Ex 10(lxvi)

 

**AMENDMENT NO. 2 TO CREDIT AGREEMENT (NUIUTILITIES)**

AMENDMENT NO. 2 TO Credit Agreement (NUI UTILITIES), dated as of May 10, 2004 (this "Amendment"), amongNUI Utilities Inc., a New JerseyCorporation (the "Borrower"), the several banks and other financialinstitutions from time to time party hereto and CREDIT SUISSE FIRST BOSTON,acting through its Cayman Islands Branch, as administrative agent (in suchcapacity, the "Agent").

**PRELIMINARY STATEMENT**

Reference is made to (i) that certain CreditAgreement dated as of November 24, 2003 (as amended, supplemented or otherwisemodified 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 theRequired Lenders (as defined in the Credit Agreement) agreed to certainextensions, waivers, consents and amendments under the Credit Agreement (the "Waiverand Modification Agreement") including without limitation certainamendments to Sections 2.2c and 5.16 of the Credit Agreement and (iii) thatcertain Agreement dated March 12, 2004 by which the Borrower and the RequiredLenders agreed to certain waivers, deferrals and consents (the "LimitedWaiver and Forbearance Letter").

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

In consideration of the mutual agreementsherein contained and other good and valuable consideration, the sufficiency andreceipt of which are hereby acknowledged, the parties hereto hereby agree asfollows:

**AGREEMENT**

SECTION 1.       Definitions;Rules of Construction.  Each termcapitalized herein and not otherwise defined herein shall have the meaningascribed to it in the Credit Agreement. Rules of construction or interpretation set forth in the CreditAgreement shall apply to the interpretation of this Amendment.

SECTION 2.       Amendments.  The Credit Agreement is hereby amended asfollows:

(a)             Section 1.1 of the Credit Agreement is hereby amended bydeleting the definition of "Consolidated EBITDA" appearing therein in itsentirety and inserting the following definition for such term in lieu thereofand inserting the following definitions of NJBPU Settlement Amount and PennAcquisition to appear in alphabetical order:

"ConsolidatedEBITDA" for any period means, with respect to the Borrower Consolidated NetIncome before interest and taxes, plus (to the extent deducted indetermining such Consolidated Net Income) (i) depreciation, amortization andother similar non-cash expenses (excluding any such non-cash expense to theextent that it represents an accrual of or reserve for cash expenses in anyfuture period or amortization of a prepaid cash expense that was paid in aprior period), (ii) extraordinary losses, losses in connection with asset sales(other than ordinary course sales including sales of inventory) orrestructuring charges, (iii) non-recurring items of loss and expense relatingto the credit facilities provided hereby to the extent not otherwise reflectedin Consolidated Net Income, (iv) non-recurring items of loss and expense of upto $2,000,000 relating to the Focused Audit, and (v) $36,300,000 consisting ofnon-recurring expenses of the NJBPU Settlement Amount, severance expensesrelated to certain senior officers and expenses relating to the Stierinvestigation; minus (to the extent included in determining suchConsolidated Net Income) extraordinary gains or gains in connection with assetsales (other than ordinary course sales including sales of inventory).

"NJBPUSettlement Amount" means an amount equal to $33,000,000 relating to thesettlement of the Focused Audit and other restructuring costs and expenses.

"PennAcquisition" means the Borrower's purchase from Penn-Jersey Pipeline Co. ofapproximately (i) 21,600 feet of eight-inch pipeline for the transport ofnatural gas from Forks Township, PA to Lopatcong, NJ and (ii) related equipmentand facilities for an aggregate purchase price (including assumption ofliabilities or liens) not to exceed $350,000.

(b)            Section 2.2b of the Credit Agreement is hereby amended byinserting at the end of such section the following clause:

"(iii)Delayed Draw Term Loans. Notwithstanding the foregoing, the Base Rate Option and the Euro-RateOption (as set forth above) shall each be increased by1.00% per annum solely with respect to Delayed Draw Term Loans (if any); provided that such increase shallnot be effective if and for so long as a definitive purchase agreement has beenfully executed and remains in full force and effect, to which NUI Corporationand an unaffiliated third person are parties and pursuant to which such thirdparty agrees to purchase substantially all of the outstanding capital stock ofNUI Corporation or all or substantially all of the assets of the Borrower."

(c)             Section 4.2(i) of the Credit Agreement is hereby amended byinserting at the end of such clause the following proviso:

";provided however, that solely with respect to each of the Fiscal Quarters endedDecember 31, 2003 and March 31, 2004, the Borrower shall be required to makethe foregoing deliveries to the Agent for each such Fiscal Quarters on or priorto the earlier of (y) the 10th day after NUI Corporation files its Form 10-Qfor such Fiscal Quarter with the Securities and Exchange Commission and (z)June 15, 2004;"

(d)            Section 4.2(ii) of the Credit Agreement is hereby amended byinserting at the end of such clause the following proviso:

";provided however, that solely with respect to the Fiscal Year ended September30, 2003, the Borrower shall be required to make the foregoing deliveries tothe Agent for such Fiscal Year on or prior to the earlier of (y) the 10th dayafter NUI Corporation files its Form 10-K for such Fiscal Year with theSecurities and Exchange Commission and (z) June 15, 2004;"

(e)             Section 5.1(b) of the Credit Agreement is hereby deleted inits entirety and replaced with the following in the place thereof:

"(b)declare or pay cash dividends to NUI Corporation and purchase, redeem orotherwise acquire shares of its equity interests or warrants, rights or optionsto acquire for consideration of any such shares, so long as the aggregate ofsuch Restricted Payments made, paid or declared since the Closing Date in theaggregate would not exceed $35,000,000; provided, that (x) prior to orimmediately after giving effect to any such proposed Restricted Payments, noPotential Default or Event of Default shall have existed or would exist and (y)no such payment shall violate any Governmental Rule.

(f)              Section 5.4 of the Credit Agreement is hereby amended byinserting at the end of such section the following sentence:

"Notwithstandingthe foregoing, the Borrower can make the Penn Acquisition."

(g)             Article V of the Credit Agreement is hereby amended byinserting the at the end of such Article the following new Section:

"Section5.20.  Within three Business Days afterAmendment No. 2 to this Agreement, dated April 30, 2004, becomes effective, theBorrower shall make such amendment public by filing a copy thereof with theSecurities Exchange Commission pursuant to a Form 8-K filing."

(h)             Section 7.2 of the Credit Agreement is hereby amended byinserting at the end thereof the following proviso:

";provided however that, prior to June 30, 2004, any such default arising solelyas a result of the failure to deliver financial statements (or to file periodicreports with the Securities and Exchange Commission) or related informationwith respect to the Fiscal Year ended September 30, 2003 or the Fiscal Quartersended December 31, 2003 or March 31, 2004 shall not constitute an Event ofDefault hereunder unless and until such default causes the acceleration of suchIndebtedness or causes the termination of any commitment to lend with respectthereto (notwithstanding this proviso, any such default shall constitute anEvent of Default for purposes of Sections 2.2c, and 6.1a)(it being understoodthat this proviso shall have no effect after June 30, 2004);" and

(i)               Section 7.7(ii) of the Credit Agreement is hereby amended byreplacing "$25,000,000" with "$35,000,000".

SECTION 3.       Representationand Warranties.  The Borrowerrepresents and warrants as of the date hereof to each of the Agent and theLenders that after giving effect to this Amendment:

(a)             No Potential Default or Event of Default has occurred and isnow continuing;

(b)            The Borrower has the corporate power and authority to execute,deliver and perform this Amendment and has taken all corporate actionsnecessary to authorize the execution, delivery and performance of thisAmendment;

(c)             This Amendment has been duly executed and delivered on behalfof the Borrower by a duly authorized officer or attorney-in-fact of theBorrower;

(d)            The execution, deliveryand performanceof this Amendmentwill not violate any Requirement of Law or any material contractual obligationbinding on the Borrower; and

(e)             No consent or authorization of, filing with, notice to orother act by or in respect of, any Governmental Authority or any other Personis required in connection with the execution, delivery or performance by theBorrower of this Amendment.

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

SECTION 4.       Effectiveness.  This Amendment shall become effective as ofthe date the Agent receives (i) the consents of Lenders constituting the RequiredLenders as contemplated by the Memorandum to Lenders dated April 27, 2004, (ii)counterparts of this Amendment that, when taken together, bear the signaturesof the Borrower and of the Agent, (iii) on behalf of each Lender consenting tothis Amendment by the time provided in the Memorandum to Lenders dated April27, 2004, payment of an amendment fee equal to 0.625% of the aggregateprincipal amount of such Lender's Term Loans and Commitments then outstandingand (iv) payment of all of the Agent's reasonable out-of-pocket costs andexpenses incurred in connection with this Amendment (including, withoutlimitation, reasonable fees and expenses of its counsel) for which invoiceshave been submitted to the Borrower.

SECTION 5.       Miscellaneous.  (a) Except as expressly set forth herein,this Amendment shall not, by implication or otherwise, limit, impair,constitute a waiver of, or otherwise affect the rights and remedies of theLenders 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 CreditAgreement or any other Loan Document, all of which are ratified and affirmed inall respects and shall continue in full force and effect.  Nothing herein shall be deemed to entitlethe Borrower to a consent to, or a waiver, amendment, modification or otherchange of, any of the terms, conditions, obligations, covenants or agreementscontained in the Credit Agreement in similar or different circumstances.  This Amendment shall apply and be effectiveonly with respect to the provisions of the Credit Agreement specificallyreferred to herein.  Upon this Amendmentbecoming effective as provided herein, the term "Loan Document" as defined inthe Credit Agreement shall include, without limitation, this Amendment.

(b)        As used in the Credit Agreement, theterms "Agreement," "herein," "hereinafter," "hereunder," "hereto," and words ofsimilar import shall mean, from and after the date hereof, the Credit Agreementas amended by this Amendment.

(c)        Section headings used herein are forconvenience of reference only and are not to affect the construction of, or tobe taken into consideration in interpreting, this Amendment.

(d)        THIS AMENDMENT SHALL BE CONSTRUED INACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.  The parties hereto each hereby consents tothe non-exclusive jurisdiction of the state and federal courts of the State ofNew York and irrevocably waives all right to trial by jury in any action,proceeding or counterclaim arising out of or relating to this Amendment.

(e)        This Amendment may be executed in anynumber 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 thisAmendment by fax will be deemed as effective as delivery of an originallyexecuted counterpart. 

**INWITNESS WHEREOF**, the parties hereto have caused this Amendment to be dulyexecuted and delivered by their proper and duly authorized officers as of thedate first written above.

**NUI UTILITIES, INC.**

                                                                                   

By:      /S/  Peter E. MaricondoName:       Peter E. MaricondoTitle:         Chief Financial Officer

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

By:       /S/  Dana KleinName:        Dana KleinTitle:           ManagingDirector

By:     /S/   S. William FoxName:       S. William FoxTitle:          Director