As filed with the Securities and Exchange Commission on August 21, 1998
REGISTRATION NO. 333-
================================================================================December 16, 2002
Registration No. 333-98411
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________----------------------------------
SOUTH JERSEY GAS COMPANY
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(Exact name of Registrantregistrant as specified in its Charter)
NEW JERSEYcharter)
New Jersey 21-0398330
- ------------------------ ----------------------
(State of Incorporation)incorporation) (I.R.S. Employer
Identification Number)
NUMBER ONE SOUTH JERSEY PLAZA, ROUTE1 South Jersey Plaza, Route 54
FOLSOM, NEW JERSEYFolsom, New Jersey 08037
(609-561-9000)(609) 561-9000
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(Address, including zip code, and telephone number, including area
code, of Registrant'sregistrant's principal executive offices)
______________
GEORGE L. BAULIG, SECRETARY
SOUTH JERSEY GAS COMPANY
NUMBER ONE SOUTH JERSEY PLAZA, ROUTERichard H. Walker
South Jersey Gas Company
1 South Jersey Plaza, Route 54
FOLSOM, NEW JERSEYFolsom, New Jersey 08037
(609) 561-9000
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(Name, address, including zip code, and telephone number, including
area code, of agent for service)
______________
Copies of communications to:
GEORGE W. PATRICK, ESQUIRE JONATHANRichard J. Busis, Esquire Jonathan A. KOFF, ESQUIRE
DECHERT PRICE & RHOADS CHAPMAN AND CUTLER
4000 BELL ATLANTIC TOWERKoff, Esquire
Cozen O'Connor Chapman and Cutler
1900 Market Street 111 WEST MONROE
1717 ARCH STREET CHICAGO, ILLINOISWest Monroe
Philadelphia, Pennsylvania 19103 Chicago, Illinois 60603
PHILADELPHIA, PENNSYLVANIA 19103-2793(215) 665-2000 (312) 845-2978
(215) 994-2631
______________
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
After this Registration Statement becomes845-3000
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of the registration statement, as
determined by market
conditions and other factors.
______________the registrant.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[_] [_]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box:[X] [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act of 1933 registration statement number of the earlier
effective registration statement for the same offering:[_] [_]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering:[_] [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act of 1933, please check the following box:[X]
______________
CALCULATION OF REGISTRATION FEE
================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM
SECURITIES TO BE REGISTERED AGGREGATE AMOUNT OF
OFFERING PRICE (1) REGISTRATION FEE
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Debt Securities.................... $100,000,000 $29,500
==============================================================================
(1) Estimated solely for [_]
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The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the purposeregistrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
determiningthe Securities Act of 1933 or until the registration feestatement shall become
effective on such date as the Commission, acting pursuant to Rule 457(o).said Section 8(a),
may determine.
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THE REGISTRANT HEREBY AMENDSINFORMATION IN THIS REGISTRATION STATEMENT ON SUCH DATE ASPROSPECTUS IS NOT COMPLETE AND MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THECHANGED. WE MAY
NOT SELL THESE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE ASFILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ACTING PURSUANTIS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
Information contained herein is subjectSELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST , 1998
$100,000,000
SOUTH JERSEY GAS COMPANY
SECURED MEDIUM TERM NOTES, SERIES A
______________________Completion, dated December 16, 2002
$150,000,000
South Jersey Gas Company
(the "Company") intends to offer andMedium Term Notes, Series B
-------------------------------
We may sell from time to time its Secured Medium Term Notes, Series A (the "Notes"), inmedium term notes with an aggregate
principal amountoffering price of up to $100,000,000 and having maturities ranging from
1 year to 40 years from date of issue. The Notes will be issued only in fully-
registered form, in minimum denominations of $1,000 and integral multiples of
$1,000 in excess thereof. Unless otherwise indicated in the applicable Pricing
Supplement (as defined below), interest on each Note will be payable
semiannually in arrears on May 1 and November 1 at a fixed rate determined by
the Company and agreed upon by the purchaser thereof at or prior to the time of
sale. The purchase price, aggregate principal amount, interest rate, stated
maturity date, optional redemption provisions and any other material terms not
described herein of each issue of Notes will be set forth in an accompanying
supplement to this Prospectus (each, a "Pricing Supplement"). See "Description
of Notes."
Prior to the Substitution Date (as defined herein), the Notes will be
serviced and secured as to the payment$150,000,000. All of the principal thereof and interest
thereon by the Company's First Mortgage Bonds, 10% Medium Term Notes Series A
(the "Pledged Bond") in an aggregate principal amount equal to $100,000,000notes issued and pledged by the Company and delivered to the Note Trustee (as defined
herein) in accordance with the provisions of the Note Indenture (as defined
herein). The principal amount of the Pledged Bond deemed outstanding will at all
times be equal to the outstanding principal amount of the Notes. The Pledged
Bond will be deemed to bear interest corresponding to the required payments of
interest in respect of the Notes. Payments of principal and interest in respect
of the Notes will constitute payments on the Pledged Bond. The Pledged Bond
constitutes a separate series of the Company's First Mortgage Bonds, all of
which are secured by a lien on substantially all of the property owned by the
Company. See "Description of the Pledged Bond." On the Substitution Date, the
Pledged Bond will cease to secure the Notes, and, at the option of the Company,
the Notes either will become unsecured general obligations of the Company orunder this
prospectus will be secured by first mortgage bonds issued under our Indenture of
First Mortgage. We will provide specific terms of these medium term notes in
supplements to this prospectus.
You should read this prospectus and any prospectus supplement carefully
before you invest.
-------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
mortgagecriminal offense.
-------------------------------
This prospectus is dated _______, 2002.
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You should rely only on the information contained in or incorporated by
reference in this prospectus or any accompanying supplemental prospectus. We
have not authorized anyone to provide you with different information or make any
additional representations. We are not making an offer of these medium term
notes in any state where the offer is not permitted. You should not assume that
the information contained in or incorporated by reference in this prospectus or
any prospectus supplement is accurate as of any date other than the Company's current mortgage indenture. See "Descriptiondate on the
front of Notes -- Security;
Substitution Date."
Eacheach of such documents.
TABLE OF CONTENTS
About this Prospectus.......................................................3
Where You Can Find More Information.........................................3
Incorporation of Certain Documents by Reference.............................3
Special Note will be represented by a GlobalRegarding Forward-Looking Statements...........................4
Ratio of Earnings to Fixed Charges..........................................5
South Jersey Gas............................................................6
Use of Proceeds.............................................................6
Description of Debt Securities..............................................7
Description of Note (each, a "Global Note")
registered in the name of The Depository Trust Company, as depository ("DTC" or
the "Depository"), or its nominee, unless otherwise specified in the applicable
Pricing Supplement. Beneficial interests in Global Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository and its participants. Global Notes will not be issuable in
certificate form except under the limited circumstances described herein. See
"Description of Notes -- Certificated Notes."
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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Price to Agents' Proceeds to
Public (1) Commissions(2) Company(1)(3)
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Per Note............... 100.00%
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Total.................. $100,000,000
================================================================================
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes will
be sold at 100%Indenture...............................................8
Description of the principal amount thereof.
(2) The Company will pay to PaineWebber Incorporated, PrudentialPledged Bonds............................................19
Plan of Distribution........................................................27
Legal Matters...............................................................28
Experts.....................................................................28
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities Incorporated and First Union Capital Markets, as agents (each an "Agent"
and collectively,Exchange Commission utilizing a "shelf" registration process.
Under this shelf registration process, we may sell the "Agents"), a commission ranging from ___% to ____% of
the principal amount of any Note, depending on its stated maturity, sold
through such Agent. The Company may also sell Notes to an Agent, as
principal, for resale todebt securities described
in this prospectus in one or more investors or other purchasers atofferings up to a fixed public offering price or at varying prices related to prevailing
market prices at the timetotal dollar amount of
resale, as determined by such Agent. Unless
otherwise specified in the applicable Pricing Supplement, any Notes sold to
an Agent as principal shall be purchased by such Agent at$150,000,000. This prospectus provides you with a price equal to
100%general description of the
principal amount thereof lessdebt securities we may offer. Each time we sell securities, we will provide a
percentageprospectus supplement that will contain specific information about the terms of
the principal
amount equal to the commission applicable to an agency sale of a Note of
identical maturity. See "Plan of Distribution."
(3) Before deduction of expenses payable by the Company, estimated at $614,500.that offering. The Company has agreed to indemnify the Agents against certain liabilities,
including liabilitiesprospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the Securities Act of 1933, as amended. See
"Plan of Distribution.next heading, "Where You Can Find More Information."
_____________
The Notes will be offered on a continuing basis by the Company through the
Agents, who have agreed to use their reasonable best efforts to solicit offers
to purchase the Notes. The Company also may sell Notes to an Agent, as
principal, for resale to one or more investors or other purchasers. The Notes
will not be listed on any securities exchange,WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and there can be no assurance
that the Notes will be sold or that there will be a secondary market for the
Notes. The Company reserves the right to withdraw, cancel or modify the offer
made hereby without notice. The Company or an Agent, if it solicits such offer,
may reject any offer to purchase Notes, in whole or in part. See "Plan of
Distribution."
_____________
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
FIRST UNION CAPITAL MARKETS
_____________
The date of this Prospectus is August , 1998.
AVAILABLE INFORMATION
South Jersey Gas Company (the "Company") is a wholly-owned subsidiary of
South Jersey Industries, Inc. ("SJI"). Each of the Company and SJI is subject to
the informational reporting requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and in accordance therewith filescurrent reports and other information
with the Securities and Exchange Commission (the
"Commission"). Such reportsCommission. You may read and other information can be inspected and copiedcopy any document
we file at the Commission's public reference facilities maintained by the Commissionroom at 450 Fifth Street, N.W.,
Washington, D.C. and at its regional offices at 500 West Madison
Street, Chicago, Illinois and 7 World Trade Center, New York, New York. Copies
of such material can also be obtained from the Public Reference Section ofDC 20549. Please call the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549-1004 at prescribed
rates. Information regarding the operation of1-800-SEC-0330 for further
information on the public reference facilities
may be obtained by callingrooms. Our Commission filings are also
available to the Commissionpublic through the Internet on the Commission's web site at
(800) SEC-0330.http://www.sec.gov.
The Commission also
maintains an Internet siteallows us to "incorporate by reference" some information
into this document, which means that contains reports, proxy statements and otherwe can disclose important information regarding issuers that file electronicallyto
you by referring you to another document we have filed separately with the
Commission. The addressinformation incorporated by reference is deemed to be part of
this document, except for any information superseded by information contained
directly in this document. This prospectus incorporates by reference the
documents set forth under "Incorporation of Certain Documents by Reference" that
we have previously filed with the Commission. These documents contain important
information about us and our financial condition.
We have filed a registration statement and related exhibits with the
Commission under the Securities Act of 1933. The registration statement contains
additional information about us and the debt securities. A copy of the
Commission's Internet site is http://www.sec.gov. Such material
can alsoregistration statement, including exhibits, may be inspected atread and copied from the
New York Stock Exchange, Inc. where certain of the
Company's and SJI's securities are listed.places listed above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Companyus with the Commission are
incorporated herein by reference:
1. The Company'sOur Annual Report on Form 10-K for the year ended
December 31, 1997, filed pursuant to the Exchange Act.2001.
2. The Company'sOur Quarterly ReportsReport on Form 10-Q for the quartersquarter ended
March 31, 1998 and2002.
3. Our Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, filed pursuant to2002.
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4. Our Quarterly Report on Form 10-Q for the Exchange Act.
Allquarter ended
September 30, 2002.
In addition, all documents subsequently filed by us with the CompanyCommission pursuant to
Sections 13(a), 13(c), 14 orand 15(d) of the Exchange Act after the date of this
prospectus and prior to the termination of thethis offering of the Notes shall be deemed to be
incorporated by reference in this
Prospectus and toshall be a part hereofof this prospectus from the
date of the filing of such documents.
Any statement contained herein or in a document incorporated or deemed to beThe information incorporated by reference herein shallis considered to be modified or superseded for the
purposespart of
this Prospectus toprospectus, and later information filed with the extent that a statement contained hereinCommission will modify or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement.supersede this information. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Companyprospectus.
This prospectus does not contain all the information contained in the
registration statement and its exhibits which we have filed with the Commission
under the Securities Act with respect to the debt securities offered hereby undertakesand
to which reference is hereby made. We will provide without charge to each person
including any beneficial owner, to whom a copy of this Prospectusprospectus is delivered, upon written or oral request, of such person, a copy of any or all of the
documents referred to above which have been or may bedocument
incorporated by reference in this Prospectus,prospectus or in the registration statement,
other than exhibits to such documents not specifically
incorporated by reference herein.documents. Requests for such copies should be directedmade to George L. Baulig,Richard H.
Walker, Corporate Secretary, South Jersey Gas Company, Number One1 South Jersey Plaza,
Route 54, Folsom, New Jersey 08037, telephone: (609) 561-9000.
CERTAIN STATEMENTS CONTAINED IN THIS REGISTRATION STATEMENT, INCLUDING THOSE
STATEMENTS CONTAINED IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE, THAT ARE NOT
RELATED TO HISTORICAL RESULTS ARE FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE PROJECTED OR IMPLIED IN THE FORWARD-LOOKING
STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE,
BUT ARE NOT LIMITED TO, THOSE DISCUSSED UNDER "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND "BUSINESS."
FURTHER, CERTAINSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
ARE BASED UPON ASSUMPTIONS AS TO
FUTURE EVENTS THAT MAY NOT PROVE TO BE ACCURATE.
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CERTAIN PERSONS PARTICIPATING IN A PARTICULAR OFFERING OF NOTES HEREUNDER
MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE NOTES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN THE NOTES, AND THE IMPOSITION OF A PENALTY BID. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION.This prospectus contains or incorporates certain forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. Such statements may be preceded by, followed
by or include words such as "anticipate," -3-
THE COMPANY
GENERAL
The Company is"believe," "expect," "intend,"
"estimate" or similar expressions. These forward-looking statements are made
based upon management's expectations and beliefs concerning future events
impacting South Jersey Gas and involve a regulated New Jersey public utilitynumber of risks and is the principal
subsidiary of SJI. The Company is a gas distribution utilityuncertainties. We
caution that supplies
natural gas to residential, commercialforward-looking statements are not guarantees and industrial customersactual results
could differ materially from those expressed or implied in the southern
partforward-looking
statements. In making forward-looking statements, we assume no duty to update
these statements should expectations change or actual results and events differ
from current expectations.
A number of New Jersey. The Company also makes off-system salesfactors could cause our actual results to differ materially
from those anticipated, including, but not limited to, the following:
* weather conditions in our marketing areas;
* changes in commodity costs;
* regulatory and court decisions;
* competition in our utility activities;
* the availability and cost of natural gas on a
wholesale basis to variouscapital;
* costs and effects of legal proceedings and environmental liabilities;
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* the failure of our customers on the interstate pipeline system and
transports natural gas purchased directly from producers or suppliers by some of
its customers.
At December 31, 1997, the Company served approximately 261,000 residential,
commercialto fulfill their
contractual obligations; and
industrial customers throughout 112 municipalities* changes in Atlantic,
Cape May, Cumberland, and Salem counties and portions of Burlington, Camden and
Gloucester Counties. The Company's service territory covers approximately 2,500
square miles and has an estimated permanent population of 1.1 million. Gas sales
and transportation for 1997 amounted to 73,574,000 Mcf (thousand cubic feet), of
which approximately 50,181,000 Mcf was firm sales and transportation, 8,931,000
Mcf was interruptible sales and transportation and 14,462,000 Mcf was off system
sales. At December 31, 1997 the breakdown of firm sales includes 39.8%
residential, 16.1% commercial, 2.5% cogeneration and electric generation, 1.4%
industrial and other and 40.2% transportation. The Company is regulated as to
rates and other matters by the New Jersey Board of Public Utilities.
The Company's executive offices are located at Number One South Jersey
Plaza, Route 54, Folsom, New Jersey 08037 and its telephone number is (609) 561-
9000.business strategies.
RATIO OF EARNINGS TO FIXED CHARGES
The Company'sOur ratio of earnings to fixed charges for each of the periods
indicated is as follows:
TWELVE
MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
- ---------------------------------------------------- -----------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
2.6 2.1 2.3 2.5 2.6 2.4
Twelve Months
Ended
Year Ended December 31, September 30,
-------------------------------- -------------
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
Ratio of earnings
to fixed charges 2.6x 2.2x 2.5x 2.6x 2.6x 2.7x
The ratio of earnings to fixed charges represents, on a pre-tax basis,
the number of times earnings cover fixed charges. Earnings consist of net
income, to which has been added fixed charges and taxes based on income of the Company,
excluding the cumulative effect of an accounting change.our income.
Fixed charges consist of interest charges and preferred securities dividend
requirements and an interest factor in rentals.
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SOUTH JERSEY GAS
South Jersey Gas Company is a regulated New Jersey public utility and
is the principal subsidiary of South Jersey Industries, Inc. We are a gas
distribution utility that supplies natural gas to residential, commercial and
industrial customers on a retail basis in the southern part of New Jersey. We
provide gas to some customers which use gas as their sole source of fuel (firm
customers). We also sell gas to some industrial and commercial customers which
have the ability to use other fuels as well as natural gas on an "interruptible"
basis. Service to these customers is called interruptible because we supply
natural gas to them only after we have fulfilled the needs of our firm
customers, and then only to the extent we still have gas available.
We also sell natural gas and transportation capacity on a wholesale
basis to various customers on the interstate pipeline system and transport
natural gas purchased by some of our customers directly from producers or
suppliers. Our wholesale activities, or off-system sales, are regulated by the
Federal Energy Regulatory Commission and are the result of our maintenance of
some gas supplies and transportation capacity on interstate gas pipelines for
the purpose of serving our customers in extreme cold or hot weather.
Consequently, when we find that natural gas or transportation capacity will not
be utilized by our retail customers, we seek buyers on a wholesale basis outside
of the utilities service territory. In addition, we service appliances such as
natural gas water heaters, washers, dryers, dishwashers and ranges as well as
electric central air conditioners through the sale of appliance warranty
programs as well as on a time and materials basis.
At September 30, 2002, we served approximately 292,000 residential,
commercial and industrial customers throughout 112 municipalities in Atlantic,
Cape May, Cumberland, and Salem Counties and portions of Burlington, Camden and
Gloucester Counties. Our service territory covers approximately 2,500 square
miles and has an estimated permanent population of 1.2 million people. Gas
sales, transportation and transportation capacity release for fiscal year 2001
amounted to 108,935 MMcf (thousand cubic feet), of which approximately 48,786
MMcf were firm sales and transportation, 2,845 MMcf were interruptible sales and
transportation and 57,304 MMcf were off-system sales and capacity release. For
fiscal 2001, the breakdown of firm sales consisted of 35.6% residential, 15.5%
commercial, 3.1% cogeneration and electric generation, 0.5% industrial and 45.3%
transportation. Interruptible sales, as opposed to firm sales, represent
customer relationships in which we may cease the delivery of gas on short
notice, causing the customer to utilize an alternative fuel source. We are
regulated as to rates and other matters by the New Jersey Board of Public
Utilities.
Our executive offices are located at 1 South Jersey Plaza, Route 54,
Folsom, New Jersey 08037, and our telephone number is (609) 561-9000.
USE OF PROCEEDS
Unless otherwise specified in the applicable Pricing Supplement,prospectus supplement, the
net proceeds from the sale of the Notesdebt securities will be used by the Companyus to retire
short-
termshort-term and long-term debt and to fund capital expenditure requirements. At
JuneSeptember 30, 1998, the
Company2002, we had $72.3$127.0 million of short-term debt outstanding with a
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weighted-average interest cost of 5.8%2.70%, with maturities not exceeding
one month.forty-five days.
DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of our
debt securities. When we offer to sell a particular series of debt securities,
we will describe the specific terms of the series in a supplement to this
prospectus.
We intend to offer and sell from time to time our secured debt
securities (the Notes), in an aggregate principal amount up to $150,000,000 with
maturities ranging from one year to 40 years from their respective dates of
issue. The Notes maywill be issued only in one or more series (i) secured byfully registered form, in minimum
denominations of $1,000 and integral multiples of $1,000 in excess thereof.
Unless otherwise indicated in the Company's
first mortgage bonds issued under the Company's current mortgage indenture or
(ii) following the Substitution Date (as defined below), as either unsecured
notes or as notes secured by the Company's first mortgage bonds issued under a
mortgage indenture other than the Company's current mortgage indenture. On the
Substitution Date, any outstanding Notes secured by the Company's first mortgage
bonds when issued will cease to be secured by first mortgage bonds issued under
the Company's current mortgage indenture and, at the Company's option, either
(a) will become unsecured general
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obligations of the Company or (b)applicable prospectus supplement, interest on
each Note will be secured by the Company's first
mortgage bonds issued under a mortgage indenturepayable semiannually in arrears on May 1 and November 1. The
purchase price, aggregate principal amount, interest rate, stated maturity date,
optional redemption provisions and any other than the Company's
current mortgage indenture.material terms of each issue of
Notes not described in this prospectus will be set forth in an accompanying
prospectus supplement.
The Notes will be issued under an indenture of trust dated as of
October 1, 1998, as supplemented on June 29, 2000, July 5, 2000 and July 9, 2001
(the "Note Indenture")Note Indenture), the
form of which is an exhibit to the Registration Statement of which this
Prospectus is a part, between the Companyus and The Bank of New York, as trustee
(the "Note Trustee"), andthe Note Trustee.
The material provisions of the Note Indenture are described below under the
caption "Description of Notes.Note Indenture." Prior to the Substitution Date, a SeriesA series of first mortgage bonds
designated as "South Jersey Gas Company First Mortgage Bonds, 10% Medium Term
Notes, Series A"B" (the "Pledged Bond")Pledged Bonds) will be issued under the Indenture of First
Mortgage, dated October 1, 1947, as heretofore supplemented and amended by supplemental
indentures, andincluding a new Twenty-SecondTwenty-Third Supplemental Indenture (the "New
Supplement") (such Indenture
of First Mortgage, as amended and supplemented, is herein referred to as the "Mortgage")Mortgage),
all from the Companyus to The Bank of New York, as
successor trustee to Guaranty Bank (the "Mortgage Trustee") and pledged to the Note Trustee under the Note Indenture to secure the Notes.Mortgage Trustee. The Pledged BondBonds to be
issued under the Mortgage isare described below under the caption "Description of
the Pledged Bond.Bonds." All first mortgage bonds issued or issuable under the
Mortgage are sometime called Bonds.
Until the Substitution Date, the Notes will be secured by Pledged Bonds
in an aggregate principal amount equal to the principal amount of Notes issued.
The "Substitution Date" is the date that all of our first mortgage bonds issued
and outstanding under the Mortgage, other than the first mortgage bonds pledged
and delivered by us to the Note Trustee under the Note Indenture, have been
retired at, before or after their maturity. On the Substitution Date, the Note
Trustee shall deliver to us for cancellation the Pledged Bonds, and we will
cause the Note Trustee to provide notice to all holders of Notes of the
occurrence of the Substitution Date. As a result, on the Substitution Date, the
Pledged Bonds will cease to secure the Notes, and, at our option, the Notes
either will become our unsecured general obligations or will be secured by first
mortgage bonds (Substituted Pledged Bonds) issued under a new mortgage indenture
(a Substituted Mortgage). See "Description of Note Indenture-General."
The Pledged Bonds will be pledged to the Note Trustee. Prior to the
Substitution Date, the principal amount of the Pledged Bonds deemed outstanding
will at all times be equal to the outstanding principal amount of the Notes then
outstanding. The Pledged Bonds will be deemed to bear interest corresponding to
- 7 -
the required payments of interest on the Notes. Payments of principal and
interest in respect of the Notes will constitute payments on the Pledged Bonds.
The Pledged Bonds constitute a separate series of our first mortgage bonds, all
of which are secured by a lien on substantially all of the property owned by us.
See "Description of the Pledged Bonds."
Each Note will be represented by a global note registered in the name
of The Depository Trust Company, as depository, or its nominee, unless otherwise
specified in the applicable prospectus supplement. Beneficial interests in
global notes will be shown on, and transfers of global notes will be effected
only through, records maintained by the depository and its participants. Global
notes will not be issuable in certificated form except under the limited
circumstances described below. See "Book-Entry System."
There is no requirement under either the Note Indenture or the Mortgage
(collectively, the "Indentures"), that future issues of debt securities of the
CompanySouth Jersey Gas be issued under the
Note Indenture and, subjector the Mortgage. Subject to certain restrictions following the
Substitution Date which are described in "Description of Notes-
LimitationsNote
Indenture-Limitations on Liens" the CompanyLiens," we will be free to employuse other indentures or
documentation, containing provisions different from those included in the Note
Indenture or applicable to one or more issues of Notes,and the Mortgage, in connection with future issues of such other debt
securities.
The Notes will be offered on a continuing basis by us through one or
more agents, each of which has agreed to use its reasonable best efforts to
solicit offers to purchase the Notes. We also may sell Notes to an agent, as
principal, for resale to one or more investors or other purchasers. The Notes
will not be listed on any securities exchange, and we can make no assurance that
any Notes will be sold or that there will be a secondary market for them. We
reserve the right to withdraw, suspend, cancel or modify the offer of Notes
without notice. We or an agent, if it solicits such offer, may reject any offer
to purchase Notes, in whole or in part. See "Plan of Distribution."
Our timely payment of the principal and interest on an issuance of
Notes may be insured by a financial guaranty insurance policy issued by Ambac
Assurance Corporation. We will disclose in the prospectus supplement relating to
an issuance of Notes if we have elected to insure the issuance of those Notes.
See "Description of Note Indenture-Insured Notes."
DESCRIPTION OF NOTES
GENERALNOTE INDENTURE
The following summariessummary of certain provisions of the Note Indenture dois
not
purport to be complete and areis subject to, and qualified in theirits entirety by, all of the
provisions of the Note Indenture, which is incorporated herein by reference and
the form of which is an exhibit to the Registration Statementregistration statement of which this Prospectusprospectus is a part.
References to Sectionsection numbers under this caption are references to the Sectionsection
numbers of the Note Indenture.
Until the Substitution Date (as defined below), the Notes will be secured
by the Pledged Bond issued under the Mortgage and delivered by the Company to
the Note Trustee. See "Security; Substitution Date." ON THE SUBSTITUTION DATE
(AS DEFINED BELOW), THE NOTES WILL CEASE TO BE SECURED BY THE PLEDGED BOND AND,
AT THE COMPANY'S OPTION, EITHER (I) WILL BECOME UNSECURED GENERAL OBLIGATIONS OF
THE COMPANY OR (II) WILL BE SECURED BY THE COMPANY'S FIRST MORTGAGE BONDS (THE
"SUBSTITUTED PLEDGED BONDS") ISSUED UNDER A MORTGAGE INDENTURE OTHER THAN THE
MORTGAGE (A "SUBSTITUTED MORTGAGE").General
The Note Indenture provides that in
addition to the Notes offered hereby, additional notes may be issued thereunder
without limitation as to aggregate principal amount, provided that, prior to the
Substitution Date, the amount of Notes that may be issued cannot exceed the
aggregate principal amount of first mortgage bonds that the Company is able to
issue under the Mortgage. See "Description of the Pledged Bond--Issuance of
Additional Bonds."
The Note Indenture provides that the Notes will be issued in one
or more series, may be issued at various times, may have differing maturity
dates and may bear interest at differing rates; provided that Notes which are secured by
the Pledged Bond will bear interest at a rate not to exceed 10%, the stated
interest rate of the Pledged Bond.rates. The Pricing Supplementprospectus supplement
applicable to each
series and issue of Notes will set forth the specific terms of such
- 8 -
Notes as well as any variation in the terms and provisions of such Notes from
those described in this Prospectus. Unless
otherwise indicated inprospectus.
Until the applicable Pricing Supplement,Substitution Date, the Notes will be denominated in United States currency in minimum denominations of $1,000 and
integral multiples thereof.
Unless otherwise indicated in the applicable Pricing Supplement, there are
no provisions in the Note Indenture or the Notes that require the Company to
redeem, or permit the holders to cause a redemptionsecured by Pledged
Bonds. See "Description of the Notes or that
otherwise protect the holders in the event that the Company incurs substantial
additional indebtedness (except for certain restrictions on the Company's
ability to create, assume or incur certain liens afterPledged Bonds." On the Substitution Date, as
described in "Limitations on Liens") whether or not in connection with a change
in controlthe
Note Trustee shall deliver to us for cancellation the Pledged Bonds, and we will
cause the Note Trustee to provide notice to all holders of Notes of the
Company. However, under current law, any changeoccurrence of the Substitution Date. As a result, on the Substitution Date, the
Pledged Bonds will cease to secure the Notes, and, at our option, the Notes
either will become our unsecured general obligations or will be secured by
Substituted Pledged Bonds. (Section 4.10)
Registration, Transfer and Exchange
With the exception of Notes issued in control
transaction that involves the incurrenceform of additional long-term
-5-
indebtedness (asglobal notes, first mortgage bonds or otherwise) by the Company would
require approval of state utility regulatory authorities and, possibly, of
federal utility regulatory authorities.
REGISTRATION, TRANSFER AND EXCHANGE Notes
of any seriesissue will be exchangeable for one or more Notes of the same series and
issue of any authorized denominations and of a likein the same aggregate principal
amount and tenor.amount. (Section 2.6).
Unless otherwise indicated in the applicable Pricing Supplement,prospectus supplement,
Notes may be presented for registration of transfer (duly endorsed or accompanied by a
duly executed written instrument of transfer), at the office of the Note Trustee
maintained for such purpose with respect to any series of Notes and referred to
in the applicable Pricing Supplement, without
service charge but upon the payment of any taxes and other certain governmental
charges as described in the Note
Indenture.charges. Such transfer or exchange will be effected upon being satisfied with
the documentssatisfaction of
certain requirements relating to documentation of title and indemnity of the person making the request. (Sections
2.6 and 2.7).
In the event ofindemnification.
(Section 2.6)
If any redemption of Notes of any series,are redeemed, the Note Trustee will not be required to
exchange or register a transfer of any Notes of such
series selected, called or being called
for redemption except, in the case of any Note to be redeemed in part, the
portion thereof not to be so redeemed. (Section 2.6). See "Book-Entry System."
CERTIFICATED NOTESCertificated Notes
Each Note will be represented by a Global Noteglobal note registered in the name
of the Depository,depository or its nominee unless otherwise specified in the applicable
Pricing Supplement.prospectus supplement. The Notes represented by the Global Noteglobal note are exchangeable
for similar certificated Notes in definitive form of like tenor as such Notes in denominations of U.S.$1,000$1,000 and integral multiples
thereof if (i)if:
* the Depositorydepository notifies the Companyus that it is unwilling or unable to continue
as Depositorydepositary for the Global Noteglobal note or if at any time the Depositorydepository
ceases to be a clearing agency registered under the Exchange ActAct; or
(ii) the Company in its discretion,
at any time, determines* we determine not to have all of the Notes represented by the Global
Note. Any Note that is exchangeable pursuant to the preceding sentence is
exchangeable for certificated Notes issuable in authorized denominations and
registered in such names as the Depository shall direct. Subject to the
foregoing, the Global Noteglobal
note.
The global note is not exchangeable except for a Global Noteglobal note of the same
aggregate denomination to be registered in the name of the Depositorydepository or its
nominee. PAYMENT AND PAYING AGENTS(Section 2.13)
Payment and Paying Agents
Principal of and interest on Notes issued in the form of Global Notesglobal notes
will be paid in the manner described below under the caption "Book-Entry
System." Unless otherwise indicated in the applicable Pricing Supplement,prospectus supplement,
- 9 -
interest on Notes that are in the form of certificated securities will be paid
by wire transfer of clearinghouse or similar next day funds or by check mailed
to the person entitled thereto at such person's address as it appears in the register for the Notes
maintained by the Note Trustee; however,thereto. However, a holder of Notesnotes of one or more series
under the Note Indenture in the aggregate principal amount of $10,000,000 or
more having the same interest payment dates will be entitled to request to
receive payments
of interest on such series by wire transfer of immediately available funds to a
bank located within the continental United States if an appropriate request including wire transfer instructions has
been received by the Note Trustee on or prior to the applicable regular record
date in accordance
with the Note Indenture.date. Unless otherwise indicated in the applicable Pricing
Supplement,prospectus supplement, the
principal of and interest at maturity on Notes in the form of certificated Notesnotes will be
payable at maturity in immediately available funds at the office of the Note
Trustee upon proper presentment and surrender thereof.of the Notes. (Section 2.12).
All moneys paid by the Companyus to a paying agent for the payment of principal of, or
interest on any Note which remain unclaimed at the end of one year after such principal or interest shall have become due and payable will be repaid to the Companyus, and
the holder of such Note willmust thereafter look only to the Companyus for payment thereofpayment. (Section
5.4).
-6-
SECURITY; SUBSTITUTION DATE
Until
Insured Notes
The Note Indenture provides that we may issue notes covered by a
financial guaranty insurance policy issued by Ambac Assurance Corporation, which
policy will insure payment when due of the Substitution Date (as defined below),principal and interest on such notes.
If we issue insured notes, so long as Ambac is not in default under the Notes willpolicy,
it shall be secured
byentitled to control and direct the Pledged Bond issuedenforcement of all rights and
delivered by the Companyremedies with respect to such notes. No amendment to the Note Trustee. See
"DescriptionIndenture which
requires noteholder consent or which affects the rights of Ambac may be made
without the Pledged Bond."
THE "SUBSTITUTION DATE" WILL BE THE DATE THAT ALL FIRST MORTGAGE BONDS OF
THE COMPANY ISSUED AND OUTSTANDING UNDER THE MORTGAGE OTHER THAN THE PLEDGED
BOND (THE "FIRST MORTGAGE BONDS") HAVE BEEN RETIRED (AT, BEFORE OR AFTER THE
MATURITY THEREOF) THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE
FIRST MORTGAGE BONDS DEEMED TO BE PAID WITHIN THE MEANING OF THE MORTGAGE). ON
THE SUBSTITUTION DATE, THE NOTE TRUSTEE WILL DELIVER TO THE COMPANY FOR
CANCELLATION THE PLEDGED BOND, AND THE COMPANY WILL CAUSE THE NOTE TRUSTEE TO
PROVIDE NOTICE TO ALL HOLDERS OF NOTES OF THE OCCURRENCE OF THE SUBSTITUTION
DATE. AS A RESULT, ON THE SUBSTITUTION DATE, THE PLEDGED BOND WILL CEASE TO
SECURE THE NOTES, AND, AT THE OPTION OF THE COMPANY, THE NOTES EITHER (I) WILL
BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (II) WILL BE SECURED BY
SUBSTITUTED PLEDGED BONDS (Section 4.11).
LIMITATIONS ON LIENSprior written consent of Ambac.
Limitations on Liens
Following the Substitution Date, the Company shallwe will cause the Mortgage to be
closedterminated, and the Company shallwe will not issue any additional Bondsbonds under the Mortgage. In
addition, following the Substitution Date, except as described below and unless
Substituted Pledged Bonds are issued to secure notes issued under the Notes, the CompanyNote
Indenture, we may not create, assume or incur any mortgage, pledge, lien or
security interest (collectively referred to in this context as "mortgages") upon
any real property interest or other depreciable asset which is used in the Company'sour gas utility
business, whether owned at the Substitution Date or thereafter acquired, to
secure any indebtedness for money borrowed (Debt) other than indebtedness with
maturities of twelve months or less ("Debt")(other than the Notes), without effectively
securing all Notesnotes (other than such Notes, if any notes, which shall by their terms be
expressly excluded from such provision) equally and ratably with such Debt; provided,
however, that thisDebt. This
restriction will not apply to:
(a) mortgages on* any mortgage upon property existing at the time of the
property's acquisition,
including acquisition by means of merger or consolidation, (but excludingsubject to
certain exceptions;
* any extension of or addition to such
property unless the terms of the mortgage as of the date of
acquisition of such property provide that such mortgage shall be
secured by such extensions or additions);
(b) mortgages to secure the payment of all or part of the purchase
price of property or to secure any Debt incurred prior to, at the
time of or within 180 days after the acquisition of such property for
the purpose of financing all or part of the purchase price of such
property;
(d) mortgages- 10 -
* any mortgage existing as of the Substitution Date;
(e) Permitted Encumbrances (as defined below);
(f)* certain liens or other encumbrances permitted under the Note
Indenture; and
* any extension, refinancing, renewal or replacement, (or
successive extensions, refinancings, renewals or replacements), in whole or in
part, of any mortgage referred to in clauses (a) through
(e);above; provided, however, that the
principal amount of Debt secured thereby mayshall not exceed the
principal amount of Debt (plus any premiumrelated premiums or fee payable in connection with such extension, renewal or
replacement)fees) so secured
at the time of such extension, refinancing, renewal or replacement;
and provided further that such mortgage mustshall be limited to all or
such part of the property which was subject to the mortgage so
extended, refinanced, renewed or replaced (plus improvements on such
property);
(g) mortgages in favor of the United States, any State thereof,
any other country or any political subdivision of any of the
foregoing, to secure partial, progress, advance or other payments
under any contract or statute; or
(h) mortgages securing industrial development, pollution control
or similar revenue bonds..
Notwithstanding the foregoing restriction, the Companywe may create, assume or
incur any mortgage not excepted above without equally and ratably securing the
Notesnotes if the aggregate amount of all Debt then outstanding and secured by such
mortgage or any other mortgage not excepted above does not exceed 10%15% of theour
total -7-
consolidated capitalization of the Company as shown on the audited consolidated balance
sheet contained in theour latest annual report of the Company as filed with the Commission. For
the purposes of this provision, any mortgagecertain mortgages in favor of the
United States of America or any States thereof, or any other country, or any
political subdivision of any of the foregoing,government entities to
secure partial, progress,
advance or other payments pursuant to the provisions of any contract or statute, or any
mortgage securing industrial development, pollution control or similar revenue
bonds, shall not be deemed to create a mortgage to secure any Debt. For the purposes of this provision, the term "Permitted Encumbrance" means
(a) Liens for taxes, assessments or governmental charges or levies
for the then current year and taxes, assessments or governmental charges or
levies not then delinquent or which thereafter can be paid without penalty or
are being contested in good faith; liens for worker's compensation awards and
similar obligations not then delinquent or which thereafter can be paid without
penalty or are being contested in good faith; liens imposed by law, such as
carriers', warehousemen's, landlords', suppliers', mechanics', laborers',
materialmen's and other similar liens not then delinquent or which are being
contested in good faith;
(b) Liens and charges incidental to construction or current operation
which have not at such time been filed or asserted or the payment of which has
been adequately secured or which are insignificant in amount;
(c) Liens securing obligations not assumed by the Company and on
account of which it has not customarily paid and does not expect to pay interest
and existing upon real estate over or in respect of which the Company has a
right of way or other easement or right for pipelines, rights of way,
transmission, distribution or similar purposes; provided that the loss of all
such easements would not materially adversely affect the operations of the
Company;
(d) Any right which the United States of America or any municipal or
governmental body or agency may have by virtue of any franchise, license,
contract or statute to recapture or to purchase, or designate a purchaser of or
order the sale of, any property of the Company upon payment of reasonable
compensation therefor, or upon reasonable compensation or conditions to
terminate any franchise, license or other rights before the expiration date
thereof or to regulate the property and business of the Company;
(e) Liens of judgments covered by insurance, or upon appeal or other
proceeding for review, or not exceeding at any one time $10 million in aggregate
amount;
(f) Easements or reservations in respect of any property of the
Company for the purpose of transmission or distribution lines or other rights-
of-way, including overhead and underground transmission and distribution lines
and pipelines, or similar purposes, zoning ordinances, regulations,
reservations, survey exceptions, building restrictions, covenants, party wall
agreements, conditions of records and such other encumbrances or charges against
real property as are of a nature generally existing with respect to properties
of a similar character;
(g) Liens on the property of the Company incurred in the ordinary
course of business to secure performance of obligations with respect to
statutory or regulatory requirements, performance or return-of-money bonds,
surety bonds or other obligations of a like nature, in each case which are not
incurred in connection with the borrowing of money, the obtaining of advances or
credit or the payment of the deferred purchase price of property;
(h) Pledges or deposits by the Company under workmen's compensation
laws, unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts (other than for the payment of Debt)
or leases to which the Company is a party, or deposits to secure public or
statutory obligations of the Company, or deposits of cash or United States
government bonds to secure surety or appeals bonds obtained in the ordinary
course of business to which the Company is a party, or deposits as security for
taxes (that shall not at the time be delinquent or thereafter can be paid
without penalty or are being
-8-
contested in good faith) or import duties incurred in the ordinary course of
business, or deposits for the payment of rent or performance of other
obligations under a lease, in each case incurred in the ordinary course of
business;
(i) Rights reserved to or vested in any municipality or public
authority by the terms of any franchise, grant, license, or governmental consent
or permit, or by any provision of law, to acquire, purchase, or recapture at
fair value, or to designate a purchaser of such property;
(j) Rights reserved to or vested in any municipality or public
authority to use or control or regulate such property;
(k) Any obligations or duties, affecting such property, to any
municipality or public authority with respect to any franchise, grant, license
or permit;
(l) Exceptions or reservations therefrom of minerals, precious
metals, gas, oil, petroleum, hydrocarbons, or any other substances, which
exceptions or reservations exist at the time of acquisition by the Company of
the property and which do not materially and adversely affect the use made or
proposed to be made by it of such property; or
(m) Liens existing on the Substitution Date not otherwise described
in clauses (a) through (l) above.
REDEMPTION(Section
6.8)
Redemption
The Pricing Supplementprospectus supplement relating to each Note will indicate thatwhether
we have the right to redeem such Note
cannot be redeemed prior to its stated maturity or thatmaturity. If we have
the right to redeem a Note, such Note will be redeemable at theour option of the Company in whole
or in part on any date on or after the date specified in such Pricing Supplement,prospectus
supplement at prices declining from a specified premium, if any, to par,
together with accrued interest to the date of redemption.
In addition, the Notes shall be subject to redemption upon payment of
all or a part of the principal amount thereof either as a whole or in part, from time to
time, through the application of proceeds available under the
Mortgage upon redemption of the Pledged BondBonds from the condemnation of property
subject to the lien of the Mortgage or proceeds offrom the sale of such property to a
governmental body or agency having the power of eminent domain made as a result
of the threat (evidenced in writing by such body or agency) of condemnation of such property
together with accrued interest to the date fixed for redemption in accordance
with the terms of the Mortgage.property. See "Description of the Pledged
Bond--
Redemption"
EVENTS OF DEFAULTBonds-Redemption." (Section 3)
The Note Indenture allows us to issue Notes that are subject to
redemption at the request of representatives of deceased noteholders under
certain conditions (RHO Notes). The Note Indenture provides that unless an RHO
Note has been declared due and payable prior to its maturity by reason of an
event of default or unless an RHO Note has been defeased, the representative of
a deceased beneficial owner has the right to request redemption of an RHO Note
prior to maturity. RHO Notes are redeemable at 100% of their principal amount
plus any accrued but unpaid interest in integral multiples of $1,000 principal
amount, subject to any limitations that will be set forth in the applicable
prospectus supplement.
- 11 -
In the case of any redemption request which is presented on behalf of a
deceased beneficial owner and which has not been fulfilled at the time we give
notice of our election to partially redeem RHO Notes, the interests in the RHO
Notes which are the subject of such redemption request shall not be eligible for
redemption pursuant to our option to redeem but shall remain subject to
redemption pursuant to the redemption request.
Events of Default
Each of the following constitute eventsconstitutes an event of default under the Note
Indenture:
(a)* default in the payment of interest on any note issued under the Note
Indenture when due which continues for 30 days;
* default in the payment of principal or premium, if any, on any note
issued under the Note Indenture when due and payable and continuance of such defaultwhich continues
for five days;
(b) default in the payment of interest on any Note when due which
continues for 30 days;
(c)* our default in the performance or breach of any other covenant or
warranty of the Companyagreement in the Note Indenture andor any note issued under the continuation thereofNote
Indenture which continues for 90 days after written notice to the Company as provided in the Note
Indenture;
(d)us;
* prior to the Substitution Date, the occurrence of a default under the
Mortgage, of which default the Mortgage Trustee or the holders of a
majority in aggregate principal amount of the outstanding Notesnotes
issued under the Note Indenture have given written notice to the Note
Trustee;
(e)* if any Substituted Pledged Bonds are outstanding, the occurrence of a
default under the Substituted Mortgage, of which default the trustee
under such Substituted Mortgage or the holders of a majority in
aggregate principal amount of the outstanding Notesnotes issued under the
Note Indenture have given written notice to the Note Trustee; and
-9-
(f)* certain events of bankruptcy, insolvency or reorganization of the Company.South
Jersey Gas. (Section 8.1).
If an Event of Default, other than one relating to an event of default under the Note Indenture occurs and is
continuing (other than an event of default related to a default under the
Mortgage or the Substituted Mortgage, as applicable, and the
acceleration of the principal of the First Mortgage Bonds or any Substituted
Pledged Bonds in accordance with the Mortgage or the Substituted Mortgage, as
applicable, occurs and is continuing,Mortgage), either the Note Trustee or the registered
holders of a majority in aggregate principal amount of the outstanding Notesnotes
issued under the Note Indenture of such series may declare the principal amount
of all Notesnotes of such series to be immediately due and payable immediately.payable. At any time after
an acceleration of the Notesnotes of such series has been declared but before a
judgment or decree for the immediate payment of the principal amount of such
Notesnotes has been obtained and so long as all of the Company's first mortgage bondsour Bonds have not been
accelerated, the registered holders of a majority in aggregate principal amount
of the outstanding Notesnotes of such series may, under certain circumstances,
rescind and
annul such acceleration and its consequences.acceleration. If an Eventevent of Defaultdefault occurs relating to an event ofa default
under the Mortgage or the Substituted Mortgage as
applicable, and the acceleration of the
principal of the related first mortgage bonds
issued under either the Mortgage or the Substituted Mortgage, as the case may
be, in accordance with the Mortgage or the Substituted Mortgage, as applicable,
occurs (see "Description of the Pledged
Bond--DefaultsBonds-Defaults and Notice Thereof"), the principal of all of the Notes,outstanding
notes issued under the Note Indenture, together with interest accrued thereon, shall become
- 12 -
immediately due and payable immediately without the necessity of any action by the
Note Trustee or the registered holders of any Notes;payable; provided, however, that a rescission and annulment of the declaration thatacceleration
of the Company'srelated first mortgage bonds outstanding under the Mortgage or the Substituted Mortgage, as applicable,
be due and payable prior to their stated maturities shall constitute a waiver of such Eventevent of
Defaultdefault under the Note Indenture and of its consequencesIndenture. (Section 8.1).
The Note Indenture provides that the Note Trustee generally will be
under no obligation to exercise any of its rights or powers under the Note
Indenture at the request or direction of any of the holders unless such holders
have offered to the Note Trustee reasonable security or indemnity against the
liabilities and costs which may be incurred by such exercise. (Section 9.2). The
holders of a majority in principal amount of the outstanding Notesnotes generally
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Note Trustee, or of exercising any
trust or power conferred on the Note Trustee, with respect to the Notes.
(Section 8.7). Each holder of anya Note has the right to institute a proceeding with
respect to the Note Indenture but such right is subject to certain conditions precedent specified in the
Note Indenture. (Section 8.4). The Note Indenture provides that the Note Trustee,
within 90 days after the occurrence of a default with respect to the Notes, is
required to give the holders of the Notes notice of such default, unless cured
or waived, but,waived. However, except in the case of default in the payment of principal,
of, or premium if any, or interest on any Notes, the Note Trustee may withhold such notice if
it determines in good faith that it is in the interest of such holders to do so.
(Section 8.8). The Company
is We are required to deliver to the Note Trustee each year a
certificate as to whether or not, to the knowledge of the officers signing such
certificate, the Company
iswe are in compliance with the conditions and covenants under the
Note IndentureIndenture. (Section 6.6).
MODIFICATION We are required to notify the Note Trustee within
five days of becoming aware of an event of default. (Section 6.7)
Modification
and amendment of theThe Note Indenture may be effectedmodified and amended by the
Companyus and the Note
Trustee with the consent of the holders of a majority in principal amount of the
outstanding Notesnotes affected thereby,thereby; provided that no
such modification or amendment
may, without the consent of the holder of each outstanding Notenote affected
thereby, (a)thereby:
* change the maturity date of any Note;
(b)* reduce the rate or extend the time of payment of interest on any
Note;
(c)* reduce the principal amount of, or premium payable on, any Note;
(d)* change the
coin or currency of any payment of principal of, or any premium or interest on any Note;
(e)* change the date on which any Note may be redeemed orredeemed;
* adversely affect the rights of a holder to institute suit for the
enforcement of any payment on or with respect to any Note;
(f)* impair the interest of the Note Trustee in the Pledged BondBonds or
Substituted Pledged Bonds held by it or prior to
the Substitution Date, reduce the principal amount
of the Pledged BondBonds (except as permitted on the Substitution Date)
or Substituted Pledged Bonds securing the Notes to an amount less
than the principal amount of the related issueseries of Notes or alter the
- 13 -
payment provisions of such Pledged BondBonds or Substituted Pledged Bonds
in a manner adverse to the holders of the Notes; or
(g)* modify the foregoing requirements or reduce the percentage of
outstanding Notesnotes necessary to modify or amend the Note Indenture or
to waive any past default to less than a majority.
Modification and amendment
of theThe Note Indenture may be effectedmodified and amended by the Companyus and the Note
Trustee without the consent -10-
of the holders (a)of the notes:
* to add to the covenants of the CompanySouth Jersey Gas for the benefit of the
holders or to surrender a right conferred on the Companyus in the Note
Indenture;
(b)* to add further security for the Notes;
(c)* to make certain other
modifications, generally of a ministerial or immaterial nature;modifications; or
(d)* to make certain other modifications which are not prejudicial to the
interests of the holders of the Notesnotes. (Sections 13.1 and 13.2).
DEFEASANCE AND DISCHARGE
Defeasance and Discharge
The Note Indenture provides that, the Companysubject to certain exceptions, we
will be discharged from any and all obligations in respect toof the Notes and the
Note Indenture (except for
certain obligations such as obligations to register the transfer or exchange of
Notes, replace stolen, lost or mutilated Notes and maintain paying agencies) if, among other things, the Companywe irrevocably depositsdeposit with the Note
Trustee, in trust for the benefit of holders of Notes, money or certain United
States government obligations or any combination thereof, which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an amount sufficient without reinvestment, to make all
payments of principal of and any premium and interest on the Notes on the dates
such payments are due in accordance with the terms of the Note Indenture
and the Notes.due. Thereafter, the holders of Notes must look only to such
deposit for payment of the principal of and interest and any premium on the
NotesNotes. (Section 5.1).
CONSOLIDATION, MERGER AND SALE OR DISPOSITION OF ASSETS
The Company will
Consolidation, Merger and Sale or Disposition of Assets
We may not consolidate with or merge into any other corporation or
sell, transfer or otherwise dispose of all or substantially all itsof our assets
unless the successor or transferee corporation assumes by supplemental indenture
the due and punctual payment of the principal of and premium and interest on all
of the Notes and the performance of every covenant of the Note Indenture to be
performed or observed by the Company and (i)us, and:
* if such transaction occurs prior to the Substitution Date, unless the
successor or transferee corporation assumes the Company'sour obligations under the
Mortgage with respect to the Pledged Bond,
or (ii)Bonds; and
* if such transaction occurs on or after the Substitution Date and if
Substituted Pledged Bonds are outstanding, unless the successor or
transferee corporation assumes the Company'sour obligations under the Substituted
Mortgage with respect to the Substituted Pledged Bonds.
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Upon any such consolidation, merger, sale, transfer or other
disposition of all or substantially all of theour assets, of the Company, the successor corporation
formed by such consolidation or into which the Company iswe are merged or to which such
transfer is made shall succeed to and be substituted for, and may exercise every
right and power of, the
CompanySouth Jersey Gas under the Note Indenture with the same effect as if such successor
corporation had been named as the Company therein and the Companywe will be
released from all obligations under the Note Indenture. The Note Indenture
defines "allall or substantially all"all of theour assets of the Company as being 50% or more of theour total
assets of the Company as shown on theour balance sheet of the
Company as of the end of the prior year and
specifically permits any such sale, transfer or other disposition during a calendar
year of less than 50% of our total assets without the consent of the holders of
the Notes and without the assumption by the transferee of the Company'sour obligations on the
Notes and covenants contained in the Note Indenture. (Sections 12.1 and 12.2).
VOTING OF THE PLEDGED BOND HELD BY NOTE TRUSTEE
Voting of the Pledged Bonds Held by Note Trustee
The Note Trustee, as a holder of the Pledged Bond,Bonds, may attend any
meeting of bondholders under the Mortgage to which it receives due notice or, at
its option, may deliver its proxy in connection therewith. Either at such
meeting or where any action, amendment, modification, waiver or consent to or in
respect of the Mortgage or Bonds issued under the Mortgage is sought without a
meeting, (a "proposed action"), the Note Trustee will vote the Pledged BondBonds held by it or will consent
with respect thereto as described below. The Note Trustee may agree to any
proposed action without the consent of or notice to holders of the
Notesnotes of a series
where such proposed action would not adversely affect the holders of the Notes.notes
of such series. In the event that the proposed action would adversely affect the
holders of the Notes,notes of a series, the Note Trustee shall not vote the Pledged
BondBonds that secured such series without notice to and the approval of holders of
at least a majority in aggregate principal amount of Notesthe notes of such series
then outstanding. (Section 4.3).
-11-
RESIGNATION OR REMOVAL OF NOTE TRUSTEE
Resignation or Removal of Note Trustee
The Note Trustee may resign at any time upon written notice to the Companyus
specifying the day upon which the resignation is to take effect and sucheffect. Such
resignation will take effect immediately upon the later of the appointment of a
successor Note Trustee and suchthe specified day.resignation date. (Section 9.10).
The Note Trustee may be removed at any time by an instrument or concurrent
instruments in writing filed with the Note Trustee and signed by the holders or
their attorneys-in-fact, of at least
a majority in principal amount of the then outstanding Notes.notes issued under the
Note Indenture. In addition, so long as no event of default or event which, with
the giving of notice or lapse of time or both, would become an event of default
has occurred and is continuing, the Companywe may remove the Note Trustee upon notice to
the holder of each Note outstanding note and to the Note Trustee and the appointment
by us of a successor Note TrusteeTrustee.
(Section 9.10).
BOOK-ENTRY SYSTEM
Book-Entry System
Each issueNote will be represented by either a permanent global note
registered in the name of, Notes may beor a nominee of, the depository or a certificate
issued in definitive registered form, without coupons, as set forth in the
formapplicable prospectus supplement. Each Note represented by a global note is
referred to below as a "Book-Entry Note. " Except as set forth below, Book-Entry
Notes will not be issuable in certificated form. So long as the depository or
its nominee is the registered holder of oneany permanent global note, the
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depository or more Globalits nominee will be considered the sole holder of the Book-Entry
Notes or Notes represented by the applicable permanent global note for all
purposes under the Note Indenture and the Notes.
For a further description of the respective forms, denominations and
transfer and exchange procedures for any such permanent global note and the
Book-Entry Notes, refer to the following discussion and to the applicable
prospectus supplement.
Upon issuance, all Book-Entry Notes of like tenor and having the same
date of issue will be represented by a single permanent global note. Each
permanent global note representing all or part of such issue ofBook-Entry Notes and which will be deposited with, or
on behalf of, the Depositorydepository, as depositary, located in the Borough of
Manhattan, the City of New York, and will be registered in the name of the
Depositorydepository or a nominee of the Depository.
The following is based solely on information furnished bydepository. Currently, the Depository:
Unless otherwise specifieddepository will accept
the deposit of only permanent global notes denominated in the Pricing Supplement, DTC will act as
Depository for those Notes issued as Global Notes. The GlobalU.S. dollars.
Ownership of beneficial interests in a permanent global note
representing Book-Entry Notes will be issuedlimited to institutions that have accounts
with the depository or its nominee (such institutions are referred to as
fully-registeredparticipants) or persons that may hold interests through participants. In
addition, ownership of beneficial interests by participants in such a permanent
global note will be evidenced only by, and the transfer of that ownership
interest will be effected only through, records maintained by the depository or
its nominee for such permanent global note. Ownership of beneficial interests in
such a permanent global note by persons that hold through participants will be
evidenced only by, and the transfer of that ownership interest within such
participant will be effected only through, records maintained by such
participant. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a permanent
global note.
We have been advised by the depository that upon the issuance of a
permanent global note representing Book-Entry Notes, and upon the deposit of
such permanent global note with the depository, the depository will immediately
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Book-Entry Notes represented by such permanent global
note to the accounts of participants. The accounts to be credited shall be
designated by the soliciting agent or, to the extent that the Book-Entry Notes
are offered and sold directly, by us.
Payment of principal of and any premium and interest on Book-Entry
Notes represented by any permanent global note registered in the name of Cede & Co.
(DTC's partnership nominee).or held
by the depository or its nominee will be made to the depository or its nominee,
as the case may be, as the registered owner and holder of the permanent global
note representing such Book-Entry Notes. Neither South Jersey Gas, the trustee,
nor any agent of the trustee, will have any responsibility or liability for any
aspect of the depository's records or any participant's records relating to or
payments made on account of beneficial ownership interests in a permanent global
note representing such Book-Entry Notes or for maintaining, supervising or
reviewing any of the depository's records or any participant's records relating
to such beneficial ownership interests.
- 16 -
We have been advised by the depository that upon receipt of any payment
of principal of or any premium or interest in respect of a permanent global
note, the depository will immediately credit, on its book-entry registration and
transfer system, accounts of participants with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such
permanent global note as shown on the records of the depository. Payments by
participants to owners of beneficial interests in a permanent global note held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in "street name," and will be the sole responsibility of
such participants.
No permanent global note described above may be transferred except as a
whole by the depository for such permanent global note to a nominee of the
depository or by a nominee of the depository to the depository or another
nominee of the depository.
A permanent global note representing Book-Entry Notes is exchangeable
for definitive notes registered in the name of, and a transfer of a permanent
global note may be registered to, any person other than the depository or its
nominee, only if:
* we are notified by the depository that it is unwilling or unable to
continue as depositary for such permanent global note or if at any
time the depository ceases to be a clearing agency registered under
the Exchange Act; or
* we, in our sole discretion, at any time determine not to have all of
the Notes represented by the permanent global note.
Any permanent global note that is exchangeable pursuant to the preceding
sentence shall be exchangeable in whole for definitive notes in registered form,
of like tenor and of an equal aggregate principal amount, in denominations of
$1,000 and integral multiples of $1,000 in excess thereof. Such definitive notes
shall be registered in the name or names of such person or persons as the
depository shall instruct the trustee. It is expected that such instructions may
be based upon directions received by the depository from its participants with
respect to ownership of beneficial interests in such permanent global note.
Except as provided above, owners of beneficial interests in a permanent
global note will not be entitled to receive physical delivery of notes in
definitive form and will not be considered the holders thereof for any purpose
under the Note Indenture, and no permanent global note representing Book-Entry
Notes shall be exchangeable, except for another permanent global note of like
denomination and tenor to be registered in the name of the depository or its
nominee. Accordingly, each person owning a beneficial interest in a permanent
global note must rely on the procedures of the depository and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a holder under the Note
Indenture.
The Note Indenture provides that the depository, as a holder, may
appoint agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a holder is entitled to give or take under the Note Indenture. We understand
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that, under existing industry practices, in the event that we request any action
of holders of notes or an owner of a beneficial interest in such permanent
global note desires to give or take any action that a holder of a note is
entitled to give or take under the Note Indenture, the depository would
authorize the participants holding the relevant beneficial interests to give or
take such action, and such participants would authorize beneficial owners owning
through such participants to give or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
The Depository Trust Company, or DTC, is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934. DTC holds securitiesand provides
asset servicing for U.S. and non-U.S. equity issues, corporate and municipal
debt issues, and money market instruments that itsDTC's participants ("Participants")(Direct
Participants) deposit with DTC. DTC also facilitates the post-trade settlement
among Direct Participants of sales and other securities transactions such as transfers and pledges, in
deposited securities, through electronic computerized book-entry changes intransfers and
pledges between Direct Participants' accounts, thereby eliminatingaccounts. This eliminates the need for
physical movement of securities certificates. "Direct Participants"Direct Participants include both
U.S. and non-U.S. securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation (DTCC). DTCC, in turn,
is owned by a number of itsthe Direct Participants of DTC and Members of the
National Securities Clearing Corporation, Government Securities Clearing
Corporation, MBS Clearing Corporation, and Emerging Markets Clearing
Corporation, as well as by the New York Stock Exchange, Inc., the American Stock
Exchange Inc.,LLC and the National Association of Securities Dealers, Inc. Access to
the DTC system is also available to others such as both U.S. and non-U.S.
securities brokers and dealers, banks, and
trust companies, and clearing
corporations that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").indirectly. The DTC rules applicable to DTC and
its Participants are on file with the Commission. Purchases of the Notes under theMore information about DTC system mustcan
be made by or through
Direct Participants, which will receive a credit for the Notes on DTC's records.
The ownership interest of each actual purchaser of each Note ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation from DTC of
their purchase, but Beneficial Owners are expected to receive written
confirmation providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Notes are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in the Notes, except
in the event that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of the Notes with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Notes; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Notes are credited,
which may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of the holdings on behalf of their customers.
-12-
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
If the Global Notes are redeemable, redemption notices shall be sent to
Cede & Co. If less than all of the Global Notes are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Notes.
Under its usual procedures, DTC mails an Omnibus Proxy to the Company as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Notes are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Principal, interest and any premium payments on the Notes will be made to
DTC. DTC's practice is to credit Direct Participant's accounts on payable date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on payable date. Payments
by Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as in the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the applicable Trustee or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal, interest and any premium to DTC is the
responsibility of the Company or the applicable Trustee, disbursement of such
payments to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to a series of Notesfound at any time by giving reasonable notice to the
Company or the Note Trustee. Under such circumstances, if a successor securities
depository is not obtained, certificates for such series of Notes are required
to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository) for any series of
Notes. In that event, certificates for such series of Notes will be printed and
delivered.www.dtcc.com.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from DTC, and the CompanySouth Jersey Gas and any underwriters,
dealers or agents take no responsibility for the accuracy thereof.
The underwriters, dealers or agents of any Notes may be Direct
Participants of DTC.
NONE OF THE COMPANY, THE NOTE TRUSTEE, THE MORTGAGE TRUSTEE, OR ANY AGENT
FOR PAYMENT ON OR REGISTRATION OF TRANSFER OR EXCHANGE OF THE GLOBAL NOTE WILL
HAVE ANY RESPONSIBILITY OR LIABILITY FOR ANY ASPECT OF THE RECORDS RELATING TO
OR PAYMENTS MADE ON ACCOUNT OF BENEFICIAL INTERESTS IN SUCH GLOBAL NOTE OR FOR
MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO SUCH BENEFICIAL
INTERESTS.
CONCERNING THE NOTE TRUSTEEConcerning the Note Trustee
The Bank of New York is the Note Trustee under the Note Indenture. The
Note Trustee also acts as trustee for the Company's first mortgage bonds. The Companyour Bonds. We also currently maintainsmaintain
other banking relationships with the Note Trustee in the ordinary course of
business.
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DESCRIPTION OF THE PLEDGED BOND
GENERALBONDS
General
The Pledged Bond isBonds are to be issued under and secured by the Mortgage
and the New SupplementTwenty-Third Supplemental Indenture providing for the Pledged Bond.Bonds. The
Pledged Bond constitutesBonds constitute the seriesTwenty-First Series of the Company's First Mortgage Bondsour first mortgage bonds and
are designated as South"South Jersey Gas Company First Mortgage Bonds, 10% Medium
Term Notes, Series A, which is limited
to theB." The Twenty-Third Supplemental Indenture provides that we
may issue Pledged Bonds in an aggregate principal amount not to exceed
$150,000,000. However, the Mortgage limits the amount of $100,000,000.new debt, such as the
Notes, that can be ratably secured under the Mortgage. The limit is determined
by a formula based on the value of certain property additions as provided in the
Mortgage. As of the date of this prospectus, the maximum principal amount of
Pledged Bonds that can be issued (and, therefore, the maximum principal amount
of Notes that can be secured under the Mortgage through Pledged Bonds) is
approximately $99,746,000. We may issue from time to time one or more additional
Pledged Bonds when so permitted under the Mortgage. Prior to the Substitution
Date, we will not issue Notes so that there are Notes outstanding in an
aggregate amount greater than the then outstanding Pledged Bonds.
The following statement
includesis a brief summariessummary of certain provisions of the Mortgage.
For a complete statement of such provisions, reference is made to the actual provisions
-13-
of the Mortgage. First Mortgage Bonds issued or issuable under the Mortgage are
hereinafter sometimes called "Bonds."
A copy of the Mortgage, including a
proposed New Supplementthe Twenty-Third Supplemental Indenture, may
be inspected at the office of the Mortgage Trustee at 101 Barclay Street, Floor
21 West, New York, New York 10286 or at the office of the Commission, 450 Fifth
Street, N.W., Washington, D.C. References to articles and sections under this
caption are reference to articles and sections of the Mortgage.
The Pledged BondBonds will be issued initially to the Note Trustee and will
be issuable only in fully registered form in any denomination authorized by the
Company.us.
The Pledged Bond will beBonds are transferable, and the several denominations thereof will beare
exchangeable for Bonds of other authorized denominations but of the same series
and aggregate principal amount, upon compliance with the applicable provisions of the Mortgage and the Note
Indenture. No service chargefee will be madecharged for any such transfer or exchange, but
the Companywe may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
The Pledged Bond hasBonds have not been registered under the Securities Act of 1933,
as amended.
INTEREST, MATURITY AND PAYMENTAct.
Interest, Maturity and Payment
Interest on the Pledged BondBonds shall accrue at the rate of 10% per annum
computed on the basis of a 360-day year of twelve 30-day months and shall be
payable semi-annually in arrears on May 1 and November 1 of each year,year. Interest
is payable initially on May 1, 1999,2003, subject to receipt of certain credits
against principal and interest and such obligations as set forth below.
In addition to any other credit, payment or satisfaction to which the
Company iswe
are entitled with respect to the Pledged Bond, the CompanyBonds, we shall be entitled to credits
against amounts otherwise payable in respect of the Pledged BondBonds in an amount
corresponding to (i)to:
- 19 -
* the principal amount of any of the Notes issued under the Note Indenture secured thereby surrendered to the Note
Trustee by the Company,us, or purchased by the Note Trustee, for cancellation, (ii)cancellation;
* the amount of money held by the Note Trustee and available and
designated for the payment of principal of and/or interest on the
Notes secured thereby, regardless of the source of payment to the
Note Trustee of such moneysmoneys; and
(iii)* the amount by which principal of and interest due on the Pledged
BondBonds exceeds principal of and interest due on the Notes secured
thereby. The Note Trustee
shall make notation on the Pledged Bond of any such credit.
LIEN AND SECURITY(Section 2.1, 23rd Supp.)
Lien and Security
The Pledged Bond isBonds are secured by the lien of the Mortgage equally and
proportionately with all other Bonds. TheSubject to certain exceptions, the
Mortgage constitutes a first lien (subject to "excepted encumbrances" as defined in the Mortgage) on substantially all of the property and
franchises of the Company now ownedwe currently own or hereafter acquired,
for the equal and ratable benefit of all Bonds now or hereafter outstanding
under the Mortgage.acquire. The Mortgage excepts from its
lien materials and supplies consumable in the operation of the Company,our business, certain
merchandise and products, acquired,
manufactured, produced or held for sale in the usual course of business, motor vehicles, and cash, accounts receivable, stocks,
bonds, notes and securities which are neither specifically pledged with the
Mortgage Trustee nor required by the Mortgage to be so pledgedpledged. (Granting Clause).
There are certain conditions which must be complied with relating to the lien of
the Mortgage in the case of a merger, consolidation or sale of all the assets of
the Company. (Article VII)
ISSUANCE OF ADDITIONAL BONDSSouth Jersey Gas. (Section 5)
Issuance of Additional Bonds
Additional Bonds, ranking equally with all outstanding Bonds, may be
issued under the Mortgage without limit as to aggregate principal amount upon
compliance with Article III of the Mortgage and after obtaining the approval of the New Jersey
Board of Public Utilities ("BPU"). The principal provisions for
the issuance ofUtilities.
In general, additional Bonds are summarized below.
Additional Bonds may be issued in principal amount not
exceeding:
(i)* 60% of the cost or fair value (whichever is less) of property
additions, which consist of real and personal property constructed or
acquired by the Companyus subject to the lien of the Mortgage and not previously
utilized under the Mortgage as the basis for additional bonds or
certain other purposes, located in the State of New Jersey, and used
or useful by the Companyus in connection with itsour business, after deducting from
such cost or fair value the excess if any,
of the cost of -14-
mortgaged property
retired (as defined in the Mortgage) and certain amounts relating to depreciation of the mortgaged
property which are calculated in the
annual certificate for the replacement fund hereafter referred to;property; provided that:
(a) the- our net earnings of the Company (as defined in the Mortgage) for 12
consecutive months within the preceding 15 months shall have
been at least 2two times the annual interest charges on all
prior lien obligations and all Bonds to be outstanding after
the authentication of those about to be authenticated; and
(b)- if such property additions are subject to a prior lien: (x)
166-2/166 2/3% of the principal amount of the outstanding
obligations secured by such prior lien shall be deducted from
the cost or fair value of such property additions (unless such
deduction has been made previously); and (y) if the deduction
referred to in clause (x) has not previously been made, then
the aggregate principal amount of all outstanding prior lien
- 20 -
obligations upon all property additions used as the basis for
authentication of Bonds, withdrawal of money, or release of
property under the Mortgage or as a credit against a payment
to any improvement or sinking fund for Bonds of a particular
series, or the replacement fund hereinafter referred to, shall
not exceed 10% of the principal amount of all Bonds to be
outstanding after authentication of those about to be
authenticated (Section 3.04);
(ii)* the principal amount of other Bonds acquired, paid, retired, or with
respect to which payment has been provided for, excluding, however,
any such Bonds paid or retired by the operation of any sinking,
replacement, purchase or other analogous fund or otherwise used as a
credit against the obligations of the Company,South Jersey Gas, with certain
specified exceptions; provided that if such Bonds were not theretofore bona-fidebona fide
issued and bear interest at a lower rate than the Bonds to be
authenticated, the net earnings condition specified above in paragraph (i)the bullet
point above must be complied with (Sections 3.04 and 3.06); and
(iii)* the amount of money deposited with the Mortgage Trustee for that
purposepurpose. (Sections 3.03, 3.06 and 3.07).
Money so deposited may be withdrawn by the Companyus upon the same conditions as
would entitle itus to obtain the authentication of Bonds of an equal principal
amount under the above clauses (i)
or (ii), except thatfirst two bullet points above. However, if the net earnings
condition specified in clause (i)the first bullet point was complied with at the time of
the deposit of such money and included all interest charges on prior lien
obligations existing at the time of the requested withdrawal, it need not again
be again complied with upon the withdrawal thereof. Pending such withdrawal, such money may be invested by the Mortgage Trustee in
obligations of the United States and the net proceeds of any sale thereof
withdrawn as aforesaid (Section(Sections 3.08 and 3.09).
If the additional Bonds are to be issued on the basis of property
additions, the Mortgage requires the deliverythat we deliver to the Mortgage Trustee of a
certificate of an engineer, appraiser or other expert as to the fair value of
such additions to the Company as of a specified date not more than three months
before the application for the additional Bonds is filed with the Mortgage
Trustee.date. If any of such additions were acquired from
another gas utility, the Mortgage requires that the initial appraisal must be performed by an engineer,
appraiser or other expert who is independent of the CompanySouth Jersey Gas. (Section 3.04,
as amended by 17/th/17th Supp.).
REPLACEMENT FUND
Upon the earlier to occur of (a) the date as of which no Bonds remain
outstanding that were part of a series of Bonds initially issued prior to the
Nineteenth Series and (b) the date as of which a Supplemental Indenture is
executed amending Section 3.06 of the Mortgage, we will be permitted to use the
collateral underlying Bonds that are retired, acquired, paid or surrendered by
us as collateral for subsequently issued Bonds.
Replacement Fund
The Mortgage requires that, the Company on or before April 1 of each year, we
deliver a replacement fund certificate and pay to the Mortgage Trustee for a
replacement fund an amount equal to $198,000 plus 2% of the cost of all
additions made to itsour depreciable public utility property during the period from
0ctoberOctober 1, 1947, to the end of the preceding calendar year, less 2% of the cost
of all depreciable public utility property retired by itus during such period. The
CompanyWe
may take as a credit against such payment (a) 166-2/166 2/3% timesof the principal amount of
bondsBonds which could then be issued on the basis of property additions and (b) the
- 21 -
principal amount of Bonds paid, acquired or retired by it,us, to the extent that
the same have not been otherwise included in a prior Replacement Fund
Certificate filed with the Mortgage Trustee. So long as any Bonds of the
Fourteenth Series, Fifteenth Series, Sixteenth Series, Seventeenth Series,
Eighteenth Series, Nineteenth Series, Twentieth Series or TwentiethTwenty-First Series
remain outstanding, the Companywe will satisfy itsour obligations under the replacement fund
through the use of cash only if it haswe have first used all available property
additions and retired bonds,Bonds, and then only to the extent such amounts are not
sufficient to satisfy such obligations. All money in the replacement fund shall,
upon our request,
by the Company, be applied as described below under "Release and Substitution
of Property" in the case of proceeds from the sale of released propertyproperty.
(Sections 5.19 and 6.07; 15/th/15th Supp., Section 3.2; 16th Supp., Section 3.2; 18th
Supp., Section 3.2.; 19th Supp., Section 3.2.; 20th Supp., Section 3.2; 21/st/21st
Supp., Section 3.2; 22nd Supp., Section 3.2; and 22/nd/23rd Supp., Section 3.2).
-15-
RELEASE AND SUBSTITUTION OF PROPERTY
Release and Substitution of Property
Upon substitution of other property of equal value, the Companywe may dispose of,
free from the lien of the Mortgage, and without procuring a release
therefrom, any machinery, tools, implements, fixtures,
or equipment unsuitable or not required for the conduct of its businessour business.
(Section 6.03). Any property no longer necessary for the proper conduct of itsour
business may be sold, exchanged or disposed of by the Company,us, and released from the lien
of the Mortgage upon receipt by the Companyus of a consideration, which shall be paid or
delivered to the Mortgage Trustee (unless required to be paid or delivered to
the trustee of a prior lien), equal to at least the fair value thereofof such property
and which shall consist of (i) money, (ii)of:
* money;
* obligations of any federal, state, municipal or other governmental
body or agency purchasing such property, (iii)property;
* obligations maturing within 15 years, secured by a purchase money
mortgage on such property and constituting not more than 60% of such
consideration,consideration; and/or
(iv)* property additions (not otherwise utilized under the Mortgage) which
might have formed the basis for the authentication of additional
BondsBonds. (Sections 6.04 and 6.05).
Property taken by eminent domain proceedings or under governmental power of
purchase shall be released from the Mortgage and the proceeds of such taking or
purchase shall be paid to the TrusteeTrustee. (Section 6.08). Proceeds received by the
condemnation or from the sale of property released from the Mortgage (i)Mortgage:
* may be withdrawn by the Companyus upon compliance with the same conditions that
would authorize the authentication of Bonds of an equal principal
amount, except that no earnings condition shall be applicable and
except that money may be withdrawn on the basis of property additions
up to 100% of the cost or fair value (whichever is less) thereof
after deducting the required amount on account of any prior lien
obligations and without any deduction for the cost of property
retired;
(ii)- 22 -
* may be temporarily invested by the Mortgage Trustee in obligations of
the United States; or
(iii)* may be applied to the purchase or redemption of Bonds;
provided that all such proceeds (including proceeds temporarily invested as
aforesaid) not withdrawn or applied for 5five years after receipt by the Mortgage
Trustee shall be applied to the purchase or redemption of BondsBonds. (Section 6.07).
Proceeds of insurance on mortgaged property, except on losses of less than
$10,000, are payable to the Mortgage Trustee and may be applied by it (i) to
reimburse the Companyus for the cost of repairing, renewing or replacing property damaged
or destroyed or (ii) as above provided in the case of proceeds of the sale of
property released from the MortgageMortgage. (Section 5.12). No prior notice is required
in connection with any releases or substitutions of property, but Section 8.03
contains provisions relating to the transmission by the Mortgage Trustee to
Bondholders, from time to time, of reports of such releases or substitutions and
the consideration received therefor.
RESTRICTIONS ON DIVIDENDSRestrictions on Dividends
So long as any Bonds of the TwentiethTwenty-First Series shall remain
outstanding, the
Companywe will not declare or pay any dividend on any shares of its Common Stockour common
stock (other than dividends payable in shares of its Common Stock)our common stock) or make any
distribution on such shares, or purchase or otherwise acquire any such shares
(except shares acquired without cost to the Company)us), or advance any amount to or invest
any amount in the property, securities or indebtedness of, or guarantee any
indebtedness of, any subsidiary (as defined in the Mortgage) if, after giving
effect to such action, the sum of the aggregate amounts so declared, paid,
distributed, purchased, acquired, advanced, invested or guaranteed after
December 31, 19972001, would exceed the aggregate net income of the CompanySouth Jersey Gas
available for dividends on its Common Stockour common stock earned after such date plus the sum
of $56,000,000.$69,000,000 (Section 3.1; 22/nd/3.1, 23rd Supp.) For the purposes of this restriction, "subsidiary" shall
mean any corporation directly or indirectly controlled by or under common
control with the Company. For the purpose. The method of calculating the requirements of
this restriction, the net income
of the Company available for dividends on its
Common Stock shall be determined in accordance with such system of accounts as
may be prescribed by any governmental authority having jurisdictionis specified in the premises or in the absence thereof in accordance with generally accepted
accounting principles as in effect at such time; provided, however, that (a) the
deductions for depreciation or renewal or replacement reserves in respect of
each year shall be the amount taken therefor on the accounts of the Company or
the amount required to be stated in item (1) of the Replacement Fund Certificate
to be filed under the Mortgage with respect to the period ending at the close of
such year, whichever be greater, and (b) no deduction or adjustment shall be
made from gross income for or in respect of (i) expenses in connection with the
redemption or retirement of any securities issued by the Company, including any
amount paid in excess of the principal or par or stated value of securities
redeemed or retired, and, if such redemption or retirement is effected with the
proceeds of sale of other securities of the Company, interest on the securities
redeemed or retired from the date on which the funds required for such
redemption or retirement shall be deposited in trust for such purpose to the
date of such redemption or retirement, (ii) profits or losses from sales of
-16-
capital assets or taxes in respect of such profits, (iii) any adjustments to
retained earnings (including tax adjustments) applicable to any period prior to
January 1, 1998, (iv) charges for the write-off of unamortized debt discount and
expense carried on the books of the Company at December 31, 1997, or (v) charges
for the write-off or write-down of the amount at which any property of the
Company was carried on its books at December 31, 1997, to the extent that the
same shall be approved by, or be made pursuant to any rule, regulation, or order
of, any governmental authority having jurisdiction in the premises and shall not
be required by such authority to be charged against earning accumulated after
December 31, 1997. (Section 3.1; 22/nd/ Supp.)
REDEMPTIONMortgage.
Redemption
The Pledged Bonds of the Twentieth Series, including the Pledged Bond, shall beare subject to redemption, either as a whole or in
part, from time to time upon payment of the principal amount thereof through the application offrom
proceeds available under the Mortgage resulting from the condemnation of
property subject to the lien of the Mortgage or proceeds offrom the sale of such property
to a governmental body or agency having the power of eminent domain made as a
result of the threat (evidenced in
writing by such body or agency) of condemnation of such property together with
accrued interest to the date fixed for redemption in accordance with the
terms of the Mortgage, which provides that if less than all Bonds of all Seriesseries
are redeemed, then proceeds from the sale of such property will be applied to
the redemption of all Bonds, including the Pledged Bond,Bonds, on a pro rata basis
based on the amount of the Bonds then outstanding. (Section 1.7, 22/nd/23rd Supp.)
CONSOLIDATION, MERGER, OR SALEConsolidation, Merger or Sale
Subject to the approval of the BPU,New Jersey Board of Public Utilities,
the Mortgage does not prevent aour consolidation or merger of the Company with or into any other
corporation or a conveyance and transfer of all of theour property and franchises of the Company
to any other corporation if (i)if:
- 23 -
* the consolidation, merger or conveyance and transfer is subject to
the continuing lien of the Mortgage on the mortgaged property and
will not impair the lien or any of the rights or powers of the
Trustee or Bondholders;
(ii)* the corporation formed by the consolidation or into which the Company iswe are
merged or which acquires the mortgaged property assumes and agrees in
writing to pay the Bondholders the principal of and interest on all
the Bonds, as and when due;
(iii)* any such successor corporation executes and delivers a supplemental
indenture which contains, among other things: (w)(a) an agreement to
perform all obligations of the Companyour obligations under the Mortgage, (x)Mortgage; (b) a stipulation
that such consolidation, merger or conveyance and transfer is not a
waiver or release of any rights or powers of the Mortgage Trustee or
the Bondholders, (y)Bondholders; (c) a grant confirming the lien of the Mortgage
Trustee upon the mortgaged propertyproperty; and (z)(d) a grant to the Mortgage
Trustee subjecting to the lien of the Mortgage property additions to
be used in the future and certain after-acquired property; and
(iv)* the Mortgage Trustee shall have consented to the consolidation,
merger or conveyance and transfer, which consent the Mortgage Trustee
is required to give upon receiving an opinion of counsel that the
foregoing conditions in the Mortgage have been satisfied, unless in
the Mortgage Trustee's opinion the transaction would be prejudicial
to the interests of the bondholders.Bondholders. (Section 7.01)
MODIFICATIONS OF MORTGAGE
With the written consentModifications of the holders of 66-2/3% in principal amount of
the Bonds outstanding, anyMortgage
Any of the provisions of the Mortgage or of the Bonds may be altered,
amended or eliminated, orand additional provisions added.added, with the written consent
of the holders of 66 2/3% in principal amount of the Bonds outstanding. If such
change pertains only to the Bonds of one or more Series,series but less than all
Series,series, only the written consent of the holders of 66-2/66 2/3% in principal amount
of the then outstanding Bonds of each Seriesseries to which such change pertains is
needed. However, no such change may (i)may:
* alter or modify the right (expressed in
Section 9.16) of any Bondholder to receive payment of the
principal of and interest on hisits Bonds on or after the respective due
dates thereof;
(ii)* change any of the provisions of any Bond with respect to the time,
terms, manner, or amount of any payment of the principal thereof or
interest thereon without the consent of the holder of such Bonds; or
(iii)* reduce the percentage of Bondholders whose consent shall be required
for the execution of any subsequent supplemental indenture.
The consent of the BPUBoard of Public Utilities may be required before certain of
the above actions may be takentaken. (Section 10.02). Certain other modifications and
amendments described in the Mortgage may be made without the consent of the
BondholdersBondholders. (Section 10.01).
-17-
PERCENTAGE OF BONDHOLDERS REQUIRED TO TAKE CERTAIN ACTION
- 24 -
Percentage of Bondholders Required to Take Certain Action
Upon the occurrence of aan event of default under the Mortgage, Event of Default (as defined below), the
Mortgage Trustee or the holders of 25% in principal amount of the Bonds then
outstanding may by written declaration accelerate the maturity of the principal of all the Bonds
(Section 9.03); but if the Company shallwe cure all Mortgage
Eventsevents of Default,default under the Mortgage, the
holders of a majority in principal amount of the Bonds then outstanding may
rescind, or require the Mortgage Trustee to rescind, such accelerationacceleration. (Section
9.13). The holders of 66-2/66 2/3% in principal amount of the Bonds then outstanding
may waive any past default under the Mortgage and its
consequences except for a default
in the payment of principal of or interest on any of the BondsBonds. (Section 9.13).
No bondholderBondholder may enforce the lien of the Mortgage unless the holders of 25% in
principal amount of the Bonds then outstanding have requested the Mortgage
Trustee to do so and have offered to indemnify it against expenses and
liabilities in connection therewith, and unless the Mortgage Trustee has failed
to take such action within 60 daysdays. (Section 9.15). The holders of a majority in
principal amount of the Bonds then outstanding may direct the time, method and
place of conducting any proceeding for any remedy available to the Mortgage
Trustee or exercising any trust or power conferred on it, unless such action
would be contrary to law or the provisions of the Mortgage or would, in the
opinion of the Mortgage Trustee, be unjustly prejudicial to the other
BondholdersBondholders. (Section 9.18).
For the purpose of computing the percentage of holders of Bonds requisite
for the taking of any action permitted under the Mortgage (including the
modification of the Mortgage) the calculation will be on the basis of the
principal amount of all Bonds outstanding exclusive of Bonds held by the Company
Defaults and all Bonds known to the Mortgage Trustee to be held by or any person
controlling or controlled by or under common control with the Company shall be
disregarded (Article I).
DEFAULTS AND NOTICE THEREOFNotice Thereof
The following constitute events of default under the Mortgage (a "Mortgage
Event of Default"): (i)Mortgage:
* defaults in the payment of principal of any Bond or prior lien
obligation;
(ii)* default for 60 days in the payment of interest on any Bond or any
prior lien obligations,obligation, or in the payment of any sinking, replacement,
purchase or analogous fund;
(iii)* default for 60 days after notice in the performance of any other
covenant in the Mortgage or in any prior lien
mortgage in certain cases; (iv)Mortgage;
* default occurs in observing or performing any covenant or condition in any
mortgage constituting a prior lien on mortgaged property and the
mortgagee or trustee thereunder institutes proceedings to invoke
rights or remedies available by reason of such default,default; and
(v)* certain events of bankruptcy, insolvency or reorganizationreorganization. (Section
9.02).
The 15th, Supp., 16th, Supp., 18th, Supp., 19th, Supp., 20th, Supp., 21/st/ Supp21st, 22nd and 22/nd/
Supp.23rd Supplements provide that
the following also constitute events of default under the Mortgage:
(i)* default in the payment of principal of any Bond of the Fourteenth
Series, Fifteenth Series, Sixteenth Series, Seventeenth Series, Eighteenth
Series, Nineteenth Series or Twentieththrough Twenty-First Series, respectively, at maturity or upon
redemption pursuant to the provisions of any sinking, replacement,
purchase or analogous fund or pursuant to any optional or other
redemption or otherwise
provided if payment is made by wire transfer reasonably expected to be effective
on such due date, which transfer is not credited to the Bondholder's account on
such date, default shall not occur until after five days following the due date;
(ii)otherwise; and
- 25 -
* default for ten days in the payment of interest on any Bond of the
Fourteenth through Twenty-First Series, Fifteenth Series, Sixteenth Series, Seventeenth Series,
Eighteenth Series, Nineteenth Series or Twentieth Series respectivelyrespectively. (15th Supp.,
Section 6.1; 16th Supp., Section 6.1; 18th Supp., Section 6.1; 19th
Supp., Section 6.1; 20th Supp., Section 7.1; 21/st/21st Supp., Section 7.1,
22nd Supp., Section 7.1 and 22/nd/23rd Supp., Section 7.1).
The 15th, Supp., 16th, Supp., 18th, Supp., 19th, Supp.,
20th, Supp. 21/st/ Supp.21st, 22nd and 22/nd/ Supp.23rd Supplements also
provide that it shall be an event of default under the Mortgage if the Company shallwe default in
the performance of or compliance with any covenant, condition or term in the
Mortgage or the 15th, Supp., 16th, Supp., 18th, Supp., 19th, Supp., 20th, Supp., 21/st/ Supp.21st, 22nd or 22/nd/
Supp.,23rd Supplements,
respectively, and such default shall continue for 30 days after the
Company shallwe have
knowledge thereof. Within 90 days after the occurrence thereof, the Mortgage
Trustee shall give notice of any defaults to the Bondholders,Bondholders; provided that in
the case of default in the payment of principal of or interest on any Bond or of
any sinking fund or purchase fund installment, the Mortgage Trustee is not
required to give notice to the Bondholders of any default under the Mortgage if
the Mortgage Trustee in good faith determines that the withholding of such
notice is in the interest of the BondholdersBondholders. (Section 11.05). Periodic evidence
of compliance with certain provisions of the Mortgage is required to be
submitted to the Mortgage TrusteeTrustee. (Sections 5.09, 5.12, 5.18 and 5.19). The
Mortgage Trustee subject to its duty to use the same degree of
care and skill as a prudent man would use in the conduct of his own affairs
(Section 11.02), before proceeding to enforce the lien of the Mortgage, is
-18-
entitled to be indemnified to its satisfaction against all
its prospective costs, expenses, and liability in connection therewith.
(Section 11.01)
DISCHARGE AND SATISFACTION(Sections 11.01 and 11.02)
Discharge and Satisfaction
Whenever all amounts due or to become due on all outstanding Bonds
issued under the Mortgage
shall have been paid or provision for the payment thereof shall have been made
(as such provision for payment is defineddiscussed below), and all amounts payable by the Companyus to the Mortgage Trustee under
the Mortgage shall have been paid, the Mortgage Trustee shall, upon theour request
and at theour expense, of the Company, satisfy or discharge the Mortgage of record wherever
recorded and convey, transfer, assign and deliver the mortgaged property to or upon the order of the Company, andus.
At such time, all the title, estate, rights and powers of the Mortgage Trustee
shall forthwith cease and the mortgaged property shall revert to the Company,us, and all
responsibility of the Mortgage Trustee and all obligations of the Companyour obligations under the
Mortgage (except as expressly provided therein) shall then cease. "Provision(Section
12.01).
Provision for payment of a Bond"Bond shall be deemed to have been made if
(a)if:
* when the principal of such Bond shall have become due and payable,
whether
by maturity, call for redemption, declaration, or otherwise, all amounts due
thereon shall have been paid or shall have been deposited in
trust with and shall be held by the Mortgage Trustee for the account of the
holder thereof,thereof; or
(b)* at any time in advance of the maturity thereof, the Company (1)we (a) shall have
either (i)(1) deposited with the Mortgage Trustee in trust all amounts
to become due thereon up to and upon the maturity date thereof or (ii)(2) duly
called such Bond for redemption on a date specified, in accordance with the provisions of
the Mortgage, given all
notices required to make such call effective or made provision
satisfactory to the Mortgage Trustee for giving all such notices, and
deposited with the Mortgage Trustee in trust all amounts to become
due upon such Bond up to and upon such redemption date, and (2)(b) shall
have irrevocably authorized the Mortgage Trustee forthwith to pay to the holder
thereof, out of the funds so deposited with it, all amounts so to become
due on such Bond up to and upon the maturity date or the redemption date, as
- 26 -
the case may be, such payment to be made upon such Bond whenever the sameit
shall be presented for that purpose without awaiting the maturity
date or the redemption date, and shall have given at least one notice
by publication of such deposit and authorization or shall have made
provision satisfactory to the Mortgage Trustee for giving such
notice. (Article I)
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis by us through agents.
The prospectus supplement will identify those agents and will describe the Company throughplan
of distribution, including commissions to be paid. It is anticipated that the
Agents, each of which has agreedagents will agree to use reasonable best efforts to solicit purchases of the Notes.
The Notes may also be sold to an Agentagent as principal for reoffering as described
below. The CompanyWe will have the sole right to accept offers to purchase Notes and may
reject any proposed purchase of Notes in whole or in part. Each Agentagent will have
the right, in its discretion reasonably exercised, to reject any proposed
purchase of Notes through it in whole or in part. The CompanyUnless otherwise specified in
a prospectus supplement, we will pay a commission to an Agent,agent, depending upon
the length of maturity of the Notes then being offered, ranging from ____%0.15% to
____%0.75% of the principal amount of any Notes sold through such Agent.agent.
Unless otherwise specified in the applicable Pricing Supplement,prospectus supplement, any
Notes sold to an Agentagent as principal will be purchased by such Agentagent at a price
equal to 100% of the principal amount thereof less a percentage equal to the
commission applicable to any agency sale of a Note of identical maturity. Such
Note may be resold by an Agentagent to investors and other purchasers from time to
time in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale or may
be resold to certain dealers. Resales of notes by an Agentagent to a dealer may be
made at a discount, which will not be in excess of the discount to be received
by such Agentagent from the Company.us. After the initial public offering of Notes, the public
offering price (in the case of Notes to be resold on a fixed public offering
price basis), the commission and the discount may be changed.
The Company reservesWe reserve the right to withdraw, cancel or modify the offer made
hereby without notice and may reject orders in whole or in part placed through
an Agent.agent.
Unless otherwise specified in an applicable Pricing Supplement,prospectus supplement,
payment of the purchase price of the Notes will be required to be made in
immediately available funds in New York City on the date of settlement.
No Note will have an established trading market when issued. The Notes
will not be listed on any securities exchange. Each Agentagent may from time to time
purchase and sell Notes in the secondary market, but no Agentagent is obligated to do
so, and there can be no assurance that there will be a secondary market for the
Notes or liquidity in the secondary market if one develops. From time to time,
the Agentsagents may make a market in the Notes but are not obligated to do so and may
discontinue such market-making activity at any time.
In connection with certain offerings of the Notes, the agents may
engage in overallotment, stabilizing transactions and syndicate covering
transactions in accordance with Regulation M under the Exchange Act.
- 27 -
Overallotment involves sales in excess of the offering size which create a short
position for the rules ofagents. Stabilizing transactions involve bids to purchase the
Commission permitNotes in the Agents to engage in certain transactions that stabilize the price of the Notes.
Such transactions consist of bids or purchasesopen market for the purpose of pegging, fixing or maintaining the
price of the Notes. If the Agents create a short position in the Notes in connection with an
offering of Notes (i.e., if they sell more Notes than are set forth on the cover
pageSyndicate covering transactions involve purchases of the Pricing Supplement), the Agents may reduce that short position by
purchasing Notes in the open market.
PaineWebber Incorporated, on behalf of the Agents, may also impose a
penalty bid on certain of the Agents. This means that if PaineWebber
Incorporated, on behalf of the Agents, purchases
Notes in the open market after the distribution has been completed in order to
reduce the Agents'cover short position or to stabilizepositions. Stabilizing transactions and syndicate covering
transactions may cause the price of the Notes it may
reclaim the amount of the selling concession from the Agents who sold the Notes
as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than it mightwould
otherwise be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.those transactions. Those activities, if
commenced, may be discontinued at any time.
Neither the Companywe nor any of the Agentsagents makes any representation or prediction
as to the direction or magnitude of any effect that the transactions described
above might have on the price of the Notes. In addition, neither the
Companywe nor any of
the Agentsagents make any representation that they will engage in such transactions or
that such transactions, once commenced, will not be discontinued without notice.
The Agentsagents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. The Company has1933. We have agreed to indemnify the Agentsagents against certain
liabilities, including liabilities under -19-
suchthe Securities Act, and to contribute
to payments the Agentsagents may be required to make in respect thereof. In addition,
the Company haswe have agreed to reimburse the Agentsagents for certain expenses related to the
offering made hereby.
LEGAL MATTERS
The validity of the securities being offered will be passed upon for us
by Cozen O'Connor, Philadelphia, Pennsylvania. Certain legal matters will be
passed upon for the Company by Dechert Price
& Rhoads, Philadelphia, Pennsylvania, counsel to the Company, and for the Agentsagents by Chapman and Cutler, Chicago, Illinois.
EXPERTS
The financial statements and the related financial statement schedules
included in the Company'sour Annual Report on Form 10-K incorporated in this prospectus by
reference have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
-20-
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND ANY PRICING
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY AGENT. THIS
PROSPECTUS AND ANY PRICING SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS AND ANY PRICING SUPPLEMENT OR AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS AND ANY PRICING SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT
THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE OF SUCH INFORMATION.
________
TABLE OF CONTENTS
PROSPECTUS
PAGE
----
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Company............................................................... 4
Use of Proceeds........................................................... 4
Description of Securities................................................. 4
Description of Notes...................................................... 5
Description of the Pledged Bond........................................... 13
Plan of Distribution...................................................... 19
Legal Matters............................................................. 20
Experts................................................................... 20
_________
$100,000,000
SOUTH JERSEY GAS COMPANY
[LOGO]
SECURED MEDIUM TERM
NOTES
SERIES A
----------
PROSPECTUS
----------
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES
INCORPORATED
FIRST UNION CAPITAL
MARKETS
__________
AUGUST , 1998
================================================================================
- 28 -
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEMItem 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.Other Expenses of Issuance and Distribution.
SEC Registration Fee................................................. Fee.....................................$ 29,50013,800
Legal Fees and Expenses.............................................. 200,000Expenses..................................200,000
Accounting Fees and Expenses......................................... 110,000Expenses.............................110,000
Rating Agency Fees................................................... 105,000
Printing and Certificate Engraving................................... 150,000Fees.......................................105,000
Printing.................................................150,000
Miscellaneous (including Blue Sky Fees and Expenses)................. 20,000
-------
Total................................................................ ......21,200
--------
Total...................................................$ 614,500
=======600,000
--------
Each amount set forth above, except for the SEC registration fee, is
estimated.
ITEMItem 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.Indemnification of Directors and Officers.
Under Section 14A:3-5 of the New Jersey Business Corporation Act, the Company:South
Jersey Gas:
(1) has the power to indemnify each director and officer of the CompanySouth
Jersey Gas (as well as itsour employees and agents) against expenses and liabilities
in connection with any proceeding involving him or her by reason of his or her
being or having been sucha director or officer, other than a proceeding by or in the
right of the Company,South Jersey Gas, if (a) such director or officer acted in good faith
and in a manner he reasonably believed to be in or not opposed to theour best
interests, of the
Company, and (b) with respect to any criminal proceeding, such director or
officer had no reasonable cause to believe his conduct was unlawful;
(2) has the power to indemnify each director and officer of the CompanySouth
Jersey Gas against expenses in connection with any proceeding by or in the right
of the
CompanySouth Jersey Gas to procure a judgment in itsour favor which involves such
director or officer by reason of his or her being or having been sucha director or
officer if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to theour best interest of the Company;interest; however, in such
proceeding no indemnification may be provided in respect to any claim, issue or
matter as to which such director or officer shall have been adjudged to be
liable to the
Company,South Jersey Gas, unless and only to the extent that the court
determines that the director or officer is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper;
(3) must indemnify each director and officer against expenses to
the extent that he or she has been successful on the merits or otherwise in any
proceeding referred to in (1) and (2) above or in defense of any claim, issue or
matter therein; and
(4) has the power to purchase and maintain insurance on behalf of
a director or officer against any expenses incurred in any proceeding and any
liabilities asserted against him or her by reason of his or her being or having
been a director or officer, whether or not the Companywe would have the power to indemnify
him or her against such expenses and liabilities under the statute.
- 29 -
As used in the statute, "expenses" means reasonable costs,
disbursements and counsel fees, "liabilities" means amounts paid or incurred in
satisfaction of settlements, judgments, fines and penalties, and "proceedings"
means any pending, threatened or completed civil, criminal, administrative or
arbitrative action, suit or proceeding, and any appeal therein and any inquiry
or investigation which could lead to such action, suit or proceeding.
II-1
Indemnification may be awarded by a court under (1) or (2) as well as
under (3) above, notwithstanding a prior determination by the Companyus that the director
or officer has not met the applicable standard of conduct.
Indemnification under the statute does not exclude any other rights to
which a director or officer may be entitled under a certificate of
incorporation, by-law,bylaws, or otherwise.
Article VII of the Company'sour Bylaws provides, in pertinent part, as follows:
(1) the Companywe shall indemnify any corporate agent against his or her
expenses and liabilities in connection with any proceedings involving
the corporate agent by reason of his or her being or having been such a
corporate agent to the extent that (a) such corporate agent is not
otherwise indemnified;indemnified and (b) the power to do so has been or may be
granted by statute; and for this purpose the Boardour board of Directors of the Companydirectors may,
and on request of any such corporate agent shall be required to,
determine in each case whether or not the applicable standards in any
such statute have been met, or such determination shall be made by
independent legal counsel if the Boardboard so directs or if the Boardboard is
not empowered by statute to make such determination;
(2) to the extent that the power to do so has been or may be
granted by statute, the Companywe shall pay expenses incurred by a corporate agent
in connection with a proceeding in advance of the final disposition of
the proceeding upon receipt of an undertaking by or on behalf of such
corporate agent to repay such amount unless it shall ultimately be
determined that he or she is entitled to be indemnified as provided by
statute;
(3) the indemnification provided in the Company'sour Bylaws shall not be
exclusive of any other rights to which a corporate agent may be
entitled, both as to any action in his or her official capacity or as
to any action in another capacity while holding such office, and shall
inure to the benefits of the heirs, executors, or administrators of any
such corporate agent; and
(4) the Boardour board of Directors of the Companydirectors shall have the power to (a) purchase
and maintain, at the Company'sour expense, insurance on our behalf of the
Company and on behalf of
others to the extent that power to do so has been or may be granted by
statute and (b) give other indemnification to the extent permitted by
law.
The Company maintainsWe maintain and payspay all premiums on directors and officers liability
insurance policies with a primary liability limit of $35,000,000.
ITEM- 30 -
Item 16. EXHIBITS.
EXHIBIT NO. EXHIBIT DESCRIPTION
1(a)*Exhibits.
Exhibit
Number Description
1* Form of Distribution Agreement.
(4)(a) Form4(a)(i) Indenture of Stock Certificate for Common Stock. IncorporatedTrust dated as of October 1,
1998 between South Jersey Gas and The Bank
of New York (incorporated by reference from
Exhibit (4)(a)exhibit 4(e) of Form 10 filed March 1997
(4)(b)S-3 of South Jersey Gas
(333-62019)).
4(a)(ii) First Supplement to Indenture of Trust dated
as of June 29, 2000 (incorporated by
reference from exhibit 4.1 of Form 8-K of
South Jersey Gas dated July 12, 2001).
4(a)(iii) Second Supplement to Indenture of Trust
dated as of July 5, 2000 (incorporated by
reference from exhibit 4.2 of Form 8-K of
South Jersey Gas dated July 12, 2001).
4(a)(iv) Third Supplement to Indenture of Trust dated
as of July 9, 2001 (incorporated by
reference from exhibit 4.3 of Form 8-K of
South Jersey Gas dated July 12, 2001).
4(b)(i) First Mortgage Indenture dated October 1,
1947. Incorporated1947 (incorporated by reference from Exhibit
(4)(b)4(b)(i) of Form 10-K of SJISouth Jersey
Industries, Inc. for 1987
(1-6364)
(4)(b)the year ended December
31, 1987).
4(b)(ii) Twelfth Supplemental Indenture dated as of
June 1, 1980.
Incorporated1980 (incorporated by reference from
Exhibit 5(b) of Form S-7 of SJI
(2-68038)South Jersey
Industries, Inc.).
(4)(b)4(b)(iii) Sixteenth Supplemental Indenture dated as of
April 1, 1989 10
1/4% Series due 2008. Incorporated(incorporated by reference
from Exhibit (4)(b)4(b)(xv) of Form 10-Q of SJISouth
Jersey Industries, Inc. for the quarter
ended March 31, 1988 (1-6364)1988).
(4)(b)4(b)(iv) Seventeenth Supplemental Indenture dated as
of May 1, 1989.
Incorporated1989 (incorporated by reference
from Exhibit (4)(b)4(b)(xv) of Form 10-K of SJISouth
Jersey Industries, Inc. for 1989 (1-6364)the year ended
December 31, 1989).
(4)(b)4(b)(v) Eighteenth Supplemental Indenture dated as
of MarchMach 1, 1990.
Incorporated1990 (incorporated by reference
from Exhibit (4)(e)4(e) of Form S-3 of SJISouth
Jersey Gas (33-36581)).
II-2
EXHIBIT NO. EXHIBIT DESCRIPTION
(4)(b)4(b)(vi) Nineteenth Supplemental Indenture dated as
of April 1, 1992.
Incorporated1992 (incorporated by reference
from Exhibit (4)(b)4(b)(xvii) of Form 10-
K10-K of
SJISouth Jersey Industries, Inc. for 1992 (1-6364)the year
ended December 31, 1992).
(4)(b)4(b)(vii) Twentieth Supplemental Indenture dated as of
June 1, 1993.
Incorporated1993 (incorporated by reference from
Exhibit (4)(b)4(b)(xviii) of Form
10-KForm10-K of SJISouth
Jersey Industries, Inc. for 1993 (1-6364)the year ended
December 31, 1993).
(4)(b)4(b)(viii) Twenty-First Supplemental Indenture dated as
of March 1, 1997.
Incorporated1997 (incorporated by reference
from Exhibit (4)(b)4(b)(xviv) of Form 10-
K10-K of
SJISouth Jersey Industries, Inc. for 1997 (1-6364)the year
ended December 31, 1997).
(4)(b)- 31 -
4(b)(ix) Form of Twenty-Second Supplemental Indenture.
(4)(c) Indenture dated
as of January 31, 1995; 8.60% Debenture Notes
due FebruaryOctober 1, 2010. Incorporated1998 (incorporated by
reference from Exhibit
(4)(c) of Form 10-K of SJI for 1994 (1-6364).
(4)(d) Certificate of Trust for SJG Capital Trust. Incorporated by
reference from Exhibit 3(a)exhibit 4(b)(ix) of Form S-3
of SJG Capital Trust
and South Jersey Gas Company as filed March 27, 1997, as
amended April 18, 1997 and April 23, 1997 (333-24065)(333-62019)).
(4)(d)(i) Trust Agreement of SJG Capital Trust. Incorporated by reference
from Exhibit 3(b) of Form S-3 of SJG Capital Trust and South
Jersey Gas Company as filed March 27, 1997, as amended April
18, 1997 and April 23, 1997 (333-24065).
(4)(d)(ii)4(b)(x)** Form of Amended and Restated Trust Agreement for SJG Capital
Trust. Incorporated by reference from Exhibit 3(c) of Form S-3
of SJG Capital Trust and South Jersey Gas Company as filed
March 27, 1997, as amended April 18, 1997 and April 23, 1997
(333-24065).
(4)(d)(iii) Form of Preferred Security for SJG Capital Trust. Incorporated
by reference from Exhibit 4(a) of Form S-3 of SJG Capital Trust
and South Jersey Gas Company as filed March 27, 1997, as
amended April 18, 1997 and April 23, 1997 (333-24065).
(4)(d)(iv) Form of Deferrable Interest Subordinated Debenture.
Incorporated by reference from Exhibit 4(b) of Form S-3 of SJG
Capital Trust and South Jersey Gas Company as filed March 27,
1997, as amended April 18, 1997 and April 23, 1997 (333-24065).
(4)(d)(v) Form of Deferrable Interest Subordinated Debenture.
Incorporated by reference from Exhibit 4(c) of Form S-3 of SJG
Capital Trust and South Jersey Gas Company as filed March 27,
1997, as amended April 18, 1997 and April 23, 1997 (333-24065).
(4)(d)(vi) Form of Guaranty Agreement between South Jersey Gas Company and
SJG Capital Trust. Incorporated by reference from Exhibit 4(d)
of Form S-3 of SJG Capital Trust and South Jersey Gas Company
as filed March 27, 1997, as amended April 18, 1997 and April
23, 1997 (333-24065).
(4)(e) Form of Medium Term Note IndentureTwenty-Third Supplemental Indenture.
5* Opinion of Dechert Price & Rhoads
(12) CalculationCozen O'Connor.
12* Statement regarding computation of Ratio of Earningsearnings
to Fixed Charges (Before
Federal Income Taxes) (filed herewith).
(23)(a)fixed charges.
23(a)** Consent of Deloitte & Touche LLP (see page II-6 hereof).
(23)(b)LLP.
23(b)* Consent of Dechert Price & RhoadsCozen O'Connor (included in
Exhibit 5).
(24)24* Power of Attorney (See page II-5 hereof).
II-3
EXHIBIT NO. EXHIBIT DESCRIPTION
(25)(a)Attorney.
25 Statement of Eligibility of Trustee on Form
T-1 under the Trust Indenture Act of 1939
(incorporated by reference from Exhibit
25(a) of The BankForm S-3 of New York as Indenture Trustee under the Medium
Term Note Indenture (filed herewith)South Jersey Gas
(333-62019)).
(27) Financial Data Schedule (submitted only in electronic format to
the Securities and Exchange Commission).------------------------
* To be filed by amendment.
ITEMPreviously filed.
** Filed herewith.
Item 17. UNDERTAKINGS.
A. Undertaking required by Item 512(a) of Regulation S-K.Undertakings.
The undersigned Registrantregistrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statementregistration statement
to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statementregistration statement or
any material change to such information in this Registration Statement;registration statement;
(2) that, for the purpose of determining any liability under
the Securities Act of 1933 as amended, each post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. Undertaking required by Item 512(b) of Regulation S-K.
The undersigned Registrantregistrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
undersigned Registrant'sregistrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 as amended that is incorporated by reference in this
Registration Statementregistration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Undertaking required by Item 512(h) of Regulation S-K.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 as amended, may be permitted to directors, officers and controlling persons of
the undersigned Registrantregistrant pursuant to the foregoing provisions, or otherwise, the
undersigned Registrantregistrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the undersigned Registrantregistrant of expenses incurred or paid by a director, officer or
controlling person of the undersigned Registrantregistrant in the successful defense of any action,
- 32 -
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the undersigned Registrantregistrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-4
- 33 -
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, South
Jersey Gas Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
Folsom, New Jersey, on the 2116th day of August 1998.December, 2002.
SOUTH JERSEY GAS COMPANY
By: /s George L. Baulig
-------------------
George L. Baulig,
Senior Vice/s/ Charles Biscieglia
-------------------------------------------------
Charles Biscieglia
President and Corporate SecretaryChief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below
constitutesName Capacity Date
/s/ Charles Biscieglia Director, President and appoints George L. Baulig such person's trueChief December 16, 2002
- -------------------------- Executive Officer (principal
Charles Biscieglia executive officer)
* Executive Vice President and lawful
attorney-in-factDecember 16, 2002
- -------------------------- Chief Financial Officer
David A. Kindlick (principal financial and
agent, with full poweraccounting officer)
- 34 -
* Director December 16, 2002
- --------------------------
Shirli M. Billings
* Director December 16, 2002
- --------------------------
Sheila Hartnett-Devlin
* Director December 16, 2002
- --------------------------
Clarence D. McCormick
* Director December 16, 2002
- --------------------------
Frederick R. Raring
* Director December 16, 2002
- --------------------------
William J. Hughes
* By: /s/ Charles Biscieglia
----------------------------
Charles Biscieglia
Attorney-In-Fact
- 35 -
EXHIBIT INDEX
Exhibit
Number Description
1* Form of substitutionDistribution Agreement
4(a)(i) Indenture of Trust dated as of October 1,
1998 between South Jersey Gas and revocation, for
such person and in such person's name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any registration statements filed pursuant to
Rule 462 promulgated under the Securities ActThe Bank
of 1933 and to file the same with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as such
person might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
NAME TITLE DATE SIGNATURE
C. Biscieglia President (principal August 21, 1998 s/ C. Biscieglia
executive officer)
and Director
D.A. Kindlick Senior Vice President August 21, 1998 s/ D.A. Kindlick
principal financial
officer)
W.J. Smethurst, Vice President and August 21, 1998 s/ W.J. Smethurst, Jr.
Jr. Treasurer (principal
accounting officer)
F.R. Raring Director August 21, 1998 /s F.R. Raring
A.G. Dickson Director August 21, 1998 /s A.G. Dickson
R.L. Dunham Director
C.D. McCormick Director August 21, 1998 /s C.D. McCormick
S.M. Vioni Director August 21, 1998 /s S.M. Vioni
II-5
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporationNew York (incorporated by reference in this Registration Statementfrom
exhibit 4(e) of Form S-3 of South Jersey Gas
Company on(333-62019)).
4(a)(ii) First Supplement to Indenture of Trust dated
as of June 29, 2000 (incorporated by
reference from exhibit 4.1 of Form S-38-K of
our reportSouth Jersey Gas dated February 18, 1998
appearing in the Annual Report onJuly 12, 2001).
4(a)(iii) Second Supplement to Indenture of Trust
dated as of July 5, 2000 (incorporated by
reference from exhibit 4.2 of Form 8-K of
South Jersey Gas dated July 12, 2001).
4(a)(iv) Third Supplement to Indenture of Trust dated
as of July 9, 2001 (incorporated by
reference from exhibit 4.3 of Form 8-K of
South Jersey Gas dated July 12, 2001).
4(b)(i) First Mortgage Indenture dated October 1,
1947 (incorporated by reference from Exhibit
4(b)(i) of Form 10-K of South Jersey
Gas CompanyIndustries, Inc. for the year ended December
31, 1987).
4(b)(ii) Twelfth Supplemental Indenture dated as of
June 1, 1980 (incorporated by reference from
Exhibit 5(b) of Form S-7 of South Jersey
Industries, Inc.).
4(b)(iii) Sixteenth Supplemental Indenture dated as of
April 1, 1989 (incorporated by reference
from Exhibit 4(b)(xv) of Form 10-Q of South
Jersey Industries, Inc. for the quarter
ended March 31, 1988).
4(b)(iv) Seventeenth Supplemental Indenture dated as
of May 1, 1989 (incorporated by reference
from Exhibit 4(b)(xv) of Form 10-K of South
Jersey Industries, Inc. for the year ended
December 31, 1989).
4(b)(v) Eighteenth Supplemental Indenture dated as
of Mach 1, 1990 (incorporated by reference
from Exhibit 4(e) of Form S-3 of South
Jersey Gas (33-36581)).
4(b)(vi) Nineteenth Supplemental Indenture dated as
of April 1, 1992 (incorporated by reference
from Exhibit 4(b)(xvii) of Form 10-K of
South Jersey Industries, Inc. for the year
ended December 31, 1992).
4(b)(vii) Twentieth Supplemental Indenture dated as of
June 1, 1993 (incorporated by reference from
Exhibit 4(b)(xviii) of Form10-K of South
Jersey Industries, Inc. for the year ended
December 31, 1993).
- 36 -
4(b)(viii) Twenty-First Supplemental Indenture dated as
of March 1, 1997 and(incorporated by reference
from Exhibit 4(b)(xviv) of Form 10-K of
South Jersey Industries, Inc. for the year
ended December 31, 1997).
4(b)(ix) Twenty-Second Supplemental Indenture dated
as of October 1, 1998 (incorporated by
reference from exhibit 4(b)(ix) of Form S-3
of South Jersey Gas (333-62019)).
4(b)(x)** Form of Twenty-Third Supplemental Indenture.
5* Opinion of Cozen O'Connor.
12* Statement regarding computation of earnings
to the reference to usfixed charges.
23(a)** Consent of Deloitte & Touche LLP.
23(b)* Consent of Cozen O'Connor (included in
Exhibit 5).
24* Power of Attorney.
25 Statement of Eligibility of Trustee on Form
T-1 under the heading
"Experts" in the Prospectus which is partTrust Indenture Act of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP1939
(incorporated by reference from Exhibit
25(a) of Form S-3 of South Jersey Gas
(333-62019)).
--------------------------
* Previously filed.
** Filed herewith.
- -------------------------
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
August 21, 1998
II-637 -