related
                  Transactions

              	
                7

              
	 	
                Section
                  4.8

              	
                Payment
                  of Special Counsel Fees

              	
                7

              
	 	
                Section
                  4.9

              	
                Private
                  Placement Number

              	
                8

              
	 	
                Section
                  4.10

              	
                Changes
                  in Corporate Structure

              	
                8

              
	 	
                Section
                  4.11

              	
                Funding
                  Instructions

              	
                8

              
	 	
                Section
                  4.12

              	
                Proceedings
                  and Documents

              	 
	 	 	 	 
	
                SECTION 5.

              	 	
                REPRESENTATIONS
                  AND WARRANTIES OF THE COMPANY

              	
                8

              
	 	
                Section
                  5.1

              	
                Organization;
                  Power and Authority

              	
                8

              
	 	
                Section
                  5.2

              	
                Authorization,
                  Etc

              	
                8

              
	 	
                Section
                  5.3

              	
                Disclosure

              	
                8

              
	 	
                Section
                  5.4

              	
                Organization
                  and Ownership of Shares of Subsidiaries

              	
                9

              
	 	
                Section
                  5.5

              	
                Financial
                  Statements

              	
                9

              
	 	
                Section
                  5.6

              	
                Compliance
                  with Laws, Other Instruments, Etc

              	
                9

              
	 	
                Section
                  5.7

              	
                Governmental
                  Authorizations, Etc

              	
                9

              
	 	
                Section
                  5.8

              	
                Litigation;
                  Observance of Statutes and Orders

              	
                9

              
	 	
                Section
                  5.9

              	
                Taxes

              	
                10

              
	 	
                Section
                  5.10

              	
                Title
                  to Property; Leases

              	
                10

              
	 	
                Section
                  5.11

              	
                Licenses,
                  Permits, Etc

              	
                10

              
	 	
                Section
                  5.12

              	
                Compliance
                  with ERISA

              	
                10

              
	 	
                Section
                  5.13

              	
                Private
                  Offering by the Company

              	
                10

              
	 	
                Section
                  5.14

              	
                Use
                  of Proceeds; Margin Regulations

              	
                11

              
	 	
                Section
                  5.15

              	
                Existing
                  Debt

              	
                11

              
	 	
                Section
                  5.16

              	
                Foreign
                  Assets Control Regulations, Etc

              	
                11

              
	 	
                Section
                  5.17

              	
                Status
                  under Certain Statutes

              	
                11

              
	 	
                Section
                  5.18

              	
                Environmental
                  Matters

              	
                11

              
	 	
                Section
                  5.19

              	
                Notes
                  Rank Pari Passu

              	
                12

              
	 	 	 	 
	
                SECTION
                  6.

              	 	
                REPRESENTATIONS
                  OF THE PURCHASERS

              	
                12

              
	 	
                Section
                  6.1

              	
                Purchase
                  for Investment

              	
                12

              
	 	
                Section
                  6.2

              	
                Source
                  of Funds

              	
                12

              


      

    

    
      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

    

    
      

        TABLE
          OF CONTENTS

        (continued)

         

        

          
            	
                    Section

                  	 	
                    HEADING

                  	
                    PAGE

                  
	 	 	 	 
	
                    SECTION
                      7

                  	 	
                    INFORMATION
                      AS TO COMPANY

                  	
                    13

                  
	 	
                    Section
                      7.1

                  	
                    Financial
                      and Business Information

                  	
                    13

                  
	 	
                    Section
                      7.2

                  	
                    Officer’s
                      Certificate

                  	
                    15

                  
	 	
                    Section
                      7.3

                  	
                    Inspection

                  	
                    15

                  
	 	 	 	 
	
                    SECTION
                      8.

                  	 	
                    PREPAYMENT
                      OF THE NOTES

                  	
                    15

                  
	 	
                    Section
                      8.1

                  	
                    Required
                      Prepayments

                  	
                    15

                  
	 	
                    Section
                      8.2

                  	
                    Optional
                      Prepayments with Make-Whole Amount

                  	
                    15

                  
	 	
                    Section
                      8.3

                  	
                    Allocation
                      of Partial Prepayments

                  	
                    16

                  
	 	
                    Section
                      8.4

                  	
                    Maturity;
                      Surrender, Etc

                  	
                    16

                  
	 	
                    Section
                      8.5

                  	
                    Purchase
                      of Notes

                  	
                    16

                  
	 	
                    Section
                      8.6

                  	
                    Offer
                      to Prepay Upon Asset Disposition

                  	
                    16

                  
	 	
                    Section
                      8.7

                  	
                    Make-Whole
                      Amount for Notes

                  	
                    16

                  
	 	 	 	 
	
                    SECTION
                      9.

                  	 	
                    AFFIRMATIVE
                      COVENANTS

                  	
                    17

                  
	 	
                    Section
                      9.1

                  	
                    Compliance
                      with Law

                  	
                    17

                  
	 	
                    Section
                      9.2

                  	
                    Insurance

                  	
                    17

                  
	 	
                    Section
                      9.3

                  	
                    Maintenance
                      of Properties

                  	
                    18

                  
	 	
                    Section
                      9.4

                  	
                    Payment
                      of Taxes and Claims

                  	
                    18

                  
	 	
                    Section
                      9.5

                  	
                    Corporate
                      Existence, Etc

                  	
                    18

                  
	 	
                    Section
                      9.6

                  	
                    Ownership
                      of Subsidiaries

                  	
                    18

                  
	 	
                    Section
                      9.7

                  	
                    Guaranty
                      Agreement

                  	
                    18

                  
	 	
                    Section
                      9.8

                  	
                    New
                      Jersey Natural Gas Regulated Nature

                  	
                    19

                  
	 	
                    Section
                      9.9

                  	
                    Notes
                      to Rank Pari Passu

                  	
                    19

                  
	 	 	 	 
	
                    SECTION
                      10.

                  	 	
                    NEGATIVE
                      COVENANTS

                  	
                    19

                  
	 	
                    Section
                      10.1

                  	
                    Leverage
                      Ratio

                  	
                    19

                  
	 	
                    Section
                      10.2

                  	
                    Limitation
                      on Priority Debt

                  	
                    19

                  
	 	
                    Section
                      10.3

                  	
                    Liens

                  	
                    19

                  
	 	
                    Section
                      10.4

                  	
                    Restricted
                      Payments

                  	
                    21

                  
	 	
                    Section
                      10.5

                  	
                    Restrictions
                      on Dividends of Subsidiaries, Etc

                  	
                    21

                  
	 	
                    Section
                      10.6

                  	
                    Sale
                      of Assets, Etc

                  	
                    21

                  
	 	
                    Section
                      10.7

                  	
                    Merger,
                      Consolidation, Etc

                  	
                    22

                  
	 	
                    Section
                      10.8

                  	
                    Disposal
                      of Ownership of a Restricted Subsidiary

                  	
                    22

                  
	 	
                    Section
                      10.9

                  	
                    Limitations
                      on Subsidiaries, Partnerships and Joint Ventures

                  	
                    22

                  
	 	
                    Section
                      10.10

                  	
                    Limitation
                      on Certain Leases

                  	
                    23

                  
	 	
                    Section
                      10.11

                  	
                    Nature
                      of Business

                  	
                    23

                  
	 	
                    Section
                      10.12

                  	
                    Transactions
                      with Affiliates

                  	
                    23

                  
	 	
                    Section
                      10.13

                  	
                    Designation
                      of Restricted and Unrestricted Subsidiaries

                  	
                    23

                  
	 	
                    Section
                      10.14

                  	
                    Terrorism
                      Sanctions Regulations

                  	
                    23

                  
	 	 	 	 
	
                    SECTION
                      11.

                  	 	
                    EVENTS
                      OF DEFAULT

                  	
                    24

                  
	 	 	 	 
	
                    SECTION
                      12.

                  	 	
                    REMEDIES
                      ON DEFAULT, ETC

                  	
                    25

                  
	 	
                    Section
                      12.1

                  	
                    Acceleration

                  	
                    25

                  
	 	
                    Section
                      12.2

                  	
                    Other
                      Remedies

                  	
                    26

                  
	 	
                    Section
                      12.3

                  	
                    Rescission

                  	
                    26

                  
	 	
                    Section
                      12.4

                  	
                    No
                      Waivers or Election of Remedies, Expenses, Etc

                  	
                    26

                  


          

        

      

    

    


    
      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

    

    


     

    TABLE
      OF CONTENTS

    (continued)

     

    

      
        	
                Section

              	 	
                HEADING

              	
                PAGE

              
	 	 	 	 
	
                SECTION
                  13.

              	 	
                REGISTRATION;
                  EXCHANGE; SUBSTITUTION OF NOTES

              	
                26

              
	 	
                Section
                  13.1

              	
                Registration
                  of Notes

              	
                26

              
	 	
                Section
                  13.2

              	
                Transfer
                  and Exchange of Notes

              	
                26

              
	 	
                Section
                  13.3

              	
                Replacement
                  of Notes

              	
                27

              
	 	 	 	 
	
                SECTION 14.

              	 	
                PAYMENTS
                  ON NOTES

              	
                27

              
	 	
                Section 14.1.

              	
                Place
                  of Payment

              	
                27

              
	 	
                Section 14.2.

              	
                Home
                  Office Payment

              	
                27

              
	 	 	 	 
	
                SECTION 15.

              	 	
                EXPENSES,
                  ETC

              	
                27

              
	 	
                Section 15.1.

              	
                Transaction
                  Expenses

              	
                27

              
	 	
                Section 15.2.

              	
                Survival

              	
                28

              
	 	 	 	 
	
                SECTION 16.

              	 	
                SURVIVAL
                  OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

              	
                28

              
	 	 	 	 
	
                SECTION
                  17.

              	 	
                AMENDMENT
                  AND WAIVER

              	
                28

              
	 	
                Section
                  17.1

              	
                Requirements

              	
                28

              
	 	
                Section
                  17.2

              	
                Solicitation
                  of Holders of Notes

              	
                28

              
	 	
                Section
                  17.3

              	
                Binding
                  Effect, Etc

              	
                28

              
	 	
                Section
                  17.4

              	
                Notes
                  Held by Company, Etc

              	
                29

              
	 	 	 	 
	
                SECTION
                  18.

              	 	
                NOTICES

              	
                29

              
	 	 	 	 
	
                SECTION 19.

              	 	
                REPRODUCTION
                  OF DOCUMENTS

              	
                29

              
	 	 	 	 
	
                SECTION 20.

              	 	
                CONFIDENTIAL
                  INFORMATION

              	
                30

              
	 	 	 	 
	
                SECTION 21.

              	 	
                SUBSTITUTION
                  OF PURCHASER

              	
                30

              
	 	 	 	 
	
                SECTION 22.

              	 	
                MISCELLANEOUS

              	
                30

              
	 	
                Section
                  22.1

              	
                Successors
                  and Assigns

              	
                30

              
	 	
                Section
                  22.2

              	
                Submission
                  to Jurisdiction; Waiver of Jury Trial

              	
                30

              
	 	
                Section
                  22.3

              	
                Payments
                  Due on Non-Business Days

              	
                31

              
	 	
                Section
                  22.4

              	
                Accounting
                  Terms

              	
                31

              
	 	
                Section
                  22.5

              	
                Severability

              	
                31

              
	 	
                Section
                  220.6

              	
                Construction

              	
                31

              
	 	
                Section
                  22.7

              	
                Counterparts

              	
                31

              
	 	
                Section
                  22.8

              	
                Governing
                  Law

              	
                31

              


      

      
 

    

    
      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

    

    


     

    
      Attachments
        to Note Purchase Agreement:

    

     

    
      
        	
                Schedule A

              	
                —

              	
                 

                Information
                  Relating to Purchasers

              
	
                Schedule B

              	
                —

              	
                 

                Defined
                  Terms

              
	
                Schedule 4.10

              	
                —

              	
                 

                Changes
                  in Corporate Structure

              
	
                Schedule 5.3

              	
                —

              	
                 

                Disclosure
                  Materials

              
	
                Schedule 5.4

              	
                —

              	
                 

                Subsidiaries
                  of the Company and Ownership of Subsidiary Stock

              
	
                Schedule 5.5

              	
                —

              	
                 

                Financial
                  Statements

              
	
                Schedule 5.8

              	
                —

              	
                 

                Certain
                  Litigation

              
	
                Schedule 5.11

              	
                —

              	
                 

                Patents,
                  Etc.

              
	
                Schedule 5.14

              	
                —

              	
                 

                Use
                  of Proceeds

              
	
                Schedule 5.15

              	
                —

              	
                 

                Existing
                  Debt

              
	
                Exhibit 1

              	
                —

              	
                 

                Form
                  of 6.05% Senior Note due September 24, 2017

              
	
                Exhibit 2

              	
                —

              	
                 

                Form
                  of Subsidiary Guaranty Agreement

              
	
                Exhibit 4.5(a)

              	
                —

              	
                 

                Form
                  of Opinion of Special Counsel for the Company and the
                  Guarantors

              
	
                Exhibit 4.5(b)

              	
                —

              	
                 

                Form
                  of Opinion of Special Counsel for the
                  Purchasers

              


      



     

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

    


    New
      Jersey Resources Corporation

    1415
      Wyckoff Road

    Wall,
      New Jersey 07719

     

    


     

    6.05%
      Senior Notes due September 24, 2017

    


    Dated
      as
      of September 24, 2007

    


    To
      the
      Purchasers listed in

      the
      attached Schedule A:

    


    Ladies
      and Gentlemen:

     

    New
      Jersey Resources Corporation, a New Jersey corporation (the “Company”),
      agrees with the purchasers listed in the attached
ScheduleA (each, a “Purchaser” and
      collectively, the “Purchasers”) as follows:

     

    
      	
              Section 1.

            	
              Authorization
                of Notes.

            


    

     

                              Section 1.1.Authorization
      of
      Notes.  The Company will authorize the issue and sale of
      $50,000,000 aggregate principal amount of its 6.05% Senior Notes due
      September 24, 2017 (the “Notes,” such term to include any such
      notes issued in substitution therefor pursuant to
Section 13).  The Notes shall be substantially
      in the form set out in Exhibit 1, with such changes
      therefrom, if any, as may be approved by the Purchasers and the
      Company.  Certain capitalized terms used in this Agreement are defined
      in Schedule B; references to a “Schedule”
or an “Exhibit” are, unless otherwise specified, to a Schedule
      or an Exhibit
      attached to this Agreement.

     

    
      	
              Section 2.

            	
              Sale
                and Purchase of Notes; Guaranty.

            


    

     

                              Section 2.1.Sale
      and Purchase of
      Notes.  Subject to the terms and conditions of this Agreement,
      the Company will issue and sell to each Purchaser and each Purchaser will
      purchase from the Company, at the Closing provided for in
Section 3, Notes in the principal amount specified
      opposite such Purchaser’s name in
Schedule A for an aggregate purchase
      price of $49,850,000.  Each Purchaser’s obligations hereunder are
      several and not joint and no Purchaser shall have any obligation or liability
      to
      any Person for the performance or nonperformance by any other Purchaser
      hereunder.

     

                              Section 2.2.Guaranty
      Agreement.  The obligations of the Company hereunder and under
      the Notes are absolutely, unconditionally and irrevocably guaranteed by each
      Restricted Subsidiary existing on the date of the Closing and each other
      Subsidiary from time to time required to guaranty the Notes pursuant to
Section 9.7 (each a “Guarantor” and,
      collectively, the “Guarantors”), pursuant to that
      certain Subsidiary Guaranty Agreement dated as of September 24, 2007 (as
      the same may be amended, supplemented, restated or otherwise modified from
      time
      to time, the “Guaranty Agreement”) substantially in the form of
Exhibit 2.

     

    
      	
              Section 3.

            	
              Closing.

            


    

     

    The
      sale
      and purchase of the Notes to be purchased by the Purchasers shall occur at
      the
      offices of Schiff Hardin LLP, 900 Third Avenue, 23rd Floor, New York, New York
      10022, at 11:00 a.m., New York, New York time, at a closing (the
“Closing”) on September 24, 2007 or on such other Business Day
      thereafter on or prior to September 28, 2007 as may be agreed upon by the
      Company and the Purchasers.  At the Closing, the Company will deliver
      to each Purchaser the Notes to be purchased by such Purchaser in the form of
      a
      single Note (or such greater number of Notes in denominations of at least
      $100,000 as such Purchaser may request) dated the date of the Closing and
      registered in such Purchaser’s name (or in the name of its nominee), against
      delivery by such Purchaser to the Company or its order of immediately available
      funds in the amount of the purchase price therefor by wire transfer of
      immediately available funds for the account of the Company in accordance with
      the funding instructions provided pursuant to
Section 4.11.  If at the Closing the Company
      shall fail to tender such Notes to any Purchaser as provided above in this
      Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to any Purchaser’s
      satisfaction, such Purchaser shall, at its election, be relieved of all further
      obligations under this Agreement, without thereby waiving any rights such
      Purchaser may have by reason of such failure or such
      nonfulfillment.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              Section 4.

            	
              Conditions
                to Closing.

            


    

     

    Each
      Purchaser’s obligation to purchase and pay for the Notes to be sold to such
      Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
      satisfaction, prior to or at the Closing, of the following
      conditions:

     

                              Section 4.1.Representations
      and
      Warranties.  (a) The representations and warranties of the
      Company in this Agreement shall be correct when made and at the time of the
      Closing.

     

                  (b)The
      representations and warranties of
      each Guarantor in the Guaranty Agreement shall be correct when made and at
      the
      time of the Closing.

     

                              Section 4.2.Performance;
      No
      Default.  The Company and each Guarantor shall have performed and
      complied with all agreements and conditions contained in this Agreement or
      in
      the Guaranty Agreement, as applicable, required to be performed or complied
      with
      by it prior to or at the Closing, and after giving effect to the issue and
      sale
      of the Notes (and the application of the proceeds thereof as contemplated by
      Schedule 5.14), no Default or Event of Default shall have
      occurred and be continuing.

     

                              Section 4.3.Compliance
      Certificates.

     

                  (a)Officer’s
      Certificate.  (1) The Company shall have delivered to such
      Purchaser an Officer’s Certificate, dated the date of the Closing, certifying
      that the conditions specified in Sections 4.1, 4.2
and 4.10 have been fulfilled.

     

                  (2)Each
      Guarantor shall have delivered
      to such Purchaser an Officer’s Certificate, dated the date of the Closing,
      certifying that the conditions specified in Section 4.1(b)
and 4.2 have been fulfilled.

     

                  (b)Secretary’s
      Certificate.  (1) The Company shall have delivered to such
      Purchaser a certificate of its Secretary, dated the date of Closing, certifying
      as to the resolutions attached thereto and other corporate proceedings relating
      to the authorization, execution and delivery of the Notes and this
      Agreement.

     

                  (2)Each
      Guarantor shall have delivered
      to such Purchaser a certificate of its Secretary, dated the date of Closing,
      certifying as to the resolutions attached thereto and other corporate or similar
      proceedings relating to the authorization, execution and delivery of the
      Guaranty Agreement.

     

                              Section 4.4.Guaranty
      Agreement.  The Guaranty Agreement shall have been duly
      authorized, executed and delivered by each Guarantor and shall be in full force
      and effect and such Purchaser shall have received a duly executed copy
      thereof.

     

                              Section 4.5.Opinions
      of
      Counsel.  Such Purchaser shall have received opinions in form and
      substance satisfactory to such Purchaser, dated the date of the Closing
      (a) from Chapman and Cutler LLP, special counsel for the Company and the
      Guarantors, covering the matters set forth in Exhibit 4.5(a)
and covering such other matters incident to the transactions
      contemplated hereby as such Purchaser or special counsel to the Purchasers
      may
      reasonably request (and the Company hereby instructs its counsel to deliver
      such
      opinion to such Purchaser) and (b) from Schiff Hardin LLP, special counsel
      to the Purchasers in connection with such transactions, substantially in the
      form set forth in Exhibit 4.5(b) and covering such other
      matters incident to such transactions as such Purchaser may reasonably
      request.

     

                              Section 4.6.Purchase
      Permitted by Applicable
      Law, Etc.  On the date of the Closing,
      such  Purchaser’s purchase of Notes shall (a) be permitted by the
      laws and regulations of each jurisdiction to which such Purchaser is subject,
      without recourse to provisions (such as Section 1405(a)(8) of the New York
      Insurance Law) permitting limited investments by insurance companies without
      restriction as to the character of the particular investment, (b) not
      violate any applicable law or regulation (including, without limitation,
      Regulation T, U or X of the Board of Governors of the Federal Reserve System)
      and (c) not subject such Purchaser to any tax, penalty or liability under
      or pursuant to any applicable law or regulation.  If requested by any
      Purchaser, such Purchaser shall have received an Officer’s Certificate
      certifying as to such matters of fact as such Purchaser may reasonably specify
      to enable it to determine whether such purchase is so permitted.

     

                              Section 4.7.Related
      Transactions.  The Company shall have consummated the sale of the
      entire principal amount of the Notes scheduled to be sold on the date of the
      Closing pursuant to this Agreement.

     

                              Section 4.8.Payment
      of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the
      Company shall have paid on or before the Closing the reasonable fees, charges
      and disbursements of special counsel to the Purchasers referred to in
Section 4.5(b) to the extent reflected in a statement of
      such counsel rendered to the Company at least one Business Day prior to the
      Closing.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

                              Section 4.9.Private
      Placement
      Number.  A Private Placement Number issued by Standard &
Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office
      of the National Association of Insurance Commissioners) shall have been obtained
      for the Notes.

     

                              Section 4.10.Changes
      in Corporate
      Structure.  Except as specified in
Schedule 4.10, the Company shall not have changed its
      jurisdiction of incorporation or been a party to any merger or consolidation
      and
      shall not have succeeded to all or any substantial part of the liabilities
      of
      any other entity, at any time following the date of the most recent financial
      statements referred to in Schedule 5.5.

     

                              Section 4.11.Funding
      Instructions.  At least three Business Days prior to the date of
      the Closing, such Purchaser shall have received written instructions executed
      by
      an authorized financial officer of the Company on letterhead of the Company
      directing the manner of the payment of funds and setting forth (a) the name
      and
      address of the transferee bank, (b) such transferee bank’s ABA number, (c) the
      account name and number into which the purchase price for the Notes is to be
      deposited and (d) the name and telephone number of the account representative
      responsible for verifying receipt of such funds.

     

                              Section 4.12.Proceedings
      and
      Documents.  All corporate and other proceedings in connection
      with the transactions contemplated by this Agreement and all documents and
      instruments incident to such transactions shall be satisfactory to such
      Purchaser and special counsel to the Purchasers, and such Purchaser and special
      counsel to the Purchasers shall have received all such counterpart originals
      or
      certified or other copies of such documents as such Purchaser or special counsel
      to the Purchasers may reasonably request.

     

    
      	
              Section 5.

            	
              Representations
                and Warranties of the Company.

            


    

     

    The
      Company represents and warrants to each Purchaser that:

     

                              Section 5.1.Organization;
      Power and
      Authority.  The Company is a corporation duly organized, validly
      existing and in good standing under the laws of its jurisdiction of
      incorporation, and is duly qualified as a foreign corporation and is in good
      standing in each jurisdiction in which such qualification is required by law,
      other than those jurisdictions as to which the failure to be so qualified or
      in
      good standing would not, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect.  The Company has the
      corporate power and authority to own or lease the properties it purports to
      own
      or lease, to transact the business it transacts and proposes to transact, to
      execute and deliver this Agreement and the Notes and to perform the provisions
      hereof and thereof.

     

                              Section 5.2.Authorization,
      Etc.  (a) This Agreement and the Notes have been duly authorized
      by all necessary corporate action on the part of the Company, and this Agreement
      constitutes, and upon execution and delivery thereof each Note will constitute,
      a legal, valid and binding obligation of the Company enforceable against the
      Company in accordance with its terms, except as such enforceability may be
      limited by (1) applicable bankruptcy, insolvency, reorganization,
      moratorium or other similar laws affecting the enforcement of creditors’ rights
      generally and (2) general principles of equity (regardless of whether such
      enforceability is considered in a proceeding in equity or at law).

     

                  (b)The
      Guaranty Agreement has been duly
      authorized by all necessary corporate or other action on the part of each
      Guarantor, and the Guaranty Agreement constitutes a legal, valid and binding
      obligation of each Guarantor enforceable against each Guarantor in accordance
      with its terms, except as such enforceability may be limited by
      (1) applicable bankruptcy, insolvency, reorganization, moratorium or other
      similar laws affecting the enforcement of creditors’ rights generally and
      (2) general principles of equity (regardless of whether such enforceability
      is considered in a proceeding in equity or at law).

     

                              Section 5.3.Disclosure.  The
      Company, through its agent, Goldman, Sachs & Co., has delivered to each
      Purchaser a copy of a Private Placement Memorandum, dated September 2007 (the
      “Memorandum”), relating to the transactions contemplated
      hereby.  Except as disclosed in Schedule 5.3,
      this Agreement, the Memorandum, the documents, certificates or other writings
      identified in Schedule 5.3 and the financial statements
      listed in Schedule 5.5 (collectively, the “Disclosure
      Documents”), taken as a whole, do not contain any untrue statement of a
      material fact or omit to state any material fact necessary to make the
      statements therein not misleading in light of the circumstances under which
      they
      were made.  Except as disclosed in the Disclosure Documents, since
      September 30, 2006, there has been no change in the financial condition,
      operations, business or properties of the Company, any of its Restricted
      Subsidiaries or New Jersey Natural Gas except changes that, individually or
      in
      the aggregate, would not reasonably be expected to have a Material Adverse
      Effect.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

                              Section
      5.4.Organization
      and
      Ownership of Shares of
      Subsidiaries.  (a) Schedule 5.4 is
      (except as noted therein) a complete and correct list of the Company’s
      Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
      jurisdiction of its organization, the percentage of shares of each class of
      its
      capital stock or similar equity interests outstanding owned by the Company
      and
      each other Subsidiary and whether or not such Subsidiary is a Restricted
      Subsidiary, an Inactive Subsidiary and/or a Regulated Entity.

     

                  (b)All
      of the outstanding shares of
      capital stock or similar equity interests of each Restricted Subsidiary and
      New
      Jersey Natural Gas shown in Schedule 5.4 as being owned by
      the Company and its Subsidiaries have been validly issued, are fully paid and
      nonassessable and are owned by the Company or another Subsidiary free and clear
      of any Lien (except as otherwise disclosed in
Schedule 5.4).

     

                  (c)Each
      Restricted Subsidiary identified
      in Schedule 5.4 and New Jersey Natural
      Gas is a corporation or other legal entity duly organized,
      validly existing and in good standing under the laws of its jurisdiction of
      organization, and is duly qualified as a foreign corporation or other legal
      entity and is in good standing in each jurisdiction in which such qualification
      is required by law, other than those jurisdictions as to which the failure
      to be
      so qualified or in good standing would not, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect.  Each such
      Restricted Subsidiary and New Jersey Natural Gas has the corporate or other
      power and authority to own or lease the properties it purports to own or lease,
      to transact the business it transacts and proposes to transact and, in the
      case
      of each Restricted Subsidiary that is a Guarantor, to execute and deliver the
      Guaranty Agreement and to perform the provisions thereof.

     

                              Section 5.5.Financial
      Statements.  The Company has delivered to each Purchaser copies
      of the consolidated financial statements of the Company and its Subsidiaries
      listed on Schedule 5.5.  All of said financial
      statements (including in each case the related schedules and notes) fairly
      present in all material respects the consolidated financial position of the
      Company and its Subsidiaries as of the respective dates specified in such
      Schedule and the consolidated results of their operations and cash flows for
      the
      respective periods so specified and have been prepared in accordance with GAAP
      consistently applied throughout the periods involved except as set forth in
      the
      notes thereto (subject, in the case of any interim financial statements, to
      normal year-end adjustments). The Company and its Subsidiaries do not have
      any
      Material liabilities that are not disclosed on such financial statements or
      otherwise disclosed in the Disclosure Documents.

     

                              Section 5.6.Compliance
      with Laws, Other
      Instruments, Etc.  The execution, delivery and performance by the
      Company of this Agreement and the Notes and the execution and delivery by each
      Guarantor of the Guaranty Agreement will not (a) contravene, result in any
      breach of, or constitute a default under, or result in the creation of any
      Lien
      in respect of any property of the Company, any Restricted Subsidiary or New
      Jersey Natural Gas under, any indenture, mortgage, deed of trust, loan, purchase
      or credit agreement, lease, corporate charter or by-laws, or any other Material
      agreement or instrument to which the Company, any Restricted Subsidiary or
      New
      Jersey Natural Gas is bound or by which the Company,  any Restricted
      Subsidiary  or New Jersey Natural Gas or any of their respective
      properties may be bound or affected, (b) conflict with or result in a
      breach of any of the terms, conditions or provisions of any order, judgment,
      decree or ruling of any court, arbitrator or Governmental Authority applicable
      to the Company, any Restricted Subsidiary or New Jersey Natural Gas or
      (c) violate any provision of any statute or other rule or regulation of any
      Governmental Authority applicable to the Company, any Restricted Subsidiary
      or
      New Jersey Natural Gas.

     

                              Section 5.7.Governmental
      Authorizations,
      Etc.  No consent, approval or authorization of, or registration,
      filing or declaration with, any Governmental Authority is required in connection
      with the execution, delivery or performance by (a) the Company of this
      Agreement or the Notes or (b) any Guarantor of the Guaranty Agreement, in each
      case, other than such consents, approvals, authorizations, registrations,
      filings or declarations that have been obtained or made prior to the date of
      the
      Closing.

     

                              Section 5.8.Litigation;
      Observance of
      Statutes and Orders.  (a) Except as disclosed in
      Schedule 5.8, there are no actions, suits or proceedings pending or, to the
      knowledge of the Company, threatened against or affecting the Company, any
      Restricted Subsidiary or New Jersey Natural Gas or any property of the Company,
      any Restricted Subsidiary or New Jersey Natural Gas in any court or before
      any
      arbitrator of any kind or before or by any Governmental Authority that,
      individually or in the aggregate, would reasonably be expected to have a
      Material Adverse Effect.

     

                  (b)None
      of the Company, any Restricted
      Subsidiary or New Jersey Natural Gas is in default under any order, judgment,
      decree or ruling of any court, arbitrator or Governmental Authority or is in
      violation of any applicable law, ordinance, rule or regulation (including,
      without limitation, ERISA, Environmental Laws or the USA Patriot Act) of any
      Governmental Authority, which default or violation, individually or in the
      aggregate, would reasonably be expected to have a Material Adverse
      Effect.

    
       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

                              Section
      5.9.Taxes.  The Company
      and
      its Subsidiaries have filed all income tax returns that are required to have
      been filed in any jurisdiction, and have paid all taxes shown to be due and
      payable on such returns and all other taxes and assessments payable by them,
      to
      the extent such taxes and assessments have become due and payable and before
      they have become delinquent, except for any taxes and assessments (a) the
      amount of which is not, individually or in the aggregate, Material or
      (b) the amount, applicability or validity of which is currently being
      contested in good faith by appropriate proceedings and with respect to which
      the
      Company or a Subsidiary, as the case may be, has established adequate reserves
      in accordance with GAAP.  The charges, accruals and reserves on the
      books of the Company and its Subsidiaries in respect of Federal, state or other
      taxes for all fiscal periods are adequate.  The Federal income tax
      liabilities of the Company and its Subsidiaries have been determined by the
      Internal Revenue Service and paid for all fiscal years up to and including
      the
      fiscal year ended September 30, 2004.

                              

          Section 5.10.Title
      to Property;
      Leases.  The Company, its Restricted Subsidiaries and New Jersey
      Natural Gas have good and sufficient title related to the ownership of their
      respective Material properties, including all such properties reflected in
      the
      most recent audited balance sheet referred to in Section 5.5
or purported to have been acquired by the Company, any Restricted
      Subsidiary or New Jersey Natural Gas after said date (except as sold or
      otherwise disposed of in the ordinary course of business), in each case free
      and
      clear of Liens prohibited by this Agreement, except for those defects in title
      and Liens that, individually or in the aggregate, would not have a Material
      Adverse Effect.  All Material leases are valid and subsisting and are
      in full force and effect in all material respects.

     

                              Section 5.11.Licenses,
      Permits,
      Etc.  Except as disclosed in Schedule 5.11,
      the Company, its Restricted Subsidiaries and New Jersey Natural Gas own or
      possess all licenses, permits, franchises, authorizations, patents, copyrights,
      proprietary software, service marks, trademarks, trade names and domain names
      or
      rights thereto, that are Material, without known conflict with the rights of
      others, except for those conflicts that, individually or in the aggregate,
      would
      not have a Material Adverse Effect.

     

                              Section 5.12.Compliance
      with
      ERISA.  (a) The Company and each ERISA Affiliate have
      operated and administered each Plan in compliance with all applicable laws
      except for such instances of noncompliance as have not resulted in and would
      not
      reasonably be expected to result in a Material Adverse
      Effect.  Neither the Company nor any ERISA Affiliate has incurred any
      liability pursuant to Title I or IV of ERISA or the penalty or excise tax
      provisions of the Code relating to employee benefit plans (as defined in
      Section 3 of ERISA), and no event, transaction or condition has occurred or
      exists that would reasonably be expected to result in the incurrence of any
      such
      liability by the Company or any ERISA Affiliate, or in the imposition of any
      Lien on any of the rights, properties or assets of the Company or any ERISA
      Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
      or excise tax provisions or to Section 401(a)(29) or 412 of the Code or
      Section 4068 of ERISA, other than such liabilities or Liens as would not be,
      individually or in the aggregate, Material.

     

                  (b)The
      present value of the aggregate
      benefit liabilities under each of the Plans which are subject to Title IV
      of ERISA (other than Multiemployer Plans), determined as of the end of such
      Plan’s most recently ended plan year on the basis of the actuarial assumptions
      specified for funding purposes in such Plan’s most recent actuarial valuation
      report, did not exceed the aggregate current value of the assets of such Plans
      allocable to such benefit liabilities by more than $8,000,000.  The
      term “benefit liabilities” has the meaning specified in Section 4001 of
      ERISA and the terms “current value” and “present value” have the meanings
      specified in Section 3 of ERISA.

     

                  (c)The
      Company and its ERISA Affiliates
      have not incurred withdrawal liabilities (and are not subject to contingent
      withdrawal liabilities) under Section 4201 or 4204 of ERISA in respect of
      Multiemployer Plans that, individually or in the aggregate, are
      Material.

     

                  (d)The
      accumulated post-retirement
      benefit obligation (determined as of the last day of the Company’s most recently
      ended fiscal year in accordance with Financial Accounting Standards Board
      Statement No. 106, without regard to liabilities attributable to continuation
      coverage mandated by Section 4980B of the Code) of the Company, its
      Restricted Subsidiaries and New Jersey Natural Gas is not Material.

     

                  (e)The
      execution and delivery of this
      Agreement and the issuance and sale of the Notes hereunder will not involve
      any
      transaction that is subject to the prohibitions of Section 406 of ERISA or
      in connection with which a tax could be imposed pursuant to
      Section 4975(c)(1)(A)-(D) of the Code.  The representation by the
      Company in the first sentence of this Section 5.12(e) with
      respect to each Purchaser is made in reliance upon and subject to the accuracy
      of such Purchaser’s representation in Section 6.2 as to
      the sources of the funds used to pay the purchase price of the Notes to be
      purchased by such Purchaser.

     

                              Section 5.13.Private
      Offering by the
      Company.  Neither the Company nor anyone authorized to act on its
      behalf has offered the Notes or the Guaranty Agreement or any similar securities
      for sale to, or solicited any offer to buy any of the same from, or otherwise
      approached or negotiated in respect thereof with, any Person other than the
      Purchasers and not more than __ other Institutional Investors of the type
      described in clause (c) of the definition thereof, each of which has been
      offered the Notes and the Guaranty Agreement at a private sale for
      investment.  Neither the Company nor anyone acting on its behalf has
      taken, or will take, any action that would subject the issuance or sale of
      the
      Notes or the execution and performance of the Guaranty Agreement to the
      registration requirements of Section 5 of the
      Securities Act.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

                              Section 5.14.Use
      of Proceeds; Margin
      Regulations.  The Company will apply the proceeds of the sale of
      the Notes as set forth in Schedule 5.14.  No
      part of the proceeds from the sale of the Notes hereunder will be used, directly
      or indirectly, for the purpose of buying or carrying any margin stock within
      the
      meaning of Regulation U of the Board of Governors of the Federal Reserve System
      (12 CFR 221), or for the purpose of buying or carrying or trading in any
      securities under such circumstances as to involve the Company in a violation
      of
      Regulation X of said Board (12 CFR 224) or to involve any broker or dealer
      in a
      violation of Regulation T of said Board (12 CFR 220).  Margin stock
      does not constitute more than 25% of the value of the consolidated assets of
      the
      Company and its Subsidiaries and the Company does not have any present intention
      that margin stock will constitute more than 25% of the value of such
      assets.  As used in this Section, the terms “margin stock” and
“purpose of buying or carrying” shall have the meanings assigned to them in said
      Regulation U.

     

                              Section 5.15.Existing
      Debt.  (a) Except as described therein,
Schedule 5.15 sets forth a complete and correct list of
      all outstanding Debt of the Company, its Restricted Subsidiaries and New Jersey
      Natural Gas as of June 30, 2007, since which dates there has been no Material
      change in the amounts, interest rates, sinking funds, installment payments
      or
      maturities of the Debt of the Company, its Restricted Subsidiaries or New Jersey
      Natural Gas.  None of the Company, any Restricted Subsidiary or New
      Jersey Natural Gas is in default and no waiver of default is currently in
      effect, in the payment of any principal or interest on any Debt of the Company,
      such Restricted Subsidiary or New Jersey Natural Gas and no event or condition
      exists with respect to any Debt of the Company, any Restricted Subsidiary or
      New
      Jersey Natural Gas the outstanding principal amount of which exceeds $1,000,000
      that would permit (or that with notice or the lapse of time, or both, would
      permit) one or more Persons to cause such Debt to become due and payable before
      its stated maturity or before its regularly scheduled dates of
      payment.

     

                  (b)Neither
      the Company nor any
      Subsidiary is a party to, or otherwise subject to any provision contained in,
      any instrument evidencing Debt of the Company or such Subsidiary, any agreement
      relating thereto or any other agreement (including, but not limited to, its
      charter or other organizational document) which limits the amount of, or
      otherwise imposes restrictions on the incurring of, Debt of the Company or
      any
      Guarantor, except as specifically indicated in Schedule
      5.15.

     

                              Section 5.16.Foreign
      Assets Control
      Regulations, Etc.  (a) Neither the sale of the Notes by the
      Company hereunder nor its use of the proceeds thereof will violate the
      Anti-Terrorism Order, the USA Patriot Act, the Trading with the Enemy Act,
      as
      amended, or any of the foreign assets control regulations of the United States
      Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
      legislation or executive order relating thereto.

     

                  (b)Neither
      the Company nor any
      Subsidiary (1) is a Person described or designated in the Specially
      Designated Nationals and Blocked Persons List of the Office of Foreign Assets
      Control or in Section 1 of the Anti-Terrorism Order or (2) engages in
      any dealings or transactions with any such Person.  The Company and
      its Subsidiaries are in compliance, in all material respects, with the USA
      Patriot Act.

     

                  (c)No
      part of the proceeds from the sale
      of the Notes hereunder will be used, directly or indirectly, for any payments
      to
      any governmental official or employee, political party, official of a political
      party, candidate for political office, or anyone else acting in an official
      capacity, in order to obtain, retain or direct business or obtain any improper
      advantage, in violation of the United States Foreign Corrupt Practices Act
      of
      1977, as amended, assuming in all cases that such Act applies to the
      Company.

     

                              Section
      5.17.Status under
      Certain Statutes.  Neither the Company nor any Subsidiary is an
“investment company” registered or required to be registered under the
      Investment Company Act of 1940 or an “affiliated person” of an “investment
      company” or an “affiliated person” of such “affiliated person” or under the
“control” of an “investment company” as such terms are defined in the Investment
      Company Act of 1940, as amended, and shall not become such an “investment
      company” or such an “affiliated person” or under such
“control.”  Neither the Company nor any Subsidiary is a “holding
      company” or a “subsidiary company” of a “holding company,” or an “affiliate” of
      a “holding company” or of a “subsidiary company” of a “holding company” within
      the meaning of the Public Utility Holding Company Act of 2005, as
      amended.  Based upon the immediately preceding sentence, neither the
      Company nor the issue and sale of the Notes is subject to regulation under
      the
      Public Utility Holding Company Act of 2005, as amended.  Neither the
      Company nor any Subsidiary is subject to the ICC Termination Act of 1995, as
      amended, or the Federal Power Act, as amended.  Neither the Company
      nor any Subsidiary (other than New Jersey Natural Gas) is subject to any Federal
      or state statute or regulation limiting its ability to incur Debt.

     

                              Section
      5.18.Environmental
      Matters.  None of the Company, any Restricted Subsidiary or New
      Jersey Natural Gas has knowledge of any claim or has received any notice of
      any
      claim, and no proceeding has been instituted raising any claim against the
      Company, any of its Restricted Subsidiaries or New Jersey Natural Gas or any
      of
      their respective real properties now or formerly owned, leased or operated
      by
      any of them or other assets, alleging any damage to the environment or violation
      of any Environmental Laws, except, in each case, such as would not reasonably
      be
      expected to result in a Material Adverse Effect.  Except as otherwise
      disclosed to the Purchasers in writing:

     

                     (a)none
      of the Company, any Restricted
      Subsidiary or New Jersey Natural Gas has knowledge of any facts which would
      give
      rise to any claim, public or private, of violation of Environmental Laws or
      damage to the environment emanating from, occurring on or in any way related
      to
      real properties now or formerly owned, leased or operated by any of them or
      to
      other assets or their use, except, in each case, such as would not reasonably
      be
      expected to result in a Material Adverse Effect;

    
      
        11

        
          

        

      

    

                     (b)none
      of the Company, any of its
      Restricted Subsidiaries or New Jersey Natural Gas has stored any Hazardous
      Materials on real properties now or formerly owned, leased or operated by any
      of
      them or has disposed of any Hazardous Materials in a manner contrary to any
      Environmental Laws in each case in any manner that would reasonably be expected
      to result in a Material Adverse Effect; and

     

                     (c)all
      buildings on all real properties
      now owned, leased or operated by the Company, any of its Restricted Subsidiaries
      or New Jersey Natural Gas are in compliance with applicable Environmental Laws,
      except where failure to comply would not reasonably be expected to result in
      a
      Material Adverse Effect.

     

                              Section
      5.19.Notes Rank Pari
      Passu.  The obligations of the Company under this Agreement and
      the Notes rank at least pari passu in right of payment with all other
      unsecured Senior Debt (actual or contingent) of the Company, including, without
      limitation, all unsecured Senior Debt of the Company described in
Schedule 5.15.

     

    
      	
              Section 6.

            	
              Representations
                of the Purchasers.

            


    

     

                              Section
      6.1.Purchase for
      Investment.  Each Purchaser severally represents that it is
      purchasing the Notes for its own account or for one or more separate accounts
      maintained by such Purchaser or for the account of one or more pension or trust
      funds and not with a view to the distribution thereof, provided that
      the disposition of such Purchaser’s or such pension or trust fund’s property
      shall at all times be within such Purchaser’s or such pension or trust fund’s
      control.  Each Purchaser represents that it is an “accredited
      investor,” as defined in Rule 501(a)(1), (2), (3) or (7) of
      Regulation D under the Securities Act.  Each Purchaser
      understands that the Notes have not been registered under the Securities Act
      and
      may be resold only if registered pursuant to the provisions of the Securities
      Act or if an exemption from registration is available, except under
      circumstances where neither such registration nor such an exemption is required
      by law, and that the Company is not required to register the Notes.

     

                              Section
      6.2.Source of
      Funds.  Each Purchaser severally represents that at least one of
      the following statements is an accurate representation as to each source of
      funds (a “Source”) to be used by such Purchaser to pay the purchase
      price of the Notes to be purchased by such Purchaser hereunder:

     

                     (a)the
      Source is an “insurance company
      general account” (as the term is defined in the United States Department of
      Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of
      which the reserves and liabilities (as defined by the annual statement for
      life
      insurance companies approved by the National Association of Insurance
      Commissioners (the “NAIC Annual Statement”)) for the general account
      contract(s) held by or on behalf of any employee benefit plan together with
      the
      amount of the reserves and liabilities for the general account contract(s)
      held
      by or on behalf of any other employee benefit plans maintained by the same
      employer (or affiliate thereof as defined in PTE 95-60) or by the same employee
      organization in the general account do not exceed 10% of the total reserves
      and
      liabilities of the general account (exclusive of separate account liabilities)
      plus surplus as set forth in the NAIC Annual Statement filed with such
      Purchaser’s state of domicile; or

     

                     (b)the
      Source is a separate account that
      is maintained solely in connection with such Purchaser’s fixed contractual
      obligations under which the amounts payable, or credited, to any employee
      benefit plan (or its related trust) that has any interest in such separate
      account (or to any participant or beneficiary of such plan (including any
      annuitant)) are not affected in any manner by the investment performance of
      the
      separate account; or

     

                     (c)the
      Source is either (1) an
      insurance company pooled separate account, within the meaning of PTE 90-1 or
      (2) a bank collective investment fund, within the meaning of the PTE 91-38
      and, except as disclosed by such Purchaser to the Company in writing pursuant
      to
      this clause (c), no employee benefit plan or group of plans maintained by the
      same employer or employee organization beneficially owns more than 10% of all
      assets allocated to such pooled separate account or collective investment fund;
      or

     

                     (d)the
      Source constitutes assets of an
“investment fund” (within the meaning of Part V of PTE 84-14 (the
“QPAM Exemption”)) managed by a “qualified professional asset manager”
or “QPAM” (within the meaning of Part V of the QPAM Exemption), no employee
      benefit plan’s assets that are included in such investment fund, when combined
      with the assets of all other employee benefit plans established or maintained
      by
      the same employer or by an affiliate (within the meaning of Section V(c)(1)
      of the QPAM Exemption) of such employer or by the same employee organization
      and
      managed by such QPAM, exceed 20% of the total client assets managed by such
      QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
      neither the QPAM nor a Person controlling or controlled by the QPAM (applying
      the definition of “control” in Section V(e) of the QPAM Exemption) owns a
      5% or more interest in the Company and (1) the identity of such QPAM and
      (2) the names of all employee benefit plans whose assets are included in
      such investment fund have been disclosed to the Company in writing pursuant
      to
      this clause (d); or

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

                     (e)the
      Source constitutes assets of a
“plan(s)” (within the meaning of Section IV of PTE 96-23 (the
“INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM”
(within the meaning of Part IV of the INHAM Exemption), the conditions
      of Part
      I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor
      a
      Person controlling or controlled by the INHAM (applying the definition of
“control” in Section IV(d) of the INHAM Exemption) owns a 5% or more
      interest in the Company and (1) the identity of such INHAM and (2) the
      name(s) of the employee benefit plan(s) whose assets constitute the Source
      have
      been disclosed to the Company in writing pursuant to this clause (e);
      or

     

                     (f)the
      Source is a governmental plan;
      or

     

                     (g)the
      Source is one or more employee
      benefit plans, or a separate account or trust fund comprised of one or more
      employee benefit plans, each of which has been identified to the Company in
      writing pursuant to this clause (g); or

     

                     (h)the
      Source does not include assets of
      any employee benefit plan, other than a plan exempt from the coverage of
      ERISA.

     

    As
      used
      in this Section 6.2, the terms “employee benefit plan,”
“governmental plan,” and “separate account” shall have the respective meanings
      assigned to such terms in Section 3 of ERISA.

     

    
      	
              Section 7.

            	
              Information
                as to Company.

            


    

     

                              Section
      7.1.Financial and
      Business Information.  The Company shall deliver to each holder
      of Notes that is an Institutional Investor:

     

                     (a)Quarterly
      Statements— within
      55 days after the end of each quarterly fiscal period in each fiscal year of
      the
      Company (other than the last quarterly fiscal period of each such fiscal year),
      duplicate copies of:

     

                     (1)a
      consolidated and consolidating
      balance sheet of the Company and its Subsidiaries as at the end of such quarter,
      and

     

                     (2)consolidated
      and consolidating
      statements of income, changes in shareholders’ equity and cash flows of the
      Company and its Subsidiaries for such quarter and (in the case of the second
      and
      third quarters) for the portion of the fiscal year ending with such
      quarter,

     

    setting
      forth in each case in comparative form the figures for the corresponding periods
      in the previous fiscal year, all in reasonable detail, prepared in accordance
      with GAAP applicable to quarterly financial statements generally, and certified
      by a Senior Financial Officer as fairly presenting, in all material respects,
      the financial position of the companies being reported on and their results
      of
      operations and cash flows, subject to changes resulting from normal year-end
      adjustments, provided that delivery within the time period specified
      above of copies of the Company’s Quarterly Report on Form 10-Q prepared in
      compliance with the requirements therefor and filed with the Securities and
      Exchange Commission shall be deemed to satisfy the requirements of this
Section 7.1(a), and provided, further, that the
      Company shall be deemed to have made such delivery of such Form 10-Q if it
      shall
      have timely made such Form 10-Q available on “EDGAR” and on its home page on the
      worldwide web (at the date of this Agreement located at:
      http//www.njresources.com) and shall have given such holder prior notice of
      such
      availability on EDGAR and on its home page in connection with each delivery
      (such availability and notice thereof being referred to as “Electronic
      Delivery”);

     

                     (b)Annual
      Statements— within 100
      days after the end of each fiscal year of the Company, duplicate copies
      of:

     

                     (1)a
      consolidated and consolidating
      balance sheet of the Company and its Subsidiaries, as at the end of such year,
      and

     

                     (2)consolidated
      and consolidating
      statements of income, changes in shareholders’ equity and cash flows of the
      Company and its Subsidiaries, for such year,

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    setting
      forth in each case in comparative form the figures for the previous fiscal
      year,
      all in reasonable detail, prepared in accordance with GAAP, and accompanied
      by
      an opinion thereon of independent certified public accountants of recognized
      national standing, which opinion shall state that such financial statements
      present fairly, in all material respects, the financial position of the
      companies being reported upon and their results of operations and cash flows
      and
      have been prepared in conformity with GAAP, and that the examination of such
      accountants in connection with such financial statements has been made in
      accordance with generally accepted auditing standards, and that such audit
      provides a reasonable basis for such opinion in the circumstances,
provided that the delivery within the time period specified above of
      the Company’s Annual Report on Form 10-K for such fiscal year (together with the
      Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3
      under the Exchange Act) prepared in accordance with the requirements therefor
      and filed with the Securities and Exchange Commission shall be deemed to satisfy
      the requirements of this
Section 7.1(b), and provided,
      further, that the Company shall be deemed to have made such delivery of
      such Form 10-K if it shall have timely made Electronic Delivery
      thereof;

     

                     (c)SEC
      and Other Reports— with
      reasonable promptness, upon their becoming available, one copy of (1) each
      financial statement, report, notice or proxy statement sent by the Company,
      any
      Restricted Subsidiary or New Jersey Natural Gas to its principal lending banks
      as a whole (excluding information sent to such banks in the ordinary course
      of
      administration of a bank facility, such as information relating to pricing
      and
      borrowing availability) or to its public securities holders generally and
      (2) each regular or periodic report, each registration statement that shall
      have become effective (without exhibits except as expressly requested by such
      holder), and each final prospectus and all amendments thereto filed by the
      Company, any Restricted Subsidiary or New Jersey Natural Gas with the Securities
      and Exchange Commission, excluding in any event confidential correspondence
      delivered by any of the foregoing Persons to the Securities and Exchange
      Commission;

     

                     (d)Notice
      of Default or Event of
      Default— with reasonable promptness, and in any event within five days
      after a Responsible Officer becoming aware of the existence of any Default
      or
      Event of Default, a written notice specifying the nature and period of existence
      thereof and what action the Company is taking or proposes to take with respect
      thereto;

     

                     (e)ERISA
      Matters— with reasonable
      promptness, and in any event within five days after a Responsible Officer
      becoming aware of any of the following, a written notice setting forth the
      nature thereof and the action, if any, that the Company or an ERISA Affiliate
      proposes to take with respect thereto:

     

                     (1)with
      respect to any Plan, any
      reportable event, as defined in Section 4043(c) of ERISA and the
      regulations thereunder, for which notice thereof has not been waived pursuant
      to
      such regulations as in effect on the date thereof; or

     

                     (2)the
      taking by the PBGC of steps to
      institute, or the threatening by the PBGC of the institution of, proceedings
      under Section 4042 of ERISA for the termination of, or the appointment of a
      trustee to administer, any Plan, or the receipt by the Company or any ERISA
      Affiliate of a notice from a Multiemployer Plan that such action has been taken
      by the PBGC with respect to such Multiemployer Plan; or

     

                     (3)any
      event, transaction or condition
      that could result in the incurrence of any liability by the Company or any
      ERISA
      Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax
      provisions of the Code relating to employee benefit plans, or in the imposition
      of any Lien on any of the rights, properties or assets of the Company or any
      ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise
      tax
      provisions, if such liability or Lien, taken together with any other such
      liabilities or Liens then existing, would reasonably be expected to have a
      Material Adverse Effect;

     

                     (f)Unrestricted
      Subsidiaries— at
      such time as either (1) the aggregate amount of the total assets of all
      Unrestricted Subsidiaries (for this purpose, excluding New Jersey Natural Gas)
      exceeds 10% of the consolidated total assets of the Company and its Subsidiaries
      determined in accordance with GAAP or (2) one or more Unrestricted Subsidiaries
      (for this purpose, excluding New Jersey Natural Gas) account for more than
      10%
      of the consolidated gross revenues of the Company and its Subsidiaries
      determined in accordance with GAAP, and within the respective periods provided
      in paragraphs (a) and (b) above, financial statements of the character and
      for
      the dates and periods as in said paragraphs (a) and (b) covering each
      Unrestricted Subsidiary (or groups of Unrestricted Subsidiaries on a
      consolidated basis, excluding New Jersey Natural Gas) together with
      consolidating statements reflecting eliminations or adjustments required in
      order to reconcile such financial statements to the corresponding consolidated
      financial statements of the Company and its Subsidiaries delivered pursuant
      to
      paragraphs (a) and (b) above; and

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

                     (g)Requested
      Information— with
      reasonable promptness, such other data and information relating to the business,
      operations, affairs, financial condition, assets or properties of the Company,
      any of its Restricted Subsidiaries or New Jersey Natural Gas or relating to
      the
      ability of the Company to perform its obligations hereunder and under the Notes
      as from time to time may be reasonably requested by any such holder of
      Notes.

     

                              Section
      7.2.Officer’s
      Certificate.  Each set of financial statements delivered to a
      holder of Notes pursuant to Section 7.1(a) or
Section 7.1(b) shall be accompanied by a certificate of
      a
      Senior Financial Officer setting forth (which, in the case of Electronic
      Delivery of any such financial statements, shall be by separate concurrent
      delivery of such certificate to each holder of Notes):

     

                     (a)Covenant
      Compliance— the
      information (including reasonably detailed calculations) required in order
      to
      establish whether the Company was in compliance with the requirements of
Section 10.1 through Section 10.8,
      inclusive, and Section 10.10 during the quarterly or
      annual period covered by the statements then being furnished (including with
      respect to each such Section, where applicable, the calculations of the maximum
      or minimum amount, ratio or percentage, as the case may be, permissible under
      the terms of such Sections, and the calculation of the amount, ratio or
      percentage then in existence); and

     

                     (b)Event
      of Default— a statement
      that such Senior Financial Officer has reviewed the relevant terms hereof and
      has made, or caused to be made, under his or her supervision, a review of the
      transactions and conditions of the Company and its Subsidiaries from the
      beginning of the quarterly or annual period covered by the statements then
      being
      furnished to the date of the certificate and that such review shall not have
      disclosed the existence during such period of any condition or event that
      constitutes a Default or an Event of Default or, if any such condition or event
      existed or exists (including, without limitation, any such event or condition
      resulting from the failure of the Company or any Subsidiary to comply with
      any
      Environmental Law), specifying the nature and period of existence thereof and
      what action the Company shall have taken or proposes to take with respect
      thereto.

     

                              Section
      7.3.Inspection.  The Company
      shall permit the representatives of each holder of Notes that is an
      Institutional Investor:

     

                     (a)No
      Default— if no Default or
      Event of Default then exists, at the expense of such holder and upon reasonable
      prior written notice to the Company, to visit the principal executive office
      of
      the Company, to discuss the affairs, finances and accounts of the Company,
      its
      Restricted Subsidiaries and New Jersey Natural Gas with the Company’s officers,
      and, with the consent of the Company (which consent will not be unreasonably
      withheld) to visit the other offices and properties of the Company, each
      Restricted Subsidiary and New Jersey Natural Gas, all at such reasonable times
      during normal business hours and as often as may be reasonably requested in
      writing; and

     

                     (b)Default—
if
      a Default or Event
      of Default then exists, at the expense of the Company, upon prior notice to
      the
      Company, to visit and inspect any of the offices or properties of the Company,
      any Restricted Subsidiary or New Jersey Natural Gas, to examine all their
      respective books of account, records, reports and other papers, to make copies
      and extracts therefrom, and to discuss their respective affairs, finances and
      accounts with their respective officers and independent public accountants
      (and
      by this provision the Company authorizes said accountants to discuss the
      affairs, finances and accounts of the Company, its Restricted Subsidiaries
      and
      New Jersey Natural Gas), all at such times during normal business hours and
      as
      often as may be requested.

     

    
      	
              Section 8.

            	
              Prepayment
                of the Notes.

            


    

     

                              Section
      8.1.Required
      Prepayments.  The Notes shall not be subject to required
      prepayments.

     

                              Section
      8.2.Optional
      Prepayments with Make-Whole Amount.  The Company may, at its
      option, upon notice as provided below, prepay at any time all, or from time
      to
      time any part of, the Notes, in an amount not less than $1,000,000 in aggregate
      principal amount of the Notes then outstanding in the case of a partial
      prepayment, at 100% of the principal amount so prepaid together with interest
      accrued thereon to the date of such prepayment and the Make-Whole Amount, if
      any, determined for the prepayment date with respect to such principal
      amount.  The Company will give each holder of Notes written notice of
      each optional prepayment under this Section 8.2 not less
      than 30 days and not more than 60 days prior to the date fixed for such
      prepayment.  Each such notice shall specify such date (which shall be
      a Business Day), the aggregate principal amount of the Notes to be prepaid
      on
      such date, the principal amount of each Note held by such holder to be prepaid
      (determined in accordance with Section 8.4), and the
      interest to be paid on the prepayment date with respect to such principal amount
      being prepaid, and shall be accompanied by a certificate of a Senior Financial
      Officer as to the estimated Make-Whole Amount due in connection with such
      prepayment (calculated as if the date of such notice were the date of the
      prepayment), setting forth the details of such computation.  Two
      Business Days prior to such prepayment, the Company shall deliver to each holder
      of Notes a certificate of a Senior Financial Officer specifying the calculation
      of such Make-Whole Amount as of the specified prepayment date.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

                              Section 8.3.Allocation
      of Partial
      Prepayments.  In the case of each partial prepayment of the Notes
      pursuant to Section 8.2 hereof, the principal amount of
      the Notes to be prepaid shall be allocated among all of the Notes at the time
      outstanding in proportion, as nearly as reasonably practicable, to the
      respective unpaid principal amounts thereof not theretofore called for
      prepayment.  All partial prepayments made pursuant to
Section 8.5(b) or Section 8.6 shall
      be applied only to the Notes of the holders who have elected to participate
      in
      such prepayment.

     

                              Section 8.4.Maturity;
      Surrender,
      Etc.  In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid
      shall mature and become due and payable on the date fixed for such prepayment
      (which shall be a Business Day), together with interest on such principal amount
      accrued to such date and the applicable Make-Whole Amount, if
      any.  From and after such date, unless the Company shall fail to pay
      such principal amount when so due and payable, together with the interest and
      Make-Whole Amount, if any, as aforesaid, interest on such principal amount
      shall
      cease to accrue.  Any Note paid or prepaid in full shall be
      surrendered to the Company and cancelled and shall not be reissued, and no
      Note
      shall be issued in lieu of any prepaid principal amount of any
      Note.

     

                              Section 8.5.Purchase
      of
      Notes.  The Company will not, and will not permit any Affiliate
      to, purchase, redeem, prepay or otherwise acquire, directly or indirectly,
      any
      of the outstanding Notes except (a) upon the payment or prepayment of the
      Notes in accordance with the terms of this Agreement and the Notes or
      (b) pursuant to an offer to purchase made by the Company or an Affiliate
      pro rata to the holders of all Notes at the time outstanding upon the same
      terms
      and conditions.  Any such offer shall provide each holder with
      sufficient information to enable it to make an informed decision with respect
      to
      such offer, and shall remain open for at least 15 Business Days.  If
      the holders of more than 50% of the principal amount of the Notes then
      outstanding accept such offer, the Company shall promptly notify the remaining
      holders of such fact and the expiration date for the acceptance by holders
      of
      Notes of such offer shall be extended by the number of days necessary to give
      each such remaining holder at least 10 Business Days from its receipt of such
      notice to accept such offer.  The Company will promptly cancel all
      Notes acquired by it or any Affiliate pursuant to any payment, prepayment or
      purchase of Notes pursuant to any provision of this Agreement and no Notes
      may
      be issued in substitution or exchange for any such Notes.

     

                              Section
      8.6Offer to Prepay Upon Asset
      Disposition. 

     

    (a)  Notice
      and Offer.  In the event of a Transfer where the Company has
      elected to apply all or a portion of the Net Proceeds Amount of such Transfer
      pursuant to Section 10.6(b), the Company shall, no later
      than the 305th
      day following the date of such Transfer, give written notice of such event
      (an
“Asset Disposition Prepayment Event”) to each holder of
      Notes.  Such notice shall contain, and shall constitute, an
      irrevocable offer to prepay a Ratable Portion of the Notes held by such holder
      on the date (which shall be a Business Day) specified in such notice (the
“Asset Disposition Prepayment Date”) which date shall be not less than
      30 days and not more than 60 days after such notice.

     

    (b)  Acceptance
      and Payment.  A holder of Notes may accept or reject the offer to
      prepay pursuant to this Section 8.6 by causing a notice of such
      acceptance or rejection to be delivered to the Company at least 10 days prior
      to
      the Asset Disposition Prepayment Date.  A failure by a holder of the
      Notes to respond to an offer to prepay made pursuant to this Section
      8.6 shall be deemed to constitute a rejection of such offer by such
      holder.  If so accepted, such offered prepayment in respect of the
      Ratable Portion of the Notes of each holder that has accepted such offer shall
      be due and payable on the Asset Disposition Prepayment Date.  Such
      offered prepayment shall be made at 100% of the aggregate Ratable Portion of
      the
      Notes of each holder that has accepted such offer, together with interest on
      that portion of the Notes then being prepaid accrued to the Asset Disposition
      Prepayment Date, but without any Make-Whole Amount.  If any holder of
      a Note rejects or is deemed to have rejected such offer of prepayment, the
      Company may use the Ratable Portion for such Note for general corporate
      purposes.

     

    (c)  Officer’s
      Certificate.  Each offer to prepay the Notes pursuant to this
Section 8.6 shall be accompanied by a certificate, executed by
      a Senior Financial Officer and dated the date of such offer, specifying: (1)
      the
      Asset Disposition Prepayment Date; (2) that such offer is being made pursuant
      to
      this Section 8.6 and that the failure by a holder to respond to
      such offer by the deadline established in Section 8.6(b) shall
      result in such offer to such holder being deemed rejected; (3) the Ratable
      Portion of each such Note offered to be prepaid; (4) the interest that would
      be
      due on the Ratable Portion of each such Note offered to be prepaid, accrued
      to
      the Asset Disposition Prepayment Date; (5) that the conditions of this
Section 8.6 have been satisfied and (6) in reasonable detail, a
      description of the nature and date of the Asset Disposition Prepayment Event
      giving rise to such offer of prepayment.

    
       

    

                              Section 8.7.Make-Whole
      Amount for
      Notes.  The term “Make-Whole Amount” shall mean, with
      respect to any Note, an amount equal to the excess, if any, of the Discounted
      Value of the Remaining Scheduled Payments with respect to the Called Principal
      of such Note over the amount of such Called Principal, provided that
      the Make-Whole Amount may in no event be less than zero.  For the
      purposes of determining the Make-Whole Amount, the following terms have the
      following meanings:

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
      “Called
        Principal” shall mean, with respect to any Note, the principal of such Note
        that is to be prepaid pursuant to Section 8.2
or has become or is declared to be immediately
        due and payable pursuant to Section 12.1, as the context
        requires.

    

     

    “Discounted
      Value” shall mean, with respect to the Called Principal of any Note, the
      amount obtained by discounting all Remaining Scheduled Payments with respect
      to
      such Called Principal from their respective scheduled due dates to the
      Settlement Date with respect to such Called Principal, in accordance with
      accepted financial practice and at a discount factor (applied on the same
      periodic basis as that on which interest on the Notes is payable) equal to
      the
      Reinvestment Yield with respect to such Called Principal.

     

    “Reinvestment
      Yield” shall mean, with respect to the Called Principal of any Note, 0.50%
      over the yield to maturity implied by (a) the yields reported, as of 10:00
      a.m.
      (New York, New York time) on the second Business Day preceding the Settlement
      Date with respect to such Called Principal, on the display designated as “Page
      PX1” (or such other display as may replace Page PX1) on the Bloomberg Financial
      Markets Services Screen) for the most recently issued actively traded on the
      run
      U.S. Treasury securities having a maturity equal to the Remaining Average Life
      of such Called Principal as of such Settlement Date, or (b) if such yields
      are
      not reported as of such time or the yields reported as of such time are not
      ascertainable (including by way of interpolation), the Treasury Constant
      Maturity Series Yields reported, for the latest day for which such yields have
      been so reported as of the second Business Day preceding the Settlement Date
      with respect to such Called Principal, in Federal Reserve Statistical Release
      H.15 (or any comparable successor publication) for U.S. Treasury securities
      having a constant maturity equal to the Remaining Average Life of such Called
      Principal as of such Settlement Date.

     

    In
      the
      case of each determination under clause (a) or clause (b), as the case may
      be,
      of the preceding paragraph, such implied yield will be determined, if necessary,
      by (1) converting U.S. Treasury bill quotations to bond-equivalent yields in
      accordance with accepted financial practice and (2) interpolating linearly
      between (i) the applicable U.S. Treasury security with the maturity closest
      to
      and greater than such Remaining Average Life and (ii) the applicable U.S.
      Treasury security with the maturity closest to and less than such Remaining
      Average Life.  The Reinvestment Yield shall be rounded to the number
      of decimal places as appears in the interest rate of the applicable
      Note.

     

    “Remaining
      Average Life” shall mean, with respect to any Called Principal, the number
      of years (calculated to the nearest one-twelfth year) obtained by dividing
      (a)
      such Called Principal into (b) the sum of the products obtained by multiplying
      (1) the principal component of each Remaining Scheduled Payment with respect
      to
      such Called Principal by (2) the number of years (calculated to the nearest
      one-twelfth year) that will elapse between the Settlement Date with respect
      to
      such Called Principal and the scheduled due date of such Remaining Scheduled
      Payment.

     

    “Remaining
      Scheduled Payments” shall mean, with respect to the Called Principal of any
      Note, all payments of such Called Principal and interest thereon that would
      be
      due after the Settlement Date with respect to such Called Principal if no
      payment of such Called Principal were made prior to its scheduled due date,
      provided that if such Settlement Date is not a date on which interest
      payments are due to be made under the terms of the Notes, then the amount of
      the
      next succeeding scheduled interest payment will be reduced by the amount of
      interest accrued to such Settlement Date and required to be paid on such
      Settlement Date pursuant to Section 8.2 or
Section 12.1.

     

    “Settlement
      Date” shall mean, with respect to the Called Principal of any Note, the
      date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately
      due and payable pursuant to Section 12.1, as the context
      requires.

     

    
      	
              Section 9.

            	
              Affirmative
                Covenants.

            


    

     

    The
      Company covenants that so long as any of the Notes are outstanding:

     

                              Section 9.1.Compliance
      with
      Law.  The Company will, and will cause each of its Subsidiaries
      to, comply with all laws, ordinances or governmental rules or regulations to
      which each of them is subject, including, without limitation, ERISA, the USA
      Patriot Act and Environmental Laws, and will obtain and maintain in effect
      all
      licenses, certificates, permits, franchises and other governmental
      authorizations necessary to the ownership of their respective properties or
      to
      the conduct of their respective businesses, in each case to the extent necessary
      to ensure that non-compliance with such laws, ordinances or governmental rules
      or regulations or failures to obtain or maintain in effect such licenses,
      certificates, permits, franchises and other governmental authorizations would
      not reasonably be expected, individually or in the aggregate, to have a Material
      Adverse Effect.

     

                             

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

                       Section 9.2.Insurance.  The
      Company will, and will cause each of its Restricted Subsidiaries and New Jersey
      Natural Gas to, maintain, with financially sound and reputable insurers,
      insurance with respect to their respective properties and businesses against
      such casualties and contingencies, of such types, on such terms and in such
      amounts (including deductibles, co-insurance and self-insurance, if adequate
      reserves are maintained with respect thereto) as is customary in the case of
      entities of established reputations engaged in the same or a similar business
      and in the same industry and similarly
      situated.       

     

             Section 9.3.Maintenance
      of
      Properties.  The Company will, and will cause each of its
      Restricted Subsidiaries and New Jersey Natural Gas to, maintain and keep, or
      cause to be maintained and kept, their respective properties in good repair,
      working order and condition (other than ordinary wear and tear), so that the
      business carried on in connection therewith may be properly conducted at all
      times, provided that this Section shall not prevent the Company, any
      Restricted Subsidiary or New Jersey Natural Gas from discontinuing the operation
      and the maintenance of any of its properties if such discontinuance is desirable
      in the conduct of its business and the Company has concluded that such
      discontinuance would not reasonably be expected, individually or in the
      aggregate, to have a Material Adverse Effect.

     

                              Section 9.4.Payment
      of Taxes and
      Claims.  The Company will, and will cause each of its
      Subsidiaries to, file all income tax or similar tax returns required to be
      filed
      in any jurisdiction and to pay and discharge all taxes shown to be due and
      payable on such returns and all other taxes, assessments, governmental charges
      or levies payable by any of them, to the extent the same have become due and
      payable and before they have become delinquent, provided that neither
      the Company nor any Subsidiary need pay any such tax, assessment, governmental
      charge or levy if (1) the amount, applicability or validity thereof is
      contested by the Company or such Subsidiary on a timely basis in good faith
      and
      in appropriate proceedings, and the Company or a Subsidiary has established
      adequate reserves therefor in accordance with GAAP on the books of the Company
      or such Subsidiary or (2) the nonpayment of all such taxes, assessments,
      governmental charges and levies in the aggregate would not reasonably be
      expected, individually or in the aggregate, to have a Material Adverse
      Effect.

     

                              Section 9.5.Corporate
      Existence,
      Etc.  The Company will at all times preserve and keep in full
      force and effect its corporate existence.  Subject to
Sections 10.6, 10.7 and 10.8, the Company
      will at all times preserve and keep in full force and effect the corporate
      existence of each of its Restricted Subsidiaries and New Jersey Natural Gas
      (unless merged into the Company or a Wholly-Owned Restricted Subsidiary) and
      all
      rights and franchises of the Company, its Restricted Subsidiaries and New Jersey
      Natural Gas unless, in the good faith judgment of the Company, the termination
      of or failure to preserve and keep in full force and effect such corporate
      existence, right or franchise would not reasonably be expected, individually
      or
      in the aggregate, to have a Material Adverse Effect.

     

                              Section 9.6.Ownership
      of
      Subsidiaries.  The Company shall at all times own (a) 100% of the
      issued and outstanding common stock of New Jersey Natural Gas and 51% or more
      of
      the issued and outstanding Voting Stock of New Jersey Natural Gas and (b) 51%
      or
      more of the issued and outstanding Voting Stock of each Guarantor.

     

                              Section 9.7.Guaranty
      Agreement.  (a) The Company shall promptly, and in any event
      within five Business Days after (1) the formation or acquisition of a new
      Restricted Subsidiary (other than a Regulated Entity), (2) the occurrence
      of any other event creating a new Restricted Subsidiary (other than a Regulated
      Entity), (3) the designation of an Unrestricted Subsidiary (other than a
      Regulated Entity) as a Restricted Subsidiary or (4) an Unrestricted Subsidiary
      becoming or being a guarantor or co-obligor in respect of the Bank Credit
      Agreement, cause such Subsidiary to execute and deliver a supplement to the
      Guaranty Agreement (a “Supplement”) in the form of Exhibit A to
      the Guaranty Agreement; provided that clause (4) above shall not apply
      to NJR Energy Corporation or NJNR Pipeline Company prior to December 17,
      2007.

     

                  (b)Within
      15 days of the delivery by any
      Subsidiary of a Supplement pursuant to Section 9.7(a), the
      Company shall cause such Subsidiary to deliver to each holder of
      Notes:

     

                     (1)such
      documents and evidence with
      respect to such Subsidiary as any holder may reasonably request in order to
      establish the existence and good standing of such Subsidiary and evidence that
      the Board of Directors of such Subsidiary has adopted resolutions authorizing
      the execution and delivery of such Supplement and the guaranty of the
      Notes;

     

                     (2)evidence
      of compliance with such
      Subsidiary’s outstanding Debt instruments in the form of (i) a compliance
      certificate from such Subsidiary to the effect that such Subsidiary is in
      compliance with all terms and conditions of its outstanding Debt instruments,
      (ii) consents or approvals of the holder or holders of any evidence of Debt
      or security, and/or (iii) amendments of agreements pursuant to which any
      evidence of Debt or security may have been issued, all as may be reasonably
      deemed necessary by the holders of Notes to permit the execution and delivery
      of
      such Supplement by such Subsidiary;

     

    
      
        
        

      

      
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                     (3)an
      opinion of counsel to the effect
      that (i) such Subsidiary is a corporation or other business entity, duly
      organized, validly existing and in good standing under the laws of its
      jurisdiction of organization, has the corporate or other power and the authority
      to execute and deliver such Supplement and to perform the Guaranty Agreement,
      (ii) the execution and delivery of such Supplement and performance of the
      Guaranty Agreement has been duly authorized by all necessary action on the
      part
      of such Subsidiary, such Supplement has been duly executed and delivered by
      such
      Subsidiary and the Guaranty Agreement constitutes the legal, valid and binding
      contract of such Subsidiary enforceable against such Subsidiary in accordance
      with its terms, subject to bankruptcy, insolvency, fraudulent conveyance or
      similar laws affecting creditors’ rights generally, and general principles of
      equity (regardless of whether the application of such principles is considered
      in a proceeding in equity or at law), (iii) the execution and delivery of
      such Supplement and the performance by such Subsidiary of the Guaranty Agreement
      do not conflict with or result in any breach of any of the provisions of or
      constitute a default under or result in the creation of a Lien upon any of
      the
      property of such Subsidiary pursuant to the provisions of any law, order, rule
      or regulation, its charter documents or any agreement or other instrument known
      to such counsel to which such Subsidiary is a party to or by which such
      Subsidiary may be bound and (iv) no approval, consent or withholding of
      objection on the part of, or filing, registration or qualification with, any
      Governmental Authority, Federal or state, is necessary in connection with the
      lawful execution and delivery of such Supplement by such Subsidiary or the
      performance of the Guaranty Agreement by such Subsidiary, which opinion may
      contain such assumptions and qualifications as are reasonably acceptable to
      the
      Required Holders; and

     

                     (4)all
      other documents and showings
      reasonably requested by the holders of Notes in connection with the execution
      and delivery of such Supplement, which documents shall be reasonably
      satisfactory in form and substance to such holders and their special counsel,
      and each holder of Notes shall have received a copy (executed or certified
      as
      may be appropriate) of all of the foregoing legal documents.

     

                              Section 9.8.New
      Jersey Natural Gas Regulated
      Nature.  The Company will at all times cause New Jersey Natural
      Gas to be and remain a Person that is subject under law to regulation by a
      public utility commission or other governmental regulatory body with oversight
      responsibilities for utilities.

     

                              Section
      9.9.Notes to Rank
      Pari Passu.  The Company will ensure that its payment obligations
      under this Agreement and the Notes will at all times rank at least pari
      passu in right of payment with all other unsecured Senior Debt (actual or
      contingent) of the Company.

     

    
      	
              Section 10.

            	
              Negative
                Covenants.

            


    

     

    The
      Company covenants that so long as any of the Notes are outstanding:

     

                              Section 10.1.Leverage
      Ratio.  The Company will not permit, as of the end of any fiscal
      quarter of the Company, the ratio of Consolidated Total Debt to Consolidated
      Total Capitalization to exceed 0.65 to 1.00.

     

                              Section 10.2.Limitation
      on Priority
      Debt.  The Company will not permit, as of the end of any fiscal
      quarter of the Company, Priority Debt to exceed an amount equal to 20% of
      Consolidated Total Capitalization.

     

                              Section 10.3.Liens.  The
      Company will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly create, incur, assume or permit to exist (upon the
      happening of a contingency or otherwise) any Lien on or with respect to any
      property or asset (including, without limitation, any document or instrument
      in
      respect of goods or accounts receivable) of the Company or any such Restricted
      Subsidiary, whether now owned or held or hereafter acquired, or any income
      or
      profits therefrom, or assign or otherwise convey any right to receive income
      or
      profits, except:

    
       

    

                     (a)Liens
      for taxes, assessments or other
      governmental charges which are not yet due and payable or the payment of which
      is not at the time required by Section 9.4;

     

                     (b)statutory
      Liens of landlords and Liens
      of carriers, warehousemen, mechanics, materialmen and other similar Liens,
      in
      each case, incurred in the ordinary course of business for sums not yet due
      and
      payable or the payment of which is not at the time required by
Section 9.4;

     

                     (c)Liens
      (other than any Lien imposed by
      ERISA) incurred or deposits made in the ordinary course of business (1) in
      connection with workers’ compensation, unemployment insurance and other types of
      social security or retirement benefits, or (2) to secure (or to obtain
      letters of credit that secure) the performance of tenders, statutory
      obligations, surety bonds, appeal bonds, bids, leases (other than Capital
      Leases), performance bonds, purchase, construction or sales contracts, and
      other
      similar obligations, in each case not incurred or made in connection with the
      borrowing of money, the obtaining of advances or credit or the payment of the
      deferred purchase price of property;

    
      
        
        

      

      
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                     (d)subject
      to
Section 11(j), any attachment or judgment Lien, unless the
      judgment it secures shall not, within 30 days after the entry thereof, have
      been
      discharged or execution thereof stayed pending appeal, or shall not have been
      discharged within 30 days after the expiration of any such stay;

     

                     (e)leases
      or subleases granted to others,
      easements, rights-of-way, restrictions and other similar charges or encumbrances
      or minor survey exceptions, in each case incidental to, and not interfering
      with, the ordinary conduct of the business of the Company or any of its
      Restricted Subsidiaries, provided that such Liens do not, in the
      aggregate, materially detract from the value of such property;

     

                     (f)Liens
      on property or assets of any
      Restricted Subsidiary securing Debt owing to the Company or to a Wholly-Owned
      Restricted Subsidiary;

     

                     (g)Liens
      existing on the date of the
      Closing and described on Schedule 5.15;

     

                     (h)Liens
      on accounts receivable owned by
      Securitization Subsidiaries that are Restricted Subsidiaries and incurred
      pursuant to Receivables Securitization Transactions;

     

                     (i)any
      Lien created to secure all or any
      part of the purchase price, or to secure Debt incurred or assumed to pay all
      or
      any part of the purchase price or cost of construction, of property (or any
      improvement thereon) acquired or constructed by the Company or a Restricted
      Subsidiary after the date of the Closing, provided that:

     

                     (1)any
      such Lien shall extend solely to
      the item or items of such property (or improvement thereon) so acquired or
      constructed and, if required by the terms of the instrument originally creating
      such Lien, other property (or improvement thereon) which is an improvement
      to or
      is acquired for specific use in connection with such acquired or constructed
      property (or improvement thereon) or which is real property being improved
      by
      such acquired or constructed property (or improvement thereon);

     

                     (2)the
      principal amount of the Debt
      secured by any such Lien shall at no time exceed an amount equal to the lesser
      of (i) the cost to the Company or such Restricted Subsidiary of the
      property (or improvement thereon) so acquired or constructed and (ii) the
      Fair Market Value (as determined in good faith by one or more officers of the
      Company to whom authority to enter into the subject transaction has been
      delegated by the board of directors of the Company) of such property (or
      improvement thereon) at the time of such acquisition or
      construction;

     

                     (3)any
      such Lien shall be created
      contemporaneously with, or within 180 days after, the acquisition or
      construction of such property; and

     

                     (4)the
      aggregate principal amount of all
      Debt secured by such Liens shall be permitted by the limitation set forth in
      Section 10.1 if tested on the date such Lien is created
      and not as of the end of the immediately preceding fiscal quarter of the
      Company;

    
       

    

                     (j)any
      Lien existing on property of a
      Person immediately prior to its being consolidated with or merged into the
      Company or a Restricted Subsidiary or its becoming a Subsidiary, or any Lien
      existing on any property acquired by the Company or any Restricted Subsidiary
      at
      the time such property is so acquired (whether or not the Debt secured thereby
      shall have been assumed), provided that (1) no such Lien shall
      have been created or assumed in contemplation of such consolidation or merger
      or
      such Person becoming a Subsidiary or such acquisition of property, (2) each
      such Lien shall extend solely to the item or items of property so acquired
      and,
      if required by the terms of the instrument originally creating such Lien
      (i) other property which is an improvement to or is acquired for specific
      use in connection with such acquired property or (ii) other property that
      does not constitute property or assets of the Company or any of its Restricted
      Subsidiaries and (3) the aggregate amount of all Debt secured by such Liens
      shall be permitted by the limitation set forth in
Section 10.1 if tested on the date of such event and not
      as of the end of the immediately preceding fiscal quarter of the
      Company;

     

               
         (k) any Lien
      renewing, extending or refunding any Lien permitted by paragraphs (g), (i)
      or
      (j) of this Section 10.3, provided that
      (1) the principal amount of Debt secured by such Lien immediately prior to
      such extension, renewal or refunding is not increased or the maturity thereof
      reduced, (2) such Lien is not extended to any other property and
      (3) immediately after such extension, renewal or refunding no Default or
      Event of Default would exist (provided that, with respect to
Sections 10.1 and 10.2, calculation of
      compliance therewith shall be made as of the date of determination under this
      Section 10.3(k) and not as of the end of the immediately
      preceding fiscal quarter of the Company; and

    
      
        
        

      

      
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                            (l)other
      Liens not otherwise permitted by
      paragraphs (a) through (k), inclusive, of this
Section 10.3 securing Debt, provided that the
      Debt secured by such Liens shall be permitted by the limitations set forth
      in
Sections 10.1 and 10.2 if tested on the date such Lien is
      created and not as of the end of the immediately preceding fiscal quarter of
      the
      Company.

     

    Notwithstanding
      the foregoing, the Company will not, and will not permit any Subsidiary to,
      directly or indirectly create, incur, assume or permit to exist (upon the
      happening of a contingency or otherwise) any Lien on or with respect to the
      Voting Stock of New Jersey Natural Gas owned by the Company or any
      Subsidiary.

     

                              Section 10.4.Restricted
      Payments.  (a)  The Company will not, and will not
      permit any Restricted Subsidiary to, declare or make or incur any liability
      to
      declare or make any Restricted Payment unless immediately after giving effect
      to
      such action no Default or Event of Default would exist (provided that,
      with respect to Sections 10.1 and 10.2,
      calculation of compliance therewith shall be made as of the date of
      determination under this Section 10.4 and not as of the
      end of the immediately preceding fiscal quarter of the Company).

     

                  (b)The
      Company will not, and will not
      permit any Restricted Subsidiary to, declare a Restricted Payment that is not
      payable within 60 days of such declaration.

     

                              Section 10.5.Restrictions
      on Dividends of
      Subsidiaries, Etc.  The Company will not, and will not permit any
      Restricted Subsidiary to, enter into any agreement which would restrict any
      Restricted Subsidiary’s ability or right to pay dividends to, or make advances
      to or investments in, the Company or, if such Restricted Subsidiary is not
      directly owned by the Company, the “parent” Restricted Subsidiary of such
      Restricted Subsidiary; provided that the foregoing shall not apply to
      restrictions and conditions imposed by law or this Agreement or the Bank Credit
      Agreement, in each case, as in effect on the date of Closing.

     

                              Section 10.6.Sale
      of Assets,
      Etc.  (a) Except as permitted under Section 10.7
and Section 10.8, the Company will not, and will
      not permit any of its Restricted Subsidiaries to, make any Asset Disposition
      unless:

     

                     (1)in
      the good faith opinion of the
      Company, the Asset Disposition is in the best interest of the Company or such
      Restricted Subsidiary;

     

                     (2)immediately
      after giving effect to the
      Asset Disposition, no Default or Event of Default would exist (provided
      that, with respect to Sections 10.1 and
10.2, calculation of compliance therewith shall
      be made as of
      the date of determination under this Section 10.6 and not
      as of the end of the immediately preceding fiscal quarter of the Company);
      and

     

                     (3)immediately
      after giving effect to the
      Asset Disposition the Disposition Value of all property that was the subject
      of
      any Asset Disposition occurring in the immediately preceding 12 consecutive
      month period would not exceed 10% of Consolidated Tangible Assets as of the
      end
      of the then most recently ended fiscal year of the Company.

    
       

    

                  (b)If
      the Net Proceeds Amount for any
      Transfer is, within 365 days after such Transfer, (1) applied to a Debt
      Prepayment Application, (2) applied to or would otherwise constitute a Property
      Reinvestment Application or (3) applied to any combination of the foregoing
      clauses (1) and (2), then such Transfer, only for the purpose of determining
      compliance with subsection (3) of Section 10.6(a) as of a
      date on or after the Net Proceeds Amount is so applied, shall be deemed not
      to
      be an Asset Disposition.

     

                  (c)Notwithstanding
      the foregoing, the
      sale of accounts receivable to a Securitization Subsidiary in connection with
      a
      Receivables Securitization Transaction shall not be considered an Asset
      Disposition for purposes of this Section 10.6;
provided, that, to the extent any such sale results in the
      aggregate
      amount of Debt of all Securitization Subsidiaries under all Receivables
      Securitization Transactions being in excess of $100,000,000, the Company shall
      treat that portion of such sale resulting in the aggregate amount of Debt of
      all
      Securitization Subsidiaries under all Receivables Securitization Transactions
      being in excess of $100,000,000 as an Asset Disposition subject to this
Section 10.6 without application of this clause
      (c).

     

    
      
        
        

      

      
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                              Section 10.7.Merger,
      Consolidation, Etc.
The Company will not, and will not permit any Restricted Subsidiary to,
      consolidate with or merge with any other Person or convey, transfer or lease
      all
      or substantially all of its assets in a single transaction or series of
      transactions to any Person (except that a Restricted Subsidiary may (x)
      consolidate with or merge with, or convey, transfer or lease all or
      substantially all of its assets in a single transaction or series of
      transactions to, the Company or another Restricted Subsidiary or any other
      Person so long as such Restricted Subsidiary is the surviving Person and
      (y) convey, transfer or lease all of its assets in compliance with the
      provisions of Section 10.6 or
      Section 10.8), provided that the foregoing restriction
      does not apply to the consolidation or merger of the Company with, or the
      conveyance, transfer or lease of all or substantially all of the assets of
      the
      Company in a single transaction or series of transactions to, any Person so
      long
      as:

     

                     (a)the
      successor formed by such
      consolidation or the survivor of such merger or the Person that acquires by
      conveyance, transfer or lease all or substantially all of the assets of the
      Company as an entirety, as the case may be (the “Successor
      Corporation”), shall be a solvent Person organized and existing under the
      laws of the United States or any State thereof (including the District of
      Columbia);

     

                     (b)if
      the Company is not the Successor
      Corporation, (1) such Person shall have executed and delivered to each
      holder of the Notes its assumption of the due and punctual performance and
      observance of each covenant and condition of this Agreement and the Notes
      (pursuant to such agreements or instruments as shall be reasonably satisfactory
      to the Required Holders), (2) such Person shall have caused to be delivered
      to each holder of the Notes an opinion of nationally recognized independent
      counsel, or other independent counsel reasonably satisfactory to the Required
      Holders, to the effect that all agreements or instruments effecting such
      assumption are enforceable in accordance with their terms and comply with the
      terms hereof and (3) each Guarantor shall have reaffirmed, in writing, its
      obligations under the Guaranty Agreement; and

     

                     (c)immediately
      after giving effect to such
      transaction, no Default or Event of Default would exist (provided that,
      with respect to Sections 10.1 and 10.2,
      calculation of compliance therewith shall be made as of the date of
      determination under this Section 10.7 and not as of the
      end of the immediately preceding fiscal quarter of the Company).

     

    No
      such
      conveyance, transfer or lease of all or substantially all of the assets of
      the
      Company shall have the effect of releasing the Company or any Successor
      Corporation that shall theretofore have become such in the manner prescribed
      in
      this Section 10.7 from its liability under this Agreement
      or the Notes.

    
       

    

                              Section 10.8.Disposal
      of Ownership of a
      Restricted Subsidiary.  The Company will not, and will not permit
      any Restricted Subsidiary to, sell or otherwise dispose of any shares of
      Restricted Subsidiary Stock, nor will the Company permit any such Restricted
      Subsidiary to issue, sell or otherwise dispose of any shares of its own
      Restricted Subsidiary Stock, provided that the foregoing restrictions
      do not apply to:

     

                     (a)the
      issue of directors’ qualifying
      shares by any such Restricted Subsidiary;

     

                     (b)any
      such Transfer of Restricted
      Subsidiary Stock constituting a Transfer described in clause (a) of the
      definition of “Asset Disposition”; and

     

                     (c)the
      Transfer of the Restricted
      Subsidiary Stock of a Restricted Subsidiary owned by the Company and its other
      Subsidiaries; provided that such Transfer satisfies the requirements of
Section 9.6 and
      Section 10.6.

    
       

    

                              Section 10.9.Limitations
      on Subsidiaries,
      Partnerships and Joint Ventures.  The Company will not, and will
      not permit any of its Restricted Subsidiaries to, own or create directly or
      indirectly any Restricted Subsidiaries other than (a) any Restricted
      Subsidiary which is a Regulated Entity, (b) any Restricted Subsidiary which
      is a Guarantor on the date of the Closing and (c) any Restricted Subsidiary
      formed after the date of the Closing that becomes a Guarantor under the Guaranty
      Agreement pursuant to Section 9.7.  The Company
      shall not, and shall not permit any Restricted Subsidiary to, become or agree
      to
      become (1) a general or limited partner in any general or limited
      partnership, except that the Company may be a general or limited partner in
      any
      Subsidiary and any Restricted Subsidiary may be a general or limited partner
      in
      any other Subsidiary and except that the Company and its Restricted Subsidiaries
      may be a limited partner in a Permitted Related Business Opportunity, (2) a
      member or manager of, or hold a limited liability company interest in, a limited
      liability company, except that the Company may be a member or manager of, or
      hold limited liability company interests in, its Subsidiaries and Restricted
      Subsidiaries may be members or managers of, or hold limited liability company
      interests in, other Subsidiaries and except that the Company and its Restricted
      Subsidiaries may be members or managers of, or hold limited liability company
      interests in a Permitted Related Business Opportunity or (3) a joint
      venturer or hold a joint venture interest in any joint venture, except that
      the
      Company and its Restricted Subsidiaries may become a joint venturer in or hold
      a
      joint venture interest in any joint venture that is a Permitted Related Business
      Opportunity.

    
      
        
          
          

        

        
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                              Section 10.10.Limitation
      on Certain
      Leases.  The Company will not, and will not permit any of its
      Restricted Subsidiaries to, engage in any off-balance sheet transaction
      (i.e., the liabilities in respect of which do not appear on the
      liability side of the balance sheet, with such balance sheet prepared in
      accordance with GAAP) providing the functional equivalent of borrowed money
      (including asset securitizations, sale/leasebacks or Synthetic Leases (other
      than any sale/leaseback transaction or Synthetic Lease entered into, in either
      case, with respect to meter assets and which transaction is otherwise permitted
      by this Agreement)) with liabilities in excess, in the aggregate for the Company
      and its Restricted Subsidiaries as of any date of determination, of 5% of the
      Consolidated Tangible Assets.

     

    For
      purposes of this Section 10.10, the amount of any lease which
      is not a Capital Lease is the aggregate amount of minimum lease payments due
      pursuant to such lease for any non-cancelable portion of its term.

     

                              Section 10.11.Nature
      of
      Business.  The Company will not, and will not permit any of its
      Restricted Subsidiaries to, engage in any business if, as a result, the general
      nature of the business in which the Company and its Restricted Subsidiaries,
      taken as a whole, would then be engaged would be substantially and materially
      changed from the general nature of the business in which the Company and its
      Restricted Subsidiaries are engaged on the date of the Closing.

     

                              Section 10.12.Transactions
      with
      Affiliates.  Except in the case of a Permitted Related Business
      Opportunity, the Company will not, and will not permit any Restricted Subsidiary
      to, enter into, directly or indirectly, any Material transaction or group of
      related transactions (including, without limitation, the purchase, lease, sale
      or exchange of properties of any kind or the rendering of any service) with
      any
      Affiliate (other than the Company, a Restricted Subsidiary or New Jersey Natural
      Gas), except in the ordinary course and pursuant to the reasonable requirements
      of the Company’s or such Restricted Subsidiary’s business and upon fair and
      reasonable terms no less favorable to the Company or such Restricted Subsidiary
      than would be obtainable in a comparable arm’s-length transaction with a Person
      not an Affiliate.

     

                              Section 10.13.Designation
      of Restricted and
      Unrestricted Subsidiaries.  (a) Subject to Section 10.13(b),
      the Company may designate any Subsidiary to be a Restricted Subsidiary and
      may
      designate any Restricted Subsidiary to be an Unrestricted Subsidiary by giving
      written notice to each holder of Notes that the Board of Directors of the
      Company has made such designation, provided, however, that no
      Subsidiary may be designated a Restricted Subsidiary and no Restricted
      Subsidiary may be designated an Unrestricted Subsidiary unless, at the time
      of
      such action and after giving effect thereto, (1) solely in the case of a
      Restricted Subsidiary being designated an Unrestricted Subsidiary, such
      Restricted Subsidiary being designated an Unrestricted Subsidiary shall not
      have
      any continuing Investment in the Company or any other Restricted Subsidiary
      and
      (2) no Default or Event of Default shall have occurred and be continuing
      (provided that, with respect to Sections 10.1 and
10.2, calculation of compliance therewith
      shall be made as of
      the date of determination under this Section 10.13 and not
      as of the end of the immediately preceding fiscal quarter of the
      Company).  Any Restricted Subsidiary which has been designated an
      Unrestricted Subsidiary and which has then been redesignated a Restricted
      Subsidiary, in each case in accordance with the provisions of the first sentence
      of this Section 10.13, shall not at any time thereafter be
      redesignated an Unrestricted Subsidiary without the prior written consent of
      the
      Required Holders.  Any Unrestricted Subsidiary which has been
      designated a Restricted Subsidiary and which has then been redesignated an
      Unrestricted Subsidiary, in each case in accordance with the provisions of
      the
      first sentence of this Section 10.13, shall not at any
      time thereafter be redesignated a Restricted Subsidiary without the prior
      written consent of the Required Holders.  If the Company enters into
      any credit facility or note purchase agreement after the date of Closing and
      New
      Jersey Natural Gas shall be designated as a “restricted subsidiary” under, then
      the Company shall, within 10 Business Days of its entering into such credit
      facility or note purchase agreement, designate New Jersey Natural Gas as a
      Restricted Subsidiary under this Agreement.  If the Company enters
      into any credit facility or note purchase agreement after the date of Closing
      and New Jersey Natural Gas shall be subjected to any negative covenants of
      the
      type included in this Section 10 of such credit facility
      or note purchase agreement, then and in any such event the Company shall give
      written notice thereof to each holder not later than 30 days following the
      date
      of execution of any such agreement.  Effective on the date of
      execution of any such agreement, such additional covenant that is included
      in
      such agreement and any related definitions shall be deemed to have been
      incorporated herein.  The Company further covenants to promptly
      execute and deliver at its expense (including, without limitation, the fees
      and
      expenses of counsel for the holders) an amendment to this Agreement in form
      and
      substance satisfactory to the Required Holders evidencing the amendment of
      this
      Agreement to include such additional covenant.

     

                  (b)The
      Company will cause each
      Subsidiary that is designated as a Restricted Subsidiary on Schedule 5.4 on
      the date of Closing to at all times remain a Restricted Subsidiary.

     

                              Section 10.14.Terrorism
      Sanctions
      Regulations.  The Company will not, and will not permit any
      Subsidiary to, (a) become a Person described or designated in the Specially
      Designated Nationals and Blocked Persons List of the Office of Foreign Assets
      Control or in Section 1 of the Anti-Terrorism Order or (b) engage in
      any dealings or transactions with any such Person.

     

    
      
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                Section 11.

              	
                Events
                  of Default.

              


      

       

      An
        “Event of Default” shall exist if any of the following conditions or
        events shall occur and be continuing:

       

                       (a)the
        Company defaults in the payment of
        any principal or Make-Whole Amount on any Note when the same becomes due
        and
        payable, whether at maturity or at a date fixed for prepayment or by declaration
        or otherwise; or

    

     

                                      (b)the
      Company defaults in the payment of
      any interest on any Note for more than five Business Days after the same becomes
      due 

          and
      payable; or

     

                     (c)the
      Company defaults in the performance
      of or compliance with any term contained in any of Section 9.6
through Section 9.8, inclusive,
      Section 10.1 through Section 10.10, inclusive, or
Section 10.14; or

    
       

    

                     (d)the
      Company defaults in the performance
      of or compliance with any term contained herein (other than those referred
      to in
      paragraphs (a), (b) and (c) of this Section 11) and such
      default is not remedied within 30 days after the earlier of (1) a
      Responsible Officer obtaining actual knowledge of such default and (2) the
      Company receiving written notice of such default from any holder of a Note
      (any
      such written notice to be identified as a “notice of default” and to refer
      specifically to this paragraph (d) of Section 11);
      or

     

                     (e)any
      representation or warranty made in
      writing by or on behalf of the Company or any Guarantor or by any officer of
      the
      Company or any Guarantor in this Agreement, the Guaranty Agreement or in any
      writing furnished in connection with the transactions contemplated hereby proves
      to have been false or incorrect in any material respect on the date as of which
      made; or

     

                     (f)(1) the
      Company or any Significant
      Subsidiary is in default (as principal or as guarantor or other surety) in
      the
      payment of any principal of or premium or make-whole amount or interest on
      any
      Debt that is outstanding in an aggregate principal amount of at least
      $15,000,000 beyond any period of grace provided with respect thereto or
      (2) the Company or any Significant Subsidiary is in default in the
      performance of or compliance with any term of any evidence of any Debt in an
      aggregate outstanding principal amount of at least $15,000,000 or of any
      mortgage, indenture or other agreement relating thereto or any other condition
      exists, and as a consequence of such default or condition such Debt has become,
      or has been declared (or one or more Persons are entitled
      to declare such Debt to be), due and payable before its
      stated maturity or before its regularly scheduled dates of payment or
      (3) as a consequence of the occurrence or continuation of any event or
      condition (other than the passage of time or the right of the holder of Debt
      to
      convert such Debt into equity interests), (i) the Company or any
      Significant Subsidiary has become obligated to purchase or repay Debt before
      its
      regular maturity or before its regularly scheduled dates of payment in an
      aggregate outstanding principal amount of at least $15,000,000 or (ii) one
      or more Persons have the right to require the Company or any Significant
      Subsidiary so to purchase or repay such Debt; or

     

                     (g)the
      Company or any Significant
      Subsidiary is in default under the terms of any agreement involving any
      off-balance sheet transaction (including any asset securitization,
      sale/leaseback transaction or Synthetic Lease) with obligations in the aggregate
      thereunder for which the Company or any Significant Subsidiary may be obligated
      in an amount in excess of $15,000,000, and such breach, default or event of
      default consists of the failure to pay (beyond any period of grace permitted
      with respect thereto) any obligation when due (whether at stated maturity,
      by
      acceleration or otherwise) or if such breach or default permits or causes the
      acceleration of any obligation or the termination of such agreement;
      or

     

                     (h)the
      Company or any Significant
      Subsidiary (1) is generally not paying, or admits in writing its inability
      to pay, its debts as they become due, (2) files, or consents by answer or
      otherwise to the filing against it of, a petition for relief or reorganization
      or arrangement or any other petition in bankruptcy, for liquidation or to take
      advantage of any bankruptcy, insolvency, reorganization, moratorium or other
      similar law of any jurisdiction, (3) makes an assignment for the benefit of
      its creditors, (4) consents to the appointment of a custodian, receiver,
      trustee or other officer with similar powers with respect to it or with respect
      to any substantial part of its property, (5) is adjudicated as insolvent or
      to be liquidated or (6) takes corporate action for the purpose of any of
      the foregoing; or

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

                     (i)a
      court or Governmental Authority of
      competent jurisdiction enters an order appointing, without consent by the
      Company or any of its Significant Subsidiaries, a custodian, receiver, trustee
      or other officer with similar powers with respect to it or with respect to
      any
      substantial part of its property, or constituting an order for relief or
      approving a petition for relief or reorganization or any other petition in
      bankruptcy or for liquidation or to take advantage of any bankruptcy or
      insolvency law of any jurisdiction, or ordering the dissolution, winding-up
      or
      liquidation of the Company or any of its Significant Subsidiaries, or any such
      petition shall be filed against the Company or any of its Significant
      Subsidiaries and such petition shall not be dismissed within 60 days;
      or

    
       

    

                     (j)a
      final judgment or judgments for the
      payment of money aggregating in excess of $15,000,000 (exclusive of amounts
      fully covered by valid and collectible insurance in respect thereof subject
      to
      customary deductibles) are rendered against one or more of the Company and
      its
      Significant Subsidiaries and which judgments are not, within 45 days after
      entry
      thereof (or such shorter period as judgment creditors are stayed pursuant to
      applicable law from executing on such judgment or judgments), bonded, discharged
      or stayed pending appeal, or are not discharged within 45 days after the
      expiration of such stay (or such shorter period as judgment creditors are stayed
      pursuant to applicable law from executing on such judgment or judgments);
      or

     

                     (k)(1) default
      shall occur under the
      Guaranty Agreement and such default shall continue beyond the period of grace,
      if any, allowed with respect thereto or (2) the Guaranty Agreement shall
      cease to be in full force and effect for any reason whatsoever, including,
      without limitation, a determination by any Governmental Authority or court
      that
      such agreement is invalid, void or unenforceable or any Guarantor shall contest
      or deny in writing the validity or enforceability of the Guaranty Agreement;
      or

    
       

    

                     (l)
      if (1) any Plan shall fail to
      satisfy the minimum funding standards of ERISA or the Code for any plan year
      or
      part thereof or a waiver of such standards or extension of any amortization
      period is sought or granted under Section 412 of the Code, (2) a
      notice of intent to terminate any Plan on other than a standard basis shall
      have
      been or is reasonably expected to be filed with the PBGC or the PBGC shall
      have
      instituted proceedings under Section 4042 of ERISA to terminate or appoint
      a trustee to administer any Plan or the PBGC shall have notified the Company
      or
      any ERISA Affiliate that a Plan may become a subject of any such proceedings,
      (3) the present value of the aggregate “amount of unfunded benefit
      liabilities” within the meaning of Section 4001(a)(18) of ERISA under all Plans
      (determined in accordance with Title IV of ERISA, as of the end of the most
      recent Plan year on the basis of the actuarial assumptions specified for funding
      purposes in the most recent actuarial valuation), shall exceed the aggregate
      actuarial value of their assets by an amount equal to 10% of Consolidated
      Tangible Net Worth, (4) the Company or any ERISA Affiliate shall have
      incurred or is reasonably expected to incur any liability pursuant to Title
      I or
      IV of ERISA or the penalty or excise tax provisions of the Code relating to
      employee benefit plans, (5) the Company or any ERISA Affiliate withdraws
      from any Multiemployer Plan or (6) the Company or any ERISA Affiliate
      establishes or amends any employee welfare benefit plan that provides
      post-employment welfare benefits in a manner that would increase the liability
      of the Company or any ERISA Affiliate thereunder; and any such event or events
      described in clauses (1) through (6) above, either individually or together
      with
      any other such event or events, would reasonably be expected to have a Material
      Adverse Effect.

     

    As
      used
      in Section 11(l), the terms “employee benefit plan” and
“employee welfare benefit plan” shall have the respective meanings assigned to
      such terms in Section 3 of ERISA.

     

    
      	
              Section 12.

            	
              Remedies
                on Default, Etc.

            


    

     

                              Section 12.1.Acceleration.  (a) If
      an Event of Default with respect to the Company described in paragraph (h)
      or
      (i) of Section 11 (other than an Event of Default
      described in clause (1) of paragraph (h) or described in clause (6) of paragraph
      (h) by virtue of the fact that such clause encompasses clause (1) of paragraph
      (h)) has occurred, all the Notes then outstanding shall automatically become
      immediately due and payable.

     

                  (b)If
      any other Event of Default has
      occurred and is continuing, the Required Holders may at any time at its or
      their
      option, by notice or notices to the Company, declare all the Notes then
      outstanding to be immediately due and payable.

     

                  (c)If
      any Event of Default described in
      paragraph (a) or (b) of Section 11 has occurred and is
      continuing, any holder or holders of Notes at the time outstanding affected
      by
      such Event of Default may at any time, at its or their option, by notice or
      notices to the Company, declare all the Notes held by it or them to be
      immediately due and payable.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    Upon
      any
      Note becoming due and payable under this Section 12.1,
      whether automatically or by declaration, such Note will forthwith mature and
      the
      entire unpaid principal amount of such Note, plus (1) all accrued
      and unpaid interest thereon (including, but not limited to, interest accrued
      thereon at the Default Rate) and (2) the Make-Whole Amount, if any,
      determined in respect of such principal amount (to the full extent permitted
      by
      applicable law) shall all be immediately due and payable, in each and every
      case
      without presentment, demand, protest or further notice, all of which are hereby
      waived.  The Company acknowledges, and the parties hereto agree, that
      each holder of a Note has the right to maintain its investment in the Notes
      free
      from repayment by the Company (except as herein specifically provided for),
      and
      that the provision for payment of the Make-Whole Amount by the Company in the
      event that the Notes are prepaid or are accelerated as a result of an Event
      of
      Default, is intended to provide compensation for the deprivation of such right
      under such circumstances.

    
       

    

                              Section 12.2.Other
      Remedies.  If any Default or Event of Default has occurred and is
      continuing, and irrespective of whether any Notes have become or have been
      declared immediately due and payable under Section 12.1,
      the holder of any Note at the time outstanding may proceed to protect and
      enforce the rights of such holder by an action at law, suit in equity or other
      appropriate proceeding, whether for the specific performance of any agreement
      contained herein or in any Note, or for an injunction against a violation of
      any
      of the terms hereof or thereof, or in aid of the exercise of any power granted
      hereby or thereby or by law or otherwise.

     

                              Section 12.3.Rescission.  At
      any time after any Notes have been declared due and payable pursuant to clause
      (b) or (c) of Section 12.1, the Required Holders, by
      written notice to the Company, may rescind and annul any such declaration and
      its consequences if (a) the Company has paid all overdue interest on the
      Notes, all principal of and Make-Whole Amount, if any, on any Notes that are
      due
      and payable and are unpaid other than by reason of such declaration, and all
      interest on such overdue principal and Make-Whole Amount, if any, and (to the
      extent permitted by applicable law) any overdue interest in respect of the
      Notes, at the Default Rate, (b) neither the Company nor any other Person shall
      have paid any amounts which have become due solely by reason of such
      declaration, (c) all Events of Default and Defaults, other than non-payment
      of amounts that have become due solely by reason of such declaration, have
      been
      cured or have been waived pursuant to Section 17 and
      (d) no judgment or decree has been entered for the payment of any monies
      due pursuant hereto or to the Notes.  No rescission and annulment
      under this Section 12.3 will extend to or affect any
      subsequent Event of Default or Default or impair any right consequent
      thereon.

     

                              Section 12.4.No
      Waivers or Election of
      Remedies, Expenses, Etc.  No course of dealing and no delay on
      the part of any holder of any Note in exercising any right, power or remedy
      shall operate as a waiver thereof or otherwise prejudice such holder’s rights,
      powers or remedies.  No right, power or remedy conferred by this
      Agreement or by any Note upon any holder thereof shall be exclusive of any
      other
      right, power or remedy referred to herein or therein or now or hereafter
      available at law, in equity, by statute or otherwise.  Without
      limiting the obligations of the Company under Section 15,
      the Company will pay to the holder of each Note on demand such further amount
      as
      shall be sufficient to cover all costs and expenses of such holder incurred
      in
      any enforcement or collection under this Section 12,
      including, without limitation, reasonable attorneys’ fees, expenses and
      disbursements.

     

    
      	
              Section 13.

            	
              Registration;
                Exchange; Substitution of Notes.

            


    

     

                              Section 13.1.Registration
      of
      Notes.  The Company shall keep at its principal executive office
      a register for the registration and registration of transfers of
      Notes.  The name and address of each holder of one or more Notes, each
      transfer thereof and the name and address of each transferee of one or more
      Notes shall be registered in such register.  Prior to due presentment
      for registration of transfer, the Person in whose name any Note shall be
      registered shall be deemed and treated as the owner and holder thereof for
      all
      purposes hereof, and the Company shall not be affected by any notice or
      knowledge to the contrary.  The Company shall give to any holder of a
      Note that is an Institutional Investor promptly upon request therefor, a
      complete and correct copy of the names and addresses of all registered holders
      of Notes.

     

                              Section 13.2.Transfer
      and Exchange of
      Notes.  Upon surrender of any Note at the principal executive
      office of the Company for registration of transfer or exchange (and in the
      case
      of a surrender for registration of transfer, duly endorsed or accompanied by
      a
      written instrument of transfer duly executed by the registered holder of such
      Note or its attorney duly authorized in writing and accompanied by the address
      for notices of each transferee of such Note or part thereof), within 10 Business
      Days thereafter, the Company shall execute and deliver, at the Company’s expense
      (except as provided below), one or more new Notes (as requested by the holder
      thereof) in exchange therefor, in an aggregate principal amount equal to the
      unpaid principal amount of the surrendered Note.  Each such new Note
      shall be payable to such Person as such holder may request and shall be
      substantially in the form of Exhibit 1.  Each such
      new Note shall be dated and bear interest from the date to which interest shall
      have been paid on the surrendered Note or dated the date of the surrendered
      Note
      if no interest shall have been paid thereon.  The Company may require
      payment of a sum sufficient to cover any stamp tax or governmental charge
      imposed in respect of any such transfer of Notes.  Notes shall not be
      transferred in denominations of less than $100,000, provided that if
      necessary to enable the registration of transfer by a holder of its entire
      holding of Notes, one Note may be in a denomination of less than
      $100,000.  Any transferee, by its acceptance of a Note registered in
      its name (or the name of its nominee), shall be deemed to have made the
      representation set forth in Section 6.2.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

                              Section 13.3.Replacement
      of
      Notes.  Upon receipt by the Company of evidence reasonably
      satisfactory to it of the ownership of and the loss, theft, destruction or
      mutilation of any Note (which evidence shall be, in the case of an Institutional
      Investor, notice from such Institutional Investor of such ownership and such
      loss, theft, destruction or mutilation), and

     

                     (a)in
      the case of loss, theft or
      destruction, of indemnity reasonably satisfactory to it (provided that
      if the holder of such Note is, or is a nominee for, an original Purchaser or
      another holder of a Note with a minimum net worth of at least $50,000,000,
      such
      Person’s own unsecured agreement of indemnity shall be deemed to be
      satisfactory), or

     

                     (b)in
      the case of mutilation, upon
      surrender and cancellation thereof,

     

    within
      10
      Business Days thereafter, the Company at its own expense shall execute and
      deliver, in lieu thereof, a new Note, dated and bearing interest from the date
      to which interest shall have been paid on such lost, stolen, destroyed or
      mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
      Note if no interest shall have been paid thereon.

     

    
      	
              Section 14.

            	
              Payments
                on Notes.

            


    

     

                              Section 14.1.Place
      of
      Payment.  Subject to Section 14.2, payments
      of principal, Make-Whole Amount, if any, and interest becoming due and payable
      on the Notes shall be made in New York, New York at the principal office of
      JPMorgan Chase Bank, N.A. in such jurisdiction.  The Company may at
      any time, by notice to each holder of a Note, change the place of payment of
      the
      Notes so long as such place of payment shall be either the principal office
      of
      the Company in such jurisdiction or the principal office of a bank or trust
      company in such jurisdiction.

     

                              Section 14.2.Home
      Office
      Payment.  So long as any Purchaser or its nominee shall be the
      holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company
      will pay all sums becoming due on such Note for principal, Make-Whole Amount,
      if
      any, and interest by the method and at the address specified for such purpose
      below such Purchaser’s name in Schedule A, or by such
      other method or at such other address as such Purchaser shall have from time
      to
      time specified to the Company in writing for such purpose, without the
      presentation or surrender of such Note or the making of any notation thereon,
      except that upon written request of the Company made concurrently with or
      reasonably promptly after payment or prepayment in full of any Note, such
      Purchaser shall surrender such Note for cancellation, reasonably promptly after
      any such request, to the Company at its principal executive office or at the
      place of payment most recently designated by the Company pursuant to
Section 14.1.  Prior to any sale or other
      disposition of any Note held by any Purchaser or its nominee such Purchaser
      will, at its election, either endorse thereon the amount of principal paid
      thereon and the last date to which interest has been paid thereon or surrender
      such Note to the Company in exchange for a new Note or Notes pursuant to
Section 13.2.  The Company will afford the
      benefits of this Section 14.2 to any Institutional
      Investor that is the direct or indirect transferee of any Note purchased by
      any
      Purchaser under this Agreement and that has made the same agreement relating
      to
      such Note as such Purchaser has made in this
Section 14.2.

     

    
      	
              Section 15.

            	
              Expenses,
                Etc.

            


    

     

                              Section 15.1.Transaction
      Expenses.  Whether or not the transactions contemplated hereby
      are consummated, the Company will pay the costs and expenses incurred in
      connection with the initial filing of this Agreement and all related documents
      and financial information, and all subsequent annual and interim filings of
      documents and financial information related thereto, with the Securities
      Valuation Office of the National Association of Insurance Commissioners or
      any
      successor organization, all costs and expenses (including reasonable attorneys’
fees of a special counsel and, if reasonably required, local or other counsel)
      incurred by the Purchasers or any other holder of a Note in connection with
      such
      transactions and in connection with any amendments, waivers or consents under
      or
      in respect of this Agreement, the Notes or the Guaranty Agreement (whether
      or
      not such amendment, waiver or consent becomes effective), including, without
      limitation: (a) the costs and expenses incurred in enforcing or defending
      (or determining whether or how to enforce or defend) any rights under this
      Agreement, the Notes or the Guaranty Agreement or in responding to any subpoena
      or other legal process or informal investigative demand issued in connection
      with this Agreement, the Notes or the Guaranty Agreement, or by reason of being
      a holder of any Note and (b) the costs and expenses, including financial
      advisors’ fees, incurred in connection with the insolvency or bankruptcy of the
      Company or any Subsidiary or in connection with any work-out or restructuring
      of
      the transactions contemplated hereby and by the Notes.  The Company
      will pay, and will save the Purchasers and each other holder of a Note harmless
      from, all claims in respect of any fees, costs or expenses, if any, of brokers
      and finders (other than those retained by such Person).

    
       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

    

                              Section 15.2.Survival.  The
      obligations of the Company under this Section 15 will
      survive the payment or transfer of any Note, the enforcement, amendment or
      waiver of any provision of this Agreement, the Notes or the Guaranty Agreement,
      and the termination of this Agreement or the Guaranty Agreement.

     

    
      	
              Section 16.

            	
              Survival
                of Representations and Warranties; Entire
                Agreement.

            


    

     

    All
      representations and warranties contained herein shall survive the execution
      and
      delivery of this Agreement and the Notes, the purchase or transfer by any
      Purchaser of any Note or portion thereof or interest therein and the payment
      of
      any Note, and may be relied upon by any subsequent holder of a Note, regardless
      of any investigation made at any time by or on behalf of any Purchaser or any
      other holder of a Note.  All statements contained in any certificate
      or other instrument delivered by or on behalf of the Company pursuant to this
      Agreement shall be deemed representations and warranties of the Company under
      this Agreement.  Subject to the preceding sentence, this Agreement and
      the Notes embody the entire agreement and understanding between the Purchasers
      and the Company and supersede all prior agreements and understandings relating
      to the subject matter hereof.

     

    
      	
              Section 17.

            	
              Amendment
                and Waiver.

            


    

     

                              Section 17.1.Requirements.  This
      Agreement and the Notes may be amended, and the observance of any term hereof
      or
      of the Notes may be waived (either retroactively or prospectively), with (and
      only with) the written consent of the Company and the Required Holders, except
      that (a) no amendment or waiver of any of the provisions of
Section 1, 2, 3, 4, 5, 6 or 21 hereof, or
      any defined term (as it is used therein), will be effective as to any holder
      of
      a Note unless consented to by such holder in writing and (b) no such
      amendment or waiver may, without the written consent of the holder of each
      Note
      at the time outstanding affected thereby, (1) subject to the provisions of
Section 12 relating to acceleration or rescission, change
      the amount or time of any prepayment or payment of principal of, or reduce
      the
      rate or change the time of payment or method of computation of interest or
      of
      the Make-Whole Amount on, the Notes, (2) change the percentage of the
      principal amount of the Notes the holders of which are required to consent
      to
      any such amendment or waiver or (3) amend any of Sections 8,
      11(a), 11(b), 12, 17 or 20.

     

                              Section 17.2.Solicitation
      of Holders of
      Notes.

     

                  (a)Solicitation.  The
      Company will provide each holder of the Notes (irrespective of the amount of
      Notes then owned by it) with sufficient information, sufficiently far in advance
      of the date a decision is required, to enable such holder to make an informed
      and considered decision with respect to any proposed amendment, waiver or
      consent in respect of any of the provisions hereof or of the
      Notes.  The Company will deliver executed or true and correct copies
      of each amendment, waiver or consent effected pursuant to the provisions of
      this
Section 17 to each holder of outstanding Notes promptly
      following the date on which it is executed and delivered by, or receives the
      consent or approval of, the requisite holders of Notes.

     

                  (b)Payment.  The
      Company will not, directly or indirectly, pay or cause to be paid any
      remuneration, whether by way of supplemental or additional interest, fee or
      otherwise, or grant any security or provide any other credit support, to any
      holder of Notes as consideration for or as an inducement to the entering into
      by
      any holder of Notes of any waiver or amendment of any of the terms and
      provisions hereof unless such remuneration is concurrently paid, or security
      is
      concurrently granted or other credit support concurrently provided, on the
      same
      terms, ratably to each holder of Notes then outstanding even if such holder
      did
      not consent to such waiver or amendment.

     

                  (c)Consent
      in Contemplation of
      Transfer.  Any consent made pursuant to this
Section 17 by a holder of Notes that has transferred a
      portion or has agreed to transfer all or a portion of its Notes to the Company,
      any Subsidiary or any Affiliate of the Company and has provided or has agreed
      to
      provide such written consent as a condition to such transfer shall be void
      and
      of no force and effect except solely as to such holder, and any amendments
      effected or waivers granted or to be effected or granted that would not have
      been or be so effected or granted but for such consent (and the consents of
      all
      other holders of the Notes that were acquired under the same or similar
      conditions) shall be void and of no force and effect except solely as to such
      holder.

    
       

    

                              Section 17.3.Binding
      Effect,
      Etc.  Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is
      binding upon them and upon each future holder of any Note and upon the Company
      without regard to whether such Note has been marked to indicate such amendment
      or waiver.  No such amendment or waiver will extend to or affect any
      obligation, covenant, agreement, Default or Event of Default not expressly
      amended or waived or impair any right consequent thereon.  No course
      of dealing between the Company and the holder of any Note nor any delay in
      exercising any rights hereunder or under any Note shall operate as a waiver
      of
      any rights of any holder of such Note.  As used herein, the term “this
      Agreement” and references thereto shall mean this Agreement as it may from time
      to time be amended or supplemented.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

                              Section 17.4.Notes
      Held by Company,
      Etc.  Solely for the purpose of determining whether the holders
      of the requisite percentage of the aggregate principal amount of Notes then
      outstanding approved or consented to any amendment, waiver or consent to be
      given under this Agreement or the Notes, or have directed the taking of any
      action provided herein or in the Notes to be taken upon the direction of the
      holders of a specified percentage of the aggregate principal amount of Notes
      then outstanding, Notes directly or indirectly owned by the Company or any
      of
      its Affiliates shall be deemed not to be outstanding.

     

    
      	
              Section 18.

            	
              Notices.

            


    

     

    All
      notices and communications provided for hereunder shall be in writing and sent
      (a) by telefacsimile if the sender on the same day sends a confirming copy
      of such notice by a recognized overnight delivery service (charges prepaid),
      (b) by registered or certified mail with return receipt requested (postage
      prepaid) or (c) by a recognized overnight delivery service (charges
      prepaid).  Any such notice must be sent:

     

                     (1)if
      to any Purchaser or its nominee, to
      such Purchaser or its nominee at the address specified for such communications
      in Schedule A, or at such other address as such Purchaser
      or its nominee shall have specified to the Company in writing,

     

                     (2)if
      to any other holder of any Note, to
      such holder at such address as such other holder shall have specified to the
      Company in writing, or

     

                     (3)if
      to the Company, to the Company at
      its address set forth at the beginning hereof to the attention of the Chief
      Financial Officer of the Company, or at such other address as the Company shall
      have specified to the holder of each Note in writing.

     

    Notices
      under this Section 18 will be deemed given only when
      actually received.

     

    
      	
              Section 19.

            	
              Reproduction
                of Documents.

            


    

     

    This
      Agreement and all documents relating hereto, including, without limitation,
      (a) consents, waivers and modifications that may hereafter be executed,
      (b) documents received by the Purchasers at the Closing (except the Notes
      themselves) and (c) financial statements, certificates and other
      information previously or hereafter furnished to any holder of the Notes, may
      be
      reproduced by such holder by any photographic, photostatic, microfilm,
      microcard, miniature photographic or other similar process and such holder
      may
      destroy any original document so reproduced.  The Company agrees and
      stipulates that, to the extent permitted by applicable law, any such
      reproduction shall be admissible in evidence as the original itself in any
      judicial or administrative proceeding (whether or not the original is in
      existence and whether or not such reproduction was made by any holder of the
      Notes in the regular course of business) and any enlargement, facsimile or
      further reproduction of such reproduction shall likewise be admissible in
      evidence.  This Section 19 shall not prohibit
      the Company or any other holder of Notes from contesting any such reproduction
      to the same extent that it could contest the original, or from introducing
      evidence to demonstrate the inaccuracy of any such reproduction.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	
              Section 20.

            	
              Confidential
                Information.

            


    

     

    For
      the
      purposes of this Section 20, “Confidential
      Information” shall mean information delivered to any Purchaser by or on
      behalf of the Company or any Subsidiary in connection with the transactions
      contemplated by or otherwise pursuant to this Agreement that is proprietary
      in
      nature and that was clearly marked or labeled or otherwise adequately identified
      when received by such Purchaser as being confidential information of the Company
      or such Subsidiary, provided that such term does not include
      information that (a) was publicly known or otherwise known to such
      Purchaser prior to the time of such disclosure (provided, however, that
      to such Purchaser’s actual knowledge, the source of such information was not, at
      the time of disclosure to such Purchaser, bound by a confidentiality agreement
      with the Company or its Subsidiaries relating to such information),
      (b) subsequently becomes publicly known through no act or omission by such
      Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise
      becomes known to such Purchaser other than through disclosure by the Company
      or
      any Subsidiary (provided, however, that to such Purchaser’s actual
      knowledge, the source of such information was not, at the time of disclosure
      to
      such Purchaser, bound by a confidentiality agreement with the Company or its
      Subsidiaries relating to such information) or (d) constitutes financial
      statements delivered to such Purchaser under Section 7.1
that are otherwise publicly available.  Each Purchaser will
      maintain the confidentiality of such Confidential Information in accordance
      with
      procedures adopted by such Purchaser in good faith to protect confidential
      information of third parties delivered to such Purchaser, provided that
      such Purchaser may deliver or disclose Confidential Information to (1) its
      directors, officers, trustees, employees, agents, attorneys and affiliates
      (to
      the extent such disclosure reasonably relates to the administration of the
      investment represented by its Notes and such individuals are bound by the terms
      of this Section 20 or agree to hold confidential the
      Confidential Information substantially in accordance with the terms of this
      Section 20), (2) its financial advisors and other
      professional advisors who agree to hold confidential the Confidential
      Information substantially in accordance with the terms of this
Section 20, (3) any other holder of any Note,
      (4) any Institutional Investor to which such Purchaser sells or offers to
      sell such Note or any part thereof or any participation therein (if such Person
      has agreed in writing prior to its receipt of such Confidential Information
      to
      be bound by the provisions of this Section 20),
      (5) any Person from which such Purchaser offers to purchase any security of
      the Company (if such Person has agreed in writing prior to its receipt of such
      Confidential Information to be bound by the provisions of this
Section 20), (6) any Federal or state regulatory
      authority having jurisdiction over such Purchaser, (7) the National
      Association of Insurance Commissioners or any similar organization, or any
      nationally recognized rating agency that requires access to information about
      such Purchaser’s investment portfolio or (8) any other Person to which such
      delivery or disclosure may be necessary or appropriate (i) to effect
      compliance with any law, rule, regulation or order applicable to such Purchaser,
      (ii) in response to any subpoena or other legal process, (iii) in
      connection with any litigation to which such Purchaser is a party or
      (iv) if an Event of Default has occurred and is continuing, to the extent
      such Purchaser may reasonably determine such delivery and disclosure to be
      necessary or appropriate in the enforcement or for the protection of the rights
      and remedies under such Purchaser’s Notes and this Agreement.  Each
      holder of a Note, by its acceptance of a Note, will be deemed to have agreed
      to
      be bound by and to be entitled to the benefits of this Section 20
as though it were a party to this Agreement.  On reasonable
      request by the Company in connection with the delivery to any holder of a Note
      of information required to be delivered to such holder under this Agreement
      or
      requested by such holder (other than a holder that is a party to this Agreement
      or its nominee), such holder will enter into an agreement with the Company
      embodying the provisions of this Section 20.

     

    
      	
              Section 21.

            	
              Substitution
                of Purchaser.

            


    

     

    Each
      Purchaser shall have the right to substitute any one of its Affiliates as the
      purchaser of the Notes that such Purchaser has agreed to purchase hereunder,
      by
      written notice to the Company, which notice shall be signed by both such
      Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be
      bound by this Agreement and shall contain a confirmation by such Affiliate
      of
      the accuracy with respect to it of the representations set forth in
Section 6.  Upon receipt of such notice,
      wherever the word “Purchaser” is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such
      Affiliate in lieu of such Purchaser.  In the event that such Affiliate
      is so substituted as a purchaser hereunder and such Affiliate thereafter
      transfers to such Purchaser all of the Notes then held by such Affiliate, upon
      receipt by the Company of notice of such transfer, wherever the word “Purchaser”
is used in this Agreement (other than in this Section 21),
      such word shall no longer be deemed to refer to such Affiliate, but shall refer
      to such Purchaser, and such Purchaser shall have all the rights of an original
      holder of the Notes under this Agreement.

     

    
      	
              Section 22.

            	
              Miscellaneous.

            


    

     

                              Section 22.1.Successors
      and
      Assigns.  All covenants and other agreements contained in this
      Agreement by or on behalf of any of the parties hereto bind and inure to the
      benefit of their respective successors and assigns (including, without
      limitation, any subsequent holder of a Note) whether so expressed or
      not.

    
       

    

                              Section 22.2.Submission
      to Jurisdiction;
      Waiver of Jury Trial.  (a) The Company hereby irrevocably
      submits to the non-exclusive jurisdiction of any State of New York court or
      any
      Federal court located in New York County, New York, New York for the
      adjudication of any matter arising out of or relating to this Agreement, and
      consents to the service of all writs, process and summonses by registered or
      certified mail out of any such court or by service of process on the Company
      at
      its address to which notices are to be given pursuant to
Section 18 hereof and hereby waives any requirement to
      have an agent for service of process in the State of New
      York.  

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    Nothing
      contained herein shall affect the right of any holder of the Notes to serve
      legal process in any other manner or to bring any proceeding hereunder in any
      jurisdiction where the Company may be amenable to suit.  The Company
      hereby irrevocably waives any objection to any suit, action or proceeding in
      any
      New York court or Federal court located in New York County, New York, New York
      on the grounds of venue and hereby further irrevocably waives any claim that
      any
      such suit, action or proceeding brought in any such court has been brought
      in an
      inconvenient forum.

     

                  (b)The
      parties hereto hereby waive trial
      by jury in any action brought on or with respect to this Agreement, the Notes
      or
      any other document executed in connection herewith or therewith.

     

                              Section 22.3.Payments
      Due on Non-Business
      Days.  Anything in this Agreement or the Notes to the contrary
      notwithstanding (but without limiting the requirement in
Section 8.4 that the notice of any optional prepayment
      specify a Business Day as the date fixed for such prepayment), any payment
      of
      principal of or Make-Whole Amount, if any, or interest on any Note that is
      due
      on a date other than a Business Day shall be made on the next succeeding
      Business Day without including the additional days elapsed in the computation
      of
      the interest payable on such next succeeding Business Day; provided
      that if the maturity date of any Note is a date other than a Business Day,
      the
      payment otherwise due on such maturity date shall be made on the next succeeding
      Business Day and shall include the additional days elapsed in the computation
      of
      interest payable on such next succeeding Business Day.

     

                              Section 22.4.Accounting
      Terms.  All accounting terms used herein which are not expressly
      defined in this Agreement have the meanings respectively given to them in
      accordance with GAAP.  Except as otherwise specifically provided
      herein, (a) all computations made pursuant to this Agreement shall be made
      in accordance with GAAP, and (b) all financial statements shall be prepared
      in accordance with GAAP.

     

                              Section 22.5.Severability.  Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall (to the full extent permitted by law) not invalidate or
      render unenforceable such provision in any other jurisdiction.

     

                              Section 22.6.Construction.  Each
      covenant contained herein shall be construed (absent express provision to the
      contrary) as being independent of each other covenant contained herein, so
      that
      compliance with any one covenant shall not (absent such an express contrary
      provision) be deemed to excuse compliance with any other
      covenant.  Where any provision herein refers to action to be taken by
      any Person, or which such Person is prohibited from taking, such provision
      shall
      be applicable whether such action is taken directly or indirectly by such
      Person.

     

    For
      the
      avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall
      be deemed to be a part hereof.

     

                              Section 22.7.Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original but all of which together shall constitute one
      instrument.  Each counterpart may consist of a number of copies
      hereof, each signed by less than all, but together signed by all, of the parties
      hereto.

     

                              Section 22.8.Governing
      Law.  This Agreement shall be construed and enforced in
      accordance with, and the rights of the parties shall be governed by, the law
      of
      the State of New York excluding choice-of-law principles of the law of such
      State that would require the application of the laws of a jurisdiction other
      than such State.

    *     *     *     *     *

     

    The
      execution hereof by the Purchasers shall constitute a contract among the Company
      and the Purchasers for the uses and purposes hereinabove set forth.

    


    


    
      	
               

            	
              Very
                truly yours,

            


    

    


    
      	
               

            	
              New
                Jersey Resources Corporation

            


    

     

    


    
      	
               

            	
              By  /s/  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:  Senior
                Vice President and Chief       Financial
                Officer

            


    

     

    
      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

    

    


    
      	
              
                The
                  foregoing is hereby agreed

              

            	
               

            


    

    
      	
              
                to
                  as of the date thereof.

              

            	
               

            


    

    


    


    
      	
               

            	
              New
                York Life Insurance Company

            


    

    


    
      	
               

            	
              By:  /s/  Stuart
                Ashton

            


    

    
      	
               

            	
              Title:  Director

            


    

    


    


    
      	
               

            	
              New
                York Life Insurance and Annuity
                Corporation

            


    

    
      	
               

            	
              By:  New
                York Life Investment ManagementLLC,

            


    

    
      	
               

            	
                 its
                Investment Manager

            


    

    


    
      	
               

            	
              By:  /s/  Stuart
                Ashton

            


    

    
      	
               

            	
              Title:  Director

            


    

    


    


    
      	
               

            	
              New
                York Life Insurance and Annuity Corporation Institutionally Owned
                Life
                Insurance Separate Account

            


    

    
      	
               

            	
              (BOLI
                3)

            


    

    
      	
               

            	
              By:  New
                York Life Investment ManagementLLC,

            


    

    
      	
               

            	
                 its
                Investment Manager

            


    

    


    
      	
               

            	
              By:  /s/  Stuart
                Ashton

            


    

    
      	
               

            	
              Title:  Director

            


    

    


    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    
      	
              
                The
                  foregoing is hereby agreed

              

            	
               

            


    

    
      	
              
                to
                  as of the date thereof.

              

            	
               

            


    

    


    


    
      	
               

            	
              New
                York Life Insurance and Annuity Corporation Institutionally Owned
                Life
                Insurance Separate Account

            


    

    
      	
               

            	
              (BOLI
                3-2)

            


    

    
      	
               

            	
              By:  New
                York Life Investment ManagementLLC,

            


    

    
      	
               

            	
                 its
                Investment Manager

            


    

    


    
      	
               

            	
              By:  /s/  Stuart
                Ashton

            


    

    
      	
               

            	
              Title:  Corporate
                Vice President

            


    

    


    


    
      	
               

            	
              New
                York Life Insurance and Annuity Corporation Institutionally Owned
                Life
                Insurance Separate Account

            


    

    
      	
               

            	
              (BOLI
                30C)

            


    

    
      	
               

            	
              By:  New
                York Life Investment ManagementLLC,

            


    

    
      	
               

            	
                 its
                Investment Manager

            


    

    


    
      	
               

            	
              By:  /s/  Stuart
                Ashton

            


    

    
      	
               

            	
              Title:  Director

            


    

    


    


    
      	
               

            	
              NYLIFE
                Insurance Company of Arizona

            


    

    
      	
               

            	
              By:  New
                York Life Investment ManagementLLC,

            


    

    
      	
               

            	
                 its
                Investment Manager

            


    

    


    
      	
               

            	
              By:  /s/  Stuart
                Ashton

            


    

    
      	
               

            	
              Title:  Director

            


    

    


    


    
      
        
                

                    -  -      
    

          -2-

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


     

    Information
      Relating to Purchasers

    


    
      	
               

              Name
                and Address of Purchaser

               

              New
                York Life Insurance Company

              c/o
                New York Life Investment Management LLC

              51
                Madison Avenue

              New
                York, New York  10010-1603

              Attention:  Fixed
                Income Investors Group,

              Private
                Finance, 2nd
                Floor

              Fax
                Number:  (212) 447-4122

            	
              Principal
                Amount of

              Notes
                to be
                Purchased

               

              $29,000,000

               

            


    

     

    Payments

     

    All
      payments on or in respect of the Notes to be by bank wire transfer of Federal
      or
      other immediately available funds to:

    


    JPMorgan
      Chase Bank

    New
      York,
      New York 10019

    ABA
      No.
      021-000-021

    Credit:
      New York Life Insurance Company

    General
      Account No. 008-9-00687

    


    With
      sufficient information (including issuer, PPN number, interest rate, maturity
      and whether payment is of principal, premium, or interest) to identify the
      source and application of such funds.

    


    Notices

    


    All
      notices with respect to payments, written confirmations of such wire transfers
      and audit confirmations to be addressed:

    


    New
      York Life Insurance
      Company

    c/o
      New York Life Investment Management
      LLC

    51
      Madison Avenue

    New
      York, New
      York  10010-1603

    Attention:  Financial
      Management, Securities Operations, 2nd Floor

    Fax
      Number:  (212)
      447-4160

    With
      electronic copy to:  FIIGLibrary@nylim.com

    


    
      
        
                

                    Schedule
              A      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    All
      other
      notices and communications to be addressed as first provided above, with a
      duplicate electronic copy to FIIGLibrary@nylim.com, and with a copy of
      any notices regarding defaults or Events of Default under the operative
      documents to:  Office of General Counsel, Investment Section, Room
      1016, Fax Number (212) 576-8340.

    


    Name
      of
      Nominee in which Notes are to be issued:  None

    Taxpayer
      I.D. Number:  13-5582869

    


    
      
        
                

                    A-2     
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
               

              Name
                and Address of Purchaser

               

              New
                York Life Insurance and Annuity Corporation

              c/o
                New York Life Investment Management LLC

              51
                Madison Avenue

              New
                York, New York  10010-1603

              Attention:  Fixed
                Income Investors Group,

              Private
                Finance, 2nd
                Floor

              Fax
                Number:  (212) 447-4122

            	
              Principal
                Amount of

              Notes
                to be
                Purchased

               

               

              $19,000,000

               

            


    

     

    Payments

     

    All
      payments on or in respect of the Notes to be by bank wire transfer of Federal
      or
      other immediately available funds to:

    


    JPMorgan
      Chase Bank

    New
      York,
      New York

    ABA
      No.
      021-000-021

    Credit:
      New York Life Insurance and Annuity Corporation

    General
      Account No. 323-8-47382

    


    With
      sufficient information (including issuer, PPN number, interest rate, maturity
      and whether payment is of principal, premium, or interest) to identify the
      source and application of such funds.

    


    Notices

    


    All
      notices with respect to payments, written confirmations of such wire transfers
      and audit confirmations to be addressed:

    


    New
      York Life Insurance and Annuity
      Corporation

    c/o
      New York Life Investment Management
      LLC

    51
      Madison Avenue

    New
      York, New
      York  10010-1603

    Attention:  Financial
      Management, Securities Operations, 2nd Floor

    Fax
      Number:  (212)
      447-4160

    With
      electronic copy to:  FIIGLibrary@nylim.com

    


    
      
        
                

                    A-3      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    All
      other
      notices and communications to be addressed as first provided above, with a
      duplicate electronic copy to FIIGLibrary@nylim.com, and with a copy of
      any notices regarding defaults or Events of Default under the operative
      documents to:  Office of General Counsel, Investment Section, Room
      1016, Fax Number (212) 576-8340.

    


    Name
      of
      Nominee in which Notes are to be issued:  None

    Taxpayer
      I.D. Number:  13-3044743

    


    
      
        
                

                    A-4     
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
               

              Name
                and Address of Purchaser

               

              New
                York Life Insurance and Annuity Corporation Institutionally Owned
                Life
                Insurance Separate Account

              c/o
                New York Life Investment Management LLC

              51
                Madison Avenue

              New
                York, New York  10010-1603

              Attention:  Fixed
                Income Investors Group,

              Private
                Finance, 2nd
                Floor

              Fax
                Number:  (212) 447-4122

            	
              Principal
                Amount of

              Notes
                to be
                Purchased

               

               

              $500,000

               

            


    

     

    Payments

     

    All
      payments on or in respect of the Notes to be by bank wire transfer of Federal
      or
      other immediately available funds to:

    


    JPMorgan
      Chase Bank

    New
      York,
      New York

    ABA
      No.
      021-000-021

    Credit:
      NYLIAC SEPARATE BOLI 3 BROAD FIXED

    General
      Account No. 323-8-39002

    


    With
      sufficient information (including issuer, PPN number, interest rate, maturity
      and whether payment is of principal, premium, or interest) to identify the
      source and application of such funds.

    


    Notices

    


    All
      notices with respect to payments, written confirmations of such wire transfers
      and audit confirmations to be addressed:

    


    New
      York Life Insurance and Annuity
      Corporation

    Institutionally
      Owned Life Insurance
      Separate Account

    c/o
      New York Life Investment Management
      LLC

    51
      Madison Avenue

    New
      York, New
      York  10010-1603

    Attention:  Financial
      Management, Securities Operations, 2nd Floor

    Fax
      Number:  (212)
      447-4160

    With
      electronic copy to:  FIIGLibrary@nylim.com

    


    


    
      
        
                

                    A-5      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    All
      other
      notices and communications to be addressed as first provided above, with a
      duplicate electronic copy to FIIGLibrary@nylim.com, and with a copy of
      any notices regarding defaults or Events of Default under the operative
      documents to:  Office of General Counsel, Investment Section, Room
      1016, Fax Number (212) 576-8340.

    


    Name
      of
      Nominee in which Notes are to be issued:  None

    Taxpayer
      I.D. Number:  13-3044743

    


    
      
        
                

                    A-6      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
               

              Name
                and Address of Purchaser

               

              New
                York Life Insurance and Annuity Corporation Institutionally Owned
                Life
                Insurance Separate Account

              c/o
                New York Life Investment Management LLC

              51
                Madison Avenue

              New
                York, New York  10010-1603

              Attention:  Fixed
                Income Investors Group,

              Private
                Finance, 2nd
                Floor

              Fax
                Number:  (212) 447-4122

            	
              Principal
                Amount of

              Notes
                to be
                Purchased

               

               

              $500,000

               

            


    

     

    Payments

     

    All
      payments on or in respect of the Notes to be by bank wire transfer of Federal
      or
      other immediately available funds to:

    


    Chase
      Manhattan Bank

    New
      York,
      New York

    ABA
      No.
      021-000-021

    Credit:
      NYLIAC SEPARATE BOLI 3-2

    General
      Account No. 323-9-56793

    


    With
      sufficient information (including issuer, PPN number, interest rate, maturity
      and whether payment is of principal, premium, or interest) to identify the
      source and application of such funds.

    


    Notices

    


    All
      notices with respect to payments, written confirmations of such wire transfers
      and audit confirmations to be addressed:

    


    New
      York Life Insurance and Annuity
      Corporation

    Institutionally
      Owned Life Insurance
      Separate Account

    c/o
      New York Life Investment Management
      LLC

    51
      Madison Avenue

    New
      York, New
      York  10010-1603

    Attention:  Financial
      Management, Securities Operations, 2nd Floor, Room
      201

    Fax
      Number:  (212)
      447-4160

    With
      electronic copy to:  FIIGLibrary@nylim.com

    


    


    
      
        
                

                    A-7      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    All
      other
      notices and communications to be addressed as first provided above, with a
      duplicate electronic copy to FIIGLibrary@nylim.com, and with a copy of
      any notices regarding defaults or Events of Default under the operative
      documents to:  Office of General Counsel, Investment Section, Room
      1016, Fax Number (212) 576-8340.

    


    Name
      of
      Nominee in which Notes are to be issued:  None

    Taxpayer
      I.D. Number:  13-3044743

    


    
      
        
                

                    A-8      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
               

              Name
                and Address of Purchaser

               

              New
                York Life Insurance and Annuity Corporation Institutionally Owned
                Life
                Insurance Separate Account

              c/o
                New York Life Investment Management LLC

              51
                Madison Avenue

              New
                York, New York  10010-1603

              Attention:  Fixed
                Income Investors Group,

              Private
                Finance, 2nd
                Floor

              Fax
                Number:  (212) 447-4122

            	
              Principal
                Amount of

              Notes
                to be
                Purchased

               

               

              $500,000

               

            


    

     

    Payments

     

    All
      payments on or in respect of the Notes to be by bank wire transfer of Federal
      or
      other immediately available funds to:

    


    JPMorgan
      Chase Manhattan Bank

    New
      York,
      New York

    ABA
      No.
      021-000-021

    Credit:
      NYLIAC SEPARATE BOLI 30C

    General
      Account No. 304-6-23970

    


    With
      sufficient information (including issuer, PPN number, interest rate, maturity
      and whether payment is of principal, premium, or interest) to identify the
      source and application of such funds.

    


    Notices

    


    All
      notices with respect to payments, written confirmations of such wire transfers
      and audit confirmations to be addressed:

    


    New
      York Life Insurance and Annuity
      Corporation

    Institutionally
      Owned Life Insurance
      Separate Account

    c/o
      New York Life Investment Management
      LLC

    51
      Madison Avenue

    New
      York, New
      York  10010-1603

    Attention:  Financial
      Management, Securities Operations, 2nd Floor, Room
      201

    Fax
      Number:  (212)
      447-4160

    With
      electronic copy to:  FIIGLibrary@nylim.com

    


    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

    All
      other
      notices and communications to be addressed as first provided above, with a
      duplicate electronic copy to FIIGLibrary@nylim.com, and with a copy of
      any notices regarding defaults or Events of Default under the operative
      documents to:  Office of General Counsel, Investment Section, Room
      1016, Fax Number (212) 576-8340.

    


    Name
      of
      Nominee in which Notes are to be issued:  None

    Taxpayer
      I.D. Number:  13-3044743

    


    
      
        
                

                    A-10     
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
               

              Name
                and Address of Purchaser

               

              NYLIFE
                Insurance Company of Arizona

              c/o
                New York Life Investment Management LLC

              51
                Madison Avenue

              New
                York, New York  10010-1603

              Attention:  Fixed
                Income Investors Group,

              Private
                Finance, 2nd
                Floor

              Fax
                Number:  (212) 447-4122

            	
              Principal
                Amount of

              Notes
                to be
                Purchased

               

               

              $500,000

               

            


    

     

    Payments

     

    All
      payments on or in respect of the Notes to be by bank wire transfer of Federal
      or
      other immediately available funds to:

    


    JPMorgan
      Chase Bank

    New
      York,
      New York

    ABA
      No.
      021-000-021

    Credit:
      NYLIFE Insurance Company of Arizona

    General
      Account No. 323847633

    


    With
      sufficient information (including issuer, PPN number, interest rate, maturity
      and whether payment is of principal, premium, or interest) to identify the
      source and application of such funds.

    


    Notices

    


    All
      notices with respect to payments, written confirmations of such wire transfers
      and audit confirmations to be addressed:

    


    NYLIFE
      Insurance Company of
      Arizona

    c/o
      New York Life Investment Management
      LLC

    51
      Madison Avenue

    New
      York, New
      York  10010-1603

    Attention:  Financial
      Management, Securities Operations, 2nd Floor

    Fax
      Number:  (212)
      447-4160

    With
      electronic copy to:  FIIGLibrary@nylim.com

    


    


    
      
        
                

                    A-11      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    All
      other
      notices and communications to be addressed as first provided above, with a
      duplicate electronic copy to FIIGLibrary@nylim.com, and with a copy of
      any notices regarding defaults or Events of Default under the operative
      documents to:  Office of General Counsel, Investment Section, Room
      1016, Fax Number (212) 576-8340.

    


    Name
      of
      Nominee in which Notes are to be issued:  None

    Taxpayer
      I.D. Number:  52-1530175

     

    


    


    
      
        
                

                    A-12      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    Defined
      Terms

     

    As
      used
      herein, the following terms have the respective meanings set forth below or
      set
      forth in the Section hereof following such term:

     

    “Affiliate”
      shall mean, (a) at any time, and with respect to any Person, any other
      Person that at such time directly or indirectly through one or more
      intermediaries Controls, or is Controlled by, or is under common Control with,
      such first Person and (b) any Person beneficially owning or holding,
      directly or indirectly, 10% or more of any class of equity or Voting Stock
      of
      the Company or any Subsidiary or any Person of which the Company and its
      Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
      10% or more of any class of equity or Voting Stock.  As used in this
      definition, “Control” means the possession, directly or indirectly, of
      the power to direct or cause the direction of the management and policies of
      a
      Person, whether through the ownership of Voting Stock, by contract or
      otherwise.  Unless the context otherwise clearly requires, any
      reference to an “Affiliate” is a reference to an Affiliate of the
      Company.

     

    “Anti-Terrorism
      Order” shall mean Executive Order No. 13,224 of September 24, 2001
      (Executive Order Blocking Property and Prohibiting Transactions with Persons
      Who
      Commit, Threaten to Commit, or Support Terrorism, 66 U.S. Fed. Reg. 49,079
      (2001), as amended).

     

    “Asset
      Disposition” shall mean any Transfer except:

     

                     (a)any

     

                     (1)Transfer
      from a Restricted Subsidiary
      to the Company or a Wholly-Owned Restricted Subsidiary; and

     

                     (2)Transfer
      from the Company to a
      Wholly-Owned Restricted Subsidiary;

     

    so
      long
      as immediately before and immediately after the consummation of any such
      Transfer and after giving effect thereto, no Default or Event of Default shall
      exist (provided that, with respect to
Sections 10.1 and 10.2, calculation of
      compliance therewith shall be made as of any date of determination hereof and
      not as of the end of the immediately preceding fiscal quarter of the Company);
      and

     

                     (b)any
      Transfer made in the ordinary
      course of business and involving only property that is either (1) inventory
      held
      for sale or (2) equipment, fixtures, supplies or materials no longer required
      in
      the operation of the business of the Company or any of its Restricted
      Subsidiaries or that is obsolete.

     

    “Asset
      Disposition Prepayment Date” is defined in Section
      8.6(a).

     

    “Asset
      Disposition Prepayment Event” is defined in Section
      8.6(a).

     

    “Bank
      Credit Agreement” shall mean that certain Revolving Credit Facility by and
      among New Jersey Resources Corporation, PNC Bank, NA as Administrative Agent,
      the banks party thereto, JPMorgan Chase Bank, NA and Bank of America, N.A.,
      as
      Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company and Citicorp North
      America, Inc., as Documentation Agents and PNC Capital Markets, Inc.,
      as Lead Arranger, dated as of December 16, 2004, as the same may be
      amended, restated, increased, refinanced, replaced or otherwise modified or
      any
      successor thereto.

     

    “Business
      Day” shall mean (a) for purposes of Section 8.7
only, any day other than a Saturday, a Sunday or a day
      on which
      commercial banks in New York, New York are required or authorized to be closed
      and (b) for the purposes of any other provision of this Agreement, any day
      other than a Saturday, a Sunday or a day on which commercial banks in Wall,
      New
      Jersey or New York, New York are required or authorized to be
      closed.

     

    “Capital
      Lease” shall mean, at any time, a lease with respect to which the lessee is
      required concurrently to recognize the acquisition of an asset and the
      incurrence of a liability in accordance with GAAP.

     

    “Closing”
      is defined in Section 3.

     

    
      
        
        

      

      
        
          Schedule B

          (to Note Purchase Agreement)

        

        
          

        

      

      
        
        

      

    

    “Code”
      shall mean the Internal Revenue Code of 1986, as amended from time to time,
      and
      the rules and regulations promulgated thereunder from time to time.

     

    “Company”
      shall mean New Jersey Resources Corporation, a New Jersey corporation, or any
      Successor Corporation.

     

    “Confidential
      Information” is defined in Section 20.

     

    “Consolidated
      Shareholders’ Equity” shall mean, as of any date of determination, the sum
      of the amounts under the headings “Common Shareholders’ Equity” and “Preferred
      Shareholders’ Equity” on the balance sheet, prepared in accordance with GAAP,
      for the Company, its Restricted Subsidiaries and New Jersey Natural Gas on
      a
      consolidated basis.

     

    “Consolidated
      Tangible Assets” shall mean, as of any date of determination, the total
      assets of the Company, its Restricted Subsidiaries and New Jersey Natural Gas
      that would be shown as assets on a consolidated balance sheet of the Company,
      its Restricted Subsidiaries and New Jersey Natural Gas as of such time
      determined on a consolidated basis in accordance with GAAP after subtracting
      therefrom the aggregate amount of all intangible assets of the Company, its
      Restricted Subsidiaries and New Jersey Natural Gas, including, without
      limitation, all goodwill, franchises, licenses, patents, trademarks, trade
      name,
      copyrights, service marks and brand names.

     

    “Consolidated
      Tangible Net Worth” shall mean, as of any date of determination,
      (a) Consolidated Shareholders’ Equity minus (b) the net book
      amount of all assets of the Company, its Restricted Subsidiaries and New Jersey
      Natural Gas (after deducting reserves applicable thereto) that would be shown
      as
      intangible assets on a balance sheet, prepared in accordance with GAAP, for
      the
      Company, its Restricted Subsidiaries and New Jersey Natural Gas on a
      consolidated basis as of such date of determination.

     

    “Consolidated
      Total Capitalization” shall mean, as of any date of determination, the sum
      of (a) Consolidated Total Debt and (b) Consolidated Shareholders’
Equity.

     

    “Consolidated
      Total Debt” shall mean, as of any date of determination, without
      duplication, the total of all Debt of the Company, its Restricted Subsidiaries
      and New Jersey Natural Gas determined on a consolidated basis in accordance
      with
      GAAP.

     

    For
      purposes of determining “Consolidated Total Debt,” there shall be
      excluded from any such determination Debt of Securitization Subsidiaries that
      are Restricted Subsidiaries (but not Debt of the Company, any other Restricted
      Subsidiary or New Jersey Natural Gas) incurred pursuant to Receivables
      Securitization Transactions in an amount for principal and accrued and unpaid
      interest not to exceed $100,000,000 in the aggregate.

     

    “Debt”
      as to any Person at any time, shall mean, without duplication, any and all
      indebtedness, obligations or liabilities (whether matured or unmatured,
      liquidated or unliquidated, direct or indirect, absolute or contingent, or
      joint
      or several) of such Person for or in respect of: (a) borrowed money,
      (b) amounts raised under or liabilities in respect of any note purchase or
      acceptance credit facility, (c) reimbursement obligations (contingent or
      otherwise) under any letter of credit, currency swap agreement, interest rate
      swap, cap, collar or floor agreement or other interest rate or currency exchange
      rate management device, (d) any other transaction (including forward sale
      or purchase agreements, Capital Leases, Synthetic Leases and conditional sales
      agreements) having the commercial effect of a borrowing of money entered into
      by
      such Person to finance its operations or capital requirements (but not including
      trade payables and accrued expenses incurred in the ordinary course of business
      which are not represented by a promissory note or other evidence of indebtedness
      and which are not more than 30 days past due), (e) any Hedging Contract, to
      the
      extent that any net indebtedness, obligations or liabilities of such Person
      in
      respect thereof constitutes “indebtedness” as determined in accordance with
      GAAP, (f) any Guaranty of any Hedging Contract described in the immediately
      preceding clause (e), (g) any Guaranty of Debt for borrowed money, (h) any
      Hybrid Security described in clause (a) of the definition of Hybrid Security
      or
      (i) the mandatory repayment obligation of the issuer of any Hybrid Security
      described in clause (b) of the definition of Hybrid Security.

     

    “Debt
      Prepayment Application” shall mean, with respect to any Transfer of
      property, the application by the Company or its Restricted Subsidiaries of
      cash
      in an amount equal to the Net Proceeds Amount with respect to such Transfer
      to
      the pro rata payment of Senior Debt of the Company (other than Senior Debt
      owing
      to any of its Subsidiaries or any Affiliate and Senior Debt in respect of any
      revolving credit or similar credit facility providing the Company with the
      right
      to obtain loans or other extensions of credit from time to time, except to
      the
      extent that in connection with such payment of Senior Debt the availability
      of
      credit under such credit facility is permanently reduced by an amount not less
      than the amount of such proceeds applied to the payment of such Senior Debt),
      provided that in the course of making such application the Company
      shall offer to prepay each outstanding Note in accordance with
Section 8.6 in a principal amount that equals the Ratable
      Portion for such Note.

     

    “Default”
      shall mean an event or condition the occurrence or existence of which would,
      with the lapse of time or the giving of notice or both, become an Event of
      Default.

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

    “Default
      Rate” as of any date shall mean that rate of interest that is the greater
      of (a) 8.05% per annum or (b) 2.0% per annum over the rate of interest
      publicly announced by JPMorgan Chase Bank, N.A. in New York, New York as its
      “base” or “prime” rate.

    
       

    

    “Disclosure
      Documents” is defined in Section 5.3.

     

    “Disposition
      Value” shall mean, at any time, with respect to any property:

     

                     (a)in
      the case of property that does not
      constitute Subsidiary Stock, the book value thereof, valued at the time of
      such
      disposition in good faith by the Company, and

     

                     (b)in
      the case of property that
      constitutes Subsidiary Stock, an amount equal to that percentage of book value
      of the assets of the Subsidiary that issued such stock as is equal to the
      percentage that the book value of such Subsidiary Stock represents of the book
      value of all of the outstanding capital stock of such Subsidiary (assuming,
      in
      making such calculations, that all securities convertible into such capital
      stock are so converted and giving full effect to all transactions that would
      occur or be required in connection with such conversion) determined at the
      time
      of the disposition thereof, in good faith by the Company.

     

    “Distribution”
      shall mean, in respect of any corporation, association or other business entity:
      (a) dividends or other distributions or payments on capital stock or other
      equity interests of such corporation, association or other business entity
      (except distributions in such stock or other equity interests); and (b) the
      redemption or acquisition of such stock or other equity interests (except when
      solely in exchange for such stock or other equity interests) unless made,
      contemporaneously, from the net proceeds of a sale of such stock or other equity
      interests.

     

    “Electronic
      Delivery” is defined in Section 7.2(a).

     

    “Environmental
      Laws” shall mean any and all Federal, state, local, and foreign statutes,
      laws, regulations, ordinances, rules, judgments, orders, decrees, permits,
      concessions, grants, franchises, licenses, agreements or governmental
      restrictions relating to pollution and the protection of the environment or
      the
      release of any materials into the environment, including but not limited to
      those related to Hazardous Materials.

     

    “ERISA”
      shall mean the Employee Retirement Income Security Act of 1974, as amended
      from
      time to time, and the rules and regulations promulgated thereunder from time
      to
      time in effect.

     

    “ERISA
      Affiliate” shall mean any trade or business (whether or not incorporated)
      that is treated as a single employer together with the Company under
      Section 414 of the Code.

     

    “Event
      of Default” is defined in Section 11.

     

    “Exchange
      Act” shall mean the Securities Exchange Act of 1934, as
      amended.

     

    “Fair
      Market Value” shall mean, at any time and with respect to any property, the
      sale value of such property that would be realized in an arm’s-length sale at
      such time between an informed and willing buyer and an informed and willing
      seller (neither being under a compulsion to buy or sell).

     

    “GAAP”
      shall mean generally accepted accounting principles as in effect from time
      to
      time in the United States of America.

     

    “Governmental
      Authority” shall mean

     

                     (a)the
      government of

     

                     (1)the
      United States of America or any
      State or other political subdivision thereof, or

     

                     (2)any
      jurisdiction in which the Company
      or any Subsidiary conducts all or any part of its business, or which asserts
      jurisdiction over any properties of the Company or any Subsidiary,
      or

     

                     (b)any
      entity exercising executive,
      legislative, judicial, regulatory or administrative functions of, or pertaining
      to, any such government.

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

    “Guarantor” is
      defined in Section 2.2.

     

    “Guaranty”
      shall mean, with respect to any Person, any obligation (except the endorsement
      in the ordinary course of business of negotiable instruments for deposit or
      collection) of such Person guaranteeing or in effect guaranteeing any Debt,
      dividend or other obligation of any other Person in any manner, whether directly
      or indirectly, including, without limitation, obligations incurred through
      an
      agreement, contingent or otherwise, by such Person:

     

                     (a)to
      purchase such Debt or obligation or
      any property constituting security therefor;

     

                     (b)to
      advance or supply funds (1) for
      the purchase or payment of such Debt or obligation or (2) to maintain any
      working capital or other balance sheet condition or any income statement
      condition of any other Person or otherwise to advance or make available funds
      for the purchase or payment of such Debt or obligation;

     

                     (c)to
      lease properties or to purchase
      properties or services primarily for the purpose of assuring the owner of such
      Debt or obligation of the ability of any other Person to make payment of the
      Debt or obligation; or

     

                     (d)otherwise
      to assure the owner of such
      Debt or obligation against loss in respect thereof.

     

    In
      any
      computation of the Debt or other liabilities of the obligor under any Guaranty,
      the Debt or other obligations that are the subject of such Guaranty shall be
      assumed to be direct obligations of such obligor.

     

    “Guaranty
      Agreement” is defined in Section 2.2.

     

    “Hazardous
      Materials” shall mean any and all pollutants, toxic or hazardous wastes or
      any other substances that might pose a hazard to health or safety, the removal
      of which may be required or the generation, manufacture, refining, production,
      processing, treatment, storage, handling, transportation, transfer, use,
      disposal, release, discharge, spillage, seepage or filtration of which is or
      shall be restricted, prohibited or penalized by any applicable law (including,
      without limitation, asbestos, urea formaldehyde foam insulation and
      polychlorinated biphenyls), petroleum, petroleum products, lead based paint,
      radon gas or similar restricted, prohibited or penalized
      substances.

     

    “Hedging
      Contract” shall mean any transaction entered into by the Company, any of
      its Restricted Subsidiaries or New Jersey Natural Gas with respect to hedging
      or
      trading of gas contracts or other commodity, hedging contracts of any kind,
      or
      any derivatives or other similar financial instruments of the Company, its
      Restricted Subsidiaries and New Jersey Natural Gas.

     

    “holder”
      shall mean, with respect to any Note, the Person in whose name such Note is
      registered in the register maintained by the Company pursuant to
Section 13.1.

     

    “Hybrid
      Security” shall mean any of the following: (a) beneficial interests issued
      by a trust which constitutes a Subsidiary of the Company or any Guarantor
      substantially all of the assets of which trust are unsecured Debt of the Company
      or any Guarantor or any Subsidiary of the Company or any Guarantor or proceeds
      thereof, and all payments of such Debt are required to be, and are, distributed
      to the holders of beneficial interests in such trust promptly after receipt
      by
      such trust or (b) any shares of capital stock or other equity interests that,
      other than solely at the option of the issuer thereof, by their terms (or by
      the
      terms of any security into which they are convertible or exchangeable) are,
      or
      upon the happening of an event or the passage of time would be, required to
      be
      redeemed or repurchased, in whole or in part, or have, or upon the happening
      of
      an event or the passage of time would have, a redemption or similar
      payment.

     

    “Inactive
      Subsidiary” shall mean, at any time, any Subsidiary of any Person, which
      Subsidiary (a) does not conduct any business or have operations and
      (b) does not have total assets with a net book value, as of any date of
      determination, in excess of $100,000.

     

    “INHAM
      Exemption” is defined in Section 6.2(e).

     

    “Institutional
      Investor” shall mean (a) any original purchaser of a Note,
      (b) any holder of a Note holding (together with one or more of its
      affiliates) more than $2,000,000 of the aggregate principal amount of the Notes
      then outstanding, (c) any bank, trust company, savings and loan association
      or other financial institution, any pension plan, any investment company, any
      insurance company, any broker or dealer, or any other similar financial
      institution or entity, regardless of legal form and (d) any Related Fund of
      any holder of any Note.

     

    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

    “Investment”
      shall mean any investment, made in cash or by delivery of property, by any
      Person (a) in any other Person, whether by acquisition of stock, Debt or
      other obligation or security, or by loan, Guaranty, advance, capital
      contribution or otherwise or (b) in any property.

     

    “Lien”
      shall mean, with respect to any Person, any mortgage, lien, pledge, charge,
      security interest or other encumbrance, or any interest or title of any vendor,
      lessor, lender or other secured party to or of such Person under any conditional
      sale or other title retention agreement or Capital Lease or Synthetic Lease,
      upon or with respect to any property or asset of such Person (including in
      the
      case of stock, stockholder agreements, voting trust agreements and all similar
      arrangements).

     

    “Make-Whole
      Amount” is defined in Section 8.7.

     

    “Material”
      shall mean material in relation to the business, operations, affairs, financial
      condition, assets or properties of the Company, its Restricted Subsidiaries
      and
      New Jersey Natural Gas, taken as a whole.

     

    “Material
      Adverse Effect” shall mean a material adverse effect on (a) the
      business, operations, affairs, financial condition, assets or properties of
      the
      Company, its Restricted Subsidiaries and New Jersey Natural Gas, taken as a
      whole, or (b) the ability of the Company to perform its obligations under
      this Agreement and the Notes, (c) the ability of any Guarantor to perform
      its obligations under the Guaranty Agreement or (d) the validity or
      enforceability of this Agreement, the Notes or the Guaranty
      Agreement.

     

    “Memorandum”
      is defined in Section 5.3.

     

    “Multiemployer
      Plan” shall mean any Plan that is a “multiemployer plan” (as such term is
      defined in Section 4001(a)(3) of ERISA).

     

    “NAIC
      Annual Statement” is defined in Section
      6.2(a).

     

    “Net
      Proceeds Amount” shall mean, with respect to any Transfer of any Property
      by any Person, an amount equal to the difference of

     

                     (a)the
      aggregate amount of the
      consideration (valued at the Fair Market Value of such consideration at the
      time
      of the consummation of such Transfer) received by such Person in respect of
      such
      Transfer, minus

     

                     (b)all
      ordinary and reasonable
      out-of-pocket costs and expenses actually incurred by such Person in connection
      with such Transfer.

     

    “New
      Jersey Natural Gas” shall mean New Jersey Natural Gas Company, a
      corporation organized and existing under the laws of the State of New Jersey,
      which corporation is a wholly-owned Subsidiary of the Company.

     

    “Notes”
      is defined in Section 1.1.

     

    “Officer’s
      Certificate” shall mean a certificate of a Senior Financial Officer or of
      any other officer of the Company whose responsibilities extend to the subject
      matter of such certificate.

     

    “PBGC”
      shall mean the Pension Benefit Guaranty Corporation referred to and defined
      in
      ERISA or any successor thereto.

     

    “Permitted
      Related Business Opportunity” shall mean any transaction with another
      Person (other than any Inactive Subsidiary of the Company) involving business
      activities or assets reasonably related or complementary to the business of
      the
      Company, its Restricted Subsidiaries and New Jersey Natural Gas as conducted
      on
      the date of the Closing or as may be conducted pursuant to
Section 10.11, including, without limitation, the
      management and marketing of storage, capacity and transportation of gas and
      other forms of energy, the generation, transmission or storage of gas and other
      forms of energy, or the access to gas and energy transmission lines, and
      business initiatives for the conservation and efficiency of gas and
      energy.

     

    “Person”
      shall mean an individual, partnership, corporation, limited liability company,
      association, trust, unincorporated organization or a government or agency or
      political subdivision thereof.

     

    
      
        
        

      

      
        B-5

        
          

        

      

      
        
        

      

    

    “Plan”
      shall mean an “employee benefit plan” (as defined in Section 3(3) of ERISA)
      subject to Title I of ERISA that is or, within the preceding five years, has
      been established or maintained, or to which contributions are or, within the
      preceding five years, have been made or required to be made, by the Company
      or
      any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
      may have any liability.

     

    “Priority
      Debt” shall mean (without duplication) the sum of (a) unsecured Debt of
      Restricted Subsidiaries other than (1) Debt owed to the Company or a
      Wholly-Owned Restricted Subsidiary, (2) Debt outstanding at the time such
      Person became a Subsidiary provided that such Debt shall not have been
      incurred in contemplation of such Person becoming a Subsidiary and
      (3) unsecured Debt of a Guarantor under (i) the Guaranty Agreement and
      (ii) other Guaranties of Debt of the Company permitted to exist pursuant to
Section 10.1 and (b) Debt of the Company secured by a Lien and
      Debt of any of its Restricted Subsidiaries secured by a Lien, in each case,
      other than Liens permitted by paragraphs (a) through (k) of Section
      10.3.

     

    “property”
      or “properties” shall mean, unless otherwise specifically limited, real
      or personal property of any kind, tangible or intangible, choate or
      inchoate.

     

    “Property
      Reinvestment Application” shall mean, with respect to any Transfer of
      property, the application of an amount equal to the Net Proceeds Amount with
      respect to such Transfer to the acquisition by the Company or any Restricted
      Subsidiary of operating assets of the Company or any Restricted Subsidiary
      to be
      used in the principal business of such Person.

     

    “Purchaser”
      is defined in the first paragraph of this Agreement.

     

    “PTE”
      is defined in Section 6.2(a).

     

    “QPAM
      Exemption” is defined in Section 6.2(d).

     

    “Ratable
      Portion” for any Note shall mean an amount equal to the product of
      (a) the Net Proceeds Amount from a Transfer being applied to a Debt
      Prepayment Application pursuant to
Section 10.6(b)multiplied by (b) a fraction,
      the numerator of which is the aggregate outstanding principal amount of such
      Note and the denominator of which is the aggregate outstanding principal amount
      of all Senior Debt of the Company (other than Senior Debt owing to any of its
      Subsidiaries or any Affiliate).

     

    “Receivables
      Securitization Transaction” shall mean any transaction pursuant to which
      the Company or any Restricted Subsidiary Transfers accounts receivable to a
      Securitization Subsidiary and such Securitization Subsidiary incurs Debt in
      connection with the purchase of such accounts receivable and grants a security
      interest in such accounts receivable as collateral security for such Debt;
      provided that such Debt is non-recourse to the Company and the other
      Restricted Subsidiaries other than with respect to representations, warranties
      and indemnities entered into by the Company or the applicable Restricted
      Subsidiary in connection with such transaction that are customary in
      non-recourse securitization of receivables transactions.

     

    “Regulated
      Entity” shall mean any Person that is subject under law to any of the laws,
      rules or regulations respecting the financial, organizational or rate regulation
      of electric companies, public utilities or public utility holding
      companies.

     

    “Required
      Holders” shall mean, at any time, the holders of more than 50% in principal
      amount of the Notes at the time outstanding (exclusive of Notes then owned
      by
      the Company or any of its Affiliates).

     

    “Related
      Fund” shall mean, with respect to any holder of any Note, any fund or
      entity that (a) invests in securities or bank loans and (b) is advised or
      managed by such holder, the same investment advisor as such holder or by an
      Affiliate of such holder or such investment advisor.

     

    “Responsible
      Officer” shall mean any Senior Financial Officer and any other officer of
      the Company with responsibility for the administration of the relevant portion
      of this Agreement.

     

    
      
        
        

      

      
        B-6

        
          

        

      

      
        
        

      

    

    “Restricted
      Payment” shall mean any Distribution in respect of the Company or any
      Restricted Subsidiary (other than on account of capital stock or other equity
      interests of a Restricted Subsidiary owned legally and beneficially by the
      Company or another Restricted Subsidiary), including, without limitation, any
      Distribution resulting in the acquisition by the Company or any Restricted
      Subsidiary of securities that would constitute treasury stock.  For
      purposes of this Agreement, the amount of any Restricted Payment made in
      property shall be the greater of (a) the Fair Market Value of such property
      (determined in good faith by the Board of Directors (or equivalent governing
      body) of the Person making such Restricted Payment) and (b) the net book value
      thereof on the books of such Person, in each case determined as of the date
      on
      which such Restricted Payment is made.

     

    “Restricted
      Subsidiary” shall mean each Subsidiary that is either (a) designated
      as a Restricted Subsidiary on Schedule 5.4 or
      (b) designated as a Restricted Subsidiary by the Board of Directors of the
      Company in accordance with Section 10.13.

     

    “Restricted
      Subsidiary Stock” shall mean Subsidiary Stock of any Restricted
      Subsidiary.

     

    “Securities
      Act” shall mean the Securities Act of 1933, as amended from time to time
      and the rules and regulations promulgated thereunder from time to time in
      effect.

     

    “Securitization
      Subsidiary” shall mean any Restricted Subsidiary that (a) has been created
      for the sole purpose and business of purchasing and owning the accounts
      receivable of the Company or any other Restricted Subsidiary, (b) has no Debt
      outstanding other than Debt incurred in connection with the purchase of such
      accounts receivable and (c) does not, and by the terms of its organizational
      documents or contractual obligations to which it or its property is then bound
      can not, own or hold any other assets or participate in any other business
      or
      incur any other Debt.

     

    “Senior
      Debt” shall mean any Debt of the Company other than Debt that is in any
      manner subordinated in right of payment or security in any respect to the Debt
      evidenced by the Notes.

     

    “Senior
      Financial Officer” shall mean the chief financial officer, principal
      accounting officer, treasurer or comptroller of the Company.

     

    “Significant
      Subsidiary” shall mean at any time (a) each Guarantor, (b) each other
      Restricted Subsidiary that would at such time constitute a “significant
      subsidiary” (as such term is defined in Regulation S-X of the Securities and
      Exchange Commission as in effect on the date of the Closing) of the Company
      and
      (c) New Jersey Natural Gas.

     

    “Source”
      is defined in Section 6.2.

     

    “Subsidiary”
      shall mean, as to any Person, any corporation, association or other business
      entity in which such Person or one or more of its Subsidiaries or such Person
      and one or more of its Subsidiaries owns sufficient Voting Stock to enable
      it or
      them (as a group) ordinarily, in the absence of contingencies, to elect a
      majority of the directors (or Persons performing similar functions) of such
      entity, and any partnership or joint venture if more than a 50% interest in
      the
      profits or capital thereof is owned by such Person or one or more of its
      Subsidiaries or such Person and one or more of its Subsidiaries (unless such
      partnership or joint venture can and does ordinarily take major business actions
      without the prior approval of such Person or one or more of its
      Subsidiaries).  Unless the context otherwise clearly requires, any
      reference to a “Subsidiary” is a reference to a Subsidiary of the
      Company.

     

    “Subsidiary
      Stock” shall mean, with respect to any Person, the stock (or any options or
      warrants to purchase stock or other securities exchangeable for or convertible
      into stock) of any Subsidiary of such Person.

     

    “Supplement”
      is defined in Section 9.7(a).

     

    “Synthetic
      Lease” shall mean any lease transaction under which the parties intend that
      (a) the lease will be treated as an “operating lease” by the lessee
      pursuant to Statement of Financial Accounting Standards No. 13, as amended,
      or
      appropriate successor thereto, and (b) the lessee will be entitled to
      various tax benefits ordinarily available to owners (as opposed to lessees)
      of
      like property.

     

    
      
        
        

      

      
        B-7

        
          

        

      

      
        
        

      

    

    “Transfer”
      shall mean, with respect to any Person, any transaction in which such Person
      sells, conveys, transfers or leases (as lessor) any of its property, including,
      without limitation, Subsidiary Stock.  For purposes of determining the
      application of the Net Proceeds Amount in respect of any Transfer, the Company
      may designate any Transfer as one or more separate Transfers each yielding
      a
      separate Net Proceeds Amount.  In any such case, (a) the
      Disposition Value of any property subject to each such separate Transfer and
      (b) the amount of Consolidated Tangible Assets attributable to any property
      subject to each such separate Transfer shall be determined by ratably allocating
      the aggregate Disposition Value of, and the aggregate Consolidated Tangible
      Assets attributable to, all property subject to all such separate Transfers
      to
      each such separate Transfer on a proportionate basis.

     

    “Unrestricted
      Subsidiary” shall mean each Subsidiary that is either (a) designated
      as an Unrestricted Subsidiary on Schedule 5.4 or
      (b) designated an Unrestricted Subsidiary by the Board of Directors of the
      Company in accordance with Section 10.13.  For
      the avoidance of doubt, any Subsidiary which has not been designated as either
      a
      Restricted Subsidiary or Unrestricted Subsidiary shall be deemed to be an
      Unrestricted Subsidiary.

     

    “USA
      Patriot Act” shall mean United States Public Law 107-56, Uniting and
      Strengthening America by Providing Appropriate Tools Required to Intercept
      and
      Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
      and the rules and regulations promulgated thereunder from time to time in
      effect.

     

    “Voting
      Stock” shall mean any securities of any class of a Person whose holders are
      entitled under ordinary circumstances to vote for the election of directors
      of
      such Person (or Persons performing similar functions) irrespective of whether
      at
      the time securities of any other class shall have or might have voting power
      by
      reason of the happening of any contingency.

     

    “Wholly-Owned
      Restricted Subsidiary” shall mean, at any time, any Restricted Subsidiary
      100% of all of the equity interests (except directors’ qualifying shares) and
      voting interests of which are owned by any one or more of the Company and the
      Company’s other Wholly-Owned Restricted Subsidiaries at such time.

    


    
      
        
                

                  B-8      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


     

    Changes
      in Corporate Structure

     

    None.

     

    


    


    
      
        
                

                    Schedule
              4.10      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    Disclosure
      Materials

     

    None.

     

    


    


    
      
        
                

                    Schedule
              5.3      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      New
        Jersey Resources Corporation

      Corporate
        Structure

      


      Subsidiaries
        of the Company and

      Ownership
        of Subsidiary Stock

    

     

    

     

     

    


    
      
        
                

                    Schedule
              5.4      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    

      


      
        	
                Subsidiary

              	
                Jurisdiction
                  of Incorporation/

                Formation

              	
                Percentage
                  Ownership

              	
                Shareholder/

                Partner

              	
                Status

              	
                Regulated

              
	
                    
                  New Jersey Natural Gas Company

              	
                New
                  Jersey

              	
                100

              	
                New
                  Jersey Resources Corporation

              	
                Unrestricted

              	
                Yes

              
	
                    
                  NJR Energy Services Company

              	
                New
                  Jersey

              	
                100

              	
                New
                  Jersey Resources Corporation

              	
                Restricted

              	
                No

              
	
                    
                  NJR Storage Partners

              	
                A
                  New Jersey General Partnership

              	
                99

                 

                 

                1

              	
                NJR
                  Energy Services Company 

                (Managing
                  Partner)

                 

                New
                  Jersey Resources Corporation

              	
                Unrestricted

              	
                No

              
	
                    
                  NJR Retail Holdings Corporation

              	
                New
                  Jersey

              	
                100

              	
                New
                  Jersey Resources Corporation

              	
                Restricted

              	
                No

              
	
                    
                  NJR Home Services Company

              	
                New
                  Jersey

              	
                100

              	
                NJR
                  Retail Holdings Corporation

              	
                Restricted

              	
                No

              
	
                    
                  NJR Plumbing Services, Inc.

              	
                New
                  Jersey

              	
                100

              	
                NJR
                  Home Services Company

              	
                Restricted

              	
                No

              
	
                    
                  NJR Capital Services Corporation

              	
                New
                  Jersey

              	
                100

              	
                New
                  Jersey Resources Corporation

              	
                Restricted

              	
                No

              
	
                    
                  NJR Storage Holdings Company

              	
                Delaware

              	
                100

              	
                NJR
                  Energy Holdings Corporation

              	
                Unrestricted

              	
                No

              
	
                    
                  NJR Steckman Ridge Storage Company

              	
                Delaware

              	
                100

              	
                NJR
                  Storage Holdings Company

              	
                Unrestricted

              	
                No

              
	
                    
                  Commercial Realty and Resources Corp.

              	
                New
                  Jersey

              	
                100

              	
                NJR
                  Capital Services Corporation

              	
                Restricted

              	
                No

              
	
                    
                  NJR Investment Company

              	
                New
                  Jersey

              	
                100

              	
                NJR
                  Capital Services Corporation

              	
                Inactive
                  Restricted

              	
                No

              
	
                    
                  NJR Energy Holdings Corporation

              	
                New
                  Jersey

              	
                100

              	
                NJR
                  Capital Services Corporation

              	
                Unrestricted

              	
                No

              
	
                    
                  NJR Energy Corporation

              	
                New
                  Jersey

              	
                100

              	
                NJR
                  Energy Holdings Corporation

              	
                Unrestricted

              	
                No

              
	
                    
                  NJR Pipeline Company

              	
                New
                  Jersey

              	
                100

              	
                NJR
                  Energy Corporation

              	
                Unrestricted

              	
                No

              
	
                NJNR
                  Pipeline Company

              	
                New
                  Jersey

              	
                100

              	
                NJR
                  Energy Corporation

              	
                Unrestricted

              	
                No

              
	
                    
                  NJR Service Corporation

              	
                New
                  Jersey

              	
                100

              	
                New
                  Jersey Resources Corporation

              	
                Inactive
                  Restricted

              	
                No

              


      


      
        
          
          

        

        
          5.4-2

          
            

          

        

        
          
          

        

      

    

    


    Financials

    


    


     

    
      NEW
        JERSEY RESOURCES CORPORATION

       

    

    Annual
      Reports for the each of the Fiscal Years Ended September 30, 2002 through
      September 30, 2006

     

    Quarterly
      Report on Form 10-Q for the Quarterly Period Ended June 30,
      2007

     

    NEW
      JERSEY NATURAL GAS COMPANY

     

    Annual
      Reports for the each of the Fiscal Years Ended September 30, 2002 through
      September 30, 2006

     

    Quarterly
      Report for the Quarterly Period Ended June 30, 2007

    


    


    


    
      
        
                

                    Schedule
              5.5      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    CERTAIN
      LITIGATIONS

     

    Actions,
      suits and proceedings described in Note 12 to New Jersey Resources
      Corporation’s Quarterly Report on Form 10-Q for the quarter ended
      June 30, 2007.

     

    


    


    
      
        
                

                    Schedule
              5.8      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    Patents,
      Etc.

     

    None.

     

    


    


    
      
        
                

                    Schedule
              5.11      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    USE
      OF PROCEEDS

     

    The
      Company will apply the proceeds of the sale of the Notes to the repayment of
      existing short-term debt and for its general corporate purposes.

     

    


    


    
      
        
                

                    Schedule
              5.14      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


     

    EXISTING
      DEBT

    AS
      OF JUNE 30, 2007

     

    


     

    New
      Jersey Resources Corporation

     

    As
      of
      June 30, 2007, there was $85,400,000.00 of outstanding unsecured Debt of the
      Company and its Restricted Subsidiaries under the terms of its revolving credit
      facility as evidenced by that certain Credit Agreement dated as of December
      16,
      2004, as amended, by and among the borrower and the banks party hereto and
      PNC
      Bank, N.A., as Administrative Agent and JP Morgan Chase Bank NA and Bank of
      America, as Syndication Agents and Bank of Tokyo-Mitsubishi Trust Company and
      Citicorp North America, Inc., as Documentation Agents and PNC Capital Markets,
      Inc., as Lead Arranger.

    


    
      	
              June
                30, 2007

            	 	 	 	 	 
	
              ($000)

            	
              Rate

            	 	
              Maturity
                Date

            	 	
              Principal
                Amt.

            
	
              Unsecured
                Senior Notes

            	
              3.75%

            	 	
              3/15/09

            	 	
              25,000

            
	 	 	 	 	 	 
	
              Total

            	 	 	 	 	
              $25,000

            


    

    


    


    NJR
      Energy Services

     

    As
      of
      June 30, 2007, there was $30,000,000.00 of outstanding unsecured Debt of the
      Company under terms of a credit agreement dated as of October 12, 2006 and
      is by
      and among New Jersey Resources Corporation, a New Jersey corporation, NJR Energy
      Services Company, a New Jersey corporation and Bank of Tokyo-Mitsubishi UFJ
      Trust Company, a New York trust company.

    


     

    


    
      
        
                

                    Schedule
              5.15      
      

                    (to
              Note
              Purchase
              Agreement)      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
 

    New
      Jersey Natural Gas Company

     

    
      	
              June
                30, 2007

            	 	 	 	 	 
	
              ($000)

            	
              Rate

            	 	
              Maturity
                Date

            	 	
              Principal
                Amt.

            
	
              First
                Mortgage Bonds (Secured)

               

            	 	 	 	 	 
	
              Series
                X

            	
              6.27%

            	 	
              11/1/08

            	 	
              30,000

            
	
              Series
                AA

            	
              Var.

            	 	
              8/1/30

            	 	
              25,000

            
	
              Series
                BB

            	
              Var.

            	 	
              8/1/30

            	 	
              16,000

            
	
              Series
                CC

            	
              6.88%

            	 	
              10/1/10

            	 	
              20,000

            
	
              Series
                DD

            	
              Var.

            	 	
              9/1/27

            	 	
              13,500

            
	
              Series
                EE

            	
              Var.

            	 	
              1/1/28

            	 	
              9,545

            
	
              Series
                FF

            	
              Var.

            	 	
              1/1/28

            	 	
              15,000

            
	
              Series
                GG

            	
              Var.

            	 	
              4/1/33

            	 	
              18,000

            
	
              Series
                HH

            	
              5%

            	 	
              12/1/38

            	 	
              12,000

            
	
              Series
                II

            	
              4.5%

            	 	
              8/1/30

            	 	
              10,300

            
	
              Series
                JJ

            	
              4.6%

            	 	
              8/1/24

            	 	
              10,500

            
	
              Series
                KK

            	
              4.9%

            	 	
              10/1/40

            	 	
              6,500

            
	
              Loan
                with State Authority

            	 	 	
              10/1/40

            	 	
              8,500

            
	 	 	 	 	 	 
	
              Sub-total
                First Mortgage Bonds

            	 	 	 	 	
              194,845

            
	 	 	 	 	 	 
	
              Unsecured
                Senior Notes

            	 	 	
              3/15/14

            	 	
              60,000

            
	
              Capital
                Lease Obligation – Bldg

            	 	 	
              6/1/21

            	 	
              27,389

            
	
              Capital
                Lease Obligation – Meters

            	 	 	
              10/1/12

            	 	
              31,497

            
	
              Commercial
                Paper (Unsecured)

            	 	 	 	 	
              111,679

            
	
              Less:
                Current maturities of long-term debt

            	 	 	 	 	
              (4,266)

            
	 	 	 	 	 	 
	
              Total

            	 	 	 	 	
              $421,144

            


    

    


    


    
      
        
                

                    5.15-2      
      

                    
      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    Form
      of Note

     

    New
      Jersey Resources Corporation

     

    6.05%
      Senior Note due September 24, 2017

     

    No.
      R-_______ __________ ___, 20___

    $____________ CUSIP
      646025 AA4

     

    For
      Value
      Received, the undersigned, New Jersey Resources Corporation (herein called
      the
“Company”), a corporation organized and existing under the laws of the
      State of New Jersey, hereby promises to pay to ________________, or registered
      assigns, the principal sum of ________________ Dollars on September 24, 2017,
      with interest (computed on the basis of a 360-day year of twelve 30-day months)
      (a) on the unpaid balance thereof at the rate of 6.05% per annum from the
      date hereof, payable semiannually, on the fifteenth day of March and September
      in each year, commencing with the March 15 or September 15 next succeeding
      the
      date hereof, until the principal hereof shall have become due and payable,
      and
      (b) to the extent permitted by law on any overdue payment (including any
      overdue prepayment) of principal, any overdue payment of interest and any
      overdue payment of any Make-Whole Amount (as defined in the Note Purchase
      Agreement referred to below), payable semiannually as aforesaid (or, at the
      option of the registered holder hereof, on demand), at a rate per annum from
      time to time equal to the Default Rate (as defined in the Note Purchase
      Agreement referred to below).

     

    Payments
      of principal of, interest on and any Make-Whole Amount with respect to this
      Note
      are to be made in lawful money of the United States of America at the principal
      offices of JPMorgan Chase Bank, N.A. in New York, New York or at such other
      place as the Company shall have designated by written notice to the holder
      of
      this Note as provided in the Note Purchase Agreement referred to
      below.

     

    This
      Note
      is one of a series of 6.05% Senior Notes (herein called the “Notes”)
      issued pursuant to that certain Note Purchase Agreement dated as of
      September 24, 2007 (as from time to time amended, the “Note Purchase
      Agreement”), between the Company and the respective Purchasers named
      therein and is entitled to the benefits thereof.  Each holder of this
      Note will be deemed, by its acceptance hereof, (1) to have agreed to the
      confidentiality provisions set forth in Section 20 of the
      Note Purchase Agreement and (2) to have made the representation set forth
      in Section 6.2 of the Note Purchase
      Agreement.

     

    This
      Note
      is a registered Note and, as provided in the Note Purchase Agreement, upon
      surrender of this Note for registration of transfer, duly endorsed, or
      accompanied by a written instrument of transfer duly executed, by the registered
      holder hereof or such holder’s attorney duly authorized in writing, a new Note
      for a like principal amount will be issued to, and registered in the name of,
      the transferee.  Prior to due presentment for registration of
      transfer, the Company may treat the person in whose name this Note is registered
      as the owner hereof for the purpose of receiving payment and for all other
      purposes, and the Company will not be affected by any notice to the
      contrary.

     

    This
      Note
      is subject to prepayment, in whole or from time to time in part, at the times
      and on the terms specified in the Note Purchase Agreement, but not
      otherwise.

     

    If
      an
      Event of Default, as defined in the Note Purchase Agreement, occurs and is
      continuing, the principal of this Note may be declared or otherwise become
      due
      and payable in the manner, at the price (including any applicable Make-Whole
      Amount) and with the effect provided in the Note Purchase
      Agreement.

     

    This
      Note
      shall be construed and enforced in accordance with, and the rights of the
      parties shall be governed by, the laws of the State of New York excluding the
      choice of law principles of the law of such State that would require the
      application of the laws of a jurisdiction other than such State.

    


    
      	
               

            	
              New
                Jersey Resources Corporation

            


    

    


    


    
      	
               

            	
              By____________________________________

            


    

    
      	
               

            	
              Its

            	 


    

    


    
      
        
                

                   E-1-1      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    Form
      of Subsidiary Guaranty Agreement

     

    


    Re:                      6.05%
      Senior Notes due September 24, 2017

    of

    New
      Jersey Resources Corporation

     

    This
      Subsidiary Guaranty Agreement dated as of September 24, 2007 (this
“Guaranty”) is entered into on a joint and several basis by each of the
      undersigned, together with any entity which may become a party hereto by
      execution and delivery of a Subsidiary Guaranty Supplement in substantially
      the
      form set forth as Exhibit A hereto (a “Guaranty Supplement”)
      (which parties are hereinafter referred to individually as a
“Guarantor” and collectively as the
“Guarantors”).

     

    Recitals

     

    A.           Each
      Guarantor is a direct or indirect subsidiary of New Jersey Resources
      Corporation, a corporation organized under the laws of the State of New Jersey
      (the “Company”).

     

    B.           The
      Company is concurrently herewith entering into that certain Note Purchase
      Agreement dated as of September 24, 2007 (as the same may be amended,
      supplemented, restated or otherwise modified from time to time, the “Note
      Purchase Agreement”) between the Company and each of the institutional
      investors named on Schedule A attached thereto (the “Purchasers”),
      providing for, among other things, the issue and sale by the Company to the
      Purchasers of $50,000,000 aggregate principal amount of its 6.05% Senior Notes
      due September 24, 2017 (the “Notes”).  The Purchasers
      together with their respective successors and assigns are collectively referred
      to herein as the “Holders.”

     

    C.           The
      Purchasers have required as a condition of their purchase of the Notes that
      the
      Company cause each of the undersigned to enter into this Guaranty and, upon
      (1) the formation or acquisition of a new Restricted Subsidiary (other than
      a Regulated Entity), (2) the occurrence of any other event creating a new
      Restricted Subsidiary (other than a Regulated Entity), (3) the designation
      of an Unrestricted Subsidiary (other than a Regulated Entity) as a Restricted
      Subsidiary or (4) an Unrestricted Subsidiary becoming or being a guarantor
      or
      co-obligor in respect of the Bank Credit Agreement, to cause each such
      Subsidiary to execute a Guaranty Supplement, provided that clause (4)
      above shall not apply to NJR Energy Corporation or NJNR Pipeline
      Company prior to December 17, 2007, in each case in order to induce the
      Purchasers to purchase the Notes and thereby benefit the Company and its
      Subsidiaries by providing funds to the Company for the repayment of existing
      debt and for its general corporate purposes.

     

    Now,
      therefore, as required by Section 4.4 of the Note Purchase Agreement and in
      consideration of the premises and other good and valuable consideration, the
      receipt and sufficiency whereof are hereby acknowledged, each Guarantor does
      hereby covenant and agree, jointly and severally, as follows:

     

    
      	
              Section 1.

            	
              Definitions.

            


    

     

    Capitalized
      terms used herein shall have the meanings set forth in the Note Purchase
      Agreement unless otherwise defined herein.

     

    
      	
              Section 2.

            	
              Guaranty
                of Notes and Note Purchase
                Agreement.

            


    

     

    (a)           Each
      Guarantor jointly and severally does hereby irrevocably, absolutely and
      unconditionally guarantee unto the Holders:  (1) the full and
      prompt payment of the principal of, Make-Whole Amount, if any, and interest
      on
      the Notes from time to time outstanding, as and when such payments shall become
      due and payable whether by lapse of time, upon redemption or prepayment, by
      extension or by acceleration or declaration or otherwise (including, to the
      extent permitted by applicable law, interest due on overdue payments of
      principal, Make-Whole Amount, if any, or interest at the rate set forth in
      the
      Notes) in Federal or other immediately available funds of the United States
      of
      America which at the time of payment or demand therefor shall be legal tender
      for the payment of public and private debts, (2) the full and prompt performance
      and observance by the Company of each and all of the obligations, covenants
      and
      agreements required to be performed or owed by the Company under the terms
      of
      the Notes and the Note Purchase Agreement and (3) the full and prompt
      payment, upon demand by any Holder of all costs and expenses, legal or otherwise
      (including reasonable attorneys’ fees), if any, as shall have been expended or
      incurred in the protection or enforcement of any rights, privileges or
      liabilities in favor of the Holders under or in respect of the Notes and the
      Note Purchase Agreement, or under this Guaranty or in any consultation or action
      in connection therewith or herewith.

     

    
      
        
        

      

      
        
          Exhibit 2

          (to Note Agreement)

        

        
          

        

      

      
        
        

      

    

    (b)           To
      the extent that any Guarantor shall make a payment hereunder (a
“Payment”) which, taking into account all other Payments previously or
      concurrently made by any of the other Guarantors, exceeds the amount which
      such
      Guarantor would otherwise have paid if each Guarantor had paid the aggregate
      obligations satisfied by such Payment in the same proportion as such Guarantor’s
“Allocable Amount” (as hereinafter defined) in effect immediately prior to such
      Payment bore to the Aggregate Allocable Amount (as hereinafter defined) of
      all
      of the Guarantors in effect immediately prior to the making of such Payment,
      then such Guarantor shall be entitled to contribution and indemnification from,
      and be reimbursed by, each of the other Guarantors for the amount of such
      excess, pro rata based upon their respective Allocable Amounts in
      effect immediately prior to such Payment.

     

    As
      of any
      date of determination, (1) the “Allocable Amount” of any Guarantor shall be
      equal to the maximum amount which could then be claimed by the Holders under
      this Guaranty without rendering such claim voidable or avoidable under Section
      548 of Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Sec. 101
      et. seq.) or under any applicable state Uniform Fraudulent Transfer
      Act, Uniform Fraudulent Conveyance Act or similar statute or common law; and
      (2)
      the “Aggregate Allocable Amount” shall be equal to the sum
      of each Guarantor’s Allocable Amount.

     

    This
      clause (b) is intended only to define the relative rights of the Guarantors,
      and
      nothing set forth in this clause (b) is intended to or shall impair the
      obligations of the Guarantors, jointly and severally, to pay any amounts to
      the
      Holders as and when the same shall become due and payable in accordance
      herewith.

     

    Each
      Guarantor acknowledges that the rights of contribution and indemnification
      hereunder shall constitute an asset in favor of any Guarantor to which such
      contribution and indemnification is owing.

     

    
      	
              Section 3.

            	
              Guaranty
                of Payment and
                Performance.

            


    

     

    This
      is
      an irrevocable, absolute and unconditional guarantee of payment and performance
      and each Guarantor hereby waives, to the fullest extent permitted by law, any
      right to require that any action on or in respect of any Note or the Note
      Purchase Agreement be brought against the Company or any other Person or that
      resort be had to any direct or indirect security for the Notes or for this
      Guaranty or any other remedy.  Any Holder may, at its option, proceed
      hereunder against any Guarantor in the first instance to collect monies when
      due, the payment of which is guaranteed hereby, without first proceeding against
      the Company or any other Person and without first resorting to any direct or
      indirect security for the Notes or for this Guaranty or any other
      remedy.  The liability of each Guarantor hereunder shall in no way be
      affected or impaired by any acceptance by any Holder of any direct or indirect
      security for, or other guaranties of, any Debt, liability or obligation of
      the
      Company or any other Person to any Holder or by any failure, delay, neglect
      or
      omission by any Holder to realize upon or protect any such guarantees, Debt,
      liability or obligation or any notes or other instruments evidencing the same
      or
      any direct or indirect security therefor or by any approval, consent, waiver,
      or
      other action taken, or omitted to be taken by any such Holder.

     

    The
      covenants and agreements on the part of the Guarantors herein contained shall
      take effect as joint and several covenants and agreements, and references to
      the
      Guarantors shall take effect as references to each of them and none of them
      shall be released from liability hereunder by reason of this Guaranty ceasing
      to
      be binding as a continuing security on any other of them.

     

    
      	
              Section 4.

            	
              General
                Provisions Relating to this
                Guaranty.

            


    

     

    (a)           Each
      Guarantor hereby consents and agrees that any Holder or Holders from time to
      time, with or without any further notice to or assent from any other Guarantor
      may, without in any manner affecting the liability of any Guarantor under this
      Guaranty, and upon such terms and conditions as any such Holder or Holders
      may
      deem advisable:

     

                     (1)extend
      in whole or in part (by renewal
      or otherwise), modify, change, compromise, release or extend the duration of
      the
      time for the performance or payment of any Debt, liability or obligation of
      the
      Company or of any other Person (including, without limitation, any other
      Guarantor) secondarily or otherwise liable for any Debt, liability or obligation
      of the Company on the Notes, or waive any Default or Event of Default with
      respect thereto, or waive, modify, amend or change any provision of the Note
      Purchase Agreement or any other agreement or waive this Guaranty;
      or

     

                     (2)sell,
      release, surrender, modify,
      impair, exchange or substitute any and all property, of any nature and from
      whomsoever received, held by, or for the benefit of, any such Holder as direct
      or indirect security for the payment or performance of any Debt, liability
      or
      obligation of the Company or of any other Person (including, without limitation,
      any other Guarantor) secondarily or otherwise liable for any Debt, liability
      or
      obligation of the Company on the Notes; or

     

                     (3)settle,
      adjust or compromise any claim
      of the Company against any other Person (including, without limitation, any
      other Guarantor) secondarily or otherwise liable for any Debt, liability or
      obligation of the Company on the Notes.

     

    
      
        
        

      

      
        
          Exhibit 2

          (to Note Agreement)

        

        
          

        

      

      
        
        

      

    

    Each
      Guarantor hereby ratifies and confirms any such extension, renewal, change,
      sale, release, waiver, surrender, exchange, modification, amendment, impairment,
      substitution, settlement, adjustment or compromise and that the same shall
      be
      binding upon it, and hereby waives, to the fullest extent permitted by law,
      any
      and all defenses, counterclaims or offsets which it might or could have by
      reason thereof, it being understood that such Guarantor shall at all times
      be
      bound by this Guaranty and remain liable hereunder.

    
       

    

    (b)           Each
      Guarantor hereby waives, to the fullest extent permitted by law:

     

                     (1)notice
      of acceptance of this Guaranty
      by the Holders or of the creation, renewal or accrual of any liability of the
      Company, present or future, or of the reliance of such Holders upon this
      Guaranty (it being understood that every Debt, liability and obligation
      described in Section 2 hereof shall conclusively be presumed to have been
      created, contracted or incurred in reliance upon the execution of this
      Guaranty);

     

                     (2)demand
      of payment by any Holder from
      the Company or any other Person (including, without limitation, any other
      Guarantor) indebted in any manner on or for any of the Debt, liabilities or
      obligations hereby guaranteed; and

     

                     (3)presentment
      for the payment by any
      Holder or any other Person of the Notes or any other instrument, protest thereof
      and notice of its dishonor to any party thereto and to such
      Guarantor.

     

    The
      obligations of each Guarantor under this Guaranty and the rights of any Holder
      to enforce such obligations by any proceedings, whether by action at law, suit
      in equity or otherwise, shall not be subject to any reduction, limitation,
      impairment or termination, whether by reason of any claim of any character
      whatsoever or otherwise and shall not be subject to any defense, set-off,
      counterclaim (other than any compulsory counterclaim), recoupment or termination
      whatsoever.

     

    (c)           The
      obligations of the Guarantors hereunder shall be binding upon the Guarantors
      and
      their successors and assigns, and shall remain in full force and effect
      irrespective of:

     

                     (1)the
      genuineness, validity, regularity
      or enforceability of the Notes and the Note Purchase Agreement or any other
      agreement or any of the terms of any thereof, the continuance of any obligation
      on the part of the Company or any other Person on or in respect of the Notes
      or
      under the Note Purchase Agreement or any other agreement or the power or
      authority or the lack of power or authority of the Company to issue the Notes
      or
      the Company to execute and deliver the Note Purchase Agreement or any other
      agreement or of any Guarantor to execute and deliver this Guaranty or to perform
      any of its obligations hereunder or the existence or continuance of the Company
      or any other Person as a legal entity; or

     

                     (2)any
      default, failure or delay, willful
      or otherwise, in the performance by the Company, any Guarantor or any other
      Person of any obligations of any kind or character whatsoever under the Notes,
      the Note Purchase Agreement, this Guaranty or any other agreement;
      or

     

                     (3)any
      creditors’ rights, bankruptcy,
      receivership or other insolvency proceeding of the Company, any Guarantor or
      any
      other Person or in respect of the property of the Company, any Guarantor or
      any
      other Person or any merger, consolidation, reorganization, dissolution,
      liquidation, the sale of all or substantially all of the assets of or winding
      up
      of the Company, any Guarantor or any other Person; or

     

                     (4)impossibility
      or illegality of
      performance on the part of the Company, any Guarantor or any other Person of
      its
      obligations under the Notes, the Note Purchase Agreement, this Guaranty or
      any
      other agreements; or

     

                     (5)in
      respect of the Company or any other
      Person, any change of circumstances, whether or not foreseen or foreseeable,
      whether or not imputable to the Company or any other Person, or other
      impossibility of performance through fire, explosion, accident, labor
      disturbance, floods, droughts, embargoes, wars (whether or not declared), civil
      commotion, acts of God or the public enemy, delays or failure of suppliers
      or
      carriers, inability to obtain materials, action of any Federal or state
      regulatory body or agency, change of law or any other causes affecting
      performance, or any other force majeure, whether or not beyond the
      control of the Company or any other Person and whether or not of the kind
      hereinbefore specified; or

     

    
      
        
        

      

      
        
          Exhibit 2

          (to Note Agreement)

        

        
          

        

      

      
        
        

      

    

                     (6)any
      attachment, claim, demand, charge,
      Lien, order, process, encumbrance or any other happening or event or reason,
      similar or dissimilar to the foregoing, or any withholding or diminution at
      the
      source, by reason of any taxes, assessments, expenses, Debt, obligations or
      liabilities of any character, foreseen or unforeseen, and whether or not valid,
      incurred by or against the Company, any Guarantor or any other Person or any
      claims, demands, charges or Liens of any nature, foreseen or unforeseen,
      incurred by the Company, any Guarantor or any other Person, or against any
      sums
      payable in respect of the Notes or under the Note Purchase Agreement or this
      Guaranty, so that such sums would be rendered inadequate or would be unavailable
      to make the payments herein provided; or

     

                     (7)any
      order, judgment, decree, ruling or
      regulation (whether or not valid) of any court of any nation or of any political
      subdivision thereof or any body, agency, department, official or administrative
      or regulatory agency of any thereof or any other action, happening, event or
      reason whatsoever which shall delay, interfere with, hinder or prevent, or
      in
      any way adversely affect, the performance by the Company, any Guarantor or
      any
      other Person of its respective obligations under or in respect of the Notes,
      the
      Note Purchase Agreement, this Guaranty or any other agreement; or

     

                     (8)the
      failure of any Guarantor to receive
      any benefit from or as a result of its execution, delivery and performance
      of
      this Guaranty; or

     

                     (9)any
      failure or lack of diligence in
      collection or protection, failure in presentment or demand for payment, protest,
      notice of protest, notice of default and of nonpayment, any failure to give
      notice to any Guarantor of failure of the Company, any Guarantor or any other
      Person to keep and perform any obligation, covenant or agreement under the
      terms
      of the Notes, the Note Purchase Agreement, this Guaranty or any other agreement
      or failure to resort for payment to the Company, any Guarantor or to any other
      Person or to any other guaranty or to any property, security, Liens or other
      rights or remedies; or

     

                     (10)the
      acceptance of any additional
      security or other guaranty, the advance of additional money to the Company
      or
      any other Person, the renewal or extension of the Notes or amendments,
      modifications, consents or waivers with respect to the Notes, the Note Purchase
      Agreement, or any other agreement, or the sale, release, substitution or
      exchange of any security for the Notes; or

     

                     (11)any
      merger or consolidation of the
      Company, any Guarantor or any other Person into or with any other Person or
      any
      sale, lease, transfer or other disposition of any of the assets of the Company,
      any Guarantor or any other Person to any other Person, or any change in the
      ownership of any shares or other equity interests of the Company, any Guarantor
      or any other Person; or

     

                     (12)any
      defense whatsoever
      that:  (i) the Company or any other Person might have to the payment
      of the Notes (including, principal, Make-Whole Amount, if any, or interest),
      other than payment thereof in Federal or other immediately available funds
      or
      (ii) the Company or any other Person might have to the performance or observance
      of any of the provisions of the Notes, the Note Purchase Agreement, or any
      other
      agreement, whether through the satisfaction or purported satisfaction by the
      Company or any other Person of its debts due to any cause such as bankruptcy,
      insolvency, receivership, merger, consolidation, reorganization, dissolution,
      liquidation, winding-up or otherwise; or

     

                     (13)any
      act or failure to act with regard
      to the Notes, the Note Purchase Agreement, this Guaranty or any other agreement
      or anything which might vary the risk of any Guarantor or any other Person;
      or

     

                     (14)any
      other circumstance which might
      otherwise constitute a defense available to, or a discharge of, any Guarantor
      or
      any other Person in respect of the obligations of any Guarantor or other Person
      under this Guaranty or any other agreement;

     

    provided
      that the specific enumeration of the above-mentioned acts, failures or
      omissions shall not be deemed to exclude any other acts, failures or omissions,
      though not specifically mentioned above, it being the purpose and intent of
      this
      Guaranty and the parties hereto that the obligations of each Guarantor shall
      be
      absolute and unconditional and shall not be discharged, impaired or varied
      except by the payment of the principal of, Make-Whole Amount, if any, and
      interest on the Notes in accordance with their respective terms whenever the
      same shall become due and payable as in the Notes provided, at the place
      specified in and all in the manner and with the effect provided in the Notes
      and
      the Note Purchase Agreement, as each may be amended or modified from time to
      time.  Without limiting the foregoing, it is understood that repeated
      and successive demands may be made and recoveries may be had hereunder as and
      when, from time to time, the Company shall default under or in respect of the
      terms of the Notes or the Note Purchase Agreement and that notwithstanding
      recovery hereunder for or in respect of any given default or defaults by the
      Company under the Notes or the Note Purchase Agreement, this Guaranty shall
      remain in full force and effect and shall apply to each and every subsequent
      default.

     

    
      
        
        

      

      
        
          Exhibit 2

          (to Note Agreement)

        

        
          

        

      

      
        
        

      

    

    (d)           All
      rights of any Holder under this Guaranty shall be considered to be transferred
      or assigned at any time or from time to time upon the transfer of any Note
      held
      by such Holder whether with or without the consent of or notice to the
      Guarantors under this Guaranty or to the Company.

     

    (e)           To
      the extent of any payments made under this Guaranty, the Guarantors shall be
      subrogated to the rights of the Holder or Holders upon whose Notes such payment
      was made, but each Guarantor covenants and agrees that such right of subrogation
      and any and all claims of such Guarantor against the Company, any endorser
      or
      other Guarantor or against any of their respective properties shall be junior
      and subordinate in right of payment to the prior indefeasible final payment
      in
      cash in full of all of the Notes and satisfaction by the Company of its
      obligations under the Note Purchase Agreement and by the Guarantors of their
      obligations under this Guaranty, and the Guarantors shall not take any action
      to
      enforce such right of subrogation, and the Guarantors shall not accept any
      payment in respect of such right of subrogation, until all of the Notes and
      all
      amounts payable by the Guarantors hereunder have indefeasibly been finally
      paid
      in cash in full and all of the obligations of the Company under the Note
      Purchase Agreement and of the Guarantors under this Guaranty have been
      satisfied.  Notwithstanding any right of any Guarantor to ask, demand,
      sue for, take or receive any payment from the Company, all rights, Liens and
      security interests of each Guarantor, whether now or hereafter arising and
      howsoever existing, in any assets of the Company shall be and hereby are
      subordinated to the rights, if any, of the Holders in those
      assets.  No Guarantor shall have any right to possession of any such
      asset or to foreclose upon any such asset, whether by judicial action or
      otherwise, unless and until all of the Notes and the obligations of the Company
      under the Note Purchase Agreement shall have been paid in cash in full and
      satisfied.

     

    (f)           Each
      Guarantor agrees that to the extent the Company or any other Person makes any
      payment on any Note, which payment or any part thereof is subsequently
      invalidated, voided, declared to be fraudulent or preferential, set aside,
      recovered, rescinded or is required to be retained by or repaid to a trustee,
      receiver, or any other Person under any bankruptcy code, common law, or
      equitable cause, then and to the extent of such payment, the obligation or
      the
      part thereof intended to be satisfied shall be revived and continued in full
      force and effect with respect to the Guarantors’ obligations hereunder, as if
      said payment had not been made.  The liability of the Guarantors
      hereunder shall not be reduced or discharged, in whole or in part, by any
      payment to any Holder from any source that is thereafter paid, returned or
      refunded in whole or in part by reason of the assertion of a claim of any kind
      relating thereto, including, but not limited to, any claim for breach of
      contract, breach of warranty, preference, illegality, invalidity or fraud
      asserted by any account debtor or by any other Person.

     

    (g)           No
      Holder shall be under any obligation:  (1) to marshall any assets in
      favor of the Guarantors or in payment of any or all of the liabilities of the
      Company under or in respect of the Notes, the Note Purchase Agreement or the
      obligations of the Guarantors hereunder or (2) to pursue any other remedy that
      the Guarantors may or may not be able to pursue themselves and that may lighten
      the Guarantors’ burden, any right to which each Guarantor hereby expressly
      waives.

     

    
      	
              Section 5.

            	
              Representations
                and Warranties of the
                Guarantors.

            


    

     

    Each
      Guarantor represents and warrants to each Holder that:

     

    (a)           Such
      Guarantor is a corporation or other legal entity duly organized, validly
      existing and in good standing under the laws of its jurisdiction of
      organization, and is duly qualified as a foreign corporation or other legal
      entity and is in good standing in each jurisdiction in which such qualification
      is required by law, other than those jurisdictions as to which the failure
      to be
      so qualified or in good standing would not, individually or in the aggregate,
      reasonably be expected to have a material adverse effect on (1) the business,
      operations, affairs, financial condition, assets or properties of such Guarantor
      and its subsidiaries, taken as a whole, or (2) the ability of such Guarantor
      to
      perform its obligations under this Guaranty or (3) the validity or
      enforceability of this Guaranty (herein in this Section 5, a “Material
      Adverse Effect”).  Such Guarantor has the power and authority to
      own or lease the properties it purports to own or lease, to transact the
      business it transacts and proposes to transact, to execute and deliver this
      Guaranty and to perform the provisions hereof.

     

    (b)           Each
      subsidiary of such Guarantor is a corporation or other legal entity duly
      organized, validly existing and in good standing under the laws of its
      jurisdiction of organization, and is duly qualified as a foreign corporation
      or
      other legal entity and is in good standing in each jurisdiction in which such
      qualification is required by law, other than those jurisdictions as to which
      the
      failure to be so qualified or in good standing would not, individually or in
      the
      aggregate, reasonably be expected to have a Material Adverse
      Effect.  Each subsidiary of such Guarantor has the power and authority
      to own or lease the properties it purports to own or lease and to transact
      the
      business it transacts and proposes to transact.

     

    
      
        
        

      

      
        
          Exhibit 2

          (to Note Agreement)

        

        
          

        

      

      
        
        

      

    

    (c)           This
      Guaranty has been duly authorized by all necessary action on the part of such
      Guarantor, and this Guaranty constitutes a legal, valid and binding obligation
      of such Guarantor enforceable against such Guarantor in accordance with its
      terms, except as such enforceability may be limited by (1) applicable
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
      other similar laws affecting the enforcement of creditors’ rights generally and
      (2) general principles of equity (regardless of whether such enforceability
      is considered in a proceeding in equity or at law).

     

    (d)           The
      execution, delivery and performance by such Guarantor of this Guaranty will
      not
      (1) contravene, result in any breach of, or constitute a default under, or
      result in the creation of any Lien in respect of any property of such Guarantor
      or any of its subsidiaries which are Restricted Subsidiaries under any
      indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
      organizational document or any other agreement or instrument to which such
      Guarantor or any of its subsidiaries which are Restricted Subsidiaries is bound
      or by which such Guarantor or any of its subsidiaries or any of their respective
      properties may be bound or affected, (2) conflict with or result in a
      breach of any of the terms, conditions or provisions of any order, judgment,
      decree, or ruling of any court, arbitrator or Governmental Authority applicable
      to such Guarantor or any of its subsidiaries which are Restricted Subsidiaries
      or (3) violate any provision of any statute or other rule or regulation of
      any Governmental Authority applicable to such Guarantor or any of its
      subsidiaries which are Restricted Subsidiaries.

     

    (e)           No
      consent, approval or authorization of, or registration, filing or declaration
      with, any Governmental Authority is required in connection with the execution,
      delivery or performance by such Guarantor of this Guaranty other than such
      consents, approvals, authorizations, registrations, filings or declarations
      that
      have been obtained or made prior to the date of the Closing.

     

    (f)           (1) Except
      as disclosed in Schedule 5.8 to the Note Purchase Agreement, there are no
      actions, suits or proceedings pending or, to the knowledge of such Guarantor,
      threatened against or affecting such Guarantor or any of its subsidiaries which
      are Restricted Subsidiaries or any property of such Guarantor or any of its
      subsidiaries which are Restricted Subsidiaries in any court or before any
      arbitrator of any kind or before or by any Governmental Authority that,
      individually or in the aggregate, would reasonably be expected to have a
      Material Adverse Effect.

     

    (2)           Neither
      such Guarantor nor any of its subsidiaries which are Restricted Subsidiaries
      is
      in default under any term of any agreement or instrument to which it is a party
      or by which it is bound, or any order, judgment, decree or ruling of any court,
      arbitrator or Governmental Authority or is in violation of any applicable law,
      ordinance, rule or regulation (including, without limitation, ERISA,
      Environmental Laws or the USA Patriot Act) of any Governmental Authority, which
      default or violation, individually or in the aggregate, would reasonably be
      expected to have a Material Adverse Effect.

     

    (g)           Such
      Guarantor and its subsidiaries have filed all income tax returns that are
      required to have been filed in any jurisdiction, and have paid all taxes shown
      to be due and payable on such returns and all other taxes and assessments
      payable by them, to the extent such taxes and assessments have become due and
      payable and before they have become delinquent, except for any taxes and
      assessments (1) the amount of which is not, individually or in the
      aggregate, material to the business, operations, affairs, financial condition,
      assets or properties of such Guarantor and its subsidiaries taken as a whole
      (herein in this Section 5, “Material”) or (2) the amount,
      applicability or validity of which is currently being contested in good faith
      by
      appropriate proceedings and with respect to which such Guarantor or one of
      its
      subsidiaries, as the case may be, has established adequate reserves in
      accordance with GAAP.  The charges, accruals and reserves on the books
      of such Guarantor and its subsidiaries in respect of Federal, state or other
      taxes for all fiscal periods are adequate in accordance with GAAP.
 The Federal income tax liabilities of such Guarantor and
      its subsidiaries have been determined by the Internal Revenue Service and paid
      for all fiscal years up to and including the fiscal year ended
      September 30, 2004.

     

    (h)           Such
      Guarantor and its subsidiaries which are Restricted Subsidiaries have good
      and
      sufficient title related to the ownership of their respective Material
      properties, including all such properties reflected in the most recent audited
      consolidated balance sheet referred to in Section 5.5 of the Note Purchase
      Agreement or purported to have been acquired by such Guarantor after said date
      (except as sold or otherwise disposed of in the ordinary course of business),
      in
      each case free and clear of Liens prohibited by the Note Purchase Agreement,
      except for those defects in title and Liens that, individually or in the
      aggregate, would not have a Material Adverse Effect.  All Material
      leases to which such Guarantor is a party are valid and subsisting and are
      in
      full force and effect in all material respects.

     

    
      
        
        

      

      
        
          Exhibit 2

          (to Note Agreement)

        

        
          

        

      

      
        
        

      

    

    (i)           Except
      as disclosed in Schedule 5.11 to the Note Purchase Agreement, such
      Guarantor and its subsidiaries are Restricted Subsidiaries own or possess all
      licenses, permits, franchises, authorizations, patents, copyrights, proprietary
      software, service marks, trademarks, trade names and domain names or rights
      thereto, that are Material, without known conflict with the rights of others,
      except for those conflicts that, individually or in the aggregate, would not
      have a Material Adverse Effect.

     

    (j)           (1) Such
      Guarantor and each ERISA Affiliate have operated and administered each Plan
      in
      compliance with all applicable laws except for such instances of noncompliance
      as have not resulted in and would not reasonably be expected to result in a
      Material Adverse Effect.  Neither such Guarantor nor any ERISA
      Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
      the
      penalty or excise tax provisions of the Code relating to employee benefit plans
      (as defined in Section 3 of ERISA), and no event, transaction or condition
      has occurred or exists that would reasonably be expected to result in the
      incurrence of any such liability by such Guarantor or any ERISA Affiliate,
      or in
      the imposition of any Lien on any of the rights, properties or assets of such
      Guarantor or any ERISA Affiliate, in either case pursuant to Title I or IV
      of
      ERISA or to such penalty or excise tax provisions or to Section 401(a)(29)
      or 412 of the Code, other than such liabilities or Liens as would not be,
      individually or in the aggregate, Material.

     

    (2)           The
      present value of the aggregate benefit liabilities under each of the Plans
      which
      are subject to Title IV of ERISA (other than Multiemployer Plans), determined
      as
      of the end of such Plan’s most recently ended plan year on the basis of the
      actuarial assumptions specified for funding purposes in such Plan’s most recent
      actuarial valuation report, did not exceed the aggregate current value of the
      assets of such Plans allocable to such benefit liabilities by more than
      $8,000,000.  The term “benefit liabilities” has the meaning specified
      in Section 4001 of ERISA and the terms “current value” and “present value”
have the meanings specified in Section 3 of ERISA.

     

    (3)           Such
      Guarantor and its ERISA Affiliates have not incurred withdrawal liabilities
      (and
      are not subject to contingent withdrawal liabilities) under Section 4201 or
      4204 of ERISA in respect of Multiemployer Plans that, individually or in the
      aggregate, are Material.

     

    (4)           The
      accumulated post-retirement benefit obligation (determined as of the last day
      of
      the Company’s most recently ended fiscal year in accordance with Financial
      Accounting Standards Board Statement No. 106, without regard to liabilities
      attributable to continuation coverage mandated by Section 4980B of the
      Code) of such Guarantor and its ERISA Affiliates is not Material.

     

    (5)           The
      execution and delivery of this Guaranty will not involve any transaction that
      is
      subject to the prohibitions of Section 406 of ERISA or in connection with
      which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the
      Code.  The representation by such Guarantor in the first sentence of
      this Section 5(j)(5) is made in reliance upon and subject to the accuracy
      of each Holder’s representation in Section 6.2 of the Note Purchase
      Agreement as to the source of the funds to be used to pay the purchase price
      of
      the Notes to be purchased by such Holder.

     

    (k)           Neither
      such Guarantor nor any of its subsidiaries is an “investment company” registered
      or required to be registered under the Investment Company Act of 1940 or an
      “affiliated person” of an “investment company” or an “affiliated person” of such
“affiliated person” or under the “control” of an “investment company” as such
      terms are defined in the Investment Company Act of 1940, as amended, and shall
      not become such an “investment company” or such an “affiliated person” or under
      such “control.”  Neither such Guarantor nor any of its subsidiaries is
      a “holding company” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
      company” within the meaning of the Public Utility Holding Company Act of 2005,
      as amended.  Based upon the immediately preceding sentence, such
      Guarantor is not subject to regulation under the Public Utility Holding Company
      Act of 2005, as amended.  Neither such Guarantor nor any of its
      subsidiaries is subject to the ICC Termination Act of 1995, as amended, or
      the
      Federal Power Act, as amended.  Neither such Guarantor nor any of its
      subsidiaries is subject to any Federal or state statute or regulation limiting
      its ability to incur Debt.

     

    (l)           Neither
      such Guarantor nor any of its subsidiaries which are Restricted Subsidiaries
      has
      knowledge of any claim or has received any notice of any claim, and no
      proceeding has been instituted raising any claim against such Guarantor or
      any
      of its subsidiaries which are Restricted Subsidiaries or any of their respective
      real properties now or formerly owned, leased or operated by any of them or
      other assets, alleging any damage to the environment or violation of any
      Environmental Laws, except, in each case, such as would not reasonably be
      expected to result in a Material Adverse Effect.  Except as otherwise
      disclosed to the Holders in writing:

     

    
      
        
        

      

      
        
          Exhibit 2

          (to Note Agreement)

        

        
          

        

      

      
        
        

      

    

                     (1)neither
      such Guarantor nor any of its
      subsidiaries which are Restricted Subsidiaries has knowledge of any facts which
      would give rise to any claim, public or private, of violation of Environmental
      Laws or damage to the environment emanating from, occurring on or in any way
      related to real properties now or formerly owned, leased or operated by any
      of
      them or to other assets or their use, except, in each case, such as would not
      reasonably be expected to result in a Material Adverse Effect;

     

                     (2)neither
      such Guarantor nor any of its
      subsidiaries which are Restricted Subsidiaries has stored any Hazardous
      Materials on real properties now or formerly owned, leased or operated by any
      of
      them or has disposed of any Hazardous Materials in a manner contrary to any
      Environmental Laws in each case in any manner that would reasonably be expected
      to result in a Material Adverse Effect; and

     

                     (3)all
      buildings on all real properties
      now owned, leased or operated by the Guarantor or any of its subsidiaries are
      in
      compliance with applicable Environmental Laws, except where failure to comply
      would not reasonably be expected to result in a Material Adverse
      Effect.

     

    (m)           Such
      Guarantor is solvent, has capital not unreasonably small in relation to its
      business or any contemplated or undertaken transaction and has assets having
      a
      value both at fair valuation and at present fair salable value greater than
      the
      amount required to pay its debts as they become due and greater than the amount
      that will be required to pay its probable liability on its existing debts as
      they become absolute and matured.  Such Guarantor does not intend to
      incur, or believe or should have believed that it will incur, debts beyond
      its
      ability to pay such debts as they become due.  Such Guarantor will not
      be rendered insolvent by the execution and delivery of, and performance of
      its
      obligations under, this Guaranty.  Such Guarantor does not intend to
      hinder, delay or defraud its creditors by or through the execution and delivery
      of, or performance of its obligations under, this Guaranty.

     

    (n)           The
      obligations of such Guarantor under this Guaranty rank at least pari passu
      in
      right of payment with all other unsecured Senior Debt of such Guarantor,
      including without limitation, all unsecured Senior Debt of such Guarantor
      described in Schedule 5.15 to the Note Purchase Agreement.

     

    
      	
              Section 6.

            	
              Amendments,
                Waivers and Consents.

            


    

     

    (a)           This
      Guaranty may be amended, and the observance of any term hereof may be waived
      (either retroactively or prospectively), with (and only with) the written
      consent of each Guarantor and the Required Holders, except that (1) no
      amendment or waiver of any of the provisions of Sections 3, 4 or 5, or any
      defined term (as it is used therein), will be effective as to any Holder unless
      consented to by such Holder in writing, and (2) no such amendment or waiver
      may, without the written consent of each Holder, (i) change the percentage
      of the principal amount of the Notes the Holders of which are required to
      consent to any such amendment or waiver or (ii) amend Section 2 or
      this Section 6.

     

    (b)           The
      Guarantors will provide each Holder (irrespective of the amount of Notes then
      owned by it) with sufficient information, sufficiently far in advance of the
      date a decision is required, to enable such Holder to make an informed and
      considered decision with respect to any proposed amendment, waiver or consent
      in
      respect of any of the provisions hereof.  The Guarantors will deliver
      executed or true and correct copies of each amendment, waiver or consent
      effected pursuant to the provisions of this Section 6 to each Holder
      promptly following the date on which it is executed and delivered by, or
      receives the consent or approval of, the requisite Holders.

     

    (c)           No
      Guarantor will directly or indirectly pay or cause to be paid any remuneration,
      whether by way of fee or otherwise, or grant any security, to any Holder as
      consideration for or as an inducement to the entering into by such Holder of
      any
      waiver or amendment of any of the terms and provisions hereof unless such
      remuneration is concurrently paid, or security is concurrently granted, on
      the
      same terms, ratably to each Holder even if such Holder did not consent to such
      waiver or amendment.

     

    (d)           Any
      consent made pursuant to this Section 6 by a Holder that has transferred a
      portion or has agreed to transfer all or a portion of its Notes to such
      Guarantor, any subsidiary or any affiliate of such Guarantor and has provided
      or
      has agreed to provide such written consent as a condition to such transfer
      shall
      be void and of no force and effect except solely as to such Holder, and any
      amendment effected or waivers granted or to be effected or granted that would
      not have been or be so effected or granted but for such consent (and the
      consents of all other Holders that were acquired under the same or similar
      conditions) shall be void and of no force and effect except solely as to such
      Holder.

     

    
      
        
        

      

      
        
          Exhibit
            2

          (to
            Note
            Agreement)

        

        
          

        

      

      
        
        

      

    

    (e)           Any
      amendment or waiver consented to as provided in this Section 6 applies
      equally to all Holders of Notes affected thereby and is binding upon them and
      upon each future holder and upon the Guarantors.  No such amendment or
      waiver will extend to or affect any obligation, covenant or agreement not
      expressly amended or waived or impair any right consequent
      thereon.  No course of dealing between the Guarantors and any Holder
      nor any delay in exercising any rights hereunder shall operate as a waiver
      of
      any rights of any Holder.  As used herein, the term “this Guaranty”
and references thereto shall mean this Guaranty as it may from time to time
      be
      amended or supplemented.

     

    (f)           Solely
      for the purpose of determining whether the Holders of the requisite percentage
      of the aggregate principal amount of Notes then outstanding approved or
      consented to any amendment, waiver or consent to be given under this Guaranty,
      Notes directly or indirectly owned by any Guarantor or any subsidiaries or
      Affiliates of any Guarantor shall be deemed not to be outstanding.

     

    
      	
              Section 7.

            	
              Notices.

            


    

     

    All
      notices and communications provided for hereunder shall be in writing and sent
      (a) by telefacsimile if the sender on the same day sends a confirming copy
      of such notice by a recognized overnight delivery service (charges prepaid),
      (b) by registered or certified mail with return receipt requested (postage
      prepaid) or (c) by a recognized overnight delivery service (charges
      prepaid).  Any such notice must be sent:

     

                     (1)if
      to a Purchaser or its nominee, to
      such Purchaser or its nominee at the address specified for such communications
      in Schedule A to the Note Purchase Agreement, or at such other address as
      such Purchaser or its nominee shall have specified to any Guarantor in
      writing,

     

                     (2)if
      to any other Holder, to such Holder
      at such address as such Holder shall have specified to any Guarantor in writing,
      or

     

                     (3)if
      to any Guarantor, to such Guarantor
      c/o the Company at its address set forth at the beginning of the Note Purchase
      Agreement to the attention of the Chief Financial Officer of the Company, or
      at
      such other address as such Guarantor shall have specified to the Holders in
      writing.

     

    Notices
      under this Section 7 will be deemed given only when actually
      received.

     

    
      	
              Section 8.

            	
              Miscellaneous.

            


    

     

    (a)           No
      remedy herein conferred upon or reserved to any Holder is intended to be
      exclusive of any other available remedy or remedies, but each and every such
      remedy shall be cumulative and shall be in addition to every other remedy given
      under this Guaranty now or hereafter existing at law or in equity.  No
      delay or omission to exercise any right or power accruing upon any default,
      omission or failure of performance hereunder shall impair any such right or
      power or shall be construed to be a waiver thereof but any such right or power
      may be exercised from time to time and as often as may be deemed
      expedient.  In order to entitle any Holder to exercise any remedy
      reserved to it under this Guaranty, it shall not be necessary for such Holder
      to
      physically produce its Note in any proceedings instituted by it or to give
      any
      notice, other than such notice as may be herein expressly required.

     

    (b)           The
      Guarantors will pay all sums becoming due under this Guaranty by the method
      and
      at the address specified for such purpose for such Holder, in the case of a
      Holder that is a Purchaser, on Schedule A to the Note Purchase Agreement or
      by such other method or at such other address as any Holder shall have from
      time
      to time specified to the Guarantors or the Company on behalf of the Guarantors
      in writing for such purpose, without the presentation or surrender of this
      Guaranty or any Note.

     

    (c)           Any
      provision of this Guaranty that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall (to the full extent permitted by law) not invalidate or
      render unenforceable such provision in any other jurisdiction.

     

    (d)           If
      the whole or any part of this Guaranty shall be now or hereafter become
      unenforceable against any one or more of the Guarantors for any reason
      whatsoever or if it is not executed by any one or more of the Guarantors, this
      Guaranty shall nevertheless be and remain fully binding upon and enforceable
      against each other Guarantor as if it had been made and delivered only by such
      other Guarantors.

     

    
      
        
        

      

      
        
          Exhibit
            2

          (to
            Note
            Agreement)

        

        
          

        

      

      
        
        

      

    

    (e)           This
      Guaranty shall be binding upon each Guarantor and its successors and assigns
      and
      shall inure to the benefit of each Holder and its successors and assigns so
      long
      as its Notes remain outstanding and unpaid.

     

    (f)           This
      Guaranty may be executed in any number of counterparts, each of which shall
      be
      an original but all of which together shall constitute one
      instrument.  Each counterpart may consist of a number of copies
      hereof, each signed by less than all, but together signed by all, of the parties
      hereto.

     

    (g)           This
      Guaranty shall be construed and enforced in accordance with, and the rights
      of
      the parties shall be governed by, the law of the State of New York excluding
      choice-of-law principles of the law of such State that would require the
      application of the laws of a jurisdiction other than such State.

     

    (h)           Each
      Guarantor hereby irrevocably submits to the non-exclusive jurisdiction of any
      State of New York court or any Federal court located in New York County, New
      York, New York for the adjudication of any matter arising out of or relating
      to
      this Guaranty, and consents to the service of all writs, process and summonses
      by registered or certified mail out of any such court or by service of process
      on such Guarantor at its address to which notices are to be given pursuant
      to
      Section 7 hereof and hereby waives any requirement to have an agent for service
      of process in the State of New York.  Nothing contained herein shall
      affect the right of any Holder to serve legal process in any other manner or
      to
      bring any proceeding hereunder in any jurisdiction where such Guarantor may
      be
      amenable to suit.  Each Guarantor hereby irrevocably waives any
      objection to any suit, action or proceeding in any New York court or Federal
      court located in New York County, New York, New York on the grounds of venue
      and
      hereby further irrevocably waives any claim that any such suit, action or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

     

    (i)           Each
      Guarantor hereby waives trial by jury in any action brought on or with respect
      to this Guaranty or any other document executed in connection
      herewith.

     

    


    


    
      
        
                

                    Exhibit
              2      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


     

    InWitnessWhereof,
      the undersigned has caused this Guaranty to be duly executed by an authorized
      representative as of the date first written above.

    


    
      	
               

            	
              NJR
                Retail Holdings Corporation

            


    

    


    


    
      	
               

            	
              By:

            	 


    

    
      	
               

            	
              Name:  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:

            	
              President

            


    

    


    


    
      	
               

            	
              NJR
                Home Services Company

            


    

    


    


    
      	
               

            	
              By:

            	 


    

    
      	
               

            	
              Name:  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:

            	
              President
                and Treasurer

            


    

    


    


    
      	
               

            	
              NJR
                Plumbing Services, Inc.

            


    

    


    


    
      	
               

            	
              By:

            	 


    

    
      	
               

            	
              Name:  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:

            	
              President
                and Treasurer

            


    

    


    


    
      	
               

            	
              NJR
                Service Corporation

            


    

    


    


    
      	
               

            	
              By:

            	 


    

    
      	
               

            	
              Name:  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:

            	
              Senior
                Vice President and

            


    

    
      	
               

            	
              Chief
                Financial Officer

            


    

    


    


    
      	
               

            	
              NJR
                Energy Services Company

            


    

    


    


    
      	
               

            	
              By:

            	 


    

    
      	
               

            	
              Name:  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:

            	
              Senior
                Vice President, Chief

            	 


    

    
      	
               

            	
              Financial
                Officer and Treasurer

            


    

    


    


    
      	
               

            	
              NJR
                Capital Services Corporation

            


    

    


    


    
      	
               

            	
              By:

            	 


    

    
      	
               

            	
              Name:  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:

            	
              Senior
                Vice President, Chief

            


    

    
      	
               

            	
              Financial
                Officer and Treasurer

            


    

    


    


    
      	
               

            	
              Commercial
                Realty and Resources Corp.

            


    

    


    


    
      	
               

            	
              By:

            	 


    

    
      	
               

            	
              Name:  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:

            	
              Senior
                Vice President, Chief

            


    

    
      	
               

            	
              Financial
                Officer and Treasurer

            


    

    


    


    
      	
               

            	
              NJR
                Investment Company

            


    

    


    


    
      	
               

            	
              By:

            	 


    

    
      	
               

            	
              Name:  Glenn
                C. Lockwood

            


    

    
      	
               

            	
              Title:

            	
              President
                and Treasurer

            


    

    


    


    
      
        
                

                    Exhibit
              2      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    Guaranty
      Supplement

    


    


    


    To
      the
      Holders (as defined in the hereinafter

      defined
      Guaranty Agreement)

     

    Ladies
      and Gentlemen:

     

    Whereas,
      New Jersey Resources Corporation, a corporation organized under the laws of
      the
      State of New Jersey (the “Company”), in order to repay existing debt
      and for general corporate purposes, the Company issued $50,000,000 aggregate
      principal amount of its 6.05% Senior Notes due September 24, 2017 (the
“Notes”) pursuant to a Note Purchase Agreement dated as of
      September 24, 2007 (“Note Purchase Agreement”) between the Company
      and each of the purchasers named on Schedule A attached to said Note
      Purchase Agreement (the “Purchasers”).  Capitalized terms
      used herein shall have the meanings set forth in the hereinafter defined
      Guaranty Agreement unless herein defined or the context shall otherwise
      require.

     

    Whereas,
      as a condition precedent to their purchase of the Notes, the Purchasers required
      that from time to time certain Subsidiaries of the Company enter into that
      certain Subsidiary Guaranty Agreement dated as of September 24, 2007
      attached hereto as Exhibit 1 (as amended, supplemented, restated or otherwise
      modified from time to time, the “Guaranty Agreement”) as security for
      the Notes.

     

    Pursuant
      to Section 9.7(a) of the Note Purchase Agreement, the Company has agreed to
      cause the undersigned, ____________, a [corporation] organized under the laws
      of
      ______________ (the “Additional Guarantor”), to join in the Guaranty
      Agreement.  In accordance with the requirements of the Guaranty
      Agreement, the Additional Guarantor desires to amend the definition of Guarantor
      (as the same may have been heretofore amended) set forth in the Guaranty
      Agreement attached hereto so that at all times from and after the date hereof,
      the Additional Guarantor shall be jointly and severally liable as set forth
      in
      the Guaranty Agreement for the obligations of the Company under the Notes,
      the
      Note Purchase Agreement to the extent and in the manner set forth in the
      Guaranty Agreement.

     

    The
      undersigned is the duly elected ____________ of the Additional Guarantor, a
      Subsidiary of the Company, and is duly authorized to execute and deliver this
      Guaranty Supplement to each of you.  The execution by the undersigned
      of this Guaranty Supplement shall evidence such Additional Guarantor’s consent
      to and acknowledgment and approval of the terms set forth herein and in the
      Guaranty Agreement and its agreement to be bound by the covenants, terms and
      provisions of the Guaranty Agreement as a Guarantor thereunder and by such
      execution the Additional Guarantor shall be deemed to have made in favor of
      the
      Holders the representations and warranties set forth in Section 5 of the
      Guaranty Agreement.

     

    Upon
      execution of this Guaranty Supplement, the Guaranty Agreement shall be deemed
      to
      be amended as set forth above.  Except as amended herein, the terms
      and provisions of the Guaranty Agreement are hereby ratified, confirmed and
      approved in all respects.

     

    Any
      and
      all notices, requests, certificates and other instruments (including the Notes)
      may refer to the Guaranty Agreement without making specific reference to this
      Guaranty Supplement, but nevertheless all such references shall be deemed to
      include this Guaranty Supplement unless the context shall otherwise
      require.

     

    Dated:  _________________,
      20 .

    
      	
               

            	
              [Name
                of Additional Guarantor]

            


    

    


    
      	
               

            	
              By

            


    

    
      	
               

            	
              Its

            


    

     

    
      
        
                

                    Exhibit 4.5(a)      
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    Form
      of Opinion of Special Counsel

    to
      the Company and the Guarantors

     

    The
      closing opinion of Chapman and Cutler, LLP, special counsel for the Company
      and
      the Guarantors, which is called for by Section 4.5(a) of
      the Agreement, shall be dated the date of the Closing and addressed to each
      Purchaser, shall be satisfactory in scope and form to each Purchaser and shall
      be to the effect that:

     

                     1.The
      Company is a corporation duly
      incorporated, validly existing and in good standing under the laws of the State
      of New Jersey has the corporate power and the corporate authority to execute
      and
      perform the Agreement and to issue the Notes and has the full corporate power
      and the corporate authority to conduct the activities in which it is now engaged
      and is duly licensed or qualified and is in good standing as a foreign
      corporation in each jurisdiction in which the character of the properties owned
      or leased by it or the nature of the business transacted by it makes such
      licensing or qualification necessary, other than those jurisdictions as to
      which
      the failure to be so licensed, qualified or in good standing could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect.

     

                     2.Each
      Guarantor and New Jersey Natural
      Gas is a corporation or other business entity duly organized, validly existing
      and in good standing under the laws of its jurisdiction of organization and
      is
      duly licensed or qualified and is in good standing in each jurisdiction in
      which
      the character of the properties owned or leased by it or the nature of the
      business transacted by it makes such licensing or qualification necessary,
      other
      than those jurisdictions as to which the failure to be so licensed, qualified
      or
      in good standing could not, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect, and all of the issued and
      outstanding shares of capital stock or other equity interests of each such
      Guarantor and New Jersey Natural Gas have been duly issued, are fully paid
      and
      non-assessable, other than as shown on Schedule 5.4, and
      are owned by the Company, by one or more Restricted Subsidiaries, or by the
      Company and one or more Restricted Subsidiaries.

     

                     3.Each
      Guarantor has the corporate or
      other power and authority to execute and perform the Guaranty Agreement and
      has
      full corporate or other power and authority to conduct the activities in which
      it is now engaged.

     

                     4.The
      Agreement has been duly authorized
      by all necessary corporate action on the part of the Company, has been duly
      executed and delivered by the Company and constitutes the legal, valid and
      binding contract of the Company enforceable in accordance with its terms subject
      to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting
      creditors’ rights generally, and general principles of equity (regardless of
      whether the application of such principles is considered in a proceeding in
      equity or at law).

     

                     5.The
      Notes have been duly authorized by
      all necessary corporate action on the part of the Company, have been duly
      executed and delivered by the Company and constitute the legal, valid and
      binding obligations of the Company enforceable in accordance with their terms
      subject to bankruptcy, insolvency, fraudulent conveyance and similar laws
      affecting creditors’ rights generally, and general principles of equity
      (regardless of whether the application of such principles is considered in
      a
      proceeding in equity or at law).

     

                     6.The
      Guaranty Agreement has been duly
      authorized by all necessary corporate action on the part of the of each
      Guarantor, has been duly executed and delivered by each Guarantor and, assuming
      adequate consideration has been given, constitutes the legal, valid and binding
      obligations of each Guarantor enforceable in accordance with its terms subject
      to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting
      creditors’ rights generally, and general principles of equity (regardless of
      whether the application of such principles is considered in a proceeding in
      equity or at law).

     

                     7.No
      approval, consent or withholding of
      objection on the part of, or filing, registration or qualification with, any
      Governmental Authority, Federal or state, is necessary in connection with the
      execution, delivery or performance by the Company of the Agreement or the Notes
      or by any Guarantor of the Guaranty Agreement, in each case, other than such
      consents, approvals, authorizations, registrations, filings or declarations
      that
      have been obtained or made prior to the date of the Closing.

     

    
      
        
        

      

      
        
          Exhibit 4.5(a)-2

          (to Note Agreement)

        

        
          

        

      

      
        
        

      

    

                     8.The
      execution and delivery of the
      Agreement and the Notes by the Company do not, and the performance of the
      Agreement and the Notes as therein contemplated will not (a) violate, any
      provision of any applicable law, rule or regulation to which the Company is
      subject or any order of any court, or of any other agency of government
      presently in effect to which the Company is subject, (b) violate the Certificate
      of Incorporation or by-laws of the Company, (c) result in a breach of, or
      constitute a default under any indenture, mortgage, contract or other instrument
      to which the Company is a party or by which the Company or any of its properties
      and assets are bound, (d) result in the creation or imposition of any Lien
      on,
      or security interest in, any assets of the Company or any Subsidiary or (e)
      result in a breach of, or constitute a default under, any order, judgment,
      decree or ruling of any court binding on the Company.

     

                     9.The
      execution and delivery of the
      Guaranty Agreement by each Guarantor do not, and the performance of the Guaranty
      Agreement as therein contemplated will not (a) violate, any provision of any
      applicable law, rule or regulation to which such Guarantor is subject or any
      order of any court, or of any other agency of government presently in effect
      to
      which such Guarantor is subject (b) violate the organizational documents of
      such
      Guarantor, (c) result in a breach of, or constitute a default under any
      indenture, mortgage, contract or other instrument to which such Guarantor is
      a
      party or by which such Guarantor or any of its properties and assets are bound,
      (d) result in the creation or imposition of any Lien on, or security interest
      in, any assets of such Guarantor or (e) result in a breach of, or constitute
      a
      default under, any order, judgment, decree or ruling of any court binding on
      such Guarantor.

     

                     10.To
      our knowledge, neither the Company
      nor any Subsidiary is an “investment company,” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
      as amended.  The issuance of the Notes by the Company is not subject
      to regulation under the Public Utility Holding Company Act of 2005.

     

                     11.The
      issuance of the Notes and the use
      of the proceeds of the sale of the Notes in accordance with the provisions
      of
      and contemplated by the Agreement do not violate Regulation T, U or X of the
      Board of Governors of the Federal Reserve System.

     

                     12.The
      issuance, sale and delivery of the
      Notes and the execution and delivery of the Guaranty Agreement under the
      circumstances contemplated by the Agreement do not, under existing law, require
      the registration of the Notes or the Guaranty Agreement under the Securities
      Act
      or the qualification of an indenture under the Trust Indenture Act of 1939,
      as
      amended.

     

    The
      opinion of Chapman and Cutler, LLP, shall cover such other matters relating
      to
      the sale of the Notes as any Purchaser may reasonably request.  With
      respect to matters of fact on which such opinion is based, such counsel shall
      be
      entitled to rely on appropriate certificates of public officials, Goldman,
      Sachs
& Co. and officers of the Company and of the Guarantors and upon
      representations of the Company, the Guarantors and the Purchasers delivered
      in
      connection with the issuance and sale of the Notes and the execution and
      delivery of the Guaranty Agreement.  

    
      
        
                

                    Exhibit 4.5(a)-3    
      

                    (to
              Note
              Purchase
              Agreement)      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    Form
      of Opinion of Special Counsel

    to
      the Purchasers

     

    The
      closing opinion of Schiff Hardin LLP, special counsel to the Purchasers, called
      for by Section 4.5(b) of the Agreement, shall be dated the date
      of the Closing and addressed to the Purchasers, shall be satisfactory in form
      and substance to the Purchasers and shall be to the effect that:

     

                     1.The
      Company is a corporation validly
      existing and in good standing under the laws of the State of New
      Jersey.

     

                     2.The
      Agreement and the Notes being
      delivered on the date hereof constitute the legal, valid and binding contracts
      of the Company, enforceable against the Company in accordance with their
      respective terms.

     

                     3.The
      issuance, sale and delivery of the
      Notes being delivered on the date hereof under the circumstances contemplated
      by
      this Agreement do not, under existing law, require the registration of such
      Notes under the Securities Act or the qualification of an indenture under the
      Trust Indenture Act of 1939, as amended.

     

    The
      opinion of Schiff Hardin LLP shall also state that the opinion of Chapman and
      Cutler, LLP, is satisfactory in scope and form to Schiff Hardin LLP and that,
      in
      their opinion, the Purchasers are justified in relying thereon.

     

    In
      rendering the opinion set forth in paragraph 1 above, Schiff Hardin LLP may
      rely, as to matters referred to in paragraph 1, solely upon an examination
      of
      the Certificate of Incorporation certified by, and a certificate of good
      standing of the Company from, the Secretary of State of the State of New
      Jersey.  The opinion of Schiff Hardin LLP is limited to the laws of
      the State of New York and the Federal laws of the United States.

     

    With
      respect to matters of fact upon which such opinion is based, Schiff Hardin
      LLP
      may rely on appropriate certificates of public officials and officers of the
      Company and upon representations of the Company and the Purchasers delivered
      in
      connection with the issuance and sale of the Notes.

    


    


    


    


     

    


    
      
        
                

                    Exhibit 4.5(b)      
      

                    (to
              Note
              Purchase
              Agreement)