Document:

AGREEMENT AND AMENDMENT NO. 3 TO CREDIT AGREEMENT

                                 (NUI UTILITIES)

          AGREEMENT AND AMENDMENT NO. 3 TO CREDIT AGREEMENT (NUI UTILITIES),
dated as of August 20, 2004 (this "Agreement"), between NUI UTILITIES INC., a
New Jersey Corporation (the "Borrower") and CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands Branch, as administrative agent (in such capacity,
the "Agent") for the several banks and other financial institutions party to the
Credit Agreement referred to below.

                              PRELIMINARY STATEMENT

          Reference is made to (i) that certain Credit Agreement dated as of
November 24, 2003 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, the financial institutions
from time to time party thereto and the Agent, (ii) that certain Agreement dated
January 26, 2004 by which the Borrower and the Required Lenders (as defined in
the Credit Agreement) agreed to certain extensions, waivers, consents and
amendments under the Credit Agreement including without limitation certain
amendments to Sections 2.2c and 5.16 of the Credit Agreement, (iii) that certain
Agreement dated March 12, 2004 by which the Borrower and the Required Lenders
agreed to certain waivers, deferrals and consents and (iv) that certain
Amendment No. 2 to the Credit Agreement dated as of May 10, 2004 by which the
Borrower and the Required Lenders agreed to certain amendments under the Credit
Agreement.

          The Borrower has requested that the Credit Agreement be amended as
provided herein and the Required Lenders have agreed to the requested amendments
on the terms and conditions set forth herein and have directed the Agent to
enter into this Agreement for and on their behalf.

          In consideration of the mutual agreements herein contained and other
good and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                                    AGREEMENT

          SECTION 1. Definitions; Rules of Construction. Each term capitalized
herein and not otherwise defined herein shall have the meaning ascribed to it in
the Credit Agreement. Rules of construction or interpretation set forth in the
Credit Agreement shall apply to the interpretation of this Agreement.

          SECTION 2. Amendments. Subject to Section 4(b) of this Agreement, the
Credit Agreement is hereby amended as follows:

          (a) The definitions of "Consolidated EBITDA", "Consolidated Interest
     Expense", "Consolidated Net Income", "Consolidated Shareholders' Equity",
     "Consolidated Total Indebtedness" and "Termination Date" in Section 1.1 are

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     hereby deleted in their entirety and replaced with the following in the
     place thereof:

          "Consolidated EBITDA" for any period means, with respect to the
     Borrower Consolidated Net Income before interest and taxes, plus (to the
     extent deducted in determining such Consolidated Net Income) (i)
     depreciation, amortization and other similar non-cash expenses (excluding
     any such non-cash expense to the extent that it represents an accrual of or
     reserve for cash expenses in any future period or amortization of a prepaid
     cash expense that was paid in a prior period), (ii) extraordinary losses,
     losses in connection with asset sales (other than ordinary course sales
     including sales of inventory) or restructuring charges, (iii) non-recurring
     items of loss and expense relating to the credit facilities provided hereby
     to the extent not otherwise reflected in Consolidated Net Income, (iv) all
     fees, expenses and settlement costs (including the NJBPU Settlement Amount)
     related to the Focused Audit and Florida Settlement, (v) all severance and
     retention expenses in the amount of up to $5,000,000, (vi) expenses in
     connection with explosions and fires related to gas accidents that have
     occurred prior to July 14, 2004 in the aggregate amount of up to
     $4,000,000, (vii) all commissions and impairment charges related to the
     sub-leasing of excess office space, (viii) all fees, expenses and
     prepayment premiums in connection with any prepayment of the Medium Term
     Notes, (ix) fees and expenses related to amendments to the Standby Bond
     Purchase Agreement, and (x) all fees and expenses related to the NUI
     Utilities Secured Facility, Amendment No. 3, and all prior amendments to,
     and waivers under, this Agreement, the Extension Fee and the Additional
     Extension Fee; minus (to the extent included in determining such
     Consolidated Net Income) extraordinary gains or gains in connection with
     asset sales (other than ordinary course sales including sales of
     inventory).

          "Consolidated Interest Expense" means for any period the amount of
     interest expense, both expensed and capitalized, of the Borrower, net of
     cash interest income of the Borrower determined on a Consolidated basis in
     accordance with GAAP, for such period on the aggregate principal amount of
     its Indebtedness, determined on a consolidated basis in accordance with
     GAAP (excluding, in any event (to the extent otherwise included), one-time
     financing fees relating to the credit facilities provided hereby, by any
     agreement to refinance or otherwise extend the maturity of the Medium Term
     Notes as permitted hereunder, by the NUI Corporation Credit Agreement or by
     the NUI Utilities Secured Facility, interest payments with respect to the
     NUI Utilities Secured Facility and interest payments that will accrue to
     the maturity of the Medium Term Notes (to the extent that the Delayed Draw
     Term Loans are drawn)).

          "Consolidated Net Income" means for any period, net income (or loss)
     of the Borrower, determined on a Consolidated basis in accordance with GAAP
     (plus, in any event (to the extent otherwise deducted therefrom), one-time
     financing fees relating to the credit facilities provided hereby or any
     agreement to refinance or otherwise extend the maturity of the Medium Term
     Notes as

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<PAGE>

     permitted hereunder, by the NUI Corporation Credit Agreement or by the NUI
     Utilities Secured Facility), without giving effect to any non-cash gain,
     any non-cash loss or any reversals or adjustments to, or failure to
     recognize, revenue due to changes in applicable U.S. accounting rules and
     regulations, in each case to the extent reasonably acceptable to the Agent,
     including without limitation due to the implementation, effective as of
     October 25, 2002, of EITF 02-03 ("Issues Involved in Accounting for
     Derivative Contracts Held for Trading Purposes and Contracts Involved in
     Energy Trading and Risk Management Activities"), the effects of which EITF
     implementation are hereby deemed acceptable to the Agent.

          "Consolidated Shareholders' Equity" means the total of those items
     enumerated under the heading "Common Shareholders' Equity" in the
     Borrower's relevant balance sheets determined on a Consolidated basis in
     accordance with GAAP, consistently applied, plus (to the extent deducted in
     determining such total and on an after-tax basis) (i) all fees, expenses
     and settlement costs (including NJBPU Settlement Amount) related to the
     Focused Audit and Florida Settlement, (ii) all severance and retention
     expenses in the amount of up to $5,000,000, (iii) expenses in connection
     with explosions and fires related to gas accidents that have occurred prior
     to July 14, 2004 in the aggregate amount of up to $4,000,000, (iv) all
     commissions and impairment charges related to the sub-leasing of excess
     office space, (v) all fees, expenses and prepayment premiums in connection
     with any prepayment of the Medium Term Notes, (vi) fees and expenses
     related to amendments to the Standby Bond Purchase Agreement, and (vii) all
     fees and expenses related to the NUI Utilities Secured Facility, Amendment
     No. 3, and all prior amendments to, and waivers under, this Agreement, the
     Extension Fee and the Additional Extension Fee.

          "Consolidated Total Indebtedness" means all Indebtedness of the
     Borrower, determined on a Consolidated basis in accordance with GAAP,
     consistently applied. Solely for purposes of this definition, (A) the term
     "Indebtedness" shall not include (i) letter of credit reimbursement
     obligations except with respect to drawings actually made under letters of
     credit which then remain unreimbursed, (ii) Hedging Obligations, and (iii)
     the outstanding principal amount of the NUI Utilities Secured Facility and
     (B) if any portion of the Medium Term Notes and the Delayed Draw Term Loans
     are outstanding at such time, the term "Indebtedness" shall not include the
     principal amount of the Medium Term Notes to the extent that the proceeds
     of the Delayed Draw Term Loans are held by and under the control of an
     agent or trustee on behalf of holders of Medium Term Notes in a securities
     or deposit account or as otherwise provided in Section 4.1.

          "Termination Date" means November 21, 2005, as extended pursuant to
     and subject to the conditions set forth in Section 2.6, unless earlier
     terminated in accordance with the terms hereof.

          (b) The following new definitions are hereby added to Section 1.1
     which shall appear in alphabetical order and shall read as follows:

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          "Acquisition" means the acquisition of substantially all of the assets
     or all of the capital stock of the Borrower by AGL, Cougar Corporation or
     any other Affiliate of AGL.

          "Acquisition Agreement" means the agreement and plan of merger, dated
     as of July 14, 2004 by and among AGL, Cougar Corporation and NUI
     Corporation.

          "Additional Extension Fee" has the meaning set forth in Section
     2.4b(b).

          "Additional Term Loans" means Additional Term Loans as defined in the
     NUI Corporation Credit Agreement.

          "Additional Term Loan Closing Date" means the Additional Term Loan
     Closing Date as defined in the NUI Corporation Credit Agreement.

          "AGL" means AGL Resources Inc., a Georgia corporation.

          "Amendment No. 3" means Agreement and Amendment No. 3 to this
     Agreement, dated as of August 20, 2004 among the Borrower and the Agent on
     behalf of the Required Lenders.

          "Cougar Corporation" means Cougar Corporation, a New Jersey
     corporation and a wholly-owned subsidiary of AGL.

          "Extension Fee" has the meaning set forth in Section 2.4b(c).

          "Florida Settlement" means the anticipated settlement agreement
     between the Borrower and the Florida Public Service Commission, for which
     the Borrower has established a pre-tax reserve of approximately $2,600,000,
     any fines contemplated thereby, and all actions and negotiations in respect
     thereof.

          "FPSC" means the Florida Public Service Commission.

          "FPSC Approval" has the meaning given it in Section 3.11.

          "Lender Presentation" means that certain Lender Presentation dated
     July 2004 and made available to the Lenders prior to the Additional Term
     Loan Closing Date.

          "New Facilities Fee Letter" has the meaning given to it in Section
     2.4b(a).

          "NJBPU Approval" has the meaning given it in Section 3.11.

          "NUI Utilities Secured Facility" means a senior secured term loan
     facility in an aggregate principal amount of up to $75,000,000 to be made
     available to the Borrower on the Additional Term Loan Closing Date.

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<PAGE>

          "Standby Bond Purchase Agreement" means the amended and restated
     standby bond purchase agreement, dated as of June 12, 2001 among the
     Borrower, the Participating Banks referred to therein and The Bank of New
     York, as purchasing bank.

          (c) The definition of "Permitted Encumbrances" in Section 1.1 is
     hereby amended by deleting the word "and" after clause (ix) thereof and
     inserting a new clause (xi) after clause (x) thereof to read as follows:

          "; and (xi) security interests in favor of lenders under the NUI
          Utilities Secured Facility."

          (d) Section 2.4b(a) is hereby deleted in its entirety and replaced
     with the following in the place thereof:

          "(a) The Borrower agrees to pay to the Agent for the account of the
          Agent, the fees required to be paid by it as set forth in that certain
          letter agreement between NUI Corporation and CSFB (the "Fee Letter")
          dated as of October 31, 2003 and in that certain letter agreement
          among the Borrower, the Agent and NUI Corporation (the "New Facilities
          Fee Letter") dated as of July 14, 2004, in each case, as the same may
          be amended from time to time by the parties thereto, and as and when
          payment of such fees is due as set forth therein."

          (e) Section 2.4b(c) is hereby deleted in its entirety and replaced
     with the following in the place thereof:

          "(c) Upon extension of the Termination Date pursuant to Section 2.6,
          the Borrower shall pay the Lenders an extension fee prior to or on the
          Additional Term Loan Closing Date in an amount equal to 0.50% of the
          aggregate amount of Term Loans (including the Delayed Draw Term Loans,
          if any) and the Revolving Credit Commitments then outstanding (the
          "Extension Fee"). On May 22, 2005 the Borrower shall pay the Lenders
          an additional fee in an amount equal to 0.50% of the aggregate amount
          of Term Loans (including the Delayed Draw Term Loans, if any) and the
          Revolving Credit Commitments then outstanding then outstanding (the
          "Additional Extension Fee")."

          (f) Section 2.6 is hereby deleted in its entirety and replaced with
     the following in the place thereof:

          "2.6 Extension of Termination Date. The Termination Date is hereby
          extended until November 21, 2005 subject to the satisfaction of the
          following conditions: (i) the Borrower has obtained all governmental
          and other approvals necessary (if any) to exercise such extension,
          (ii) the maturity of the Medium Term Notes has been extended to a date
          no earlier than June 30, 2006 (without any scheduled amortization
          thereof prior to such date)(either by amendment or refinancing
          thereof, on terms

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<PAGE>

          reasonably acceptable to the Agent, it being understood that a
          refinancing thereof through the incurrence of Delayed Draw Term Loans
          is reasonably acceptable to the Agent), and (iii) no Event of Default
          has occurred and is continuing.".

          (g) Section 2.14(a) is hereby deleted in its entirety and replaced
     with the following in the place thereof:

          "(a) Unless the Required Lenders otherwise agree, if (i) any Equity
          Interests of the Borrower shall be issued to a Person other than NUI
          Corporation, (ii) any Recovery Event shall have occurred (and Net
          Asset Sale Proceeds thereof have not been reinvested in the same or
          similar property or assets within 364 days of such Recovery Event
          (with such reinvestment not to exceed $20,000,000 in the aggregate)),
          or (iii) any Indebtedness of the Borrower is incurred (excluding any
          Indebtedness incurred in accordance with Section 5.13), the Borrower
          shall prepay the Loans and reduce the Commitments pro rata with
          prepayments of the loans then outstanding under the NUI Utilities
          Secured Facility in an amount equal to 100% of the Net Proceeds
          therefrom no later than the second Business Day following receipt by
          the Borrower of such Net Proceeds.".

          (h) Clause (i) of Section 2.14(c) is hereby amended by adding after
     the phrase "or NUI Corporation" the new phrase which shall read as follows:

          "(including, without limitation, the consummation of the Acquisition)"

          (i) The last sentence of Section 3.5 is hereby deleted in its entirety
     and replaced with the following in the place thereof:

          "Except as has otherwise been fully disclosed in NUI Corporation's
          Form 10-K filed on December 31, 2002, Form 10-Qs filed on February 14,
          2003, May 15, 2003 and August 14, 2003, Current Reports on Form 8-K
          filed on July 22, 2003, July 31, 2003, September 26, 2003, October 14,
          2003 and November 19, 2003, Form 10-K filed on May 13, 2004, Form
          10-Qs filed on May 20, 2004, May 25, 2004 and August 16, 2004, and
          Form 10-Q/As filed on June 17, 2004, in each case with the Securities
          and Exchange Commission, the Confidential Information Memorandum or
          the Lender Presentation, since September 30, 2003, nothing has
          occurred that has had a Material Adverse Effect."

          (j) The first sentence of Section 3.6 is hereby deleted in its
     entirety and replaced with the following in the place thereof:

          "Except as disclosed in the NUI Corporation's Form 10-K filed on
          December 31, 2003, Form 10-Qs filed on February 14, 2003, May 15,
          2003, and August 14, 2003, Current Reports on Form 8-K filed on July
          22, 2003, July 31, 2002, September 26, 2003, October 14, 2003 and

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<PAGE>

          November 19, 2003, Form 10-K filed on May 13, 2004, Form 10-Qs filed
          on May 20, 2004, May 25, 2004 and August 16, 2004, and Form 10-Q/As
          filed on June 17, 2004, in each case with the Securities and Exchange
          Commission, the Confidential Information Memorandum or the Lender
          Presentation, there are no actions, suits, investigations, litigation
          or proceedings at law or in equity pending or, to the Borrower's
          knowledge, threatened against the Borrower or any of its properties,
          which (i) would have a Material Adverse Effect, or (ii) involve any
          Loan Document or the transactions hereunder."

          (k) Section 3.10 is hereby deleted in its entirety and replaced with
     the following in the place thereof:

          "3.10 Environmental Matters. Except to the extent described in the NUI
          Corporation's Form 10-K filed on December 31, 2003, Form 10-Qs filed
          on February 14, 2003, May 15, 2003, and August 14, 2003, Current
          Reports on Form 8-K filed on July 22, 2003, July 31, 2002, September
          26, 2003, October 14, 2003 and November 19, 2003, Form 10-K filed on
          May 13, 2004, Form 10-Qs filed on May 20, 2004, May 25, 2004 and
          August 16, 2004, and Form 10-Q/As filed on June 17, 2004, in each case
          with the Securities and Exchange Commission, the Confidential
          Information Memorandum or the Lender Presentation, the Borrower is in
          compliance with all applicable Environmental Laws, except for matters
          which do not have a Material Adverse Effect."

          (l) The word "No" at the beginning of the first sentence of Section
     3.11 is hereby deleted and replaced with the following phrase in the place
     thereof:

          "Other than approval by the NJBPU (the "NJBPU Approval") and approval
          by the FPSC (the "FPSC Approval"), no".

          (m) The last sentence of Section 3.19 is hereby deleted in its
     entirety and replaced with the following in the place thereof:

          "There are no arbitrations, unfair labor practice charges, complaints,
          representation proceedings or grievances pending against or involving
          the Borrower, nor, to the Borrower's knowledge, are there any
          threatened involving the Borrower, based on, arising out of, in
          connection with, or otherwise relating to individual or group
          employment, collective bargaining agreements, union organizing or
          other activities, or employment or other labor matters, other than
          those which, in the aggregate, would have no Material Adverse Effect."

          (n) The references to "10 days" in Sections 4.2(i) and 4.2(ii) are
     each hereby amended to read as "30 days".

          (o) The last sentence of Section 4.7 is hereby deleted in its entirety
     and replaced with the following in the place thereof:

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          "The Borrower will certify in the Compliance Certificate delivered
          pursuant to Subsection 4.2(iii) hereof that such insurance is in
          force, provides coverage consistent with the preceding sentence and
          complies with the Borrower's obligations under this Section 4.7."

          (p) Section 5.3a is hereby deleted in its entirety and replaced with
     the following in the place thereof:

          "5.3a Leverage Ratio. At no time shall its ratio of Consolidated Total
          Indebtedness to its Consolidated Total Capitalization exceed
          0.70:1.00; provided that the Borrower shall not be required to comply
          with the covenant of this Section 5.3a until the earlier of (x)
          December 31, 2004 and (y) the termination, if any, of the Acquisition
          Agreement, and such non-compliance shall not constitute an "Event of
          Default" hereunder (for the avoidance of doubt, the Borrower shall
          have to continue within such period of time to deliver a Compliance
          Certificate pursuant to the requirements of Section 4.2(iii) hereof
          with the appropriate qualifications)."

          (q) Section 5.3b is hereby deleted in its entirety and replaced with
     the following in the place thereof:

          "5.3b Interest Coverage Ratio. At no time shall the Borrower permit,
          for any period of four consecutive Fiscal Quarters ending on or after
          December 31, 2003, the ratio of (i) Consolidated EBITDA to (ii)
          Consolidated Interest Expense for such period, to be less than 2.25 to
          1.00; provided that the Borrower shall not be required to comply with
          the covenant of this Section 5.3b until the earlier of (x) December
          31, 2004 and (y) the termination, if any, of the Acquisition
          Agreement, and such non-compliance shall not constitute an "Event of
          Default" hereunder (for the avoidance of doubt, the Borrower shall
          have to continue within such period of time to deliver a Compliance
          Certificate pursuant to the requirements of Section 4.2(iii) hereof
          with the appropriate qualifications)."

          (r) Section 5.9 is hereby deleted in its entirety and replaced with
     the following in the place thereof:

          "5.9 Restrictive Agreements. The Borrower shall not enter into or
          otherwise be bound by any agreement not to pay dividends or make
          distributions to NUI Corporation, except for (i) as provided
          hereunder, the NUI Utilities Secured Facility, the Standby Bond
          Purchase Agreement and the Borrower's settlement with the NJBPU
          relating to the Focused Audit, and (ii) such agreements existing on
          the date hereof which have been fully disclosed in writing to Agent,
          and replacements of such agreements (provided that copies of such
          replacement agreements are provided to the

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          Agent and are no more restrictive in any material respect than those
          agreements being replaced)."

          (s) Clause (c) and clause (e) of Section 5.13 are hereby deleted in
     their entirety and replaced with the following clauses respectively in the
     place thereof:

          "(c) Indebtedness of the Borrower under the NUI Utilities Secured
          Facility;" and

          "(e) intercompany Indebtedness incurred in connection with the
          provision of services in the ordinary course of business;".

          (t) Clause (d) and clause (e) of Section 5.16 are hereby deleted in
     their entirety and replaced with the following clauses respectively in the
     place thereof:

          "(d) intercompany loans and advances in connection with the provision
          of services in the ordinary course of business;" and

          "(e) advance payments to gas suppliers;".

          (u) Section 5.17 is hereby amended by inserting after the phrase
     "other than Indebtedness under this Agreement," the new phrase which shall
     read as follows:

          "Indebtedness of the Borrower under the NUI Utilities Secured
          Facility, and".

          (v) Clauses (ii), (iii) and (iv) of Section 5.18 are hereby deleted in
     their entirety and replaced with the following clauses (ii) and (iii) in
     the place thereof:

          "(ii) the repayment of the intercompany receivables owing from NUI
          Corporation to the Borrower or from the Borrower to NUI Corporation,
          or (iii) the movement of employees between NUI Corporation and the
          Borrower, in each case provided at cost (if applicable), shall not be
          deemed a breach of this Section 5.18."

          (w) Section 6.1a is hereby amended by adding at the end thereof the
     proviso which shall read as follows:

          "; provided, that at the time of and immediately after an extension of
          credit under the Delayed Draw Term Loan Commitments the requirement
          that no Potential Default shall exist at either such time shall not be
          applicable".

          (x) Section 7.2 is hereby amended by inserting after the phrase "under
     or pursuant to which such Indebtedness is incurred or issued" the new
     phrase which shall read as follows:

          "(including, without limitation, the NUI Utilities Secured Facility)".

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          (y) The reference to "$2,500,000" in Sections 7.7(i) is hereby amended
     to read as "$10,000,000".

          (z) Section 7.7(ii) is hereby deleted in its entirety and replaced
     with the following in the place thereof:

          "or (ii) any one or more fines, penalties, injunctions, charges,
          orders, judgments, decrees, awards, writs of execution or attachment,
          restraining notices or any similar action or process (other than (x)
          in connection with the Focused Audit and (y) any costs related to the
          Focused Audit) has been levied, issued, entered or filed against the
          Borrower or any of its properties in connection with any actual or
          purported conflict with or violation or breach by the Borrower of any
          Governmental Rule (or the Borrower enters into any agreement or makes
          any payment in connection with any vacating, stay, settlement or
          dismissal of any such claim or charge (whether or not such payment by
          its terms constitutes an admission of liability)), in an aggregate
          amount of $10,000,000 or more (if monetary) or which could reasonably
          be expected to cause a Material Adverse Effect in the reasonable
          judgment of the Required Lenders (if non-monetary), and failure of the
          Borrower to vacate, stay or contest in good faith (by appropriate and
          lawful proceedings diligently conducted and as to which the Borrower
          shall have set aside on its books reserves for such claims as are
          determined to be adequate in accordance with GAAP) such fines,
          penalties, charges, orders, judgments, decrees, awards, writs of
          execution or attachment, restraining notices or other action or
          process within a period of 30 days (or, in the case of contesting the
          same, the failure of the Borrower to diligently conduct such contest
          thereafter).".

          (aa) Section 7.10 is hereby amended by deleting the phrase "or, during
     any period of up to 24 consecutive months, Persons who at the beginning of
     such 24-month period were directors of the Borrower (or were appointed,
     nominated or elected by such Persons) cease for any reason to constitute a
     majority of the directors of the Borrowers, then in office" in its
     entirety.

          (bb) Section 7.11 is hereby amended by inserting after the phrase "a
     final decision" the new phrase which shall read as follows:

          "(other than in connection with the Focused Audit)".

          (cc) The reference to the Borrower's address in Sections 9.3 is hereby
     amended to read as follows:

     "Borrower:                                 NUI Utilities, Inc.
                                                1085 Morris Avenue
                                                Union, NJ 07083
                                                Attention:  Treasurer

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<PAGE>

                                                Telecopier:  (908) 289-0978
                                                Telephone:  (908) 289-5000x6107

    with a copy to:                             Joseph Brazil, Esq.
                                                White & Case LLP
                                                1155 Avenue of the Americas
                                                New York, NY 10036
                                                Telecopier:  (212) 354-8113
                                                Telephone:  (212) 819-8401".

          (dd) Section 9.6a(i) is hereby amended by inserting after the words
     "the NUI Corporation Credit Agreement " the new phrase which shall read as
     follows:

          "(other than the Additional Term Loans)".

          (ee) The references to "the NUI Corporation Credit Agreement" in
     Section 9.6a(ii) are each hereby amended to read as "the NUI Corporation
     Credit Agreement (if applicable)"

          (ff) Section 3 of the form of Compliance Certificate attached as
     Exhibit F to the Credit Agreement is hereby amended by inserting after the
     words "Required Ratio" the footnote which shall read as follows:

          "Subject to Sections 5.3a and 5.3b of the Agreement.".

          SECTION 3. Representation and Warranties. The Borrower represents and
warrants as of the date hereof to each of the Agent and the Lenders that after
giving effect to the provisions of this Agreement effective as of the date
hereof:

          (a) The Borrower has the corporate power and authority to execute,
     deliver and perform this Agreement and has taken all corporate actions
     necessary to authorize the execution, delivery and performance of this
     Agreement;

          (b) This Agreement has been duly executed and delivered on behalf of
     the Borrower by a duly authorized officer or attorney-in-fact of the
     Borrower;

          (c) The execution, delivery and performance of this Agreement will not
     violate any requirement of law or any material contractual obligation
     binding on the Borrower; and

(d)      No consent or authorization of, filing with, notice to or other act by
         or in respect of, any Governmental Authority or any other Person is
         required in connection with the execution, delivery or performance by
         the Borrower of this Agreement, except for such as have been made or
         obtained and are in full force and effect (other than the NJBPU
         Approval and the FPSC Approval (as each such term is defined in Section
         2(b) hereof)).

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<PAGE>

The Borrower acknowledges and agrees that the representations and warranties set
forth above shall survive the execution and delivery hereof and shall be deemed
made in the Credit Agreement for purposes of Section 7.6 of the Credit
Agreement.

          SECTION 4. Effectiveness. (a) This Agreement (other than the
provisions of Section 2 hereof) shall become effective as of the date the Agent
receives (i) the consents of Lenders constituting the Required Lenders, (ii)
counterparts of this Agreement that, when taken together, bear the signatures of
the Borrower and the Agent, and (iii) payment of all of the Agent's reasonable
out-of-pocket costs and expenses incurred in connection with this Agreement
(including, without limitation, reasonable fees and expenses of its counsel) for
which invoices have been submitted to the Borrower.

          (b) The provisions of Section 2 hereof shall become effective subject
to the satisfaction of the following conditions: (i) the other provisions of
this Agreement shall have become effective in accordance with the terms thereof,
(ii) the Agent receives on behalf of each Lender consenting to this Agreement at
or prior to 5:00 P.M. (Eastern Standard Time) on Monday, July 26, 2004, an
amendment fee equal to 0.25% of the aggregate principal amount of such Lender's
Term Loans and Commitments then outstanding (the "Amendment Fee"); provided that
the Amendment Fee shall be payable only if the NJBPU Approval and the FPSC
Approval have been obtained and (iii) the Agent receives the evidence
satisfactory to the Agent that the NJBPU Approval and the FPSC Approval have
been obtained, in each case, in form and substance reasonably satisfactory to
the Agent.

          SECTION 5. Escrow Arrangement. (a) At any time prior to the obtaining
of the NJBPU Approval and/or the FPSC Approval, the Borrower shall have an
option to request, and the Agent and each Lender hereby agrees, subject to
satisfaction of the conditions of Sections 2.6 and 6.1 of the Credit Agreement
(determined as if Section 2 hereof had been given effect)(other than (x) the
obtaining of the NJBPU Approval and the FPSC Approval, and (y) the extension of
the Termination Date under the Credit Agreement), and receipt by the Agent of at
least three Business Days prior written notice thereof, that each Lender shall
make Delayed Draw Term Loans pursuant to Section 2.1; provided that (i) (A) the
proceeds of the Delayed Draw Term Loans, (B) the fee payable in connection with
borrowing of the Delayed Draw Term Loans pursuant to Section 2.4b(b) of the
Credit Agreement, (C) the Extension Fee under the Credit Agreement and (D) the
Amendment Fee hereunder (but not the costs and expenses under Section 4(a)(iii)
hereof) to be funded into an escrow account maintained by the Agent at The Bank
of New York (the "Escrow Account") and (ii) all invoiced reimbursable expenses
of the Agent incurred on or prior to the date of such funding (including without
limitation the reasonable fees and disbursements of the Agent's special counsel,
Dewey Ballantine LLP) shall be paid by the Borrower prior to or substantially
contemporaneously with funding the proceeds of the Delayed Draw Term Loans into
the Escrow Account. All of such funds shall be automatically released on the
date when the Agent receives the evidence satisfactory to the Agent that the
NJBPU Approval and the FPSC Approval have been obtained, in each case, in form
and substance reasonably satisfactory to the Agent and Section 2 hereof and
Section 2 of Amendment No. 3 to the NUI Corporation

                                       12
<PAGE>

Credit Agreement, dated as of August 20, 2004 among NUI Corporation, the Agent
thereunder on behalf of the Required Lenders thereunder, the Guarantors party
thereto and the Lenders listed on Schedule 2.1A thereto shall have become
effective to the respective payees as follows: (x) the Agent shall receive, for
the account of each Lender, an aggregate amount equal to the sum of the fees
specified in clauses (B), (C) and (D) above and all other fees and expenses then
due and payable pursuant hereto and (y) the Borrower shall receive the remainder
of the funds in the Escrow Account. For the avoidance of doubt, (i) the interest
on the Delayed Draw Term Loans shall start to accrue and shall be payable to the
Lenders from the date of funding of the proceeds of the Delayed Draw Term Loans
into the Escrow Account, and (ii) funds in the Escrow Account shall bear
interest from such date and such interest shall be paid to the Borrower on the
date when such funds are released or returned, as the case may be.

          (b) Notwithstanding the foregoing, if funds held in the Escrow Account
are not released on or prior to September 30, 2004 (due to the failure to obtain
the NJBPU Approval or the FPSC Approval), then (i) the provisions of Section 2
hereof shall be null and void, (ii) the Borrower shall then owe a fee (the
"Release Fee") to the Lenders in an aggregate amount equal to the amount of
interest which would have accrued on the Delayed Draw Term Loans from the date
escrowed through September 30, 2004, (iii) all funds held in the Escrow Account
shall be distributed on September 30, 2004 as follows: (A) the Agent shall
receive for the account of each Lender an aggregate amount equal to the proceeds
of the Delayed Draw Term Loans and the Release Fee, and (B) the Borrower shall
receive the remainder of the funds, if any, in the Escrow Account; provided that
in the event that the funds held in the Escrow Account are not sufficient to
make the distribution set forth in clause (iii)(A) above the Borrower shall pay
to the Agent for the account of each Lender the amount of such deficiency.

          SECTION 6. Miscellaneous. (a) Except as expressly set forth herein,
this Agreement shall not, by implication or otherwise, limit, impair, constitute
a waiver of, or otherwise affect the rights and remedies of the Lenders or the
Agent, under the Credit Agreement or any other Loan Document, and shall not
alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document, all of which are ratified and affirmed in all respects and
shall continue in full force and effect. Nothing herein shall be deemed to
entitle the Borrower to a consent to, or a waiver, amendment, modification or
other change of, any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement in similar or different
circumstances. This Agreement shall apply and be effective only with respect to
the provisions of the Credit Agreement specifically referred to herein. Upon
this Agreement becoming effective as provided herein, the term "Loan Document"
as defined in the Credit Agreement shall include, without limitation, this
Agreement.

          (b) As used in the Credit Agreement, the terms "Agreement," "herein,"
"hereinafter," "hereunder," "hereto," and words of similar import shall mean,
from and after the date this Agreement becomes effective, the Credit Agreement
as amended by this Agreement.

                                       13
<PAGE>

          (c) Section headings used herein are for convenience of reference only
and are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.

          (d) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK. The parties hereto each hereby consent to
the non-exclusive jurisdiction of the state and federal courts of the State of
New York and irrevocably waive all right to trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement.

          (e) This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which, when taken together, shall
constitute but one instrument. Delivery of an executed counterpart of this
Agreement by fax will be deemed as effective as delivery of an originally
executed counterpart.

                                       14

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the date first written above.

                                   NUI UTILITIES INC.

                                   By:/s/ Victor A. Fortkiewicz
                                      ------------------------------------------
                                      Name: Victor A. Fortkiewicz
                                      Title:President

                                   CREDIT SUISSE FIRST
                                   BOSTON, acting through its
                                   Cayman Islands Branch,
                                   as the Agent and on behalf of the
                                   Required Lenders

                                   By:/s/ Dana F. Klein
                                      ------------------------------------------
                                      Name: Dana F. Klein
                                      Title:Managing Director

                                   By:/s/ S. William Fox
                                      ------------------------------------------
                                      Name: S. William Fox
                                      Title:DirectorSECURITY AGREEMENT

                                     made by

                              NUI UTILITIES, INC.,
                                   as Grantor

                                       to

                           CREDIT SUISSE FIRST BOSTON,
                             Cayman Islands Branch,
                               as Collateral Agent

                            -------------------------

                           Dated as of August 20, 2004

                            -------------------------
<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

SECTION 1.   Certain Definitions; Rules of Construction........................1
SECTION 2.   Pledge and Grant of Security Interest.............................3
SECTION 3.   Security for Secured Obligations..................................3
SECTION 4.   Grantor Remains Liable............................................3
SECTION 5.   Representations and Warranties....................................3
SECTION 6.   Further Assurances................................................5
SECTION 7.   As to Receivables.................................................6
SECTION 8.   Collateral Agent Appointed Attorney-in-Fact.......................7
SECTION 9.   Collateral Agent May Perform......................................8
SECTION 10.  The Collateral Agent's Duties.....................................8
SECTION 11.  Remedies..........................................................8
SECTION 12.  Costs; Indemnity..................................................9
SECTION 13.  Waivers; Amendments..............................................10
SECTION 14.  Notices; Etc.....................................................10
SECTION 15.  Survival.........................................................10
SECTION 16.  Severability.....................................................11
SECTION 17.  Security Interest Absolute; Continuing Security Interest;
             Release..........................................................11
SECTION 18.  Reinstatement....................................................12
SECTION 19.  GOVERNING LAW; TERMS.............................................12
SECTION 20.  CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL....................12
SECTION 21.  Headings.........................................................13
SECTION 22.  Counterparts.....................................................13
SECTION 23.  Effectiveness....................................................13

Schedules and Appendices

Schedule 5(b)  Filing Office Locations
Schedule 5(c)  Places of Business and Locations of Collateral

                                       i
<PAGE>

     This SECURITY AGREEMENT, dated as of August 20, 2004 (this
"Agreement"), is made by NUI UTILITIES, INC., a corporation organized under the
laws of the State of New Jersey (the "Grantor"), to CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch, as collateral agent (the "Collateral
Agent") for the Secured Parties (as defined below).

                             PRELIMINARY STATEMENTS

     1. Reference is made to the Credit Agreement, dated as of August 20, 2004
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Grantor, the financial institutions from time to
time parties thereto (each, a "Lender" and collectively, the "Lenders") and
Credit Suisse First Boston, acting through its Cayman Islands Branch, as
administrative agent (the "Administrative Agent") for the Lenders.

     2. The Grantor's authentication and delivery of this Agreement is a
condition precedent to the making of the extensions of credit contemplated under
the Credit Agreement.

     NOW, THEREFORE, in consideration of the foregoing and in order to induce
the Lenders to enter into the Credit Agreement, to make available the Loans and
other extensions of credit (if any), and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

     SECTION 1. Certain Definitions; Rules of Construction. For all purposes of
this Agreement, (i) capitalized terms not otherwise defined herein shall have
the meanings set forth in the Credit Agreement and (ii) "include" and
"including" are not limiting, a reference to a law includes any amendment or
modification to such law and any rules or regulations issued thereunder or any
law enacted in substitution or replacement therefore and the other rules of
construction or interpretation set forth in the Credit Agreement shall apply to
the interpretation of this Agreement. Except for the terms defined in this
Agreement or in the Credit Agreement, all terms defined in Article 8 or 9 of the
UCC (as defined below) which are used in this Agreement shall have the meaning
specified in such Articles.

     In addition, the following terms shall have the meaning herein specified:

     "Administrative Agent" has the meaning given in the preliminary statements
to this Agreement.

     "Agreement" has the meaning given in the first paragraph of this Agreement.

     "Collateral" has the meaning given in Section 2 of this Agreement.

     "Collateral Agent" has the meaning given in the first paragraph of this
Agreement.
<PAGE>

     "Contract" means any instrument, agreement, invoice or other writing
pursuant to which a Receivable arises or which evidences such Receivable.

     "Credit Agreement" has the meaning given in the preliminary statements to
this Agreement.

     "Effective Date" means the date, on or after the date that the NJBPU
Approval and the FPSC Approval have been obtained, that the Borrower receives
the proceeds of the Loans under the Credit Agreement.

     "Lenders" has the meaning given in the preliminary statements to this
Agreement.

     "Receivables" means accounts (as defined in Section 9-102(a)(2) of the
UCC).

     "Records" means, with respect to any Receivable, all documents, books,
records and other information (including, without limitation, computer programs,
tapes, disks, punch cards, data processing software and related property and
rights but excluding Contracts) relating to such Receivable.

     "Secured Obligations" means (a) each and every obligation, covenant and
agreement of the Borrower now or hereafter existing contained in the Credit
Agreement or any other Loan Document, whether for principal, reimbursement
obligations, interest, premium, fees, late charges, expenses or otherwise, and
any amendments or supplements thereto, extensions or renewals thereof or
replacements therefore (and each and every obligation, covenant and agreement of
the Grantor now or hereafter existing contained herein), (b) all Hedging
Obligations of the Borrower contained in any agreement between the Borrower and
the Administrative Agent (or an Affiliate of the Administrative Agent), (c) all
sums advanced in accordance with the Collateral Documents by the Collateral
Agent to protect any of the Collateral purported to be covered thereby, (d) any
amounts paid by any person as to which amounts such person has a right to
reimbursement against the Borrower under the Credit Agreement or hereunder and
(e) amounts paid by the Collateral Agent in preservation of Collateral Agent's
rights or interests in the Collateral in accordance herewith or with the
Collateral Documents, together with interest on the amounts referred to in
clauses (a) through (e) above, such interest to accrue from the 15th day
following written demand delivered to the Grantor for the payment of such
amounts (unless expressly stated otherwise under the Loan Documents or the
agreements referred in clause (b) above) until reimbursement in full at the
interest rate set forth in the Credit Agreement for overdue amounts, in each
case whether direct or indirect, joint or several, absolute or contingent,
liquidated or unliquidated, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created or incurred, and including all indebtedness of the Borrower under any
instrument now or hereafter evidencing or securing any of the foregoing.

                                       2
<PAGE>

     "Secured Parties" means the Lenders, the Administrative Agent (and its
Affiliates in connection with Borrower's Hedging Obligations to such Affiliates,
as the case may be) and the Collateral Agent.

     "UCC" means the Uniform Commercial Code of the State of New York.

     SECTION 2. Pledge and Grant of Security Interest. As security for the
prompt and complete payment and performance of all Secured Obligations, the
Grantor hereby pledges and hypothecates to the Collateral Agent for the
equitable and ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent for the equitable and ratable benefit of the Secured Parties,
effective as of the Effective Date, a security interest in, and lien on, all of
the Grantor's right, title and interest, whether now owned, hereafter acquired
or hereafter arising, in and to the following (collectively, the "Collateral"):

          (a) all Receivables, other than those due from affiliates of the
     Grantor;

          (b) all Contracts; and

          (c) all cash proceeds of any and all of the foregoing.

     SECTION 3. Security for Secured Obligations. This Agreement secures the
prompt and complete payment and performance of all Secured Obligations. Without
limiting the generality of the foregoing, to the extent permitted by applicable
law, this Agreement also secures the payment of all amounts which constitute
part of the Secured Obligations and which would be owed by the Grantor to the
Secured Parties but for the fact that a claim therefor may not be allowable in a
bankruptcy, insolvency, reorganization or similar proceeding involving the
Grantor.

     SECTION 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain liable under all instruments,
contracts, permits, agreements, licenses and other general intangibles included
in the Collateral to the extent set forth therein to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed (and the Grantor agrees to indemnify and hold harmless the Collateral
Agent and the other Secured Parties from and against any and all liabilities for
such performance), (b) the exercise by the Collateral Agent of any of the rights
hereunder shall not release the Grantor from any of its duties or obligations
under any instrument, contract, permit, agreement, license or other general
intangible included in the Collateral, and (c) neither the Collateral Agent nor
any Secured Party shall have any obligation or liability under any instrument,
contract, permit, agreement, license or other general intangible included in the
Collateral by reason of this Agreement, nor shall the Collateral Agent or any
Secured Party be obligated to perform any of the obligations or duties of the
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

     SECTION 5. Representations and Warranties. The Grantor represents and
warrants as follows:

                                       3
<PAGE>

     (a) The Grantor is a corporation duly formed solely under the laws of the
State of New Jersey and no other state or jurisdiction and is validly existing
and in good standing thereunder. The Grantor is in compliance with and not in
default under any and all applicable laws and material contractual obligations,
except as would not individually or in the aggregate, have a Material Adverse
Effect. The execution, delivery and performance by the Grantor of this Agreement
are within its power, have been duly authorized by all necessary action and do
not contravene in any material respect its charter, bylaws or other
organizational agreements, or, except as would not individually or in the
aggregate have a Material Adverse Effect, any applicable law or contractual
obligation binding on or affecting the Grantor or any of its properties or
assets. This Agreement has been duly executed and delivered by the Grantor and
constitutes a legal, valid and binding agreement of the Grantor enforceable in
accordance with its terms except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought at equity or at law).

     (b) This Agreement creates a valid security interest in the Collateral,
securing the payment of the Secured Obligations. The Grantor is a "registered
organization" as defined in Article 9 of the UCC and, for purposes of such
article, is "located" in the State of New Jersey. Upon the filing of the
financing statements in the public offices set forth on Schedule 5(b) attached
hereto, the security interests granted or purported to be granted hereby in the
Collateral shall be perfected to the extent any such security interest may be
perfected by the filing of a financing statement.

     (c) On the date hereof: (i) the principal place of business and chief
executive office (or, if the Grantor has, and has had, only one place of
business, the place of business) of the Grantor for the five years preceding the
date of this Agreement, the office where the Grantor keeps all Records (and its
other records concerning Receivables and other Collateral), and the originals of
all chattel paper that evidences Receivables, and each other place of business
of the Grantor, are located at the addresses specified on Schedule 5(c) attached
hereto; (ii) no Receivable in excess of $25,000 is evidenced by a promissory
note, other instrument or chattel paper; (iii) except as set forth on Schedule
5(c), the Grantor does not conduct, and at no time during the past five years
has conducted, any business under any name or trade name other than its proper
corporate name, which is the name set forth in the first paragraph of this
Agreement; (iv) the taxpayer identification number, and jurisdiction of
organization identification number (if any), are set forth in Schedule 5(c); and
(v) except as set forth in Schedule 5(c), the Grantor has not changed (including
by way of merger and consolidation as well as any changes in the form, nature or
jurisdiction of organization) its name, identity or corporate structure in any
way within the past five years.

     (d) The Grantor is the legal and beneficial owner of the Collateral in
existence on the Effective Date and will be the legal and beneficial owner of
the Collateral thereafter acquired, free and clear of any Encumbrance, except
for Encumbrances of the type set forth in clauses (i), (ii), (iv) or (xi) of the
definition of "Permitted Encumbrances" (as such term is defined in the Credit
Agreement). Other than

                                       4
<PAGE>

the Permitted Encumbrances referred to in the preceding sentence, the Grantor
has not pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Collateral. On the Effective Date, the Grantor is not aware
of any judgment or tax lien filings against it (nor of any other Encumbrance
against the Collateral of the type set forth in clause (ii) or (iv) of the
definition of "Permitted Encumbrances"). The Grantor has not authorized the
filing of, and is not aware of any filing of, any financing statement or other
document or record similar in effect covering all or any part of the Collateral
in any recording office, except such as may have been filed in favor of the
Collateral Agent relating to this Agreement or the other Collateral Documents.

     (e) Except for the filings and actions described in Section 5(b) hereof, no
consent of any other Person and no authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority is required (i) for
the grant by the Grantor of the lien and security interest granted hereby or for
the execution, delivery or performance of this Agreement by the Grantor, (ii)
for the validity, perfection or maintenance of the lien and security interest
created hereby, in each case, except for security interests that cannot be
perfected by filing under the UCC or (iii) for the exercise by the Collateral
Agent of the rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement, except also for those which have been
duly obtained or made and, in the case of the maintenance of perfection, for the
filing of continuation statements under the UCC.

     SECTION 6. Further Assurances.(a) The Grantor agrees that from time to
time, at the expense of the Grantor, the Grantor will promptly execute and
deliver all further instruments and documents, and take all further action that
may be necessary, or that the Collateral Agent may reasonably request, in order
to perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, the Grantor will: (i) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper and such Collateral has a value in excess of $25,000, promptly
give the Collateral Agent notice thereof, and if thereafter requested to do so
by the Collateral Agent, deliver to the Collateral Agent hereunder such note or
instrument or chattel paper, in pledge, duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Collateral Agent, provided, however, that, if no
Event of Default or Potential Default has occurred and is continuing, the
Collateral Agent will return any such promissory note or other instrument or
chattel paper to the Grantor in connection with the repayment, enforcement or
settlement of such promissory note or other instrument or chattel paper promptly
after request from the Grantor; and (ii) execute, or otherwise authenticate (as
necessary) and file, with a copy thereof to the Collateral Agent, such financing
or continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the Collateral Agent may reasonably request,
in order to perfect and preserve the pledge, security interest and lien granted
or purported to be granted hereby.

     (b) The Grantor hereby authorizes the Collateral Agent to execute and file
one or more financing statements, continuation statements, amendments,

                                       5
<PAGE>

memorandums or other records with the applicable Governmental Authority for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
security interest and lien granted by this Agreement with respect to the
Collateral, without the signature of the Grantor, and naming the Grantor as
debtor and the Collateral Agent as Secured Party (in each case, to the extent
permitted by applicable law). A photocopy or other reproduction of this
Agreement or any security agreement or financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by applicable law.

     (c) The Grantor will at its expense furnish to the Collateral Agent from
time to time, statements and schedules further identifying and describing (in
reasonable detail) the Collateral and such other reports and information in
connection with the Collateral as the Collateral Agent may reasonably request.

     SECTION 7. As to Receivables.(a) The Grantor shall not change its name
or jurisdiction of organization without giving at least thirty (30) days prior
written notice thereof to the Administrative Agent and the Collateral Agent;
provided, however, that in no event shall the Grantor change its jurisdiction of
organization to a jurisdiction outside the continental United States. The
Grantor shall keep its chief executive office and the office where it keeps all
Records (and its other records concerning the Receivables and other Collateral),
and the original copies of all chattel paper, at the location therefor specified
in Section 5(c) hereof or, upon 10 days prior written notice to the Collateral
Agent, at any other location in a jurisdiction (within the continental United
States) where all actions required by Section 6 hereof to protect, preserve and
maintain the lien and security interest created hereby and the priority thereof
shall have been taken with respect to the Receivables. The Grantor will hold and
preserve such records, and chattel paper and will permit representatives of the
Collateral Agent at any time during normal business hours to inspect, copy
and/or make abstracts from such records, and chattel paper.

     (b) Except as otherwise provided in this subsection (b), the Grantor shall
continue to collect, at its own expense, all amounts due or to become due to the
Grantor in respect of the Collateral, and shall do so, in all material respects,
in accordance with applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Grantor's credit and collection
policies and practices relating to Contracts and Receivables. The Grantor shall
give the Collateral Agent prompt notice of any material change to such credit
and collections policies and practices after the Effective Date. In connection
with such collections, the Grantor may take (and following the occurrence of and
during the continuance of an Event of Default at the Collateral Agent's
direction shall take) such action as the Grantor may deem necessary or advisable
(or following the occurrence of and during the continuance of an Event of
Default, such action as the Collateral Agent may deem necessary) to enforce
collection of the Receivables and amounts due under any Receivable. The Grantor
agrees and confirms that, if directed to do so by the Collateral Agent during
the continuation of an Event of Default, it will notify each party to a Contract
and each account debtor or obligor under the Receivables of the assignment
thereof to the Collateral Agent, and will instruct each of them that all
payments due or to become due and all amounts payable to the Grantor

                                       6
<PAGE>

thereunder shall, until such time as no Event of Default exists, be made to an
account specified by the Collateral Agent.

     SECTION 8. Collateral Agent Appointed Attorney-in-Fact. The Grantor
irrevocably makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent) as the
Grantor's true and lawful agent and attorney-in-fact, and in such capacity the
Collateral Agent shall have the right, with power of substitution for the
Grantor and in the Grantor's name or otherwise, for the use and benefit of the
Collateral Agent and the Secured Parties, upon the occurrence and during the
continuance of an Event of Default (a) to receive, endorse, assign and/or
deliver any and all notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Collateral or any part thereof; (b) to
demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of the Grantor on
any invoice or bill of lading relating to any of the Collateral; (d) to send
verifications of Receivables to any account debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require the
Grantor to notify, account debtors to make payment directly to the Collateral
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent or
any Secured Party to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent or any Secured
Party, or to present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the moneys due or to become due
in respect thereof or any property covered thereby, and no action taken or
omitted to be taken under this Section by the Collateral Agent or any Secured
Party with respect to the Collateral or any part thereof shall give rise to any
defense, counterclaim or offset in favor of the Grantor or to any claim or
action against the Collateral Agent or any Secured Party except to the extent
any such action or omission constitutes gross negligence or willful misconduct
on the part of the Collateral Agent or such Secured Party, as applicable. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantor for the purposes set forth above is coupled
with an interest and is irrevocable. The provisions of this Section shall in no
event relieve the Grantor of any of its obligations hereunder or under any other
Loan Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Loan Document, by law or otherwise.

                                       7
<PAGE>

     SECTION 9. Collateral Agent May Perform. If an Event of Default has
occurred and is continuing and either the Grantor has failed to perform
hereunder or under any instrument, contract, permit, license, agreement or other
general intangible included in the Collateral, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Collateral Agent incurred in connection therewith shall be payable by the
Grantor in accordance with Section 12 hereof. The Collateral Agent shall use its
good faith efforts to give reasonable prior or contemporaneous notice to the
Grantor in connection with the exercise by the Collateral Agent of its rights
under this Section; provided that the failure to give any such notice shall not
limit the Collateral Agent's right to exercise any such right or expose the
Collateral Agent to any liability hereunder.

     SECTION 10. The Collateral Agent's Duties. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the safe custody of any Collateral in its physical possession and the accounting
for moneys actually received by it hereunder, the Collateral Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral
and no such duties shall be implied as arising hereunder. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords or would accord its own
property and no such duties shall be implied as arising hereunder.
Notwithstanding any provision of this Agreement to the contrary, the Collateral
Agent shall not be required to make any request, demand or determination, take
or omit to take any action or do any other discretionary function to be done by
it under this Agreement unless it has been directed to do so in writing by the
Administrative Agent (acting at the direction of the Required Lenders or all
Lenders, as applicable).

     SECTION 11. Remedies. If any Event of Default shall have occurred and be
continuing:

          (a) The Collateral Agent may exercise in respect of the Collateral, in
     addition to other rights and remedies provided for herein or otherwise
     available to it, all the rights and remedies of a secured party upon a
     default under the Uniform Commercial Code as in effect in any relevant
     jurisdiction the laws of which govern the perfection of the relevant
     security interests hereunder to enforce this Agreement and the security
     interests contained herein, and also may, (i) require the Grantor to, and
     the Grantor hereby agrees that it will at its expense and upon request of
     the Collateral Agent forthwith, assemble all or part of the Collateral as
     directed by the Collateral Agent and make it available to the Collateral
     Agent at a place to be designated by the Collateral Agent which is
     reasonably convenient to both parties and (ii) without notice, except as
     specified below, sell the Collateral or any part thereof in one or more
     parcels at public or private sale, at any of the Collateral Agent's offices
     or elsewhere, for cash, on credit or for future delivery, and upon such
     other

                                       8
<PAGE>

     terms as the Collateral Agent may deem commercially reasonable. The Grantor
     agrees that to the extent a notice of sale shall be required by law, at
     least ten days notice to the Grantor of the time and place of any public
     sale or the time after which any private sale is to be made shall
     constitute reasonable notification. The Collateral Agent shall not be
     obligated to make any sale of Collateral regardless of whether a notice of
     sale shall have been given. The Collateral Agent may adjourn any public or
     private sale from time to time by announcement at the time and place fixed
     therefor, and such sale may, without further notice, be made at the time
     and place to which it was so adjourned.

          (b) Any cash held by the Collateral Agent as Collateral and all cash
     proceeds received by the Collateral Agent in respect of any sale of,
     collection from, or other realization upon all or any part of, the
     Collateral may in the discretion of the Collateral Agent be held by the
     Collateral Agent as security for, and may then or at any time thereafter be
     applied in whole or in part by the Collateral Agent for the benefit of the
     Secured Parties against, performance of all or any part of the Secured
     Obligations in accordance with the terms of the Credit Agreement. Any
     excess of such cash or cash proceeds and interest accrued thereon held by
     the Collateral Agent and remaining after payment in full of the principal
     of and interest on any Loans and Fees payable under the Credit Agreement
     (and any other Obligation for which demand for payment has been made or
     which is otherwise then due and payable) shall be paid over to the Grantor
     or to whomsoever may be lawfully entitled to receive such excess.

     SECTION 12. Costs; Indemnity. The Grantor hereby agrees to pay within 30
days following demand to the Collateral Agent the amount of any and all
reasonable expenses, including the reasonable fees, disbursements and other
reasonable charges of its counsel and, upon the occurrence and during the
continuation of an Event of Default, of any experts or agents, which the
Collateral Agent may incur in connection with (i) the administration of this
Agreement (including the customary fees and charges of the Collateral Agent for
any audits conducted by it or on its behalf with respect to the Receivables upon
the occurrence and during the continuation of an Event of Default), (ii) the
custody or preservation of, or the sale of, collection from or other realization
upon any of the Collateral, (iii) the exercise, enforcement or protection of any
of the rights of the Collateral Agent hereunder or (iv) the failure of the
Grantor to perform or observe any of the provisions hereof. Without limitation
of its indemnification obligations under the other Loan Documents, the Grantor
agrees to indemnify the Collateral Agent, its affiliates and their respective
officers, directors, employees, advisors, agents and the control persons (each,
an "Indemnitee") against, and hold each of them harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
fees, disbursements and other charges of counsel, incurred by or asserted
against any of them arising out of, in any way connected with, or as a result
of, the execution, delivery or performance of this Agreement or any claim,
litigation, investigation or proceeding relating hereto or to the Collateral,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent

                                       9
<PAGE>

that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or such Indemnitee's agents or affiliates. Any such amounts
payable as provided hereunder shall be additional Secured Obligations secured
hereby and by the other Collateral Documents. Notwithstanding any other
provision of this Agreement, neither the Collateral Agent nor any other
Indemnitee shall be liable for any damages arising from the use by others of
information or other materials obtained through electronic, telecommunications
or other information transmission systems or for any indirect, special, punitive
or consequential damages in connection with its activities hereunder or related
to the Collateral. The provisions of this Section shall remain operative and in
full force and effect regardless of the termination of this Agreement or any
other Loan Document, the consummation of the transactions contemplated hereby,
the repayment of any of the Loans, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any Lender. All
amounts due under this Section shall be payable on written demand therefor.

     SECTION 13. Waivers; Amendments. No failure or delay of the Collateral
Agent in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent hereunder, and
of the Collateral Agent, the Agent and the Lenders under the other Loan
Documents, are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No notice to or demand on the Grantor in any case
shall entitle the Grantor to any other or further notice or demand in similar or
other circumstances. No waiver of any provisions of this Agreement or consent to
any departure by the Grantor therefrom shall in any event be effective unless
the same shall be permitted by the next succeeding sentence, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Neither this Agreement nor any provision hereof may be
waived, amended or modified except (i) pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Grantor and (ii) with any
consent required under Section 9.1 of the Credit Agreement.

     SECTION 14. Notices; Etc. All notices and other communications provided for
hereunder shall be given and shall be effective as provided in Section 9.3 of
the Credit Agreement. All such notices and other communications to the
Collateral Agent shall be directed to the address of the Administrative Agent.

     SECTION 15. Survival. All agreements, statements, representations and
warranties made by the Grantor herein or in any certificate or other instrument
delivered by the Grantor or on its behalf under this Agreement shall be
considered to have been relied upon by the Collateral Agent and the Secured
Parties and shall survive the making of the Loans and the execution and delivery
of this Agreement and the other Loan Documents regardless of any investigation
made by the Collateral Agent or any Secured Party or on their behalf.

                                       10
<PAGE>

     SECTION 16. Severability. Any provision hereof 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 without affecting the validity or enforceability
of any provision in any other jurisdiction. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

     SECTION 17. Security Interest Absolute; Continuing Security Interest;
Release.(a) All rights of the Collateral Agent hereunder, the security
interest and lien granted hereby, and all obligations of the Grantor hereunder
shall be absolute and unconditional irrespective of (i) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Secured Obligations or any other agreement or
instrument relating to any of the foregoing, (ii) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Secured
Obligations, other than as expressly provided in any amendment or waiver hereof
or any consent to any departure herefrom, (iii) any exchange, release or
non-perfection of any Encumbrance on other collateral, or any release or
amendment or waiver of or consent under or departure from any guarantee,
securing or guaranteeing all or any of the Secured Obligations, or (iv) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, the Grantor in respect of the Secured Obligations or this
Agreement (other than the indefeasible payment in full of all of the Secured
Obligations).

     (b) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the principal of
and accrued interest on the Loans (and any other Secured Obligation for which
demand for payment has been made or which is otherwise then due and payable)
shall have been repaid in full, (ii) be binding upon the Grantor, its successors
and assigns; provided, that the Grantor may not transfer or assign any or all of
its rights or obligations hereunder except as provided in Section 9.5 of the
Credit Agreement and (iii) inure to the benefit of, and be enforceable by, the
Collateral Agent, the Secured Parties and their respective successors,
transferees and permitted assigns. Without limiting the generality of the
foregoing clause (iii), any Secured Party may assign or otherwise transfer all
or any portion of its rights in the Secured Obligations to the extent and in the
manner provided in the Credit Agreement and such assignee shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party
herein or otherwise. Upon the payment of in full the principal of and accrued
interest on the Loans (and any other Secured Obligation for which demand for
payment has been made or which is otherwise then due and payable), the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Grantor. Upon such termination, the Collateral Agent will, at the
Grantor's expense, execute (or otherwise authenticate) and deliver to the
Grantor such documents or records as the Grantor shall reasonably request to
evidence such termination and/or transfer to the Grantor any Collateral (or
rights or interests therein) in the Collateral Agent's possession or under its
control.

                                       11
<PAGE>

     (c) If the Grantor requests the release of the security interest and lien
hereof on any Collateral to be sold or otherwise disposed of in a transaction
permitted under the terms of the Credit Agreement and delivers to the Collateral
Agent a certificate to the effect that such sale or other disposition and the
application of the proceeds thereof will comply with the terms of the Credit
Agreement, then the Collateral Agent, if satisfied in good faith that such
certificate is delivered in accordance with the terms of this Section, shall
without the consent of any Lender, execute and deliver all such instruments,
releases, financing statements or other agreements, and take all such further
actions, as the Grantor may reasonably request (and at the Grantor's expense),
which are necessary to effectuate the release of such Collateral substantially
simultaneously with or at any time after the completion of such sale or other
disposition.

     SECTION 18. Reinstatement. This Agreement shall continue to be effective or
be reinstated, as the case may be, if at any time any amount received by the
Collateral Agent in respect of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Grantor or upon
the appointment of any intervenor or conservator of, or trustee or similar
official for, the Grantor or any substantial part of its assets, or otherwise,
all as though such payments had not been made.

     SECTION 19. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE
EXTENT THAT THE CREATION, VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

     SECTION 20. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. EACH PARTY
HERETO (i) IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY
IN ANY ACTION ARISING OUT OF THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN SUCH
ACTION MAY BE DECIDED IN SUCH COURT, (iii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM AND (iv) CONSENTS TO THE
SERVICE OF PROCESS BY MAIL. A FINAL JUDGMENT IN ANY SUCH ACTION SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY
LAW OR AFFECT ITS RIGHT TO BRING ANY ACTION IN ANY OTHER COURT. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                       12
<PAGE>

     SECTION 21. Headings. Article and Section headings used herein and
preliminary statements are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

     SECTION 22. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
signature page by facsimile transmission shall be as effective as delivery of a
manually executed counterpart.

     SECTION 23. Effectiveness. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall not become effective until the occurrence of
the Effective Date.

                                       13
<PAGE>

     IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

                                     NUI UTILITIES, INC.

                                     By:/s/ Victor A. Fortkiewicz
                                        ----------------------------------------
                                        Name: Victor A. Fortkiewicz
                                        Title:President

                                     Agreed and Accepted:

                                     CREDIT SUISSE FIRST BOSTON,
                                     acting through its Cayman Islands Branch

                                     By:/s/ Dana F. Klein
                                        ----------------------------------------
                                        Name: Dana F. Klein
                                        Title:Managing Director

                                     By:/s/ S. William Fox
                                        ----------------------------------------
                                        Name: S. William Fox
                                        Title:Director

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