EXHIBIT 4(d)
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GUARANTEE AGREEMENT
between
SOUTH JERSEY GAS COMPANY
(as Guarantor)
and
THE BANK OF NEW YORK
(as Guarantee Trustee)
Dated as of March [ ], 1997
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TABLE OF CONTENTS
ARTICLE I
Definitions
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[CAPTION]
Page
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SECTION 1.01. Definitions............................................... 2
ARTICLE II
Trust Indenture Act
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SECTION 2.01. Trust Indenture Act; Application.......................... 4
SECTION 2.02. List of Holders........................................... 4
SECTION 2.03. Reports by the Guarantee Trustee.......................... 5
SECTION 2.04. Periodic Reports to Guarantee Trustee..................... 5
SECTION 2.05. Evidence of Compliance with Conditions Precedent.......... 5
SECTION 2.06. Events of Default; Waiver................................. 6
SECTION 2.07. Events of Default; Notice................................. 6
SECTION 2.08. Conflicting Interests..................................... 6
SECTION 2.09. Disclosure of Information................................. 6
SECTION 2.10. Guarantee Trustee May File Proofs of Claim................ 7
ARTICLE III
Powers, Duties and Rights of the
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Guarantee Trustee
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SECTION 3.01. Powers and Duties of the Guarantee Trustee................ 7
SECTION 3.02. Certain Rights of Guarantee Trustee....................... 9
SECTION 3.03. Indemnity................................................. 11
ARTICLE IV
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Guarantee Trustee
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SECTION 4.01. Guarantee Trustee; Eligibility............................ 11
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee................................................. 12
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ARTICLE V
Guarantee
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SECTION 5.01. Guarantee................................................. 13
SECTION 5.02. Waiver of Notice and Demand............................... 13
SECTION 5.03. Obligations Not Affected.................................. 13
SECTION 5.04. Rights of Holders......................................... 14
SECTION 5.05. Guarantee of Payment...................................... 14
SECTION 5.06. Subrogation............................................... 15
SECTION 5.07. Independent Obligations................................... 15
ARTICLE VI
Covenants and Subordination
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SECTION 6.01. Subordination............................................. 15
SECTION 6.02. Pari Passu Guarantees..................................... 15
ARTICLE VII
Termination
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SECTION 7.01. Termination................................................ 16
ARTICLE VIII
Miscellaneous
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SECTION 8.01. Successors and Assigns.................................... 16
SECTION 8.02. Amendments................................................ 16
SECTION 8.03. Notices................................................... 17
SECTION 8.04. Benefit................................................... 17
SECTION 8.05. Interpretation............................................ 18
SECTION 8.06. Governing Law............................................. 18
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CROSS-REFERENCE TABLE*
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
310(a) .......................................... 4.01(a)
310(b) .......................................... 4.01(c), 2.08
310(c) .......................................... Inapplicable
311(a) .......................................... 2.02(b)
311(b) .......................................... 2.02(b)
311(c) .......................................... Inapplicable
312(a) .......................................... 2.02(a)
312(b) .......................................... 2.02(b)
313 .......................................... 2.03
314(a) .......................................... 2.04
314(b) .......................................... Inapplicable
314(c) .......................................... 2.05
314(d) .......................................... Inapplicable
314(e) .......................................... 1.01, 2.05, 3.02
314(f) .......................................... 2.01, 3.02
315(a) .......................................... 3.01(d)
315(b) .......................................... 2.07
315(c) .......................................... 3.01
315(d) .......................................... 3.01(d)
316(a) .......................................... 1.01, 2.06, 5.04
316(b) .......................................... 5.03
316(c) .......................................... 8.02
317(a) .......................................... Inapplicable
317(b) .......................................... Inapplicable
318(a) .......................................... 2.01(b)
318(b) .......................................... 2.01
318(c) .......................................... 2.01(a)
__________________
* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
GUARANTEE AGREEMENT, dated as of March [ ], 1997, is
executed and delivered by SOUTH JERSEY GAS COMPANY, a New Jersey
corporation (the "Guarantor"), to THE BANK OF NEW YORK, a New
York banking corporation duly organized and existing under the
laws of the United States of America, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein)
of SJG CAPITAL TRUST, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement for SJG
Capital Trust (the "Trust Agreement"), dated as of March [ ], 1997, among the
Trustees named therein, the Guarantor, as Depositor, and the Holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing $35,000,000 aggregate liquidation amount of its [ ]%
Preferred Securities (liquidation amount of $25 per preferred security) (the
"Preferred Securities") representing undivided beneficial interests in the
assets of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the sale by the Issuer of its
Common Securities will be used to purchase the Debentures (as defined in the
Trust Agreement) of the Guarantor which will be deposited with The Bank of New
York, as Property Trustee under the Trust Agreement, as Trust Property (as
defined in the Trust Agreement); and
WHEREAS as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
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the benefit of the Holders from time to time of the Preferred Securities:
ARTICLE I
Definitions
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SECTION 1.01. Definitions. As used in this Guarantee Agreement, each
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of the terms set forth below shall, unless the context otherwise requires, have
the following meaning. Each capitalized or otherwise defined term used but not
otherwise defined herein shall have the meaning assigned to such term in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the common securities representing undivided
beneficial interests in the assets of the Issuer and having the rights provided
therefor in the Trust Agreement.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided that,
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except with respect to a default resulting from a failure to pay any Guarantee
Payment, the Guarantor shall have received notice of default and shall not have
cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or Distributions (as
defined in the Trust Agreement), without duplication, with respect to the
Preferred Securities, to the extent not paid or made by or on behalf of the
Issuer pursuant to the Trust Agreement: (i) any accumulated and unpaid
Distributions required to be paid on the Preferred Securities, to the extent the
Issuer shall have funds available therefor, (ii) the redemption price, including
all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to the Preferred Securities called for
redemption by the Issuer, to the extent the Issuer shall have funds available
therefor, and (iii) upon a voluntary or involuntary
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termination, winding-up or liquidation of the Issuer, unless Debentures (as
defined in the Trust Agreement) are distributed to the Holders, the lesser of
(a) the aggregate of the liquidation amount of $25 per Preferred Security plus
accumulated and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders upon a termination and liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a Successor
Guarantee Trustee (as defined below) has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Guarantee Trustee.
"Holder" means a Person in whose name a Preferred Security is
registered in the Securities Register; provided, however, that in determining
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whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indenture" means the Indenture dated as of March [ ], 1997, between
South Jersey Gas Company and The Bank of New York, as trustee thereunder.
"List of Holders" has the meaning specified in Section 2.02(a).
"Majority in liquidation amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holders of more
than 50% of the aggregate liquidation amount of all then outstanding Preferred
Securities issued by the Issuer.
"Officers' Certificate" means a certificate signed by (i) the
Chairman, the President, any Vice President, the Treasurer, or any Assistant
Treasurer, and (ii) the Secretary or any Assistant Secretary of the Guarantor.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any Vice President, any Assistant Vice President, any Trust Officer or Assistant
Trust Officer or any other officer of the Corporate Trust Department of the
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Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Senior Indebtedness" means Senior Indebtedness as defined in the
Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
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that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939, as so amended.
ARTICLE II
Trust Indenture Act
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SECTION 2.01. Trust Indenture Act; Application. (a) This Guarantee
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Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02. List of Holders. (a) The Guarantor shall furnish or
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cause to be furnished to the Guarantee Trustee (a) semiannually, on or before
April 30 and October 31 of each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the Holders ("List
of Holders") as of a date not more than 15 days prior to the delivery thereof,
and (b) at such other times as the Guarantee Trustee may request in writing,
within 5 days after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list is
furnished, in each case to the extent such information is in the possession or
control of the Guarantor and is not identical to a previously supplied List of
Holders or has not otherwise been received by the Guarantee Trustee in its
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capacity as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Guarantee Trustee. Within 60 days after
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[April 30] of each year, the Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Guarantee Trustee. The Guarantor
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shall provide to the Guarantee Trustee, the Securities and Exchange Commission
and the Holders such documents, reports and information, if any, as required by
Section 314 of the Trust Indenture Act and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form and manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
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Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Each Officers' Certificate and Opinion of Counsel delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
or Opinion of Counsel has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate or Opinion of Counsel and upon which the statements contained
therein are based;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
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(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority
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in liquidation amount of the Preferred Securities may, by vote, on behalf of the
Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.07. Events of Default; Notice. (a) The Guarantee Trustee
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shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders, notice of all Events of
Default known to the Guarantee Trustee, unless such defaults have been cured
before the giving of such notice, provided that, except in the case of a default
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in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.08. Conflicting Interests. The Trust Agreement shall be
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deemed to be specifically described in this Guarantee Agreement for the purposes
of clause (i) of the first provision contained in Section 310(b) of the Trust
Indenture Act.
SECTION 2.09. Disclosure of Information. The disclosure of
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information as to the names and addresses of the Holders in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law, or any law hereafter enacted which does not specifically refer to Section
312 of the Trust Indenture Act, nor shall the Guarantee Trustee be held
accountable by reason of mailing any material pursuant to a
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request made under Section 312(b) of the Trust Indenture Act.
SECTION 2.10. Guarantee Trustee May File Proofs of Claim. Upon the
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occurrence of an Event of Default, the Guarantee Trustee is hereby authorized to
(a) recover judgment, in its own name and as trustee of an express trust,
against the Guarantor for the whole amount of any Guarantee Payments remaining
unpaid and (b) file such proof of claim and other papers or documents as may be
necessary or advisable in order to have its claims and those of the Holders
allowed in any judicial proceedings relative to the Guarantor, its creditors or
its property.
ARTICLE III
Powers, Duties and Rights of the
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Guarantee Trustee
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SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a) This
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Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of
the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to
Section 5.04(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred and is continuing (and has not been cured or waived pursuant to
Section 2.06), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use in
the conduct of his or her own affairs.
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(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under
this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability
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in the performance of any of its duties or in the exercise of any of its
rights or powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or
reasonable indemnity against such risk or liability is not reasonably
assured to it.
SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject to
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the provisions of Section 3.01:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
advice or Opinion of Counsel with respect to legal matters shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in
accordance with such advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from
any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall
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have provided to the Guarantee Trustee such reasonable indemnity as would
satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction; provided that, nothing contained in this Section 3.02(a)(v)
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shall be taken to relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(ix) The Guarantee Trustee shall have no duty to see to any
recording, filing, or registration of any instrument (or any recording,
refiling or registration thereof).
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform
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any such act or acts or to exercise any such right, power, duty or obligation.
No permissive power or authority available to the Guarantee Trustee shall be
construed to be a duty to act in accordance with such power and authority.
SECTION 3.03. Indemnity. The Guarantor agrees to indemnify the
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Guarantee Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or willful misconduct on the part of the
Guarantee Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payments as a result
of any amount due to it under this Guarantee Agreement. The provisions of this
Section 3.03 shall survive the resignation and removal of the Guarantee Trustee
and the termination of this Guarantee Agreement.
ARTICLE IV
Guarantee Trustee
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SECTION 4.01. Guarantee Trustee; Eligibility. (a) There shall at all
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times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least fifty
million U.S. dollars ($50,000,000), and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority, then,
for the purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time, the Guarantee Trustee shall cease to be eligible
to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.02(c).
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(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act. In determining whether the
Guarantee Trustee has a "conflicting interest" within the meaning of Section
310(b)(1) of the Trust Indenture Act, the provisions contained in the proviso to
Section 310(b)(1) of the Trust Indenture Act and the Guarantee Trustee's
Statement of Eligibility on Form T-1 shall be deemed incorporated herein.
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee
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Trustee. (a) Subject to Section 4.02(b), the Guarantee Trustee may be
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appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a new, eligible
guarantee trustee has been appointed (a "Successor Guarantee Trustee") and has
accepted such appointment and assumed the applicable obligations hereunder by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
(e) The Guarantee Trustee shall not be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee Agreement or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.02, the
Guarantor shall pay to the Guarantee Trustee all amounts owing for fees and
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reimbursement of expenses which have accrued hereunder to the date of such
termination, removal or resignation.
(g) The Guarantor shall promptly notify the Holders of the
resignation, removal or appointment of a Guarantee Trustee.
ARTICLE V
Guarantee
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SECTION 5.01. Guarantee. The Guarantor irrevocably and
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unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Issuer
pursuant to the Trust Agreement or by the Guarantor pursuant to the Indenture),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby
----------------------------
waives notice of acceptance of the Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Guarantee Trustee, the Issuer or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.03. Obligations Not Affected. The obligations, covenants,
-------------------------
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment
of Distributions that results from an Extension Period on the Debentures as
so provided in the Indenture), Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Preferred
14
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, termination, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) to the extent permitted by law, any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense
of a guarantor, it being the intent of this Section 5.03 that the
obligations of the Guarantor hereunder shall be absolute and unconditional
under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly
------------------
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the
Holders; (iii) the Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of this
Guarantee Agreement or exercise or direct the exercise of any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv)
any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Guarantee Trustee, the Issuer or any other Person.
15
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates
---------------------
a guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by or on behalf of the Issuer pursuant
to the Trust Agreement or by the Guarantor pursuant to the Indenture) or upon
distribution of Debentures to Holders as provided in the Trust Agreement.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all
------------
rights (if any) of the Holders against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement and shall have
the right to waive payment by the Issuer pursuant to Section 5.01; provided,
--------
however, that the Guarantor shall not (except to the extent required by
-------
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor acknowledges
------------------------
that its obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Securities and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
Covenants and Subordination
---------------------------
SECTION 6.01. Subordination. This Guarantee Agreement shall
--------------
constitute an unsecured obligation of the Guarantor and shall rank subordinate
and junior in right of payment to all general liabilities of the Guarantor.
SECTION 6.02. Pari Passu Guarantees. This Guarantee Agreement shall
----------------------
rank pari passu with any similar guarantee agreements issued by the Guarantor on
---- -----
behalf of the holders of preferred or capital securities issued by the Issuer
and with any other security, guarantee or other obligation that is expressly
stated to rank pari passu with
---- -----
16
the obligations of the Guarantor under this Guarantee Agreement.
ARTICLE VII
Termination
-----------
SECTION 7.01. Termination. This Guarantee Agreement shall terminate
------------
and be of no further force and effect upon (i) full payment by the Issuer or the
Guarantor, as the case may be, of the Redemption Price for all Preferred
Securities, (ii) the distribution of the Debentures to the Holders in exchange
for all of the Preferred Securities or (iii) full payment by the Issuer or the
Guarantor, as the case may be, of the amounts payable in accordance with Article
VIII of the Trust Agreement upon liquidation of the Issuer. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to Preferred Securities or this Guarantee
Agreement.
ARTICLE VIII
Miscellaneous
-------------
SECTION 8.01. Successors and Assigns. All guarantees and agreements
-----------------------
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. The
Guarantor may not consolidate with or merge with or into, or sell, convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety (either in one transaction or a series of transactions) to, any
Person unless permitted under Article Five of the Indenture. In connection with
a consolidation, merger or sale involving the Guarantor that is permitted under
Article Five of the Indenture, the Person formed by or surviving such
consolidation or merger or to which such sale, conveyance, transfer or lease
shall have been made, if other than the Guarantor, shall expressly assume all of
the obligations of the Guarantor hereunder and under the Trust Agreement.
SECTION 8.02. Amendments. Except with respect to any changes which
-----------
do not adversely affect the rights of the Holders in any material respect (in
which case no consent of the Holders will be required), this Guarantee Agreement
may only be amended with the prior approval of the Holders of a Majority in
liquidation amount of the Preferred Securities
17
(excluding any Preferred Securities held by the Guarantor or any affiliate
thereof). The provisions of Article VI of the Trust Agreement concerning
meetings of the Holders shall apply to the giving of such approval.
SECTION 8.03. Notices. Any notice, request or other communication
--------
required or permitted to be given hereunder shall be in writing and delivered,
telecopied or mailed by first class mail, postage prepaid, as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Holders:
South Jersey Gas Company
Number Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 00
Xxxxxx, XX 00000
Facsimile No: 000-000-0000
Attention of Assistant Secretary
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
SJG Capital Trust
Number Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 00
Xxxxxx, XX 00000
Facsimile No: 000-000-0000
Attention of Assistant Secretary
with a copy to:
The Bank of New York
000 Xxxxxxx Xxxxxx 00X
Xxx Xxxx, XX 00000
Facsimile No:(000) 000-0000 or (000) 000-0000
Attention of Corporate Finance Unit
(c) if given to any Holder, at the address set forth in the
Securities Register.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be
18
deemed to have been delivered on the date of such refusal or inability to
deliver.
SECTION 8.04. Benefit. This Guarantee Agreement is solely for the
--------
benefit of the Holders and is not separately transferable from the Preferred
Securities.
SECTION 8.05. Interpretation. In this Guarantee Agreement, unless
---------------
the context otherwise requires:
(a) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(b) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(c) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(d) a reference to the singular includes the plural and vice versa;
and
(e) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06. GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
--------------
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW JERSEY AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW JERSEY WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
19
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
SOUTH JERSEY GAS COMPANY,
as Guarantor,
by
____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Guarantee Trustee,
by
____________________________
Name:
Title:
