South Jersey Gas Company Secured Medium Term Notes, Series C Due From One Year to Forty Years From Date of Issue Distribution Agreement
South
Jersey Gas Company
Secured
Medium Term Notes, Series C
Due
From
One Year to Forty Years
From
Date
of Issue
UBS
Securities LLC
Wachovia
Capital Markets, LLC
▇▇▇▇▇▇
▇.
▇▇▇▇▇ & Co., L.P.
A.G.
▇▇▇▇▇▇▇ & Sons, Inc.
c/o
UBS
Securities LLC
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
Stamford,
Connecticut 06901
September
8, 2005
Ladies
and Gentlemen:
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 C, 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 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: 333-126822), 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).
-2-
(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 four supplemental indentures, including the Twenty-Fourth Supplemental
Indenture, dated as of September 1, 2005 (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 common 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.
-3-
(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 June 8, 2005, 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.
The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorization, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization and (iv) amounts reflected on the Company’s balance
sheet for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
-4-
(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 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.
-5-
(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 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.
-6-
(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. 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 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.
-7-
(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 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.
-8-
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.
-9-
(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:
-10-
(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 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 reasonably 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.
-11-
(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 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 or taxation 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.
-12-
(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 reasonable 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
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.
-13-
(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
reasonably 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 reasonably
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 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 reasonably 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.
-14-
(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
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 State of New Jersey, with full corporate power
and corporate authority to own its properties and conduct its business as
described in the Prospectus. To such counsel’s knowledge, 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 common 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 common 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;
-15-
(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 required with respect to such authorization) and
has
been duly executed and delivered by authorized officers of the Company, and
the
Indenture, the Mortgage (including the New Supplement), the Notes and the
Pledged Bond are each valid and binding instruments enforceable against the
Company 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;”
-16-
(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 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;
(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, to such counsel’s knowledge, within the time period
required by Rule 424(b); to the knowledge of such counsel, (a) no stop
order suspending the effectiveness of the Registration Statement has been
issued, and (b) 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 corporate 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 June 8, 2005, 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. To such counsel’s knowledge,
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,
in any such case 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;
-18-
(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 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
to
such counsel’s knowledge, 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 and the UCC-1 financing statement constitute a valid first mortgage
lien or first security interest 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
and the UCC-1 financing statement have been duly filed for recording and filing
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).
-19-
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 ▇▇▇▇▇▇ LLP, 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 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;
-20-
(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, capital 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
(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;
-21-
(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 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 ▇▇▇▇▇▇ LLP, counsel for the Agents, at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at the Execution Time.
-22-
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 ▇▇▇▇▇▇ LLP, 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 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.
-23-
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 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)
-24-
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 reasonably satisfactory to such indemnified party;
provided,
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 reasonably 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.
-25-
(d) If
the
indemnification provided for in this Section 8 is unavailable to an indemnified
party under paragraphs (a) and (b) of this Section 8 or insufficient to hold
an
indemnified party harmless in respect of any losses, damages, expenses,
liabilities or claims referred to therein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, damages, expenses, liabilities or claims (i) in
such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Agents on the other hand from the offering
of
the Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Agents on the other in
connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the
one hand and the Agents on the other shall be deemed to be in the same
respective proportions as the total proceeds from the offering (net of
commissions but before deducting expenses) received by the Company bears to
the
total commissions received by the Agents with respect to such offering. The
relative fault of the Company on the one hand and of the Agents on the other
shall be determined by reference to whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state
a
material fact relates to information supplied by the Company or by the Agents
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
or
payable by a party as a result of the losses, damages, expenses, liabilities
and
claims referred to in this subsection shall be deemed to include any legal
or
other fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any proceeding.
(e) The
Company
and the Agents agree that it would not be just and equitable if contribution
pursuant to paragraph (d) above were determined by pro rata allocation (even
if
the Agents were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. Notwithstanding the provisions of this
Section 8, no Agent shall be required to contribute any amount in excess of
the
amount by which the total price at which the Notes sold through the Agents
and
distributed to the public were offered to the public exceeds the amount of
any
damage which the Agents have otherwise been required to pay by reason of such
untrue statement or alleged untrue statement or omission or alleged omission.
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. The respective Agents’ obligations
pursuant to this Section 8 are several and not joint.
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 the penultimate sentence of paragraph (e) above. Any party
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
paragraph (d) above, 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
paragraph (d) above.
-26-
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.
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.
-27-
11.
NO
FIDUCIARY DUTY.
The
Company acknowledges and agrees that the Agents are acting solely in the
capacity of an arm’s length contractual counterparty to the Company with respect
to the offering of Notes contemplated hereby and not as a financial advisor
or a
fiduciary to the Company or any other person. Additionally, the Agents are
not
advising the Company or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company shall consult
with its own advisors concerning such matters and shall be responsible for
making their own independent investigation and appraisal of the transactions
contemplated hereby, and the Agents shall have no responsibility or liability
to
the Company with respect thereto. Any review by the Agents of the Company,
the
transactions contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Agents and shall not be on
behalf of the Company.
12.
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 ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, 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.
13.
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.
14.
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:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its:
Executive
Vice President and CFO
-29-
The
foregoing Agreement is hereby confirmed and accepted as of the date
hereof.
UBS
Securities LLC
By:
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇
Its:
Executive Director
By:
/s/
▇▇▇▇ ▇▇▇▇▇▇
Its:
Associate
Director
Wachovia
Capital Markets, LLC
By:
/s/
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its:
Managing
Director
▇▇▇▇▇▇
▇.
▇▇▇▇▇ & Co., L.P.
By:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Principal
▇.▇.
▇▇▇▇▇▇▇ & Sons, Inc.
By:
/s/
▇▇▇ ▇▇▇▇▇
Its:
Managing
Director - Investment Banking
-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 Securities LLC shall be directed to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: Syndicate Desk.
Notices
to Wachovia Capital Markets, LLC shall be directed to it at One First Union
Center, TW-10, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Utilities and Strategic Finance.
Notices
to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. shall be directed to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
Notices
to ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. shall be directed to it at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Taxable Debt Syndicate.
-31-
Exhibit
A
Medium
Term Note Administrative Procedures
September 8,
2005
The
Secured Medium-Term Notes, Series C (the “Notes”)
are to
be offered on a continuing basis, unless suspended pursuant to Section 2(a)
of the Agreement (as defined below). UBS Securities LLC, Wachovia Capital
Markets, LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. and ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.,
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 Director, Finance. 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.
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:
|
|
If
UBS Securities LLC is the Presenting Agent, to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇.,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Syndicate Desk. Facsimile number (▇▇▇)
▇▇▇-▇▇▇▇.
|
-2-
|
If
Wachovia Capital Markets, LLC. 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 (▇▇▇) ▇▇▇-▇▇▇▇.
|
|
If
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. is the Presenting Agent, to it at ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Taxable Debt Syndicate.
Facsimile number (▇▇▇) ▇▇▇-▇▇▇▇.
|
|
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.
|
-3-
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 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 Securities LLC is the Presenting Agent, to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇.,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Syndicate Desk. Facsimile number (▇▇▇)
▇▇▇-▇▇▇▇.
|
|
If
Wachovia Capital Markets, LLC is the Presenting Agent, to it at One
First
Union Center, TW-10, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Utilities and Strategic Finance. Facsimile number (▇▇▇)
▇▇▇-▇▇▇▇.
|
|
If
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. is the Presenting Agent, to it at ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
Facsimile number (▇▇▇) ▇▇▇-▇▇▇▇.
|
|
If
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. is the Presenting Agent, to it at ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Taxable Debt Syndicate.
Facsimile number (▇▇▇)
▇▇▇-▇▇▇▇.
|
-4-
|
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.
|
|
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.
|
-5-
|
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.
|
|
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, to be dated July 16, 2003 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.
|
-6-
|
Identification:
|
The
Issuer has arranged with the CUSIP Service Bureau of Standard & Poor’s
Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇ (the “CUSIP
Service 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 behalf of beneficial transferors and
transferees of such Book-Entry
Note.
|
-7-
|
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 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.
|
-8-
|
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 Interest:
|
Payments
of Interest Only.
Not later than five 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 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.”
|
-9-
|
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 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.
|
-10-
|
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).
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.
|
-11-
|
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.
|
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.
|
-12-
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
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 Timetable:
|
For
orders of Notes accepted by the Company, 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:
|
-13-
|
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.
|
-14-
|
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
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.
|
-15-
|
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 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).
|
-16-
|
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.
|
|
6.
|
The
Trade Date.
|
|
7.
|
The
Settlement Date.
|
|
8.
|
The
Presenting Agent’s commission, determined as provided in Schedule I to the
Agreement.
|
-17-
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:
|
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.
|
-18-
|
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 (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.
|
Exhibit
B
South
Jersey Gas Company
Secured
Medium Term Notes, Series C
Due
from
One Year to Forty Years
from
Date
of Issue
Terms
Agreement
South
Jersey Gas Company
Number
One South Jersey Plaza
Route
54
Folsum,
NJ 08037
September __,
2005
Attention:
Subject
in all respects to the terms and conditions of the Distribution Agreement (the
“Agreement”)
dated
September __, 2005, among UBS Securities LLC, Wachovia Capital Markets,
LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P., ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. 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:
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:________________________