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
             ------------------------------------------------------
             (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
       ------------------------------------------------------------------
       (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
       ------------------------------------------------------------------
       (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

                                    - Page -


         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 - ------------------------------------------------------------------------------ Debt Securities.................... $100,000,000 $29,500 ==============================================================================
(1) Estimated solely for [_] - ------------------------------------------------------------------------------- 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. - ------------------------------------------------------------------------------- - Page - 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. - Page - 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.
================================================================================ Price to Agents' Proceeds to Public (1) Commissions(2) Company(1)(3) - -------------------------------------------------------------------------------- Per Note............... 100.00% - -------------------------------------------------------------------------------- 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 - 2 - 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. - 3 - 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. -2- 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; - 4 - * 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. - 5 - 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 - 6 - 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 -4- 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. - 14 - 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 - 15 - 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 - 17 - 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. - 18 - 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 -