NUI Deal Documentation

Ed and Mark,

As we discussed, I spoke to Jeff Hodge and Travis McCullough about the best
way to document this deal. We all agreed that it is better to document the
deal as a deferred payment on the sale of natural gas rather than as a loan.
Documenting the deal as a loan does not add any protection for Enron and in
fact, may be detrimental because of the various laws concerning loans and
lenders. The protections and remedies afforded by the Master track those
that Enron would have under a loan document. Enron would be in no better
position to collect from NUI in the event of bankruptcy under a loan document
than under the Master Firm Purchase/Sale Agreement. Additionally, I assume
that NUI, being a regulated utility, will not want to or be able to document
this deal as a loan.

Please let me know if you need additional information on this topic.

Stacy