EXHIBIT 1
SOUTH JERSEY GAS COMPANY
Secured Medium Term Notes, Series B
Due From One Year to Forty Years
From Date of Issue
Distribution Agreement
__________, 2002
UBS Warburg LLC
Wachovia Securities, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P.
c/o UBS Warburg LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
Stamford, Connecticut 06901
Dear Sirs:
South Jersey Gas Company, a New Jersey corporation (the "Company"),
confirms its agreement with each of you with respect to the issue and sale by
the Company from time to time of up to $150,000,000 aggregate principal amount
of its Secured Medium Term Notes, Series B, Due from One Year to Forty Years
from Date of Issue (the "Notes"). The Notes will be issued under an indenture of
trust (the "Original Indenture") dated as of October 5, 1998 between the Company
and The Bank of New York, as trustee (the "Trustee"), as supplemented by the
First Supplement to Indenture, dated as of June 29, 2000, the Second Supplement
to Indenture, dated as of July 5, 2000, and the Third Supplement to Indenture,
dated as of July 9, 2001, each between the Company and the Trustee (the Original
Indenture, as supplemented, the "Indenture"). Prior to the Substitution Date (as
defined in the Indenture), the Notes will be secured by the delivery to the
Trustee of one or more first mortgage bonds issued under the Company's mortgage
indenture, as specified in the Prospectus referred to below (collectively, the
"Pledged Bonds"). Unless otherwise set forth in a supplement to the Prospectus
referred to below, the Notes will be issued in fully registered form in minimum
denominations of $1,000 and in denominations exceeding such amount by integral
multiples of $1,000 and will have the annual interest rates, maturities and, if
appropriate, other terms set forth in such supplement to the Prospectus. The
Notes will be issued, and the terms thereof established, in accordance with the
Indenture and, in the case of Notes sold pursuant to Section 2(a), the Secured
Medium Term Note Administrative Procedures attached hereto as Exhibit A (the
"Procedures") (unless a Terms Agreement (as defined in Section 2(b)), modifies
or supersedes such Procedures with respect to the Notes issued pursuant to such
Terms Agreement). The Procedures may only be amended by written agreement of the
Company and you after notice to, and with the approval of, the Trustee. For the
purposes of this Agreement, the term "Agent" shall refer to any of you acting
solely in the capacity as agent for the Company pursuant to Section 2(a) and not
as principal (collectively, the "Agents"), the term the "Purchaser" shall refer
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to any one of you acting solely as principal pursuant to Section 2(b) and not as
agent, and the term "you" shall refer to you collectively whether at any time
any of you is acting in both such capacities or in either such capacity.
1. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to, and agrees with, you as set forth
below in this Section 1. Certain terms used in this Section 1 are defined in
paragraph (y) hereof.
(a) At the time of filing and the Effective Date, the Company
meets the requirements for use of Form S-3 under the Securities Act of
1933, as amended (the "Act"), for purposes of registering the Notes and
has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on such Form (File Number:
333-________), including a prospectus, which registration statement, as
amended, has become effective, for the registration under the Act of
the issuance of $150,000,000 aggregate principal amount of the Notes.
Such registration statement, as amended at the date of this Agreement,
meets the requirements set forth in Rule 415(a)(1)(ix) or (x) under the
Act and complies in all other material respects with said Rule. In
connection with the sale of Notes, the Company proposes to file with
the Commission pursuant to the applicable paragraph of Rule 424(b)
under the Act supplements to the Prospectus (as defined by Section
1(y)) specifying the interest rates, maturity dates and, if
appropriate, other terms of the Notes sold pursuant hereto or the
offering thereof.
(b) As of the Execution Time (as defined by Section 1(y)), on
the Effective Date (as defined by Section 1(y)), when any supplement to
the Prospectus is filed with the Commission, as of the date of any
Terms Agreement (as defined by Section 2(b)) and at the date of
delivery by the Company of any Notes sold hereunder (a "Closing Date"),
(i) the Registration Statement (as defined by Section 1(y)), as amended
as of any such time, and the Prospectus, as supplemented as of any such
time, and the Indenture will comply in all material respects with the
applicable requirements of the Act, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the respective rules
thereunder; (ii) the Registration Statement, as amended as of any such
time, did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading;
and (iii) the Prospectus, as supplemented as of any such time, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to (i) the Statement of Eligibility on Form T-1 or (ii)
the information contained in or omitted from the Registration Statement
or the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by any
of you specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplement thereto).
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(c) As of the time any Notes are issued and sold hereunder,
each of the Indenture and the Indenture of First Mortgage, dated
October 1, 1947, as supplemented and amended by twenty-three
supplemental indentures, including the Twenty-Third Supplemental
Indenture, dated as of September 1, 2002, (the "New Supplement"),
between the Company and The Bank of New York, as trustee (as so
supplemented and amended, the "Mortgage" and such trustee being the
"Mortgage Trustee"), assuming the due execution and delivery thereof by
the Trustee and the Mortgage Trustee, respectively, will constitute a
legal, valid and binding instrument enforceable against the Company in
accordance with its terms except, in each case, as enforceability may
be limited by bankruptcy, reorganization, moratorium, insolvency or
other laws now or hereafter in effect relating to or affecting
mortgagees' or other creditors' rights or general principles of equity
(whether asserted in a proceeding at law or in equity), and the Notes
and the Pledged Bonds will have been duly authorized, executed,
authenticated and, when the Notes have been paid for by the purchasers
thereof, the Notes and the Pledged Bonds will constitute legal, valid
and binding obligations of the Company entitled to the benefits of the
Indenture or the Mortgage, respectively, except, in each case, as
enforceability may be limited by bankruptcy, reorganization,
moratorium, insolvency or other laws now or hereafter in effect
relating to or affecting mortgagees' or other creditors' rights or
general principles of equity (whether asserted in a proceeding at law
or in equity); the Notes, the Indenture, the Mortgage and the Pledged
Bonds will conform in all material respects to all statements relating
thereto contained in the Prospectus.
(d)(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is incorporated, with full corporate power and
authority to own or lease its properties and conduct its business as
described in the Prospectus. The properties now owned or leased and the
business now transacted by the Company do not require it to be
qualified as a foreign corporation in any jurisdiction.
(d)(ii) SJG Capital Trust (the "Subsidiary") has been duly
organized and is validly existing as a statutory trust in good standing
under the laws of the jurisdiction in which it is organized, with full
power and authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign organization and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, except where
the failure to be so qualified would not materially adversely affect
the Company and its Subsidiary taken as a whole.
(e) All the outstanding shares of capital stock of the
Subsidiary have been duly authorized and validly issued and are fully
paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiary
are owned directly by the Company free and clear of any perfected
security interest and, to the knowledge of the Company, any other
security interests, claims, liens or encumbrances.
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(f) The Company's authorized equity capitalization is as set
forth in the Registration Statement; and the Notes and the Pledged
Bonds conform to the descriptions thereof contained in the Prospectus
(subject to the insertion in the Notes and the Pledged Bonds of the
maturity dates, the interest rates and other terms thereof which will
be described in supplements to the Prospectus as contemplated by the
last sentence of Section l(a) of this Agreement).
(g) No consent, approval, authorization or order of any court
or governmental agency or body (other than authorization from the New
Jersey Board of Public Utilities, referred to below) is required for
the consummation of the transactions contemplated herein except such as
have been obtained under the Act, the Exchange Act and the Trust
Indenture Act, and such as may be required under the blue sky laws of
any jurisdiction in connection with the sale of the Notes as
contemplated by this Agreement and such other approvals as have been
obtained. The New Jersey Board of Public Utilities (the "BPU") has
entered an order, dated July 24, 2002, authorizing the issuance and
sale of the Notes and the issuance of the Pledged Bonds by the Company
on terms and conditions not inconsistent with the terms and conditions
set forth in or contemplated by this Agreement. The Notes, when issued
and sold by the Company, and the Pledged Bonds, when issued by the
Company, will comply in all material respects with the terms,
conditions and limitations set forth in such order. Such order is in
full force and effect and has not been amended, supplemented or
otherwise modified without the consent of the Agents, and the period
has expired during which any proceeding to review, suspend, limit,
modify, restrict or revoke such order may be instituted as of right by
any Person other than the BPU.
(h) Any accounting firm which audited the financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus are independent accountants within the
meaning of the Act and the rules and regulations thereunder.
(i) The financial statements, selected financial information
and any supporting schedules of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration
Statement and the Prospectus fairly present the consolidated financial
position of the Company and its Subsidiary as of the dates indicated
and the consolidated results of their operations for the periods
specified; and, except as stated therein, said financial statements
have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis; and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be
stated therein. No other financial statements or schedules of the
Company are required by the Act or the rules and regulations
thereunder, or Exchange Act or the rules and regulations thereunder, to
be included in the Registration Statement or the Prospectus.
(j) This Agreement has been duly and validly authorized,
executed and delivered by the Company and, upon execution and delivery
by the Agents, will be a valid and binding agreement of the Company,
enforceable in accordance with its terms except as enforceability may
be limited by bankruptcy, reorganization, moratorium, insolvency or
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other laws now or hereafter in effect relating to or affecting
mortgagees' or other creditors' rights or general principles of equity
(whether asserted in a proceeding at law or in equity).
(k) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may
otherwise be stated therein or contemplated thereby, (a) there has been
no material adverse change, or any development known to the Company
involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings or business affairs of the
Company and its Subsidiary taken as a whole, whether or not arising in
the ordinary course of business and (b) there has not been any material
transaction entered into by the Company or its Subsidiary, other than
transactions in the ordinary course of business and transactions
contemplated by the Registration Statement and the Prospectus.
(l) Neither the Company nor its Subsidiary is in violation of
its articles of incorporation, by-laws or other organizational
documents. No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any obligation, agreement or condition by
the Company or its Subsidiary contained in any mortgage, indenture,
deed of trust, note, loan agreement or other agreement or instrument to
which the Company or its Subsidiary is a party or by which the Company
or its Subsidiary is bound or to which any property or asset of the
Company or its Subsidiary is subject, except for defaults the effect of
which would not materially adversely affect the Company and its
Subsidiary taken as a whole. The execution and delivery of this
Agreement, the Indenture and the New Supplement and the consummation of
the transactions contemplated herein, therein and pursuant to any
applicable Terms Agreement have been or will be duly authorized by all
necessary corporate action and will not conflict with, result in a
breach of any of the terms or provisions of, or constitute a default
under, or, except for the issuance of Notes and the Pledged Bonds,
secured by the lien of the Mortgage, result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or its Subsidiary pursuant to the terms or
provisions of, or give any party a right to terminate any of its
obligations under, or result in the acceleration of any obligation
under: (i) the articles of incorporation or bylaws (or equivalent
documents) of the Company or its Subsidiary; or (ii) any indenture,
mortgage, deed of trust, loan agreement, bond, debenture, note or other
evidence of indebtedness, lease, contract or other material agreement
or instrument to which the Company or its Subsidiary is a party or by
which it or any of them may be bound or to which any of the property or
assets of the Company or any such Subsidiary is subject, except, in the
case of clause (ii) only, where the effect of which would not
materially adversely affect the Company and its Subsidiary taken as a
whole, nor will such action, to the knowledge of the Company, violate
or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable
to the business or properties of the Company or its Subsidiary.
(m) The Company has good and marketable title to all the real
properties described in the granting clauses of the Mortgage, subject
(other than properties released from the lien of the Mortgage pursuant
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to the terms thereof) to the lien of the Mortgage and no other liens or
encumbrances except liens permitted under the Mortgage. No further
deeds, conveyances, transfers or instruments, other than the New
Supplement and related documents, are necessary for the purpose of
effectively subjecting such properties to the direct lien and operation
of the Mortgage.
(n) As of the time any Notes are issued and sold hereunder,
the Mortgage will constitute a valid first mortgage lien of record upon
all real and personal property of the Company (including easements,
rights-of-way, and other rights relating to real estate and franchises)
specifically or generally described or referred to in the Mortgage as
subject to the lien thereof and owned by the Company at the time of the
actual issue of the Pledged Bonds, subject to no liens or encumbrances
other than "excepted encumbrances" (as defined in Subdivision A of
Section 3.04 of the Mortgage).
(o) As of the time any Notes are issued and sold hereunder,
the Mortgage will have been duly filed for recording in such manner and
in such places as are required by law in order to establish, preserve,
and protect the first lien of the Mortgage on all real and personal
property of the Company specifically or generally described or referred
to in the Mortgage as subject to the lien of the Mortgage (except that
(a) additional filings and recordings of the Mortgage will be required
if property is acquired by the Company subsequent to the date hereof
which is located in a county where the Mortgage has not previously been
filed for recording and (b) the Mortgage will not be a first lien on
property hereafter acquired by the Company which at the time of
acquisition is subject to prior liens or other encumbrances), and all
taxes, fees and other charges payable in connection therewith have been
paid in full.
(p) Except as may be set forth in the Registration Statement
and Prospectus, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened against or affecting,
the Company or its Subsidiary, wherein an unfavorable ruling, decision
or finding would be expected to materially and adversely affect the
Company and its Subsidiary taken as a whole or the business,
properties, condition (financial or otherwise) or results of operations
of the Company and its Subsidiary as a whole or which in the aggregate
might affect the ability of the Company to enter into this Agreement,
the Indenture or the New Supplement or issue and sell the Notes or
issue the Pledged Bonds; and there are no contracts or documents of the
Company or its Subsidiary which are required to be described in or
filed as exhibits to the Registration Statement by the Act or the rules
and regulations thereunder, or the Exchange Act or the rules and
regulations thereunder, which have not been so described or filed as
required.
(q) Each of the Company and its Subsidiary has valid and
sufficient grants, franchises, licenses and permits, adequate for the
conduct of its business in the territories in which it is now
conducting such business and the ownership of the properties now owned
by it and, except as otherwise set forth in the Registration Statement
and the Prospectus, there are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened which might
result in a material modification, suspension or revocation thereof.
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Each of the Company and its Subsidiary has, and is operating in
compliance with, in all material respects, all material and necessary
authorizations, approvals, orders, licenses, certificates and permits
of and from all governmental regulatory officials and bodies, to own,
lease, license and operate its properties and conduct its business as
presently conducted and as contemplated by the Registration Statement
and the Prospectus, and the Company and its Subsidiary have filed all
material reports and taken all other action required by the authority
issuing the same where the failure to file or take other action would
be expected to give rise to a right in such authority to seek to
revoke, suspend or materially limit any such material license,
certificate or permit. The Company has all requisite power, authority,
authorizations, approvals, orders, licenses, certificates and permits
to enter into this Agreement and to carry out the provisions and
conditions hereof. Neither the Company nor its Subsidiary has received
any notice of conflict with asserted rights of others in any respect
(nor is the Company aware of any existing violation or breach of any
authorizations, approvals, orders, licenses, certificates or permits by
the Company or its Subsidiary providing a basis therefor) which would
be expected to materially adversely affect its business, except as
described in the Registration Statement and Prospectus.
(r) Except as set forth in the Registration Statement and the
Prospectus, no labor disturbance by the employees of the Company or its
Subsidiary exists or is imminent which would be expected to materially
adversely affect the conduct of the business, operations, financial
condition or income of the Company and its Subsidiary, taken as a
whole.
(s) South Jersey Industries, Inc., a New Jersey corporation
("SJI"), owns all of the common stock of the Company. SJI is a "holding
company" and the Company is a "subsidiary" of a "holding company" as
such terms are defined under the Public Utility Holding Company Act of
1935, as amended (the "1935 Act"). The Company and SJI are exempt from
all provisions of the 1935 Act (except Section 9(a)(2) thereof)
pursuant to Section 3(a)(1) and Rule 2 of the 1935 Act and SJI has duly
filed all exemption statements required by Rule 2 of such Act. There
are no actions, proceedings or investigations pending or (to the
knowledge of the Company) threatened to terminate such exemptions.
(t) Except as set forth in the Registration Statement and the
Prospectus, neither the Company nor its Subsidiary (in the case of
matters relating to environmental protection, occupational safety and
health and equal employment opportunity, to its knowledge) is in
violation of any laws, ordinances, governmental rules and regulations
to which it is subject, which violation would be expected to materially
adversely affect the financial condition, business or operations of the
Company and the Subsidiary taken as a whole.
(u) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
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(v) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose are pending or, to the knowledge of the Company, threatened by
the Commission.
(w) Immediately after any sale of Notes by the Company
hereunder or under any Terms Agreement, the aggregate amount of debt
securities which shall have been issued and sold by the Company
hereunder will not exceed the aggregate amount of debt securities
registered under the Registration Statement.
(x) Except as set forth in the Registration Statement, to the
knowledge of the Company, the Company is not in violation of any
applicable federal, state, or local laws, statutes, rules, regulations
or ordinances relating to public health, safety or the environment,
including, without limitation, relating to releases, discharges,
emissions or disposals to air, water, land or ground water, to the
withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde, to the
treatment, storage, disposal or management of hazardous substances
(including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to
exposure to toxic, hazardous or other controlled, prohibited or
regulated substances or to the use and restoration of land, which
violation would be expected to have a material adverse effect on the
business, financial condition or results of operations of the Company.
Except as set forth in the Registration Statement and the Prospectus,
the Company does not know of any liability or class of liability of the
Company under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.),
the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. Section 6901 et seq.), the New Jersey Spill Compensation and
Control Act, as amended (N.J.S.A. 58:10-23.11 et seq.), or the
Environmental Cleanup Responsibility Act, as amended (N.J.S.A. 13:1 K-6
et seq.), for the release of a non-deminimus quantity of hazardous or
toxic substances or wastes.
(y) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "the Effective Date" shall
mean each date that the Registration Statement and any subsequent post
effective amendment or amendments thereto became or become effective.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Prospectus" shall mean
the form of prospectus relating to the Notes contained in the
Registration Statement at the Effective Date. "Registration Statement"
shall mean the registration statement referred to in paragraph (a)
above, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time. "Rule 415" and "Rule 424"
refer to such rules under the Act. Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue
date of the Prospectus, as the case may be; and any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
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Effective Date of the Registration Statement or the issue date of the
Prospectus, as the case may be, deemed to be incorporated therein by
reference.
2. APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS OF OFFERS TO
PURCHASE; SALES OF NOTES TO A PURCHASER.
(a) Subject to the terms and conditions set forth herein, the Company
hereby authorizes each of the Agents to act as its agent to solicit offers for
the purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable best efforts to solicit offers to purchase
the Notes from the Company upon the terms and conditions set forth in the
Prospectus (and any supplement thereto) and in the Procedures. Each Agent shall
make reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company, but such Agent shall not, except as otherwise provided
in this Agreement, have any liability to the Company in the event any such
purchase is not consummated for any reason. Except as provided in Section 2(b),
under no circumstances will any Agent be obligated to purchase any Notes for its
own account. It is understood and agreed, however, that any Agent may purchase
Notes as principal pursuant to Section 2(b).
The Company shall have the sole right to accept offers to purchase Notes in
whole or, if permitted by the terms thereof, in part. The Company reserves the
right, in its sole discretion, to instruct the Agents to suspend at any time,
for any period of time or permanently, the solicitation of offers to purchase
the Notes. Upon receipt of instructions from the Company, the Agents will
forthwith suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised them that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, on the Closing Date with
respect to each sale of Notes by the Company as a result of a solicitation made
by such Agent, in an amount equal to that percentage specified in Schedule I
hereto of the aggregate principal amount of the Notes so sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers for
the purchase of Notes may be solicited by an Agent as agent for the Company at
such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent;
provided, however, that so long as this Agreement shall be in effect the Company
shall not solicit or accept offers to purchase Notes in this registered offering
through any agent other than an Agent.
If the Company shall default in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company shall indemnify and hold each
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company.
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(b) Subject to the terms and conditions stated herein, whenever the Company
and any Agent determine that the Company shall sell Notes directly to such Agent
as Purchaser, each such sale of Notes shall be made in accordance with the terms
of this Agreement, unless otherwise agreed by the Company and such Agent, and
any supplemental agreement relating thereto (which may be an oral or written
agreement) between the Company and the Purchaser. Each such supplemental
agreement (which shall be substantially in the form of Exhibit B) is herein
referred to as a "Terms Agreement." Each Terms Agreement shall describe (whether
orally or in writing) the Notes to be purchased by the Purchaser pursuant
thereto, and shall specify the principal amount of such Notes, the maturity date
of such Notes, the rate at which interest will be paid on the Notes and the
record dates for each payment of interest, the Closing Date for the purchase of
such Notes, the place of delivery of the Notes and payment therefor, the method
of payment and any requirements for the delivery of opinions of counsel,
certificates from the Company or its officers, or letter from the Company's
independent public accountants as described in Section 6(b). Such Terms
Agreement shall also specify the period of time referred to in Section 4(m). The
Purchaser's commitment to purchase Notes pursuant to any Terms Agreement shall
be deemed to have been made on the basis of the representations and warranties
of the Company herein contained and shall be subject to the terms and conditions
herein set forth.
Delivery of the certificates for Notes sold to the Purchaser pursuant to
any Terms Agreement shall be made as agreed to between the Company and the
Purchaser as set forth in the respective Terms Agreement, not later than the
Closing Date set forth in such Terms Agreement, against payment of funds to the
Company in the net amount due to the Company for such Notes by the method and in
the form set forth in the Procedures unless otherwise agreed to between the
Company and the Purchaser in such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a Terms
Agreement, any Note sold to a Purchaser (i) shall be purchased by such Purchaser
at a price equal to 100% of the principal amount thereof less a percentage equal
to the commission applicable to an agency sale of a Note of identical maturity
and (ii) may be resold by such Purchaser at varying prices related to prevailing
market prices at the time of resale or, if so agreed, at a fixed public offering
price, as determined by such Purchaser. In connection with any resale of Notes
purchased, a Purchaser may use a selling or dealer group and may reallow any
portion of the discount or commission payable pursuant hereto to dealers or
purchasers.
3. OFFERING AND SALE OF NOTES.
Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by them in the Procedures.
4. AGREEMENTS.
The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes, the Company will
not file any amendment to the Registration Statement or supplement to the
Prospectus except (i) periodic or current reports filed under the Exchange Act
(including, without limitation, pursuant to Sections 13 and 15 of the Exchange
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Act) or (ii) a supplement relating to any offering of Notes providing solely for
the specification of or a change in the maturity dates, interest rates, issuance
prices or other similar terms of any Notes, unless the Company shall have
furnished to each of you a copy for your review prior to filing and given each
of you a reasonable opportunity to comment on such proposed amendment or
supplement. Subject to the foregoing sentence, the Company will cause each
supplement to the Prospectus to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such filing. The Company will promptly
advise each of you (i) when the Prospectus, and any supplement thereto, shall
have been filed with the Commission pursuant to Rule 424(b), (ii) when, prior to
the termination of the offering of the Notes, any amendment of the Registration
Statement shall have been filed or become effective, (iii) of any request by the
Commission for any amendment of the Registration Statement or supplement to the
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement, or any part thereof, or the institution of any proceeding for that
purpose, or if the Company has knowledge that any such action is contemplated by
the Commission, and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its reasonable best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as reasonably
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend the Registration Statement or
to supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) notify each of you to
suspend solicitation of offers to purchase Notes (and, if so notified by the
Company, each of you shall forthwith suspend such solicitation and cease using
the Prospectus as then supplemented), (ii) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to each of you in such
quantities as you may reasonably request. If such amendment or supplement, and
any documents, certificates and opinions furnished to each of you pursuant to
paragraph (g) of this Section 4 in connection with the preparation or filing of
such amendment or supplement are satisfactory in all respects to you, you will,
upon the filing of such amendment or supplement with the Commission and upon the
effectiveness of an amendment to the Registration Statement, if such an
amendment is required, resume your obligation to solicit offers to purchase
Notes hereunder.
(c) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and will furnish to each of you copies of
such documents. In addition, except as otherwise provided in Section 4(n)
hereof, on or prior to the date on which the Company makes any announcement to
the general public concerning earnings or concerning any other event which is
required to be described, or which the Company proposes to describe, in a
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document filed pursuant to the Exchange Act, the Company will furnish to each of
you the information contained or to be contained in such announcement and will
also furnish to each of you copies of all other press releases or announcements
to the general public. The Company will immediately notify each of you of any
downgrading in the rating of the Notes or any other debt securities or preferred
stock of the Company, or any proposal to downgrade the rating of the Notes or
any other debt securities or preferred stock of the Company, by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), as soon as the Company learns of any such downgrading or
proposal to downgrade.
(d) As soon as practicable, the Company will make generally available to
its security holders and to each of you an earnings statement or statements of
the Company and its Subsidiary which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including all amendments and
exhibits thereto) and, so long as delivery of a prospectus may be required by
the Act, as many copies of the Prospectus and any supplement thereto as you may
reasonably request.
(f) The Company will arrange for the qualification of the Notes for sale
under the laws of such jurisdictions as any of you may designate, will maintain
such qualifications in effect so long as required for the distribution of the
Notes, and will provide access to information to assist in the determination of
the legality of the Notes for purchase by institutional investors; provided,
that the Company shall not be required to qualify as a foreign corporation or to
consent generally to the service of process under the laws of any such
jurisdiction.
(g) The Company shall furnish to each of you such information, documents,
certificates of officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to time and at
any time prior to the termination of this Agreement reasonably request.
(h) The Company shall, whether or not any sale of the Notes is consummated,
(i) pay all expenses incident to the performance of its obligations under this
Agreement, including the fees and disbursements of its accountants and counsel,
the cost of printing or other production and delivery of the Registration
Statement, the Prospectus, all amendments thereof and supplements thereto, the
Indenture, the New Supplement, this Agreement and all other documents relating
to the offering, the cost of preparing, printing, packaging and delivering the
Notes, the fees and disbursements, including fees of counsel, incurred in
compliance with Section 4(f), the fees and disbursements of the Trustee and the
fees of any agency that rates the Notes, (ii) reimburse each of you on a monthly
basis for all reasonable out-of-pocket expenses (including without limitation
advertising expenses), if any, incurred by you in connection with this
Agreement, but not during a period when the Company has instructed the Agents
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not to solicit purchasers for the Notes and (iii) pay the reasonable fees and
expenses of your counsel incurred in connection with this Agreement.
(i) Each acceptance by the Company of an offer to purchase Notes will be
deemed to be an affirmation that its representations and warranties contained in
this Agreement are true and correct at the time of such acceptance, as though
made at and as of such time, and a covenant that such representations and
warranties will be true and correct at the time of delivery to the purchaser of
the Notes relating to such acceptance, as though made at and as of such time (it
being understood that for purposes of the foregoing affirmation and covenant
such representations and warranties shall relate to the Registration Statement
and Prospectus as amended or supplemented at each such time). Each such
acceptance by the Company of an offer for the purchase of Notes shall be deemed
to constitute an additional representation, warranty and agreement by the
Company that, as of the settlement date for the sale of such Notes, after giving
effect to the issuance of such Notes and of any other Notes to be issued on or
prior to such settlement date, the aggregate amount of Notes which have been
issued and sold by the Company will not exceed the amount of Notes registered
pursuant to the Registration Statement.
(j) Each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by an amendment or supplement providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices or other similar terms of any Notes sold pursuant hereto), the
Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the date
of the effectiveness of such amendment or the date of the filing of such
supplement, in form reasonably satisfactory to you, of the same tenor as the
certificate referred to in Section 5(d) but modified to relate to the last day
of the fiscal quarter for which financial statements of the Company were last
filed with the Commission and to the Registration Statement and the Prospectus
as amended and supplemented to the time of the effectiveness of such amendment
or the filing of such supplement.
(k) Each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by an amendment or supplement (i) providing solely
for the specification of or a change in the maturity dates, the interest rates,
the issuance prices or other similar terms of any Notes sold pursuant hereto or
(ii) consisting of a current or periodic report under the Exchange Act unless,
in the case of clause (ii) above, in the reasonable judgment of any of you, such
financial statements or other information are of such a nature that an opinion
of counsel should be furnished), the Company shall furnish or cause to be
furnished promptly to each of you written opinions of counsel to the Company
satisfactory to each of you, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, in form satisfactory to
each of you, of the same tenor as the opinions referred to in Sections 5(b) and
5(c) but modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of the effectiveness of such amendment or
the filing of such supplement or, in lieu of such opinion, counsel last
furnishing such an opinion to you may furnish each of you with a letter to the
effect that you may rely on such last opinion to the same extent as though it
were dated the date of such letter authorizing reliance (except that statements
in such last opinion will be deemed to relate to the Registration Statement and
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the Prospectus as amended and supplemented to the time of the effectiveness of
such amendment or the filing of such supplement).
(l) Each time that the Registration Statement or the Prospectus is amended
or supplemented to set forth amended or supplemental financial information
(except for current reports on Form 8-K which only announce quarterly earnings),
the Company shall cause its independent public accountants promptly to furnish
to each of you a letter, dated the date of the effectiveness of such amendment
or the date of the filing of such supplement, in form satisfactory to each of
you, of the same tenor as the letter referred to in Section 5(e) with such
changes as may be necessary to reflect the amended and supplemental financial
information included or incorporated by reference in the Registration Statement
and the Prospectus, as amended or supplemented to the date of such letter;
provided, however, that, if the Registration Statement or the Prospectus is
amended or supplemented solely to include or incorporate by reference financial
information as of and for a fiscal quarter, the Company's independent public
accountants may limit the scope of such letter, which shall be satisfactory in
form to each of you, to the unaudited financial statements, the related
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and any other information of an accounting, financial or statistical
nature included in such amendment or supplement, unless, in the reasonable
judgment of any of you, such letter should cover other information or changes in
specified financial statement line items.
(m) If required pursuant to any Terms Agreement, during the period, if any,
specified (whether orally or in writing) in such Terms Agreement, the Company
shall not, without the prior consent of the Purchaser thereunder, offer, sell,
contract to sell or announce the proposed issuance of any debt securities,
including Notes (other than the Notes being sold under such Terms Agreement),
with terms substantially similar to the Notes being purchased pursuant to such
Terms Agreement, other than borrowings under its revolving credit agreement and
lines of credit and issuances of its commercial paper.
(n) The Company shall not be required to comply with the second sentence of
Section 4(c) and the provisions of Sections 4(g), 4(j), 4(k) and 4(l) hereof
during any period (x) from any time when (i) the Agents shall have suspended
solicitation of purchasers of the Notes, in their capacity as agents pursuant to
Section 2(a) hereof and (ii) the Agents shall not then hold any Notes as
principal purchased pursuant to a Terms Agreement, (y) to the time the Company
shall determine that solicitation of purchasers of the Notes should be resumed
or shall subsequently enter into a new Terms Agreement with any or all of the
Agents, at which time all such action specified in the aforementioned provisions
will be taken, as applicable.
5. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS.
The obligation of each Agent to solicit offers to purchase the Notes shall
be subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time, on the Effective Date,
when any supplement to the Prospectus is filed with the Commission, as of each
Closing Date and on the date of each solicitation, to the accuracy of the
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statements of the Company made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have
been filed in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration Statement, or any
part thereof, shall have been issued and no proceedings for that purpose shall
have been instituted or threatened, or, to the knowledge of the Company or any
Agent, be contemplated by the Commission.
(b) The Company shall have furnished to each Agent the opinion of Cozen
▇'▇▇▇▇▇▇, Philadelphia, Pennsylvania, counsel for the Company, dated the
Execution Time, substantially to the effect, as appropriate, that (except that,
after the Substitution Date, such opinion need not be given with respect to the
New Supplement, the Mortgage, the Mortgage Trustee or the Pledged Bond):
(i)(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered, with full corporate power and
authority to own its properties and conduct its business as described
in the Prospectus. The nature of the business conducted by the Company
and the location and character of the property owned or leased by it do
not require its qualification as a foreign corporation in any
jurisdiction. The Company holds all franchises, certificates of public
convenience, licenses and permits necessary to carry on the utility
business in which it is engaged;
(i)(b) The Subsidiary has been duly organized and is validly
existing as a statutory trust in good standing under the laws of the
jurisdiction in which it is organized, with full power and authority to
own its properties and conduct its business as described in the
Prospectus;
(ii) All the outstanding shares of capital stock of the
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiary
are owned directly by the Company free and clear of any perfected
security interest and, to the knowledge of such counsel, any other
security interests, claims, liens or encumbrances;
(iii) The Company's authorized equity capitalization is as set
forth in the Registration Statement; and the Notes and the Pledged Bond
conform to the descriptions thereof contained in the Prospectus
(subject to the insertion in the Notes of the maturity dates, the
interest rates and other similar terms thereof which will be described
in supplements to the Prospectus as contemplated by the last sentence
of Section l(a) of this Agreement);
(iv) Each of the Indenture, the New Supplement, the Notes and
the Pledged Bond has been duly authorized by all necessary corporate
action on the part of the Company (no shareholder approval being
- 15 -
required with respect to such authorization) and has been duly executed
and delivered by authorized officers of the Company and, in the case of
the Notes, duly authenticated by the Trustee, and in the case of the
Pledged Bond, duly authenticated by the Mortgage Trustee, and the
Indenture, the Mortgage (including the New Supplement), the Notes and
the Pledged Bond are each valid and binding instruments enforceable in
accordance with their respective terms except (A) that the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws relating to or
affecting the enforcement of creditors' or mortgagees' rights
generally, (B) to the extent that the availability of the remedy of
specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding therefor may be brought, (C)
that rights of acceleration arising from defaults other than payment
defaults and the availability of equitable remedies may be limited by
equitable principles of general applicability, (D) general principles
of equity (whether asserted at a proceeding at law or in equity), (E)
the discretion of the court before which any proceeding therefor may be
brought, and (F) that the laws of the State of New Jersey may limit
certain remedies provided therein, but none of such principles or
limitations will, in the opinion of such counsel, materially interfere
with the practical realization of the benefits of the security intended
to be provided by the Mortgage, and, in the opinion of such counsel,
the Mortgage contains adequate provisions for enforcing payment of the
Pledged Bond and realizing upon such security; and the Notes when
executed and authenticated in accordance with the provisions of the
Indenture and the Procedures and delivered by the Trustee and paid for
by the purchasers thereof, will constitute legal, valid and binding
obligations of the Company entitled to the benefits and the security of
the Indenture except, in each case, as enforceability may be limited by
bankruptcy, reorganization, moratorium, insolvency or other laws now or
hereafter in effect relating to or affecting mortgagees' or other
creditors' rights or general principles of equity (whether asserted in
a proceeding at law or in equity);
(v) The Pledged Bond is entitled to the benefits and security
intended to be granted and afforded by the Mortgage, and is so secured
equally and ratably with all other bonds outstanding under the Mortgage
(except as to any sinking or other fund established for the bonds of
any particular series);
(vi) SJI which owns all of the common stock of the Company, is
a "holding company" and the Company is a "subsidiary" of a "holding
company" as such terms are defined under the 1935 Act, but SJI, having
filed with the Commission an annual exemption statement for the current
year pursuant to Rule 2 promulgated under the 1935 Act, and the Company
are exempt from all provisions of the 1935 Act except Section 9(a)(2)
thereof, relating to the acquisition of securities of a "public utility
company";
(vii) To the knowledge of such counsel, (a) there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body involving the Company or its
Subsidiary not disclosed in the Prospectus, of a character required to
be disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus; (b) there is no franchise, contract or
other document of a character required to be described in the
- 16 -
Registration Statement or Prospectus, or to be filed as an exhibit,
which is not described or filed as required; and (c) the statements
included or incorporated in the Prospectus describing any legal
proceedings or material contracts or agreements relating to the Company
fairly summarize such matters;
(viii) The Registration Statement and the Prospectus comply, and
any document incorporated by reference into the Prospectus at the time
it was filed complied, in all material respects as to form with the
requirements of the Act, the Exchange Act, the rules and regulations
under the Exchange Act and the rules and regulations under the Act
(except that no opinion need be expressed as to (a) financial
statements, schedules and other financial and statistical data
contained in the Registration Statement or the Prospectus or
incorporated by reference therein; (b) the Trustee's Statement of
Eligibility on Form T-1); or (c) information relating to Ambac
Assurance Company, if any, included or incorporated by reference in the
Registration Statement or Prospectus. All descriptions in the
Prospectus of statutes, regulations or legal or governmental
proceedings are accurate and fairly present the information required to
be shown;
(ix) The Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have
been instituted or threatened;
(x) This Agreement has been duly authorized, executed
and delivered by the Company, and the Company has full corporate
power and authority to enter into the Agreement;
(xi) No consent, approval, authorization or order of any court
or governmental agency or body (other than authorization from the New
Jersey Board of Public Utilities, referred to below) is required for
the consummation of the transactions contemplated herein except such as
have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the sale of the
Notes as contemplated by this Agreement and such other approvals
(specified in such opinion) as have been obtained. The BPU has entered
an order, dated July 24, 2002, authorizing the issuance and sale of the
Notes and the issuance of the Pledged Bond by the Company on terms and
conditions not inconsistent with the terms and conditions set forth in
or contemplated by this Agreement. The Notes, when issued and sold by
the Company, and the Pledged Bond, when issued by the Company, will
comply in all material respects with the terms, conditions and
limitations set forth in such order. Such order is in full force and
effect and has not been amended, supplemented or otherwise modified
without the consent of the Agents and the period has expired during
which any proceeding to review, suspend, limit, modify, restrict or
revoke such order may be instituted as of right by any Person other
than the BPU;
- 17 -
(xii) Neither the execution and delivery of the Indenture or
the New Supplement, the issue and sale of the Notes or the issuance of
the Pledged Bond, nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof does or
will, as the case may be, conflict with, result in a breach or
violation of, or constitute a default under, any law or the charter or
bylaws of the Company or the terms of any indenture or other agreement
or instrument known to such counsel and to which the Company or its
Subsidiary is a party or bound, or any judgment, order, decree or
regulation known to such counsel to be applicable to the Company or its
Subsidiary of any court, regulatory body, administrative agency, or
governmental body having jurisdiction over the Company or its
Subsidiary; and except for the issuance of the Notes and the Pledged
Bonds which are secured by the lien of the Mortgage, the execution and
delivery of this Agreement by the Company, the consummation by the
Company of the transactions therein contemplated and the compliance by
the Company with the terms of this Agreement do not and will not result
in the creation or imposition of any other lien, charge or encumbrance
upon any of the assets of the Company or its Subsidiary pursuant to the
terms or provisions of any of the aforesaid documents, instruments or
matters;
(xiii) To the knowledge of such counsel, neither the Company nor
its Subsidiary is in violation of its organizational documents or in
default (nor has an event occurred which with notice or lapse of time
or both would constitute a default or acceleration) in the performance
of any obligation, agreement or condition contained in any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument known to such counsel to
which the Company or its Subsidiary is a party or by which it or its
properties is bound or affected, except for defaults which are not
reasonably expected to have a materially adverse effect on the
business, properties, condition (financial or otherwise) or results of
operations of the Company and its Subsidiary considered as one
enterprise, and neither the Company nor its Subsidiary is in violation
of any judgment, ruling, decree, order, franchise, license or permit
known to such counsel or, to the knowledge of such counsel, any
statute, rule or regulation of any court or other governmental agency
or body applicable to the business or properties of the Company or its
Subsidiary, which violation or default would be reasonably expected to
have a materially adverse effect on the business, properties, condition
(financial or otherwise) or results of operations of the Company or its
Subsidiary considered as one enterprise;
(xiv) To the knowledge of such counsel, no holders of
securities of the Company have the right to require registration of any
of the Company's securities in connection with the filing of the
Registration Statement;
(xv) All descriptions in the Prospectus of statutes,
regulations or legal or governmental proceedings are accurate and
fairly present the information required to be shown;
(xvi) The Company has good and marketable title in fee simple
to all the real property and good and merchantable title to all the
personal property specifically or generally described or referred to in
- 18 -
the Mortgage as subject to the lien thereof, except properties
expressly excepted therefrom and properties properly released from the
lien thereof pursuant to the terms thereof; the description in the
Mortgage of such properties is legally sufficient to constitute a lien
thereon; and such properties constitute substantially all the permanent
physical properties of the Company and are held by the Company free and
clear of all liens and encumbrances except the lien of the Mortgage and
"excepted encumbrances" (as defined in Subdivision A of Section 3.04 of
the Mortgage);
(xvii) The Mortgage constitutes a valid first mortgage lien of
record upon all real and personal property of the Company (including
easements, rights-of-way, and other rights relating to real estate and
franchises) specifically or generally described or referred to in the
Mortgage as subject to the lien thereof and owned by the Company at the
time of the actual issue of the Pledged Bond, subject to no liens or
encumbrances other than "excepted encumbrances" (as defined in
Subdivision A of Section 3.04 of the Mortgage);
(xviii) The Mortgage has been duly filed for recording in such
manner and in such places as are required by law in order to establish,
preserve, and protect the first lien of the Mortgage on all real and
personal property of the Company specifically or generally described or
referred to in such instruments as subject to the lien of the Mortgage
(except that (a) additional filings and recordings of the Mortgage will
be required if property is acquired by the Company subsequent to the
date hereof which is located in a county where the Mortgage has not
previously been filed for recording and (b) the Mortgage will not be a
first lien on property hereafter acquired by the Company which at the
time of acquisition is subject to prior liens or other encumbrances),
and, to the knowledge of such counsel, all taxes, fees and other
charges payable in connection therewith have been paid in full.
(xix) In addition, such counsel shall state that it has
participated in conferences with officers and other representatives of
the Company, representatives of the independent accountants of the
Company, representatives of the Agents and counsel for the Agents at
which the contents of the Registration Statement and the Prospectus and
related matters were reviewed and discussed and, although such counsel
has not independently verified and is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus or any documents incorporated, or deemed to be incorporated,
by reference therein on the basis of the foregoing, no facts have come
to such counsel's attention that have led such counsel to believe that
either the Registration Statement or the Prospectus at the Execution
Time contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that
such counsel need express no opinion or belief with respect to (a) the
financial statements, schedules and other financial information
included therein or incorporated, or deemed to be incorporated, by
reference in the Registration Statement or the Prospectus or excluded
therefrom; (b) exhibits to the Registration Statement, including the
Form T-1; or (c) information relating to Ambac Assurance Company, if
any, included or incorporated by reference in the Registration
Statement or Prospectus).
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In rendering such opinion, such counsel may rely (i) as to matters of New
Jersey law, upon local New Jersey counsel and (ii) as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the Company and
public officials. References to the Prospectus in this paragraph (b) include any
supplements thereto at the date such opinion is rendered.
(c) Each Agent shall have received from ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, Chicago,
Illinois, counsel for the Agents, such opinion or opinions, dated the Execution
Time, with respect to the issuance and sale of the Notes, the Indenture, the
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Agents may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to each Agent a certificate of the
Company, signed by the Chairman of the Board or the President and the principal
financial or accounting officer of the Company, dated the Execution Time, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects upon and as of
such date the same effect as if made on such date and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied as a condition to the obligation
of the Agents to solicit offers to purchase the Notes (except that,
after the Substitution Date, such certificate need not confirm any
representation and warranties with respect to the New Supplement, the
Mortgage or the Pledged Bonds);
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto dated
after the Execution Time), there has been no material adverse change in
the condition (financial or other), earnings, business or properties of
the Company and its Subsidiary, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto
dated after the Execution Time).
(e) At the Execution Time, Deloitte & Touche LLP shall have furnished to
each Agent a letter or letters (which may refer to letters previously delivered
to the Agents), dated as of the Execution Time, in form and substance
satisfactory to the Agents, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules, if any, included or incorporated in the
Registration Statement and the Prospectus and reported on by them
- 20 -
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter, a reading of the minutes of
the meetings of the stockholders, directors and executive committee of
the Company and the Subsidiary; a reading of the latest available
interim unaudited consolidated financial statements of the Company and
its Subsidiary; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the Company
and its Subsidiary as to transactions and events subsequent to the date
of the most recent audited financial statements included or
incorporated in the Prospectus, nothing came to their attention which
caused them to believe that:
(1) any unaudited consolidated financial statements
and pro forma financial statements, if any, included or
incorporated in the Registration Statement and the Prospectus
do not comply in form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included or incorporated in the Registration Statement and the
Prospectus;
(2) with respect to the period subsequent to the
date of the most recent consolidated financial statements
(other than any capsule information), audited or unaudited,
included or incorporated in the Registration Statement and the
Prospectus, there were any changes, at a specified date not
more than five business days prior to the date of the letter,
in the long-term or short-term debt, common equity or
preferred stock (not subject to purchase or sinking funds) of
the Company and its Subsidiary, or decreases in the
consolidated net current assets or common equity of the
Company and its Subsidiary, as compared with the amounts shown
on the most recent consolidated balance sheet included or
incorporated in the Registration Statement and the Prospectus,
or for the period from the date of the most recent financial
statements included or incorporated in the Registration
Statement and the Prospectus to such specified date there were
any decreases, as compared with the corresponding period in
the preceding year in operating revenues or operating income
or net income applicable to common stock of the Company and
its Subsidiary, except in all instances for (i) changes
resulting from the issuance of the Notes and (ii) changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is not deemed
necessary by the Agents; or
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(3) the amounts included under the caption "Selected
Financial Data" of the Company's Annual Report on Form 10-K,
incorporated in the Registration Statement and the Prospectus,
were not determined on a basis substantially consistent with
that of the corresponding amounts in the audited financial
statements included or incorporated in the Registration
Statement and the Prospectus;
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its Subsidiary) set forth
in the Registration Statement and the Prospectus, including certain of
the information included or incorporated under the caption "Selected
Financial Data" and in Items 1, 6, 7, 10 and 11 of the Company's Annual
Report on Form 10-K, incorporated in the Registration Statement and the
Prospectus, certain of the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's Quarterly Reports
on Form 10-Q, incorporated in the Registration Statement and the
Prospectus, and the information included in the Prospectus under the
captions "Ratio of Earnings to Fixed Charges" agrees with the
accounting records of the Company and its Subsidiary, excluding any
questions of legal interpretation; and
(iv) if unaudited pro forma financial statements are included
or incorporated in the Registration Statement and the Prospectus, on
the basis of a reading of the unaudited pro forma financial statements,
carrying out certain specified procedures, inquiries of certain
officials of the Company and its Subsidiary (including any entity which
is acquired, by merger or otherwise, after the Execution Time, and
including any entity which is the subject of any contract to acquire,
by merger or otherwise, on the date of such financial statements) who
have responsibility for financial and accounting matters, and proving
the arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the pro forma financial statements,
nothing came to their attention which caused them to believe that the
pro forma financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (e) include any supplement
thereto at the date of the letter.
(f) Prior to the Execution Time, the Company shall have furnished to each
Agent such further information, documents, certificates, letters from
accountants and opinions of counsel as the Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
- 22 -
and substance to such Agents and its counsel, this Agreement and all obligations
of any Agent hereunder may be canceled at any time by the Agents. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be delivered
at the office of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, counsel for the Agents, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at the Execution Time.
6. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER.
The obligations of the Purchaser to purchase any Notes will be subject to
the accuracy of the representations and warranties on the part of the Company
herein as of the date of any related Terms Agreement and as of the Closing Date
for such Notes, to the performance and observance by the Company of all
covenants and agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Company,
threatened by the Commission.
(b) If specified by any related Terms Agreement and except to the extent
modified by such Terms Agreement, the Purchaser shall have received,
appropriately updated, (i) a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(d) (except that references to the
Prospectus shall be to the Prospectus as supplemented at the time of execution
of the Terms Agreement), (ii) the opinion of Cozen ▇'▇▇▇▇▇▇, counsel for the
Company, dated as of the Closing Date, to the effect set forth in Section 5(b),
(iii) the opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, counsel for the Purchaser, dated as of
the Closing Date, to the effect set forth in Section 5(c), and (iv) a letter of
Deloitte & Touche LLP, independent accountants for the Company, dated as of the
Closing Date, to the effect set forth in Section 5(e).
(c) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the Purchaser
may reasonably request.
(d) There shall not have occurred: (i) any change in the capital stock or
long-term debt of the Company or its Subsidiary or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, stockholders' equity, business, properties, condition (financial or
other), results of operations or prospects of the Company and its Subsidiary,
which in the judgment of the Agents, materially impairs the investment quality
of the Notes; (ii) any decrease in the rating of any of the Company's debt
securities or preferred securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such rating or of
a possible change in any such rating that does not indicate the direction of the
possible change; (iii) a suspension in trading in any of the Company's
securities by the Commission or a suspension in trading securities generally on
the New York Stock Exchange or the establishment of limited trading or minimum
prices on such Exchange; (iv) a declaration of a banking moratorium by either
- 23 -
Federal or New York State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States; (v)
any outbreak or escalation of major hostilities in which the United States is
involved, any declaration of a national emergency or war by the United States,
an act of terrorism committed against the United States or any of its nationals
or properties; or (vi) the occurrence of such a calamity or crisis or such a
material adverse change in general domestic or international economic, political
or financial conditions, including without limitation as a result of terrorist
activities (and including a material adverse effect of international conditions
on the financial markets in the United States), that in the judgment of the
Agents, makes it impracticable or inadvisable to proceed with the solicitation
of offers to purchase Notes or the purchase of Notes from the Company as
principals pursuant to a Purchase Agreement, as the case may be.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement and
any Terms Agreement, or if any of the opinions and certificates mentioned above
or such Terms Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser and its counsel, such Term
Agreement and all obligations of the Purchaser thereunder and with respect to
the Notes subject thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
7. RIGHT OF PERSON WHO AGREED TO PURCHASE TO REFUSE TO PURCHASE.
(a) The Company agrees that any person who has agreed to purchase and pay
for any Note, including a Purchaser and any person who purchases pursuant to a
solicitation by any of the Agents, shall have the right to refuse to purchase
such Note if, at the Closing Date therefor, any condition set forth in Section 5
or 6, as applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed to purchase and pay
for any Note pursuant to a solicitation by any of the Agents shall have the
right to refuse to purchase such Note if, subsequent to the agreement to
purchase such Note, any change, condition or development specified in any of the
Sections 9(b)(i) through (v) shall have occurred (without regard to any judgment
of a Purchaser required therein) the effect of which is, in the judgment of the
Agent which presented the offer to purchase such Note, so material and adverse
as to make it impractical or inadvisable to proceed with the delivery of such
Note (it being understood that under no circumstance shall any such Agent have
any duty or obligation to exercise the judgment permitted to be exercised under
this Section 7(b) and Section 9(b)).
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each of you, the
directors, officers, employees and agents of each of you and each person who
controls each of you within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which you, they or any of you or them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
- 24 -
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement for the registration of the Notes
as originally filed or in any amendment thereof, or in the Prospectus or any
preliminary Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by any of you
specifically for use in connection with the preparation thereof, and (ii) such
indemnity with respect to the Prospectus or any preliminary Prospectus shall not
inure to the benefit of any of you (or any person controlling any of you) from
whom the person asserting any such loss, claim, damage or liability purchased
the Notes which are the subject thereof if such person did not receive a copy of
the Prospectus (or the Prospectus as amended or supplemented) excluding
documents incorporated therein by reference at or prior to the confirmation of
the sale of such Notes to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in the Prospectus or any preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented). This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each of you, severally and not jointly, agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement and each person who controls the Company within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, to
the same extent as the foregoing indemnity from the Company to you, but only
with reference to written information relating to such of you furnished to the
Company by such of you specifically for use in the preparation of the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability which you may otherwise have. The Company acknowledges
that the statements concerning the Agents set forth in the fifth and sixth
paragraphs under the heading "Plan of Distribution" in the Prospectus (or any
supplement thereto) constitute the only information furnished in writing by any
of you for inclusion in the documents referred to in the foregoing indemnity,
and you confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
- 25 -
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select one separate counsel (in addition to local counsel) to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by you in the case of paragraph (a) of
this Section 8, representing the indemnified parties under such paragraph (a)
who are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 8 is due
in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of public policy or otherwise, the Company and each of
you shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) to which the Company and any of you may be
subject in such proportion so that each of you is responsible for that portion
represented by the percentage that the aggregate commissions received by such of
you pursuant to Section 2 in connection with the Notes from which such losses,
claims, damages and liabilities arise (or, in the case of Notes sold pursuant to
a Terms Agreement, the aggregate commissions that would have been received by
such of you if such commissions had been payable), bears to the aggregate
principal amount of such Notes sold and the Company is responsible for the
balance; provided, however, that (y) in no case shall any of you be responsible
for any amount in excess of the commissions received by such of you in
connection with the Notes from which such losses, claims, damages and
liabilities arise (or, in the case of Notes sold pursuant to a Terms Agreement,
the aggregate commissions that would have been received by such of you if such
commissions had been payable) and (z) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls any
of you within the meaning of Section 15 of the Act shall have the same rights to
contribution as you and each person who controls the Company within the meaning
of either Section 15 of the Act or Section 20 of the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clause (z) of this paragraph (d). Any party
- 26 -
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
paragraph (d), notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this paragraph
(d).
9. TERMINATION.
This Agreement will continue in effect until terminated as provided in this
Section 9. In the event of such termination, no party shall have any liability
to the other party hereto, except as provided in the fourth paragraph of Section
2(a), Section 4(h), Section 8 and Section 10.
(a) This Agreement may be terminated by either the Company as to any of you
or by any of you insofar as this Agreement relates to such of you, by giving
written notice of such termination to such of you or the Company, as the case
may be. This Agreement shall so terminate at the close of business on the first
business day following the receipt of such notice by the party to whom such
notice is given.
(b) Each Terms Agreement (whether oral or written) shall be subject to
termination in the absolute discretion of the Purchaser, by notice given to the
Company prior to delivery of any payment for any Note to be purchased
thereunder, if prior to such time (i) there shall have occurred, subsequent to
the agreement to purchase such Note, any change in the capital stock or
long-term debt of the Company or its Subsidiary or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, stockholders' equity, business, properties, condition (financial or
other), results of operations or prospects of the Company and its Subsidiary,
which in the judgment of the Purchaser, materially impairs the investment
quality of the Notes; (ii) there shall have been, subsequent to the agreement to
purchase such Note, any decrease in the rating of any of the Company's debt
securities or preferred securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such rating or of
a possible change in any such rating that does not indicate the direction of the
possible change; (iii) trading in any of the Company's securities shall have
been suspended by the Commission or trading in securities generally on the New
York Stock Exchange shall have been suspended or limited or minimum prices shall
have been established on such Exchange; (iv) a banking moratorium shall have
been declared by either Federal or New York State authorities or a material
disruption shall have occurred in commercial banking or securities settlement or
clearance services in the United States; (v) there shall have occurred any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of a national emergency or war by the United States,
an act of terrorism has been committed against the United States or any of its
nationals or properties; or (vi) there shall have occurred such a calamity or
crisis or such a material adverse change in general domestic or international
economic, political or financial conditions, including without limitation as a
result of terrorist activities and including a material adverse effect of
international conditions on the financial markets in the United States, that in
the judgment of the Agents makes it impracticable or inadvisable to proceed with
the offering or delivery of such Notes as contemplated by the Prospectus.
- 27 -
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE.
The respective agreements, representations, warranties, indemnities and
other statements of the Company or its officers and of you set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of you or the Company or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Notes. The provisions of Sections
4(h) and 8 hereof shall survive the termination or cancellation of this
Agreement. The provisions of this Agreement (including without limitation
Section 7 hereof) applicable to any purchase of a Note for which an agreement to
purchase exists prior to the termination hereof shall survive any termination of
this Agreement.
11. NOTICES.
All communications hereunder will be in writing and effective only on
receipt, and, if sent to any of you, will be mailed, delivered or telegraphed
and confirmed to such of you, at the address specified in Schedule I hereto,
with a copy to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at Number ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: President, with a copy to Cozen ▇'▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
12. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors, directors, officers, employees, agents
and controlling persons referred to in Section 8 hereof, and, to the extent
provided in Section 7, any person who has agreed to purchase Notes, and no other
person will have any right or obligation hereunder.
13. APPLICABLE LAW.
This Agreement will be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to conflict of laws
rules thereof.
- 28 -
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and you.
Very truly yours,
SOUTH JERSEY GAS COMPANY
By: ___________________________________
Its: ___________________________________
- 29 -
The foregoing Agreement is hereby confirmed and accepted as of the date
hereof.
UBS WARBURG LLC
By: ______________________________
Its:____________________________
By: ______________________________
Its:____________________________
WACHOVIA SECURITIES, INC.
By:______________________________
Its:___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P.
By:______________________________
Its:___________________________
- 30 -
SCHEDULE I
The Company agrees to pay each Agent a commission equal to the following
percentage of the principal amount of each Note sold by such Agent, and to pay
the Purchasers a commission in the form of a discount to the purchase price
equal to the following percentage of the principal amount of each Note purchased
by the Agent under Section 2(b):
MATURITY RANGE OF NOTES AMOUNT PERCENTAGE OF PRINCIPAL
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years or longer .750%
The commission rate payable to any Agent with respect to any Notes, and the
discount with respect to any Notes sold to a Purchaser, may be increased by
agreement between the Company and such Agent or Purchaser, with no requirement
that the other Agents or Purchasers receive notice of, or consent to, such
higher commission rate or discount.
Address for Notice to you:
Notices to UBS Warburg LLC shall be directed to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Syndicate Desk.
Notices to Wachovia Securities, Inc. shall be directed to it at One First
Union Center, TW-▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Utilities and Strategic Finance.
Notices to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. shall be directed to it at ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: __________.
- 31 -
EXHIBIT A
MEDIUM TERM NOTE ADMINISTRATIVE PROCEDURES
__________, 2002
The Secured Medium-Term Notes, Series B (the "Notes") are to be offered on
a continuing basis, unless suspended pursuant to Section 2(a) of the Agreement
(as defined below). UBS Warburg LLC, Wachovia Securities, Inc. and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ & Co., L.P., as agents (the "Agents"), have agreed to use reasonable
efforts to solicit offers to purchase Notes. No Agent will be obligated to
purchase Notes for its own account. The Notes are being sold pursuant to a
Distribution Agreement between South Jersey Gas Company (the "Issuer" or the
"Company") and the Agents dated as of the date hereof (the "Agreement"). The
Notes will be issued under an indenture (the "Original Indenture") dated as of
October 1, 1998, between the Issuer and The Bank of New York, as trustee (the
"Trustee"), as supplemented by the First Supplement to Indenture, dated as of
June 29, 2000, the Second Supplement to Indenture dated as of July 5, 2000 and
the Third Supplement to Indenture, dated as of July 9, 2001, each between the
Company and the Trustee (the Original Indenture, as supplemented, the
"Indenture").
The procedures to be followed during, and the specific terms of, the
solicitation of offers by each Agent and the sale as a result thereof by the
Issuer are explained below. Administrative and record-keeping responsibilities
will be handled for the Issuer by its ___________. The Issuer will advise each
Agent and the Trustee in writing of those persons handling administrative
responsibilities with whom the Agents and the Trustee are to communicate
regarding offers to purchase Notes and the details of their delivery and will
promptly advise each Agent and the Trustee in writing if any such person shall
cease to handle such responsibilities or of the authorization of any additional
person to handle such responsibilities.
The Notes will either be issued (a) in book-entry form and represented by
one or more fully registered Notes (each, a "Book-Entry Note") delivered to the
Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in the
book-entry system maintained by DTC, or (b) in certificated form delivered to
the purchaser thereof or a person designated by such purchaser. Except in the
limited circumstances described in the Prospectus, owners of beneficial
interests in Book-Entry Notes will not be entitled to physical delivery of Notes
in certificated form.
General procedures relating to the issuance of all Notes are set forth in
Part I hereof. Book-Entry Notes will be issued in accordance with the procedures
set forth in Part II, as adjusted in accordance with changes in DTC's operating
requirements. Notes issued in certificated form will be issued in accordance
with the procedures set forth in Part III hereof. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in the
Indenture or the Notes, as the case may be. To the extent the procedures set
forth below conflict with the provisions of the Notes, the Indenture, DTC's
operating requirements or the Agreement, the relevant provisions of the Notes,
the Indenture, DTC's operating requirements or the Agreement shall control.
- 1 -
PART I: PROCEDURES OF GENERAL APPLICABILITY
Maturities: Each Note will mature on a Business Day not less
than one year nor more than 40 years after the
Original Issue Date (as defined below) for such
Note.
Denominations: The denomination of any Note will be in U.S.
dollars and a minimum of $1,000 or any larger
amount that is an integral multiple of $1,000.
Form: Notes will be issued only in fully registered form
in accordance with the Indenture.
Date of Issuance: Each Note will be dated the date of its
authentication by the Trustee. Each Note will
also bear an "Original Issue Date," which will be
the date of its original issue, or in the case of
any Note (or portion thereof) issued subsequently
upon transfer or exchange of a Note or in lieu of
a destroyed, mutilated, defaced, lost or stolen
Note, the Original Issue Date of the predecessor
Note, regardless of the date of authentication of
such subsequently issued Note.
Preparation
of Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company, with the approval of the
Agent presenting the offer (the "Presenting
Agent"), will prepare a Pricing Supplement
reflecting the terms of such Note and file the
Pricing Supplement relating to the Notes and the
plan of distribution thereof with the Commission
in accordance with Rule 424 under the Act and the
provisions of Regulation S-T under the Act. The
Presenting Agent will cause a Pricing Supplement
and a Prospectus to be delivered to the purchaser
of such Notes.
The Company shall have delivered a completed
Pricing Supplement, via next day mail or telecopy
to arrive no later than 11 a.m. on the Business
Day following the trade date, to the Presenting
Agent at the following address:
- 2 -
If UBS Warburg, LLC is the Presenting Agent, to it
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Syndicate Desk. Facsimile number (203)
719-0495.
If Wachovia Securities, Inc. is the Presenting
Agent, to it at One First Union Center, TW-▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Utilities and Strategic Finance.
Facsimile number (▇▇▇) ▇▇▇-▇▇▇▇.
If ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. is the Presenting
Agent, to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: __________. Facsimile number
(314) __________.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements, and the
Prospectuses to which they are attached (other
than those retained for files), will be destroyed.
Acceptance of Offers: Any Agent may, in its reasonable discretion,
reject any offer to purchase Notes received by it,
in whole or, if permitted by the terms thereof, in
part. Each Agent will promptly advise the Issuer
of any offers to purchase Notes received by such
Agent, other than offers rejected by such Agent
and, if such Agent or any of its affiliates shall
be the offeror, shall advise the Issuer of that
fact. The Issuer will have the sole right to
accept offers to purchase Notes in whole or, if
permitted by the terms thereof, in part. The
Issuer may reject any such offer in whole or, if
permitted by the terms thereof, in part. The
Issuer will forthwith advise the Presenting Agent
of the acceptance or rejection of any offer
received through the Presenting Agent and the
Presenting Agent will so advise the offeror.
Suspension of Solicitation;
Amendment or Supplement: The Company may instruct the Agents to suspend
solicitation of purchases at any time. Upon
receipt of such instructions, the Agents will
promptly suspend solicitation of offers to
purchase Notes, which, in any event, shall not be
later than the close of business on the day such
- 3 -
instructions are received, from the Company until
such time as the Company has advised it that
solicitation of offers to purchase may be resumed.
If the Company decides to amend the Registration
Statement (including incorporating any documents
by reference therein) or supplement any of such
documents (other than to change rates or other
variable terms), it will promptly furnish the
Agents and their counsel with copies of the
amendment (including any document proposed to be
incorporated by reference therein) or supplement.
One copy of such filed document, along with a copy
of the cover letter sent to the Commission, will
be delivered or mailed to the Agents at the
following addresses:
If UBS Warburg, LLC is the Presenting Agent, to it
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Syndicate Desk. Facsimile number (203)
719-0495.
If Wachovia Securities, Inc. is the Presenting
Agent, to it at One First Union Center, TW-▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Utilities and Strategic Finance.
Facsimile number (▇▇▇) ▇▇▇-▇▇▇▇.
If ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. is the Presenting
Agent, to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: __________. Facsimile number
(314) __________.
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
there shall be any orders outstanding which have
not been settled, the Company will promptly advise
the Agents and the Trustee whether such orders may
be settled and whether copies of the Prospectus as
in effect at the time of the suspension may be
delivered in connection with the settlement of
such orders. The Company will have the sole
responsibility for such decision and for any
arrangements which may be made in the event that
the Company determines that such orders may not be
settled or that copies of such Prospectus may not
be so delivered.
- 4 -
Delivery of Prospectus: The Agents will cause a copy of the most recent
Prospectus and Pricing Supplement to accompany or
precede the earlier of (a) the written
confirmation of a sale sent to a customer or the
agent of such customer, and (b) the delivery of
Notes to a customer or the agent of such customer.
Documents incorporated
by reference: The Company shall supply each Agent with an
adequate supply of all documents incorporated by
reference in the Registration Statement that are
reasonably requested by such Agent.
Confirmation: For each offer to purchase a Note solicited by an
Agent and accepted by the Issuer, such Agent will
issue a confirmation to the purchaser, with a copy
to the Issuer.
Settlement Date: Subject to Section 6 of the Agreement, the
Settlement Date with respect to any offer to
purchase Notes accepted by the Issuer will be the
third Business Day next succeeding the date of
acceptance unless otherwise agreed by the
purchaser and the Issuer and shall be specified
upon acceptance of such offer.
Trustee
Not to Risk Funds: Nothing herein shall be deemed to require the
Trustee to risk or expend its own funds in
connection with any payment to the Issuer or the
Agents or any purchaser, it being understood by
all parties that payments made by the Trustee to
the Issuer or the Agents or a purchaser shall be
made only to the extent that immediately available
funds are provided to the Trustee for such
purpose.
Authenticity of Signatures: The Issuer will cause the Trustee to furnish the
Agents from time to time with the specimen
signatures of each of the Trustee's officers,
employees or agents who have been authorized by
the Trustee to authenticate Notes, but the Agents
will have no obligation or liability to the Issuer
or to the Trustee in respect of the authenticity
of the signature of any officer, employee or agent
of the Issuer or the Trustee on any Note.
- 5 -
Payment of Expenses: Each Agent shall forward to the Issuer, on a
quarterly basis, a statement of the out-of-pocket
expenses incurred by such Agent during that
quarter that are reimbursable to it pursuant to
the terms of the Agreement. The Issuer will remit
payment to each Agent currently on a quarterly
basis.
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and the Trustee to DTC, dated ________, ___, 2002, and a Medium
Term Note Certificate Agreement, dated August 17, 1989, between the Trustee and
DTC (the "Certificate Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Book-Entry Notes having the same Original
Issue Date, redemption provisions, interest
payment dates, interest rate, and stated maturity
(collectively, the "Terms") will be represented
initially by a single Global Note in fully
registered form without coupons.
Each Book-Entry Note will be dated and issued as
of the date of its authentication by the Trustee.
Each Book-Entry Note will bear an Original Issue
Date, which will be (i) with respect to an
original Book-Entry Note (or any portion thereof),
the original issue date specified in such
Book-Entry Note and (ii) following a consolidation
of Global Notes, with respect to the Book-Entry
Note resulting from such consolidation, the most
recent Interest Payment Date to which interest has
been paid or duly provided for on the predecessor
Global Notes, regardless of the date of
authentication of such resulting Book-Entry Note.
No Book-Entry Note will represent any securities
in certificated form.
Identification: The Issuer has arranged with the CUSIP Service
Bureau of Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇ (the "CUSIP Service
- 6 -
Bureau"), for the reservation of approximately 900
CUSIP numbers which have been reserved for and
relating to Book-Entry Notes, and the Company has
delivered to the Trustee and DTC a written list of
such CUSIP numbers. The Trustee will assign CUSIP
numbers to Book-Entry Notes as described below
under Settlement Procedure B. DTC will notify the
CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to
Book-Entry Notes. The Trustee will notify the
Company at any time when fewer than 50 of the
reserved CUSIP numbers remain unassigned to
Book-Entry Notes, and, if it deems necessary, the
Company will reserve additional CUSIP numbers for
assignment to Book-Entry Notes. Upon obtaining
such additional CUSIP numbers, the Company will
deliver a list of such additional numbers to the
Trustee and DTC.
Registration: Each Book-Entry Note will be registered in the
name of Cede & Co., as nominee for DTC, on the
register maintained by the Trustee under the
Indenture. The beneficial owner of a Note issued
in book-entry form (i.e., an owner of a beneficial
interest in a Book-Entry Note) (or one or more
indirect participants in DTC designated by such
owner) will designate one or more participants in
DTC (with respect to such Note issued in
book-entry form, the "Participants") to act as
agent or agents for such beneficial owner in
connection with the book-entry system maintained
by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such
Participants, a credit balance with respect to
such Note issued in book-entry form in the account
of such Participants. The ownership interest of
such beneficial owner in such Note issued in
book-entry form will be recorded through the
records of such Participants or through the
separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one
or more indirect participants in DTC) acting on
- 7 -
behalf of beneficial transferors and transferees
of such Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or more
Book-Entry Notes outstanding on such date that
represent Book-Entry Notes having the same terms
(other than Original Issue Dates) and for which
interest has been paid to the same date; (b) a
date, occurring at least 30 days after such
written notice is delivered and at least 30 days
before the next Interest Payment Date for the
related Notes issued in book-entry form, on which
such Book-Entry Notes shall be exchanged for a
single replacement Book-Entry Note; and (c) a new
CUSIP number, obtained from the Company, to be
assigned to such replacement Book-Entry Note. Upon
receipt of such a notice, DTC will send to its
participants (including the Trustee) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver
to the CUSIP Service Bureau written notice setting
forth such exchange date and the new CUSIP number
and stating that, as of such exchange date, the
CUSIP numbers of the Book-Entry Notes to be
exchanged will no longer be valid. On the
specified exchange date, the Trustee will exchange
such Book-Entry Notes for a single Book-Entry Note
bearing the new CUSIP number and the CUSIP numbers
of the exchanged Book-Entry Notes will, in accord
with CUSIP Service Bureau procedures, be canceled
and not reassigned.
Interest Payments: General. Interest (if any) on each Note will
accrue from the Original Issue Date of such Note,
and will be calculated and paid in the manner
described in such Note.
Unless otherwise provided in the Indenture or the
Notes, the first payment of interest on any Note
originally issued after a Record Date (as defined
below) and on or before the next succeeding
Interest Payment Date (as defined below) will be
made no earlier than the Interest Payment Date
following the next succeeding Record Date.
Interest payable at maturity of a Note, or upon
- 8 -
earlier redemption or repayment, will be payable
to the person to whom the principal of such Note
is payable. DTC will arrange for each pending
deposit message described under Settlement
Procedure C below to be transmitted to Standard &
Poor's Ratings Group, which will use the
information in the message to include certain
terms of the related Book-Entry Note in the
appropriate daily bond report published by
Standard & Poor's Ratings Group.
Record Dates. The Record Dates with respect to the
Interest Payment Dates shall be the April 15 or
October 15 (whether or not a business day) next
preceding such Interest Payment Date.
Interest Payment Dates. Unless otherwise specified
pursuant to Settlement Procedure A below, interest
payments on Book-Entry Notes will be made
semiannually on May 1 and November 1 of each year
and at Maturity; provided, however, that if an
Interest Payment Date for a Book-Entry Note is not
a Business Day, the payment due on such day shall
be made on the next succeeding Business Day and no
interest shall accrue on such payment for the
period from and after such Interest Payment Date;
provided further, that in the case of a Book-Entry
Note issued between a Record Date and an Interest
Payment Date, the first interest payment will be
made on the Interest Payment Date following the
next succeeding Regular Record Date.
Payments of Principal and Payments of Interest Only. Not later than five
Interest: Business Days following each Record Date, the
Trustee will deliver to the Issuer and DTC a
written notice specifying by CUSIP number the
amount of interest to be paid on each Book-Entry
Note on the following Interest Payment Date (other
than an Interest Payment Date coinciding with a
Maturity Date) and the total of such amounts. DTC
will confirm the amount payable on each Book-Entry
Note on such Interest Payment Date by reference to
the daily bond reports published by Standard &
Poor's. On such Interest Payment Date, the Issuer
will pay to the Trustee, and the Trustee in turn
- 9 -
will pay to DTC, such total amount of interest due
(other than at Maturity Date), at the times and in
the manner set forth below under "Manner of
Payment."
Payments at Maturity Date. Prior to the first
Business Day of each month in which principal
and/or interest is to be paid, the Trustee will
deliver to the Issuer and DTC a written list of
principal, interest and premium, if any, to be
paid on each Book-Entry Note maturing either at
Stated Maturity or on a Redemption Date in the
following month. The Trustee, the Issuer and DTC
will confirm the amounts of such principal and
interest payments with respect to a Book-Entry
Note on or about the fifth Business Day preceding
the Maturity of such Book-Entry Note. On or before
Maturity Date, the Issuer will pay to the Trustee,
and the Trustee in turn will pay to DTC, the
principal amount of such Note, together with
interest and premium, if any, due at such Maturity
Date, at the times and in the manner set forth
below under "Manner of Payment." Promptly after
payment to DTC of the principal and interest due
at Maturity of such Book-Entry Note, the Trustee
will cancel such Book-Entry Note in accordance
with the Indenture and so advise the Issuer. If
any Maturity Date of a Book-Entry Note is not a
Business Day, the payment due on such day shall be
made on the next succeeding Business Day and no
interest shall accrue on such payment for the
period from and after such Maturity.
Manner of Payment. The total amount of any
principal, premium, if any, and interest due on
Book-Entry Notes on any Interest Payment Date or
at Maturity shall be transferred by the Issuer to
the Trustee to an account designated by the
Trustee in funds available for use by the Trustee
as of 12:00 noon, New York City time, on such
date. The Issuer will confirm such instructions in
writing to the Trustee. Prior to 2:00 p.m., New
York City time, on such date or as soon as
possible thereafter, the Trustee will pay (but
only from funds withdrawn from such account) by
separate wire transfer (using Fedwire message
entry instructions in a form previously specified
by DTC) to an account at the Federal Reserve Bank
of New York previously specified by DTC, in funds
- 10 -
available for immediate use by DTC, each payment
of interest, principal and premium, if any, due on
a Book-Entry Note on such date. Thereafter on such
date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts
in funds available for immediate use to the
respective Participants in whose names such Notes
are recorded in the book-entry system maintained
by DTC. Neither the Issuer nor the Trustee shall
have any responsibility or liability for the
payment by DTC of the principal of, or premium, if
any, or interest on, the Book-Entry Notes to such
Participants.
Withholding Taxes. The amount of any taxes
required under applicable law to be withheld from
any interest payment on a Note will be determined
and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the
beneficial owner of such Note.
Settlement Procedures: Settlement Procedures with regard to each
Book-Entry Note sold by the Presenting Agent, as
agent of the Company, and accepted by the Company
will be as follows:
A. The Presenting Agent will advise the Issuer by
telephone (confirmed in writing) or telecopy of
the following Settlement information:
1. Taxpayer identification number of the
purchaser.
2. Principal amount of the Note.
3. Interest rate, and interest payment
dates.
4. Price to public of the Note.
5. Trade date.
6. Settlement Date (Original Issue Date).
- 11 -
7. Maturity.
8. Net proceeds to the Company.
9. Agent's commission.
10. Redemption provisions, if any.
B. The Issuer will advise the Trustee by telephone
(confirmed in writing) or telecopy by
10:00 a.m. on the second Business Day preceding
the Settlement Date of the above settlement
information received from the Presenting Agent
with respect to the Book-Entry Note
representing such Note.
C. The Issuer will assign a CUSIP number to such
Note and the Trustee will communicate to DTC
through DTC's Participant Terminal System, a
pending deposit message specifying the
following settlement information, which will
route such relevant information to the
Presenting Agent, Standard & Poor's Ratings
Group and Interactive Data Corporation:
1. The information set forth in Settlement
Procedure A.
2. Identification numbers of the
participant accounts maintained by DTC
on behalf of the Trustee and the Agent.
3. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related Record Date for
DTC purposes and, if then calculable,
the amount of interest payable on such
Interest Payment Date (which amount
shall have been confirmed by the
Trustee).
4. CUSIP number of the Book-Entry Note
representing such Note.
- 12 -
D. The Trustee will complete a Book-Entry Note
representing such Note in a form that has been
approved by the Company, the Presenting Agent
and the Trustee.
E. The Trustee will authenticate the Book-Entry
Note representing such Note.
F. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such
Note to the participant account of the
Presenting Agent maintained by DTC and (ii) to
debit the settlement account of the Presenting
Agent and credit the settlement account of the
Trustee maintained by DTC, in an amount equal
to the price of such Note less such Agent's
commission. Any entry of such a deliver order
shall be deemed to constitute a representation
and warranty by the Trustee to DTC that (i) the
Book-Entry Note representing such Note has been
issued and authenticated and (ii) the Trustee
is holding such Book-Entry Note pursuant to the
Note Certificate Agreement between the Trustee
and DTC.
H. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Presenting Agent's participant account and
credit such Note to the participant account of
the Participants maintained by DTC and (ii) to
debit the settlement accounts of such
Participants and credit the settlement account
of the Presenting Agent maintained by DTC, in
an amount equal to the public offering price of
such Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
- 13 -
Procedures G and H will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date.
J. Upon receipt of such funds, the Trustee will
credit to an account of the Company identified
to the Trustee funds available for immediate
use in the amount transferred to the Trustee in
accordance with Settlement Procedure G.
K. The Presenting Agent will confirm the purchase
of such Note to the purchaser either by
transmitting to the Participant with respect to
such Note a confirmation order through DTC's
Participant Terminal System or by mailing a
written confirmation to such purchaser.
Settlement Procedures For orders of Notes accepted by the Company,
Timetable Settlement Procedures A through K set forth above
shall be completed as soon as possible but not
later than the respective times (New York City
time) set forth below:
- 14 -
SETTLEMENT
PROCEDURE TIME
A 11:00 a.m. on the trade date
B 10:00 a.m. on the second Business
Day preceding Settlement Date
C 2:00 p.m. on the trade date
D 3:00 p.m. on the Business Day
before Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H 2:00 p.m. on the Settlement Date
I 4:45 p.m. on Settlement Date
J-K 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business
Day after the trade date, Settlement Procedures A,
B, and C shall be completed as soon as practicable
but in no event later than 11:00 a.m. and 12:00
noon on the first Business Day after such sale
date but no later than 2:00 p.m. on the Business
Day before the Settlement Date, respectively.
Settlement Procedure I is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Note is rescheduled
or canceled, the Trustee, if notified in time,
will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such
effect by no later than 2:00 p.m., New York City
time, on the Business Day immediately preceding
the scheduled Settlement Date.
- 15 -
Failure to Settle: If the Trustee fails to enter an SDFS deliver
order with respect to a Book-Entry Note pursuant
to Settlement Procedure G, the Trustee may deliver
to DTC, through DTC's Participant Terminal System,
as soon as practicable a withdrawal message
instructing DTC to debit such Note to the
participant account of the Trustee maintained at
DTC. DTC will process the withdrawal message,
provided that such participant account contains a
principal amount of the Book-Entry Note
representing such Note that is at least equal to
the principal amount to be debited. If withdrawal
messages are processed with respect to all the
Notes represented by a Book-Entry Note, the
Trustee will mark such Book-Entry Note "canceled,"
make appropriate entries in its records and send
such canceled Book-Entry Note to the Company. The
CUSIP number assigned to such Book-Entry Note
shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately
reassigned. If withdrawal messages are processed
with respect to a portion of the Notes represented
by a Book-Entry Note, the Trustee will exchange
such Book-Entry Note for two Book-Entry Notes, one
of which shall represent the Book-Entry Notes for
which withdrawal messages are processed and shall
be canceled immediately after issuance, and the
other of which shall represent the other Notes
previously represented by the surrendered
Book-Entry Note and shall bear the CUSIP number of
the surrendered Book-Entry Note.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants with respect
to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in
DTC, acting on behalf of such purchaser), such
Participants and, in turn, the related Agent may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures G and H,
respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the related
actions described in the preceding paragraph. If
such failure shall have occurred for any reason
other than default by the applicable Agent to
perform its obligations hereunder or under the
- 16 -
Agreement, the Company will reimburse such Agent
on an equitable basis for its loss of the use of
funds during the period when the funds were
credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with respect to a Note that
was to have been represented by a Book-Entry Note
also representing other Notes, the Trustee will
provide, in accordance with Settlement Procedures
D and E, for the authentication and issuance of a
Book-Entry Note representing such remaining Notes
and will make appropriate entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Interest Payments: Interest (if any) on each Note will accrue from
the Original Issue Date of such Note, and will be
calculated and paid in the manner described in
such Note.
Unless otherwise provided in the Indenture or the
Notes, the first payment of interest on any Note
originally issued after a Record Date and on or
before the next succeeding Interest Payment Date
will be made no earlier than the Interest Payment
Date following the next succeeding Record Date.
Interest payable at maturity of a Note, or upon
earlier redemption or repayment, will be payable
to the person to whom the principal of such Note
is payable. All interest payments for each
Interest Payment Date (excluding interest payments
made on the Maturity Date or upon the acceleration
thereof or on earlier redemption) will be made by
check mailed to the person entitled thereto as
provided above, or at the option of the registered
holder, at such other place in the United States
as the registered holder shall designate to the
Trustee in writing, except that a holder of the
equivalent of $10,000,000 or more in aggregate
principal amount of Notes with the same Interest
Payment Date shall be entitled to receive such
- 17 -
payments in immediately available funds paid to an
account at a bank in New York, New York (or other
bank consented to by the Issuer and the Trustee),
but only if appropriate payment instructions have
been received in writing by the Trustee on or
prior to the applicable Record Date (provided that
such bank designated by the registered holder has
appropriate facilities therefor).
Within five Business Days following each Record
Date, the Trustee will provide to the Issuer a
list of interest payments to be made for each Note
on the next succeeding Interest Payment Date and
the total amount of the interest payments. The
Trustee will provide monthly to the Issuer a list
of the principal, premium, if any, and interest to
be paid on Notes maturing or being redeemed in the
next succeeding month.
Settlement: The Issuer will instruct the Trustee to effect
delivery of each Note no later than 1:00 p.m., New
York City time, on the Settlement Date to the
Presenting Agent for delivery to the purchaser.
Details for Settlement: For each offer to purchase a Note that is accepted
by the Issuer, the Presenting Agent will provide
(unless provided by the purchaser directly to the
Issuer) by telephone the following information to
the Issuer:
1. The exact name of the Registered Owner.
2. The exact address of the Registered Owner and
the address for delivery, notices and payments
of principal and interest.
3. The taxpayer identification number of the
Registered Owner.
4. A description of the terms and provisions of
the Notes that includes the information
identified in Exhibit B to the Agreement and
any other information required to describe
such Notes properly.
5. The Issue Price.
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6. The Trade Date.
7. The Settlement Date.
8. The Presenting Agent's commission, determined
as provided in Schedule I to the Agreement.
The Issuer will advise the Trustee of the
foregoing information for each offer to purchase a
Note solicited by the Presenting Agent and
accepted by the Issuer in time for the Trustee to
prepare and authenticate the required Note, but
not later than 10:00 a.m. New York City time on
the second Business Day preceding the Settlement
Date. Before accepting any offer to purchase a
Note to be settled in less than three Business
Days, the Issuer shall verify that the Trustee
will have adequate time to prepare and
authenticate such Note.
After receiving from the Presenting Agent the
details for each offer to purchase a Note, the
Issuer will, after recording the details and any
necessary calculations, provide appropriate
documentation to the Trustee, including the
information provided by the Presenting Agent
necessary for the preparation and authentication
of such Note. Prior to preparing the Note for
delivery (but in any case no later than 10:00 a.m.
on the Business Day next preceding the Settlement
Date therefor), the Trustee will confirm the
details of such issue with the Issuer, and the
Issuer will confirm such instruction to the
Presenting Agent, in each case by telephone,
telecopy or telex.
Deliveries and Cash Payment: Upon receipt of appropriate documentation and
instructions with respect to the Notes, the Issuer
will cause the Trustee to prepare and authenticate
the form of Note previously approved by the
Issuer, the Presenting Agent and the Trustee and
deliver such Note and a customer receipt to the
purchaser.
If the form of Note is not pre-printed, the
Trustee shall deliver a photocopy of such
authenticated Note to the Presenting Agent and the
Issuer and shall retain one copy. Otherwise, it
shall deliver the copies in the four-ply Note as
follows:
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Stub 1--For the Presenting Agent.
Stub 2--For the Issuer.
Stub 3--For the Trustee.
Each Note shall be authenticated on the Settlement
Date therefor. The Trustee will authenticate each
Note and deliver it to the Presenting Agent (and
deliver the stubs as indicated above), all in
accordance with written instructions (or oral
instructions confirmed in writing, which may be
given by telex or telecopy, on the next Business
Day) from the Issuer.
Upon verification by the Presenting Agent that a
Note has been prepared and properly authenticated
by the Trustee and registered in the name of the
purchaser in the proper principal amount, payment
will be made to the Issuer by the Presenting Agent
the same day in immediately available funds. Such
payment shall be made only upon prior receipt by
the Presenting Agent of immediately available
funds from or on behalf of the purchaser unless
the Presenting Agent decides, at its option,
exercised in the sole discretion of such
Presenting Agent, to advance its own funds for
such payment against subsequent receipt of funds
from the purchaser. The Presenting Agent shall
immediately notify the Issuer of its decision to
advance its own funds for payment against
subsequent receipt of funds from a purchaser.
Upon delivery of a Note to the Presenting Agent,
the Presenting Agent shall promptly deliver such
Note to the purchaser.
In the event any Note is incorrectly prepared, the
Trustee shall promptly issue a replacement Note in
exchange for the incorrectly prepared Note.
Failure to Settle: If the Presenting Agent, at its own option, has
advanced its own funds for payment against
subsequent receipt of funds from a purchaser, and
if such purchaser shall fail to make payment for
the Note on the Settlement Date therefor, the
Presenting Agent will promptly notify the Trustee
and the Issuer by telephone, promptly confirmed in
writing, which may be given by telex or telecopy
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(but no later than the next Business Day). In such
event, the Issuer shall promptly provide the
Trustee with appropriate documentation and
instructions consistent with these procedures for
the return of the Note to the Trustee, and the
Presenting Agent will promptly return the Note to
the Trustee. Upon (i) confirmation from the
Trustee in writing which may be given by telex or
telecopy) that the Trustee has received the Note
and upon (ii) confirmation from the Presenting
Agent in writing (which may be given by telex or
telecopy) that the Presenting Agent has not
received payment from such purchaser (the matters
referred to in clauses (i) and (ii) are referred
to hereinafter as the ("confirmations")), the
Issuer will promptly pay to the Presenting Agent
an amount in immediately available funds equal to
the amount previously paid by the Presenting Agent
in respect of such Note. Assuming receipt of such
Note by the Trustee and of the confirmations by
the Issuer, such payment will be made on the
Settlement Date if reasonably practical, and in
any event not later than the Business Day
following the date of receipt of the Note and the
confirmations. If a purchaser shall fail to make
payment for such Note for any reason other than
the failure of the Presenting Agent to provide the
necessary information to the Issuer as described
above for settlement or to provide a confirmation
to the purchaser within a reasonable period of
time as described above or otherwise to satisfy
its obligations hereunder or in the Agreement, and
if the Presenting Agent shall have otherwise
complied with its obligations hereunder and in the
Agreement, the Issuer will reimburse the
Presenting Agent for its loss of the use of funds
during the period when they were credited to the
account of the Issuer.
Immediately upon receipt of the Note in respect of
which the failure occurred, the Trustee will void
said Note, make appropriate entries in its records
and destroy such Note; and upon such action, such
Note will be deemed not to have been issued,
authenticated or delivered.
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Exhibit B
SOUTH JERSEY GAS COMPANY
Secured Medium Term Notes, Series A
Due from One Year to Forty Years
from Date of Issue
TERMS AGREEMENT
South Jersey Gas Company
Number One South Jersey ▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
____________, 2002
Attention:
Subject in all respects to the terms and conditions of the Distribution
Agreement (the "Agreement") dated __________, 2002, among UBS Warburg LLC,
Wachovia Securities, Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. and you, the undersigned
agrees to purchase the following Notes of:
Aggregate Principal Amount:
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
[Redemption Dates and Prices:]
[Repayment Dates and Prices:]
Purchase Price: % of Principal Amount [Plus accrued interest from
____________, 20___]
Purchase Date and Time:
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Place for Delivery of Notes and
Payment Therefor:
Method of Payment:
Modification, if any, in the
requirements to deliver the
documents specified in
Section 6(b) of the
Agreement:
Period during which
additional Notes may not be
sold pursuant to Section 4(m)
of the Agreement:
[PURCHASER]
By: ___________________________________
Accepted:
By:____________________________
Title:________________________
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