FIRST SUPPLEMENT
TO INDENTURE OF TRUST, DATED AS OF OCTOBER 1, 1998
THIS FIRST SUPPLEMENT TO INDENTURE OF TRUST, dated as of June 29, 2000,
(this "First Supplement") between SOUTH JERSEY GAS COMPANY, a corporation
organized and existing under the laws of the State of New Jersey (the
"Company"), and THE BANK OF NEW YORK, a New York banking corporation, as trustee
(the "Trustee") under the Indenture of Trust hereinafter mentioned.
WITNESSETH
WHEREAS, the Company has heretofore duly executed, acknowledged and
delivered to the Trustee, a certain Indenture of Trust, dated as of October 1,
1998 (the "Original Indenture" and as supplemented by this First Supplement, the
"Indenture") to provide for the issuance of its Secured Medium Term Notes; and
WHEREAS, the Company is making provisions for the issuance and sale of its
Secured Medium Term Notes, Series A, 2000-1, Series A, 2000-2 and Series A,
2000-3 to be issued under the Indenture, which notes (the "Insured Notes") shall
be insured by Ambac Assurance Corporation; and
WHEREAS, Ambac Assurance Corporation requires the addition of certain
provisions to the Indenture set forth in this First Supplement in connection
with its issuance of a financial guaranty insurance policy with respect to such
insurance; and
WHEREAS, the execution and delivery of this First Supplement have been duly
authorized by the Board of Directors of the Company at a meeting duly called and
held according to law; and
WHEREAS, all acts and things prescribed by law, by the charter and bylaws
of the Company and by the Indenture necessary to make the Insured Notes, when
executed by the Company and authenticated by the Trustee as provided in the
Indenture, valid, binding and legal obligations of the Company, and to make this
First Supplement a valid, binding and legal instrument in accordance with its
terms, have been done, performed and fulfilled, and the execution and delivery
hereof have been in all respects duly authorized.
NOW THEREFORE, THIS FIRST SUPPLEMENT TO INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Insured
Notes are to be authenticated, issued and delivered and in consideration of the
premises and of the purchase and acceptance of the Insured Notes by the
Noteholders thereof and the sum of One Dollar duly paid to it by the Trustee at
the execution of this First Supplement, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective Noteholders from time to time of
Insured Notes, as
follows (Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Indenture):
ARTICLE ONE
ADDITIONAL DEFINITIONS
SECTION 1.1 DEFINITIONS
AMBAC ASSURANCE
The term "Ambac Assurance" shall mean Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance company, and its successors and assigns.
FINANCIAL GUARANTY INSURANCE POLICY
The term "Financial Guaranty Insurance Policy" shall mean the financial
guaranty insurance policy issued by Ambac Assurance insuring the payment when
due of the principal of and interest on the Insured Notes as provided therein.
INSURED NOTEHOLDER
The term "Insured Noteholder" shall mean a Noteholder of the Insured Notes.
ARTICLE TWO
AMBAC CONSENT
SECTION 2.1 CONSENT OF AMBAC ASSURANCE
Any provision of the Indenture expressly recognizing or granting rights in
or to Ambac Assurance may not be amended in any manner which affects the rights
of Ambac Assurance hereunder without the prior written consent of Ambac
Assurance.
SECTION 2.2 CONSENT OF AMBAC ASSURANCE IN ADDITION TO
INSURED NOTEHOLDER CONSENT
Unless otherwise provided in this Section, Ambac Assurance's consent shall
be required in addition to any requisite Insured Noteholder consent for the
following purposes: (i) the execution and delivery of any supplemental Indenture
or any amendment, supplement or change to or modification of the Indenture that
affects Ambac Assurance or the Insured Noteholders; (ii) the removal of the
Trustee and selection and appointment of any successor trustee; and (iii) the
initiation or approval of any action not described in (i) or (ii) above which
requires consent of the Insured Noteholders.
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SECTION 2.3 CONSENT OF AMBAC ASSURANCE UPON DEFAULT;
ACCELERATION RIGHTS
(a) Anything in the Indenture to the contrary notwithstanding, upon the
occurrence and continuance of an Event of Default, Ambac Assurance shall be
entitled to control and direct the enforcement of all rights and remedies
granted to the Insured Noteholders or the Trustee for the benefit of the Insured
Noteholders under the Indenture, only to the extent the Insured Noteholders had
such rights and remedies under the Indenture, including, without limitation: (i)
the right to accelerate the principal of the Insured Notes as described in the
Indenture; and (ii) the right to annul any declaration of acceleration, and
Ambac Assurance shall also be entitled to approve all waivers of Events of
Default by or on behalf of the Insured Noteholders.
(b) Upon the occurrence of an Event of Default which is continuing, the
Trustee may, with the consent of Ambac Assurance, and shall, at the direction of
Ambac Assurance or a majority of the Insured Noteholders with the consent of
Ambac Assurance, by written notice to the Company and Ambac Assurance, declare
the principal of the Insured Notes to be immediately due and payable, whereupon
that portion of the principal of the Insured Notes thereby coming due and the
interest thereon accrued to the date of payment shall, without further action,
become and be immediately due and payable, anything in the Indenture or in the
Insured Notes to the contrary notwithstanding.
ARTICLE THREE
NOTICES/INFORMATION TO BE GIVEN TO AMBAC
SECTION 3.1 INFORMATION FOR SURVEILLANCE DEPARTMENT
As long as the Financial Guaranty Insurance Policy is in effect, the
Company or the Trustee, as appropriate, shall furnish to the Surveillance
Department of Ambac Assurance:
(a) as soon as practicable after the filing thereof with the
Securities and Exchange Commission, a copy of any financial statements of the
Company and a copy of any audit and annual report of the Company filed
therewith;
(b) such additional information Ambac Assurance may reasonably
request; and
(c) a copy of any notice to be given to the registered owners of the
Insured Notes, including without limitation, notice of any redemption of or
defeasance of any Insured Notes, and any certificate rendered pursuant to the
Indenture relating to the security for the Insured Notes.
SECTION 3.2 INFORMATION FOR GENERAL COUNSEL'S OFFICE
(a) The Trustee or the Company, as appropriate, shall notify the General
Counsel's Office of Ambac Assurance of any failure of the Company to provide
relevant notices, certificates, or other documents required to be provided under
the Indenture with respect to the Notes.
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(b) Notwithstanding any other provision of the Indenture, the Trustee or
the Company, as appropriate, shall promptly notify the General Counsel's Office
of Ambac Assurance if at any time there are insufficient moneys to make any
payments of principal and/or interest as required with respect to the Insured
Notes and promptly upon the occurrence of any Event of Default under the
Indenture.
SECTION 3.3 OTHER INFORMATION RIGHTS
The Company will permit Ambac Assurance to discuss the affairs, finances
and accounts of the Company or any information Ambac Assurance may reasonably
request regarding the security for the Insured Notes with appropriate officers
of the Company. The Trustee or the Company, as appropriate, will permit Ambac
Assurance to have access to and to make copies of all books and records relating
to the Insured Notes at any reasonable time. Ambac Assurance will keep all such
information confidential and will use such information solely for purposes of
monitoring its responsibilities with respect to the Insured Notes.
ARTICLE FOUR
DEFEASANCE
SECTION 4.1 DEFEASANCE
(a) The definition of "Outstanding" in the Indenture with respect to the
Insured Notes shall include Insured Notes as described in Section 4.1 (b) below.
(b) Notwithstanding anything herein to the contrary, in the event that the
principal and/or interest due on the Insured Notes shall be paid by Ambac
Assurance pursuant to the Financial Guaranty Insurance Policy, the Insured Notes
shall (i) remain Outstanding for all purposes; (ii) not be defeased or otherwise
satisfied; and (iii) not be considered paid by the Company, and the assignment
and pledge of the Pledged First Mortgage Bond and all covenants, agreements and
other obligations of the Company to the registered owners of the Insured Notes
shall continue to exist and shall run to the benefit of Ambac Assurance, and
Ambac Assurance shall be subrogated to the rights of such registered owners.
ARTICLE FIVE
PAYMENT PROCEDURE PURSUANT TO THE FINANCIAL GUARANTY INSURANCE POLICY
SECTION 5.1 PROCEDURES
As long as the insurance on the Insured Notes shall be in full force and
effect, the Company and the Trustee agree to comply with the following
provisions:
(a) At least one (1) day prior to all Interest Payment Dates with respect
to any Insured Notes, the Trustee or paying agent, if any, will determine
whether there will be sufficient funds
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available to pay the principal of or interest on the Insured Notes on such
Interest Payment Date. If the Trustee or paying agent, if any, determines that
there will be insufficient funds available, the Trustee or paying agent, if any,
shall so notify Ambac Assurance. Such notice shall specify the amount of the
anticipated deficiency, the Insured Notes to which such deficiency is applicable
and whether such Insured Notes will be deficient as to principal or interest, or
both. If the Trustee or paying agent, if any, has not so notified Ambac
Assurance at least one (1) day prior to an Interest Payment Date, Ambac
Assurance will make payments of principal or interest due on the Insured Notes
on or before the first (1st) day next following the date on which Ambac
Assurance shall have received notice of nonpayment from the Trustee or paying
agent, if any.
(b) The Trustee or paying agent, if any, shall, after giving notice to
Ambac Assurance as provided in Section 5.1(a) above, make available to Ambac
Assurance and, at Ambac Assurance's direction, to the United States Trust
Company of New York, as insurance trustee for Ambac Assurance or any successor
insurance trustee (the "Insurance Trustee"), the registration books of the
Company maintained by the Trustee or paying agent, if any, and all records
relating to the Insured Notes maintained under the Indenture.
(c) The Trustee or paying agent, if any, shall provide Ambac Assurance and
the Insurance Trustee with a list of registered owners of Insured Notes entitled
to receive principal or interest payments from Ambac Assurance under the terms
of the Financial Guaranty Insurance Policy, and shall make arrangements with the
Insurance Trustee (i) to mail checks to the registered owners of Insured Notes
entitled to receive full or partial interest payments from Ambac Assurance and
(ii) to pay principal upon Insured Notes surrendered to the Insurance Trustee by
the registered owners of Insured Notes entitled to receive full or partial
principal payments from Ambac Assurance.
(d) The Trustee or paying agent, if any, shall, at the time it provides
notice to Ambac Assurance pursuant to Section 5.1(a) above, notify registered
owners of Insured Notes entitled to receive the payment of principal or interest
thereon from Ambac Assurance (i) as to the fact of such entitlement; (ii) that
Ambac Assurance will remit to them all or a part of the interest payments next
coming due upon proof of Insured Noteholder entitlement to interest payments and
delivery to the Insurance Trustee, in form reasonably satisfactory to the
Insurance Trustee, of an appropriate assignment of the registered owner's right
to payment; (iii) that should they be entitled to receive full payment of
principal from Ambac Assurance, they must surrender their Insured Notes (along
with an appropriate instrument of assignment in form reasonably satisfactory to
the Insurance Trustee to permit ownership of such Insured Notes to be registered
in the name of Ambac Assurance) for payment to the Insurance Trustee, and not
the Trustee or paying agent, if any, and (iv) that should they be entitled to
receive partial payment of principal from Ambac Assurance, they must surrender
their Insured Notes for payment thereon first to the Trustee or paying agent, if
any, who shall note on such Insured Notes the portion of the principal paid by
the Trustee or paying agent, if any, and then, along with an appropriate
instrument of assignment in form reasonably satisfactory to the Insurance
Trustee, to the Insurance Trustee, which will then pay the unpaid portion of
principal.
(e) In the event that the Trustee or paying agent, if any, has notice that
any payment of principal of or interest on an Insured Note which has become due
for payment and which is made to
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an Insured Noteholder by or on behalf of the Company has been deemed a
preferential transfer and theretofore recovered from its registered owner
pursuant to the United States Bankruptcy Code or any other federal or state
bankruptcy, insolvency or preferential payment statute by a trustee in
bankruptcy or other appropriate person in accordance with the final,
nonappealable order of a court having competent jurisdiction, the Trustee or
paying agent, if any, shall, at the time Ambac Assurance is notified pursuant to
(a) above, notify all registered owners that in the event that any registered
owner's payment is so recovered, such registered owner will be entitled to
payment from Ambac Assurance to the extent of such recovery if sufficient funds
are not otherwise available, and the Trustee or paying agent, if any, shall
furnish to Ambac Assurance its records evidencing the payments of principal of
and interest on the Insured Notes which have been made by the Trustee or paying
agent, if any, and subsequently recovered from registered owners and the dates
on which such payments were made.
(f) In addition to those rights granted Ambac Assurance under the
Indenture, Ambac Assurance shall, to the extent it makes payment of principal of
or interest on Insured Notes, become subrogated to the rights of the recipients
of such payments in accordance with the terms of the Financial Guaranty
Insurance Policy, and to evidence such subrogation (i) in the case of
subrogation as to claims for past due interest, the Trustee or paying agent, if
any, shall note Ambac Assurance's rights as subrogee on the registration books
of the Company maintained by the Trustee or paying agent, if any, upon receipt
from Ambac Assurance of proof of the payment of interest thereon to the
registered owners of the Insured Notes; and (ii) in the case of subrogation as
to claims for past due principal, the Trustee or paying agent, if any, shall
note Ambac Assurance's rights as subrogee on the registration books of the
Company maintained by the Trustee or paying agent, if any, upon surrender of the
Insured Notes by the registered owners thereof together with proof of the
payment of principal thereof.
ARTICLE SIX
TRUSTEE-RELATED PROVISIONS
SECTION 6.1 SPECIAL RULES REGARDING TRUSTEE
(a) The Trustee or paying agent, if any, may be removed only with the
consent of Ambac Assurance, for any breach of the obligations set forth in the
Indenture.
(b) Ambac Assurance shall receive prior written notice from the Company of
the resignation of any Trustee or paying agent, if any.
(c) Every successor Trustee appointed pursuant to Section 9.11 of the
Indenture shall be a trust company or bank in good standing located in or
incorporated under the laws of the state of its organization, duly authorized to
exercise trust powers and subject to examination by federal or state authority,
having a reported capital and surplus of not less than $50,000,000 and
reasonably acceptable to Ambac Assurance. Any successor paying agent, if
applicable, shall not be appointed unless Ambac Assurance approves such
successor in writing, such approval not to be unreasonably withheld.
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(d) Notwithstanding any other provision of the Indenture, in determining
whether the rights of the Insured Noteholders will be adversely affected by any
action taken pursuant to the terms and provisions of the Indenture, the Trustee
(or paying agent) shall consider the effect on the Insured Noteholders as if
there were no Financial Guaranty Insurance Policy.
(e) Notwithstanding any other provision of the Indenture, no removal,
resignation or termination of the Trustee or paying agent, if any, with respect
to any Insured Notes shall take effect until a successor, reasonably acceptable
to Ambac, shall be appointed. If a successor Trustee has not been accepted by
Ambac Assurance within 60 days after a notice of removal or resignation has been
delivered, the Trustee may petition a court of competent jurisdiction at the
expense of the Company to appoint a successor trustee.
ARTICLE SEVEN
INTERESTED PARTIES
SECTION 7.1 AMBAC ASSURANCE AS THIRD PARTY BENEFICIARY
To the extent that the Indenture confers upon or gives or grants to Ambac
Assurance any right, remedy or claim under or by reason of the Indenture, Ambac
Assurance is hereby explicitly recognized as being a third-party beneficiary
hereunder and may enforce any such right remedy or claim conferred, given or
granted hereunder.
SECTION 7.2 PARTIES INTERESTED IN THE INDENTURE
Nothing in the Indenture expressed or implied is intended or shall be
construed to confer upon, or to give or grant to, any person or entity, other
than the Company, the Trustee, Ambac Assurance, the paying agent, if any, and
the registered owners of all Notes, any right, remedy or claim under or by
reason of the Indenture or any covenant, condition or stipulation of the
Indenture, and all covenants, stipulations, promises and agreements in the
Indenture contained by and on behalf of the Company shall be for the sole and
exclusive benefit of the Company, the Trustee, Ambac Assurance, the paying
agent, if any, and the registered owners of the Notes.
ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.1 EFFECT ON INDENTURE
As supplemented by the First Supplement, the Indenture is in all respects
ratified and confirmed, and the Indenture, including the First Supplement, shall
be read as one instrument. All terms used in the First Supplement shall have the
same meaning as used elsewhere in the Indenture except where the context clearly
indicates otherwise.
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SECTION 8.2 COUNTERPARTS
The First Supplement may be executed in several counterparts, each of which
shall be considered an original and all collectively as one and the same
instrument.
SECTION 8.3 TERMINATION
All rights granted to Ambac Assurance hereunder shall terminate and be of
no further force and effect at the time that there are no Insured Notes
outstanding under the Indenture.
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IN WITNESS WHEREOF, South Jersey Gas Company has caused this First
Supplement to the Indenture to be signed and acknowledged by one of its Vice
Presidents and attested by its Secretary, and The Bank of New York has caused
this Indenture to be signed by one of its authorized signatories, as of the day
and year first written above.
SOUTH JERSEY GAS COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxx
Senior Vice President,
Finance and Rates
ATTEST: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Xxxxxxx X. Xxxxxx
Assistant Secretary
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THE BANK OF NEW YORK
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxx
Title: Assistant Treasurer
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