SUPPLEMENTAL MORTGAGE
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Supplemental Indenture
Dated April 1, 1997
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SUPPLEMENTAL TO
FIRST AND REFUNDING MORTGAGE
DATED AUGUST 1, 1924
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PUBLIC SERVICE ELECTRIC AND GAS COMPANY
To
FIRST UNION NATIONAL BANK
Trustee
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
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Providing for the issue of
First and Refunding Mortgage Bonds,
Pollution Control Series X
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RECORD IN MORTGAGE BOOK AND RETURN TO:
XXXXX X. XXXXX, ESQ.
80 PARK PLAZA, T5B
X.X. XXX 000
XXXXXX, X.X. 00000
This instrument prepared by
/s/ Xxxxxx X. Xxxxx
-----------------------
(XXXXXX X. XXXXX, ESQ.)
TABLE OF CONTENTS
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Page
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RECITALS ............................................................. 1
FORM OF BOND ......................................................... 4
FORM OF CERTIFICATE OF AUTHENTICATION ................................ 9
GRANTING CLAUSES ..................................................... 9
ARTICLE I.
BONDS OF POLLUTION CONTROL SERIES X.
DESCRIPTION OF POLLUTION CONTROL SERIES X ............................ 11
ARTICLE II.
REDEMPTION OF BONDS -- POLLUTION CONTROL SERIES X.
SECTION 2.01. Redemption -- Redemption Prices ...................... 12
SECTION 2.02. Notice of Redemption ................................. 15
SECTION 2.03. Interest on Called Bonds to Cease .................... 17
SECTION 2.04. Bonds Called in Part ................................. 17
SECTION 2.05. Provisions of Indenture not Applicable ............... 17
ARTICLE III.
CREDITS WITH RESPECT TO THE BONDS
OF THE POLLUTION CONTROL SERIES X.
SECTION 3.01. Credits .............................................. 18
SECTION 3.02. Certificate of the Company ........................... 18
ARTICLE IV.
MISCELLANEOUS.
SECTION 4.01. Authentication of Bonds of Pollution Control
Series X ........................................ 19
SECTION 4.02. Additional Restrictions on Authentication of
Additional Bonds Under Indenture ................ 19
SECTION 4.03. Restriction on Dividends ............................. 20
SECTION 4.04. Use of Facsimile Seal and Signatures ................. 20
SECTION 4.05. Effective Period of Supplemental Indenture ........... 20
SECTION 4.06. Time for Making of Payment ........................... 20
SECTION 4.07. Effect of Approval of Board of Public
Utilities of the State of New Jersey ............ 21
SECTION 4.08. Execution in Counterparts ............................ 21
Acknowledgments ...................................................... 22
Certificate of Residence ............................................. 24
SUPPLEMENTAL INDENTURE, dated the 1st day of April, 1997, for convenience
of reference and effective from the time of execution and delivery hereof,
between PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a corporation organized under
the laws of the State of New Jersey, hereinafter called the "Company", party of
the first part, and FIRST UNION NATIONAL BANK, a national banking association
organized under the laws of the United States of America, as Trustee under the
indenture dated August 1, 1924, below mentioned, hereinafter called the
"Trustee", party of the second part.
WHEREAS, on July 25, 1924, the Company executed and delivered to Fidelity
Union Trust Company (now known as First Union National Bank), a certain
indenture dated August 1, 1924 (hereinafter called the "Indenture"), to secure
and to provide for the issue of First and Refunding Mortgage Gold Bonds of the
Company; and
WHEREAS, the Indenture has been recorded in the following counties of the
State of New Jersey, in the offices, and therein in the books and at the pages,
as follows:
Page
County Office Book Number Number
------ ------ ----------- ------
Atlantic Clerk's 1955 of Mortgages 160
Bergen Clerk's 94 of Chattel Mortgages 123 etc.
693 of Mortgages 88 etc.
Burlington Clerk's 52 of Chattel Mortgages Folio 8 etc.
177 of Mortgages Folio 354 etc.
Camden Register's 45 of Chattel Mortgages 184 etc.
239 of Mortgages 1 etc.
Cumberland Clerk's 786 of Mortgages 638 & c.
Essex Register's 437 of Chattel Mortgages 1-48
T-51 of Mortgages 341-392
Gloucester Clerk's 34 of Chattel Mortgages 123 etc.
142 of Mortgages 7 etc.
Xxxxxx Register's 453 of Chattel Mortgages 9 etc.
1245 of Mortgages 484 etc.
Hunterdon Clerk's 151 of Mortgages 344
Xxxxxx Clerk's 67 of Chattel Mortgages 1 etc.
384 of Mortgages 1 etc.
Middlesex Clerk's 113 of Chattel Mortgages 3 etc.
437 of Mortgages 294 etc.
Monmouth Clerk's 951 of Mortgages 291 & x.
Xxxxxx Clerk's N-3 of Chattel Mortgages 446 etc.
F-10 of Mortgages 269 etc.
Ocean Clerk's 1809 of Mortgages 40
Passaic Register's M-6 of Chattel Mortgages 178 etc.
2
Page
County Office Book Number Number
------ ------ ----------- ------
R-13 of Mortgages 268 etc.
Salem Clerk's 267 of Mortgages 249 & c.
Somerset Clerk's 46 of Chattel Mortgages 207 etc.
N-10 of Mortgages 1 etc.
Sussex Clerk's 123 of Mortgages 10 & c.
Union Register's 128 of Chattel Mortgages 28 & c.
664 of Mortgages 259 etc.
Xxxxxx Clerk's 124 of Mortgages 141 etc.
and
WHEREAS, the Indenture has also been recorded in the following counties of
the Commonwealth of Pennsylvania, in the offices, and therein in the books and
at the pages, as follows:
Page
County Office Book Number Number
------ ------ ----------- ------
Xxxxx Recorder's 22 of Mortgages 105
Xxxxxxxxx Recorder's 208 of Mortgages 381
Bedford Recorder's 90 of Mortgages 917
Xxxxx Recorder's 671 of Mortgages 430
Cambria Recorder's 407 of Mortgages 352
Cumberland Recorder's 500 of Mortgages 136
Franklin Recorder's 285 of Mortgages 373
Huntingdon Recorder's 128 of Mortgages 47
Indiana Recorder's 197 of Mortgages 281
Lancaster Recorder's 984 of Mortgages 1
Xxxxxxxxxx Recorder's 5053 of Mortgages 1221
Xxxxxxxxxxxx Recorder's 1281 of Mortgages 198
York Recorder's 31-V of Mortgages 446
and
WHEREAS, the Indenture granted, bargained, sold, aliened, remised,
released, conveyed, confirmed, assigned, transferred and set over unto the
Trustee certain property of the Company, more fully set forth and described in
the Indenture, then owned or which might thereafter be acquired by the Company;
and
WHEREAS, the Company, by various supplemental indentures, supplemental to
the Indenture, the last of which was dated December 1, 1996, has granted,
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bargained, sold, aliened, remised, released, conveyed, confirmed, assigned,
transferred and set over unto the Trustee certain property of the Company
acquired by it after the execution and delivery of the Indenture; and
WHEREAS, since the execution and delivery of said supplemental indenture
dated December 1, 1996, the Company has acquired property which, in accordance
with the provisions of the Indenture, is subject to the lien thereof and the
Company desires to confirm such lien; and
WHEREAS, the Indenture has been amended or supplemented from time to time;
and
WHEREAS, it is provided in the Indenture that no bonds other than those of
the 5 1/2% Series due 1959 therein authorized may be issued thereunder unless a
supplemental indenture providing for the issue of such additional bonds shall
have been executed and delivered by the Company to the Trustee; and
WHEREAS, the Industrial Pollution Control Financing Authority of Salem
County (now known as The Pollution Control Financing Authority of Salem
County) (the "Authority") has previously issued and sold its Pollution Control
Revenue Bonds, 1987 Series A (Public Service Electric and Gas Company Project)
(the "1987 Authority Bonds") to finance the acquisition and construction of
certain pollution control facilities at the Company's Hope Creek Generating
Station located in Lower Alloways Creek Township, Salem County, New Jersey (such
generating station being sometimes referred to herein as the "Plant" and the
pollution control facilities being sometimes referred to herein as the
"Project"); and
WHEREAS, the Authority is making provision for the issuance and sale of its
Pollution Control Revenue Refunding Bonds, 1997 Series A (Public Service
Electric and Gas Company Project) (the "1997 Authority Bonds") to provide funds
for making a loan to the Company to provide for refinancing of a portion of the
costs of the Project, including the refunding and redemption of the 1987
Authority Bonds; and
WHEREAS, the 1997 Authority Bonds are to be issued under a Trust Indenture
dated as of April 1, 1997, (the "Authority Indenture"), between the Authority
and First Union National Bank, as trustee (the "Authority Trustee"); and
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WHEREAS, the Company has entered into a Pollution Control Facilities Loan
Agreement dated as of April 1, 1997, (the "Agreement"), with the Authority
providing, among other things, for the loan by the Authority to the Company of
funds to finance a portion of the costs of the Project, including the refunding
and redemption of the 1987 Authority Bonds, and for the issuance by the Company
to the Authority Trustee, as assignee of the Authority, of First and Refunding
Mortgage Bonds of the Company to evidence the Company's obligation to repay said
loan, and for such purposes the Company desires to provide for the issue of
$25,000,000 aggregate principal amount of bonds secured by the Indenture of a
series to be designated as "First and Refunding Mortgage Bonds, Pollution
Control Series X" (hereinafter sometimes called "Pollution Control Series X");
and
WHEREAS, the text of the bonds of the Pollution Control Series X and of the
certificate of authentication to be borne by the bonds of the Pollution Control
Series X shall be substantially of the following tenor:
[FORM OF BOND]
This Bond is not transferable except as provided in the Trust Indenture
dated as of April 1, 1997 between The Pollution Control Financing Authority of
Salem County and First Union National Bank, as Trustee (the "Authority
Indenture"). Capitalized terms used herein, not otherwise expressly defined
herein, shall have the meanings ascribed to them in the Authority Indenture.
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Registered Registered
Number Amount
R- $25,000,000
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
FIRST AND REFUNDING MORTGAGE BOND,
POLLUTION CONTROL SERIES X
Public Service Electric and Gas Company (hereinafter called the "Company"),
a corporation of the State of New Jersey, for value received, hereby promises to
pay to First Union National Bank, as trustee under the Authority Indenture, or
registered assigns, the principal sum of Twenty-Five Million Dollars, on April
1, 2031, and to pay interest thereon from the date hereof, at the rate of 15.0%
per annum, and until payment of said principal sum, provided, however, that the
Company shall receive certain credits against such obligations to the extent
that interest payable by the Authority from time to time for bonds issued
pursuant to the Authority Indenture (the "1997 Authority Bonds") is less than
interest calculated pursuant to the foregoing rate. Such interest to be payable
at such times and in such manner as interest is payable on the 1997 Authority
Bonds.
Both the principal hereof and interest hereon shall be paid at the
corporate trust office of First Union National Bank in the City of Newark, State
of New Jersey, or at the corporate trust office of any paying agent appointed by
the Company, in such coin or currency of the United States of America as at the
time of payment shall constitute legal tender for the payment of public and
private debts.
This Bond is one of the First and Refunding Mortgage Bonds of the Company
issued and to be issued under and pursuant to, and all equally secured by, an
indenture of mortgage or deed of trust dated August 1, 1924, between the Company
and First Union National Bank (formerly known as Fidelity Union Trust Company),
a national banking association of the United States of America, as Trustee, as
supplemented and amended by the supplemental indentures thereto, including the
supplemental indenture dated April 1, 1997. This Bond is one of the Bonds of the
Pollution Control Series X, which series is limited to the aggregate principal
amount of $25,000,000 and is issued pursuant to said supplemental indenture
dated April 1, 1997. Reference is hereby made to said indenture and all
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supplements thereto for a specification of the principal amount of Bonds from
time to time issuable thereunder, and for a description of the properties
mortgaged and conveyed or assigned to said Trustee or its successors, the nature
and extent of the security, and the rights of the holders of said Bonds and any
coupons appurtenant thereto, and of the Trustee in respect of such security.
In and by said indenture, as amended and supplemented, it is provided that
with the written approval of the Company and the Trustee, any of the provisions
of said indenture may from time to time be eliminated or modified and other
provisions may be added thereto provided the change does not alter the annual
interest rate, redemption price or date, date of maturity or amount payable on
maturity of any then outstanding Bond or conflict with the Trust Indenture Act
of 1939 as then in effect, and provided the holders of 85% in principal amount
of the Bonds secured by said indenture and then outstanding (including, if such
change affect the Bonds of one or more series but less than all series then
outstanding, a like percentage of the then outstanding Bonds of each series
affected by such change, and excluding Bonds owned or controlled by the Company
or by the parties owning at least 10% of the outstanding voting stock of the
Company, as more fully specified in said indenture) consent in writing thereto,
all as more fully set forth in said indenture, as amended and supplemented.
First and Refunding Mortgage Bonds issuable under said indenture are
issuable in series, and the Bonds of any series may be for varying principal
amounts and in the form of coupon Bonds and of registered Bonds without coupons,
and the Bonds of any one series may differ from the Bonds of any other series as
to date, maturity, interest rate and otherwise, all as in said indenture
provided and set forth. The Bonds of the Pollution Control Series X, in which
this Bond is included, are designated "First and Refunding Mortgage Bonds,
Pollution Control Series X".
In case of the happening of an event of default as specified in said
indenture and in the supplemental indenture dated March 1, 1942 supplemental
thereto, the principal sum of the Bonds of this issue may be declared or may
become due and payable forthwith, in the manner and with the effect in said
indenture provided.
The Bonds of this series are subject to redemption as provided in said
supplemental indenture dated April 1, 1997.
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This Bond is transferable, but only as provided in the Authority Indenture
upon surrender hereof, by the registered owner in person or by attorney duly
authorized in writing, at the office of the Trustee; upon any such transfer a
new Bond similar hereto will be issued to the transferee. No service charge
shall be made for any such transfer, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto. The Company and the Trustee and any paying agent may deem
and treat the person in whose name this Bond is registered as the absolute owner
hereof for the purpose of receiving payment of or on account of the principal
hereof and the interest hereon and for all other purposes; and neither the
Company nor the Trustee nor any paying agent shall be affected by any notice to
the contrary.
The Bonds of this series are issuable only in fully registered form, in any
denomination authorized by the Company.
No recourse under or upon any obligation, covenant or agreement contained
in said indenture or in any indenture supplemental thereto, or in any Bond or
coupon issued thereunder, or because of any indebtedness arising thereunder,
shall be had against any incorporator, or against any past, present or future
stockholder, officer or director, as such, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or
otherwise; it being expressly agreed and understood that said indenture, any
indenture supplemental thereto and the obligations issued thereunder, are solely
corporate obligations, and that no personal liability whatever shall attach to,
or be incurred by, such incorporators, stockholders, officers or directors, as
such, of the Company, or of any successor corporation, or any of them, because
of the incurring of the indebtedness thereby authorized, or under or by reason
of any of the obligations, covenants or agreements contained in the indenture or
in any indenture supplemental thereto or in any of the Bonds or coupons issued
thereunder, or implied therefrom.
This Bond shall not be entitled to any security or benefit under said
indenture, as amended and supplemented, and shall not become valid or obligatory
for any purpose, until the certificate of authentication, hereon endorsed, shall
have
8
been signed by First Union National Bank, as Trustee, or by its successor in
trust under said indenture.
IN WITNESS WHEREOF, the Company has caused this Bond to be duly executed by
its proper officers under its corporate seal.
Dated
PUBLIC SERVICE ELECTRIC AND GAS
COMPANY,
By
------------------------------------
(Vice) President
(Seal)
Attest:
--------------------------
(Assistant) Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the series designated therein which are
described in the within-mentioned indenture and supplemental indenture dated
April 1, 1997, as secured thereby.
FIRST UNION NATIONAL BANK,
TRUSTEE,
By:
------------------------------------
Authorized Signatory
---------------
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WHEREAS, the execution and delivery of this supplemental indenture have
been duly authorized by the Board of Directors of the Company; and
WHEREAS, the Company represents that all things necessary to make the bonds
of the Pollution Control Series X hereinafter described, when duly authenticated
by the Trustee and issued by the Company, valid, binding and legal obligations
of the Company, and to make this supplemental indenture a valid and binding
agreement supplemental to the Indenture, have been done and performed:
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH that the Company, in
consideration of the premises and the execution and delivery by the Trustee of
this supplemental indenture, and in pursuance of the covenants and agreements
contained in the Indenture and for other good and valuable consideration, the
receipt of which is hereby acknowledged, has granted, bargained, sold, aliened,
remised, released, conveyed, confirmed, assigned, transferred and set over, and
by these presents does grant, bargain, sell, alien, remise, release, convey,
confirm, assign, transfer and set over unto the Trustee, its successors and
assigns, forever, all the right, title and interest of the Company in and to all
property of every kind and description (except cash, accounts and bills
receivable and all merchandise bought, sold or manufactured for sale in the
ordinary course of the Company's business, stocks, bonds or other corporate
obligations or securities, other than such as are described in Part V of the
Granting Clauses of the Indenture, not acquired with the proceeds of bonds
secured by the Indenture, and except as in the Indenture and herein otherwise
expressly excluded) acquired by the Company since the execution and delivery of
the supplemental indenture dated December 1, 1996, supplemental to the Indenture
(except any such property duly released from, or disposed of free from, the lien
of the Indenture, in accordance with the provisions thereof) and all such
property which at any time hereafter may be acquired by the Company;
All of which property it is intended shall be included in and granted by
this supplemental indenture and covered by the lien of the Indenture as
heretofore and hereby amended and supplemented;
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UNDER AND SUBJECT to any encumbrances or mortgages existing on property
acquired by the Company at the time of such acquisition and not heretofore
discharged of record; and
SUBJECT, also, to the exceptions, reservations and provisions in the
Indenture and in this supplemental indenture recited, and to the liens,
reservations, exceptions, limitations, conditions and restrictions imposed by or
contained in the several deeds, grants, franchises and contracts or other
instruments through which the Company acquired or claims title to the aforesaid
property; and SUBJECT, also, to existing leases, to liens on easements or rights
of way, to liens for taxes, assessments and governmental charges not in default
or the payment of which is deferred, pending appeal or other contest by legal
proceedings, pursuant to Section 4 of Article Five of the Indenture, or the
payment of which is deferred pending billing, transfer of title or final
determination of amount, to easements for alleys, streets, highways, rights of
way and railroads that may run across or encroach upon the said property, to
joint pole and similar agreements, to undetermined liens and charges, if any,
incidental to construction, and other encumbrances permitted by the Indenture as
heretofore and hereby amended and supplemented;
TO HAVE AND TO HOLD the property hereby conveyed or assigned, or intended
to be conveyed or assigned, unto the Trustee, its successor or successors and
assigns, forever;
IN TRUST, NEVERTHELESS, upon the terms, conditions and trusts set forth in
the Indenture as heretofore and hereby amended and supplemented, to the end that
the said property shall be subject to the lien of the Indenture as heretofore
and hereby amended and supplemented, with the same force and effect as though
said property had been included in the Granting Clauses of the Indenture at the
time of the execution and delivery thereof;
AND THIS SUPPLEMENTAL INDENTURE FURTHER WITNESSETH that for the
considerations aforesaid, it is hereby covenanted between the Company and the
Trustee as follows:
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ARTICLE I.
BONDS OF THE POLLUTION CONTROL SERIES X.
The series of bonds authorized by this supplemental indenture to be issued
under and secured by the Indenture shall be designated "First and Refunding
Mortgage Bonds, Pollution Control Series X"; shall be limited to the aggregate
principal amount of $25,000,000; shall be issued initially to the Authority
Trustee, as assignee of the Authority, to evidence the Company's obligation to
repay the loan to finance a portion of the costs of the Project made pursuant to
the Agreement; and shall mature and bear interest as set forth in the form of
bond hereinbefore described; provided, however, that the Company shall receive
certain credits against principal and interest obligations as set forth in
Section 3.01 hereof. The date of each bond of the Pollution Control Series X
shall be the interest payment date next preceding the date of authentication,
unless such date of authentication be an interest payment date, in which case
the date shall be the date of authentication, or unless such date of
authentication be prior to the first interest payment date, in which case the
date shall be April 1, 1997.
Bonds of the Pollution Control Series X shall be issued as fully registered
bonds in any denomination authorized by the Company. Interest on bonds of the
Pollution Control Series X shall be payable at such time and in such manner as
interest is payable on the 1997 Authority Bonds, subject to certain credits
against principal and interest as set forth in Section 3.01 hereof and shall be
payable as to both principal and interest in such coin or currency of the United
States of America as at the time of payment shall constitute legal tender for
the payment of public and private debts, at the principal office of the Trustee,
or at the corporate trust office of any paying agent appointed by the Company.
Bonds of the Pollution Control Series X shall be transferable (but only as
provided in the Authority Indenture) upon surrender thereof for cancellation by
the registered owner in person or by attorney duly authorized in writing at said
office of the Trustee.
The Company hereby waives any right to make a charge for any transfer of
bonds of the Pollution Control Series X, but the Company may require payment
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of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
ARTICLE II.
REDEMPTION OF BONDS -- POLLUTION CONTROL SERIES X.
SECTION 2.01. Redemption -- Redemption Prices. Bonds of the Pollution
Control Series X shall be subject to redemption prior to maturity, under the
conditions and upon the payment of the amounts specified in the following
subsections, together in each case with interest accrued to the redemption date:
(a) at the option of the Company
(i) whenever the Interest Rate Mode for the 1997 Authority Bonds
is the Daily Rate or the Weekly Rate, in whole or in part, at a
redemption price of 100% of the principal amount thereof on any
Interest Payment Date;
(ii) whenever the Interest Rate Mode for the 1997 Authority
Bonds is the Commercial Paper Rate, in whole or in part, at a
redemption price of 100% of the principal amount thereof on the
Interest Payment Date for each Commercial Paper Rate Period for a
1997 Authority Bond or Bonds, such redemption to be in the same
principal amount of such 1997 Authority Bond or Bonds;
(iii) whenever the Interest Rate Mode for the 1997 Authority
Bonds is the Auction Rate, in whole or in part, at a redemption
price of 100% of the principal amount thereof on the final Interest
Payment Date for each Auction Period;
(iv) whenever the Interest Rate Mode for the 1997 Authority
Bonds is the Term Rate, in whole or in part, on the final Interest
Payment Date for the then current Term Rate Period and, prior to the
end of the then current Term Rate Period, at any time during the
redemption periods and at the redemption prices set forth below, plus
interest accrued, if any, to the redemption date:
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Original Length of Current Commencement of Redemption Price as
Term Rate Period (Years) Redemption Period Percentage of Principal
-------------------------- -------------------------- --------------------------
More than 15 years Tenth anniversary of 102% declining by 1% on
commencement of Term each succeeding
Rate Period anniversary of the first day
of the redemption period
until reaching 100% and
thereafter 100%
More than 10 but not more Seventh anniversary of 102% declining by 1% on
than 15 years commencement of Term each succeeding
Rate Period anniversary of the first day
of the redemption period
until reaching 100% and
thereafter 100%
More than 5 but not more Third anniversary of 101% declining by 1% on
than 10 years commencement of Term the next anniversary of the
Rate Period first day of the redemption
period and thereafter 100%
More than 2 but not more Second anniversary of 100% on and after such
than 5 years commencement of Term second anniversary of the
Rate Period first day of the redemption
period
2 years or less Non-callable Non-callable
If, at the time of the Company's notice of a change in the Term
Rate Period pursuant to Section 2.02(c) of the Authority Indenture,
or its notice of Conversion of the Interest Rate Mode for the 1997
Authority Bonds to the Term Rate pursuant to Section 2.02(d) of the
Authority Indenture, or, when the Interest Rate Mode for the 1997
Authority Bonds is the Term Rate, at least 35 days prior to the
Purchase Date for the 1997 Authority Bonds pursuant to Section
3.01(b)(i) of the Authority Indenture, the Company provides a
certification of the Remarketing Agent to the Authority Trustee and
the Authority that the foregoing schedule is not consistent with
prevailing market conditions and an opinion of nationally recognized
bond counsel that a change in the redemption provisions of the 1997
Authority Bonds will not adversely affect the exclusion from gross
income of interest on the 1997 Authority Bonds for Federal income tax
purposes, the foregoing redemption periods and redemption prices may
be revised effective as of the date of such change in the Term Rate
Period, the Conversion Date, or that Purchase Date, as determined by
the Remarketing Agent in its judgment,
14
taking into account the then Prevailing Market Conditions, as
stipulated in such certification, which shall be appended by the
Trustee to its counterpart of this supplemental indenture. Any such
revision of redemption periods or redemption prices shall not be
considered an amendment of or supplement to this supplemental
indenture and shall not require the consent of any other person or
entity.
(b) in whole (or in part if, in the opinion of nationally recognized
bond counsel, such partial redemption will preserve the exclusion from
gross income for Federal income tax purposes of interest on the 1997
Authority Bonds remaining outstanding after such redemption) at any time
at 100% of the principal amount thereof to be redeemed, plus interest
accrued to the redemption date, within 180 days after a "final
determination" (i.e., the issuance of a published or private ruling or
technical advice) of the Internal Revenue Service or a judicial decision
in a proceeding by any court of competent jurisdiction in the United
States (from which ruling, advice or decision no further right of appeal
exists), in all cases in which the Company has participated or been a
party or has been given an opportunity to participate and has failed to
do so (no such decree or judgment by any court or action by the Internal
Revenue Service to be considered final unless the owner of the 1997
Authority Bonds involved in such proceeding or action has given the
Company and the Authority Trustee prompt written notice of the
commencement thereof and offered the Company, at the Company's expense,
the opportunity to control the defense thereof) that, as a result of a
failure by the Company to observe any covenant, agreement, representation
or warranty in the Agreement, the interest payable on the 1997 Authority
Bonds is includable in the gross income for Federal income tax purposes
of the holder thereof, other than a "substantial user" of the Project or
a "related person" as provided in Section 147(a) of the Internal Revenue
Code of 1986, as amended, and the applicable regulations thereunder.
(c) in whole at 100% of the principal amount thereof whenever the
Company receives from the Authority Trustee a copy of a written demand
sent to the Trustee stating that the principal of all outstanding 1997
Authority Bonds has been declared to be immediately due and payable
because of an Event of Default under the Authority Indenture. In such
case, redemption of the Bonds of the Pollution Control Series X shall be
any date selected by
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the Company, not more than 180 days after receipt by the Company of such
written demand for redemption.
(d) to the extent that any of the 1997 Authority Bonds shall have
become Provider Bonds, (i) on the Provider Bond Redemption Date in an
amount equal to the aggregate principal amount of Provider Bonds
outstanding at the expiration of the Liquidity Facility at 100% of the
principal amount thereof and (ii) on each of the first four anniversaries
of the expiration of the Liquidity Facility at the rate of 20% per year of
the aggregate principal amount of Provider Bonds outstanding at the
expiration of the Liquidity Facility at 100% of the principal amount
thereof.
SECTION 2.02. Notice of Redemption. (a) The election of the Company under
subsection (a) of Section 2.01 hereof to redeem any of the bonds of the
Pollution Control Series X shall be evidenced by a resolution of the Board of
Directors of the Company calling for redemption on a stated date of all or a
stated principal amount thereof. To exercise its option to redeem the bonds of
the Pollution Control Series X under subsection (a) of Section 2.01 hereof, the
Company shall deliver to the Trustee, the Authority and the Authority Trustee a
certified copy of said resolution calling all or a stated principal amount of
the bonds of the Pollution Control Series X for redemption on a date not less
than 20 days (35 days if the Interest Rate Mode is the Term Rate) nor more than
65 days from the date said resolution is delivered. The delivery to the
Authority Trustee of a certified copy of such resolution shall constitute notice
to the Authority Trustee of the redemption referred to therein, on the terms
specified therein. The Company shall on or before such redemption date deposit
with the Trustee, as paying agent hereunder, the total applicable redemption
price of all the bonds so called, with interest accrued thereon to the
redemption date, less any credits to which the Company may be entitled pursuant
to Section 3.01 hereof, and the Trustee, as such paying agent, shall apply such
funds on the redemption date to the redemption of the bonds so called.
(b) The Company shall, within 10 days after the occurrence of a "final
determination" under subsection (b) of Section 2.01 hereof, deliver to the
Trustee written notice of such "final determination". The Company shall, by
resolution of its Board of Directors, fix a redemption date for such redemption
and shall deliver to the Trustee, the Authority and the Authority Trustee a
certified copy of
16
said resolution at least 40 days prior to the date so selected for redemption.
Such redemption date may be any day not more than 180 days after the occurrence
of such "final determination". If the Trustee does not receive written notice of
such selection by the Company within 140 days after the date of the occurrence
of such "final determination", then the redemption date shall be the 180th day
after the occurrence of such "final determination". On or before such redemption
date, the Company shall deposit with the Trustee, as paying agent hereunder, the
total redemption price of the bonds so called, with interest accrued thereon to
the redemption date, less any credits to which the Company may be entitled
pursuant to Section 3.01 hereof, and the Trustee, as such paying agent, shall
apply such funds, on the redemption date, to the redemption of the bonds so
called. The delivery to the Authority Trustee of a certified copy of such
resolution shall constitute notice to the Authority Trustee of the redemption
referred to therein on the terms specified therein.
(c) The Company shall, within 10 days after the receipt of a written demand
under subsection (c) of Section 2.01 hereof, by resolution of its Board of
Directors, fix a redemption date for such redemption and shall deliver to the
Trustee, the Authority and the Authority Trustee a certified copy of said
resolution at least 40 days prior to the date so selected for redemption. Such
redemption date may be any day not more than 180 days after the receipt of such
written demand. If the Trustee does not receive written notice of such selection
by the Company within 140 days after the date of the receipt of such written
demand, then the redemption date shall be the 180th day after the receipt of
such written demand. On or before such redemption date, the Company shall
deposit with the Trustee, as paying agent hereunder, the total redemption price
of the bonds so called, with interest accrued thereon to the redemption date,
less any credits to which the Company may be entitled pursuant to Section 3.01
hereof, and the Trustee, as such paying agent, shall apply such funds, on the
redemption date, to the redemption of the bonds so called.
SECTION 2.03. Interest on Called Bonds to Cease. Each bond or portion
thereof of the Pollution Control Series X called for redemption under Section
2.02 hereof shall be due and payable at the office of the Trustee, as paying
agent hereunder, at the applicable redemption price and on the specified
redemption date, anything herein or in such bond to the contrary
notwithstanding. From and after the date when each bond or portion thereof of
the Pollution Control Series X
17
shall be due and payable as aforesaid (unless upon said date the full amount due
thereon shall not be held by or provided to the Trustee, as paying agent
hereunder, and be immediately available for payment), all further interest shall
cease to accrue on such bond or on such portion thereof, as the case may be.
SECTION 2.04. Bonds Called in Part. If only a portion of any bond of the
Pollution Control Series X shall be called for redemption pursuant to Section
2.02 hereof, the notice of redemption hereinbefore provided for shall specify
the portion of the principal amount thereof to be redeemed. Upon payment of the
portion so called for redemption, the Trustee, as paying agent hereunder, shall
give prompt written notice thereof to the Company.
SECTION 2.05. Provisions of Indenture Not Applicable. The provisions of
Article Four of the Indenture, as amended and supplemented, shall not apply to
the procedure for the exercise of any right of redemption reserved by the
Company, or to any mandatory redemption provided in this Article in respect of
the bonds of the Pollution Control Series X. There shall be no sinking fund for
the bonds of the Pollution Control Series X.
18
ARTICLE III.
CREDITS WITH RESPECT TO THE BONDS OF THE POLLUTION CONTROL SERIES X.
SECTION 3.01. Credits. (a) In addition to any other credit, payment or
satisfaction to which the Company is entitled with respect to the Bonds of the
Pollution Control Series X, the Company shall be entitled credits against
amounts otherwise payable in respect of the Bonds of the Pollution Control
Series X in an amount corresponding to the amount by which interest due on the
Bonds of the Pollution Control Series X exceeds the interest due on the 1997
Authority Bonds.
(b) The Company shall be entitled to credits against amounts otherwise
payable in respect of the bonds of the Pollution Control Series X in an amount
corresponding to (i) the principal amount of any 1997 Authority Bond surrendered
to the Authority Trustee by the Company or the Authority, or purchased by the
Authority Trustee, for cancellation and (ii) the amount of money held by the
Authority Trustee and available and designated for or applied toward the payment
of principal or redemption price of and interest on the 1997 Authority Bonds, as
the case may be, regardless of the source of payment to the Authority Trustee of
such moneys; provided, however, that the Company shall not be entitled to any
such credit with respect to amounts paid to the Authority Trustee pursuant to
the Bond Insurance Policy. The Trustee, as paying agent hereunder, shall give
prompt written notice to the Company of any such credit with respect to the
payment of interest.
19
(c) The Trustee, as paying agent hereunder, shall (i) promptly notify the
Company of each deposit in the Bond Fund under the Authority Indenture, (ii)
provide evidence to the Company that such deposit has been credited to such Fund
and (iii) give prompt written notice to the Company of any credits with respect
to payment of principal or redemption price of and interest on the bonds of the
Pollution Control Series X.
SECTION 3.02. Certificate of the Company. A certificate of the Company
signed by the President, any Vice President or any Assistant Treasurer, and
attested to by the Secretary or any Assistant Secretary, and consented to by the
Authority Trustee, stating that the Company is entitled to a credit under
Section 3.01 hereof and setting forth the basis therefor in reasonable detail,
shall be conclusive evidence of such entitlement, and the Trustee shall accept
such certificate as such evidence without further investigation or verification
of the matters stated therein.
ARTICLE IV.
MISCELLANEOUS.
SECTION 4.01. Authentication of Bonds of Pollution Control Series X. None
of the bonds of the Pollution Control Series X, the issue of which is provided
for by this supplemental indenture, shall be authenticated by the Trustee except
in accordance with the provisions of the Indenture, as amended and supplemented,
and this supplemental indenture, and upon compliance with the conditions in that
behalf therein contained.
SECTION 4.02. Additional Restrictions on Authentication of Additional Bonds
Under Indenture. The Company covenants that from and after the date of execution
of this supplemental indenture, no additional bonds (as defined in Section 1 of
Article Two of the Indenture) shall be authenticated and delivered by the
Trustee under Subdivision A of Section 4 of said Article Two on account of
additions or improvements to the mortgaged property
(1) unless the net earnings of the Company for the period required by
Subdivision C of Section 6 of said Article Two shall have been at least
twice
20
the fixed charges (in lieu of l 3/4 times such fixed charges, as required
by said Subdivision C); and for the purpose of this condition (a) such
fixed charges shall in each case include interest on the bonds applied
for, notwithstanding the parenthetical provision contained in clause (4)
of said Subdivision C, and (b) in computing such net earnings there shall
be included in expenses of operation (under paragraph (c) of said
Subdivision C) all charges against earnings for depreciation, renewals or
replacements, and all certificates with respect to net earnings delivered
to the Trustee in connection with any authentication of additional bonds
under said Article Two shall so state; and
(2) except to the extent of 60% (in lieu of 75% as permitted by
Subdivision A of Section 7 of said Article Two) of the cost or fair value
to the Company of the additions or improvements forming the basis for such
authentication of additional bonds.
SECTION 4.03. Restriction on Dividends. The Company will not declare or pay
any dividend on any shares of its common stock (other than dividends payable in
shares of its common stock) or make any other distribution on any such shares,
or purchase or otherwise acquire any such shares (except shares acquired without
cost to the Company) whenever such action would reduce the earned surplus of the
Company to an amount less than $10,000,000 or such lesser amount as may remain
after deducting from said $10,000,000 all amounts appearing in the books of
account of the Company on December 31, 1948, which shall thereafter, pursuant to
any order or rule of any regulatory body entered after said date, be required to
be removed, in whole or in part, from the books of account of the Company by
charges to earned surplus.
21
SECTION 4.04. Use of Facsimile Seal and Signatures. The seal of the Company
and any or all signatures of the officers of the Company upon any of the bonds
of the Pollution Control Series X may be facsimiles.
SECTION 4.05. Effective Period of Supplemental Indenture. The preceding
provisions of Articles I, II and III of this supplemental indenture shall remain
in effect only so long as any of the bonds of the Pollution Control Series X
shall remain outstanding.
SECTION 4.06. Time for Making of Payment. All payments of principal or
redemption price of and interest on the bonds of the Pollution Control Series X
shall be made to the Authority Trustee in such funds as shall constitute
immediately available funds when payment is due. In any case where the date of
payment of the principal or redemption price of or interest on the bonds of the
Pollution Control Series X or the date fixed for redemption of any such bonds
shall be in the city of payment a Saturday, Sunday or a legal holiday or a day
on which banking institutions are authorized by law to close, then such payment
need not be made on such date but may be made on the next succeeding business
day with the same force and effect as if made on the date of maturity or the
date fixed for redemption, and no interest on such payment shall accrue for the
period after such date.
SECTION 4.07. Effect of Approval of Board of Public Utilities of the State
of New Jersey. The approval of the Board of Public Utilities of the State of New
Jersey of the execution and delivery of these presents and of the issue of any
bonds of the Pollution Control Series X shall not be construed as approval of
said Board of any other act, matter or thing which requires approval of said
Board under the laws of the State of New Jersey.
SECTION 4.08. Execution Counterparts. For the purpose of facilitating the
recording hereof, this supplemental indenture has been executed in several
counterparts, each of which shall be and shall be taken to be an original, and
all collectively but one instrument.
22
IN WITNESS WHEREOF, Public Service Electric and Gas Company, party hereto
of the first part, after due corporate and other proceedings, has caused this
supplemental indenture to be signed and acknowledged or proved by its President
or one of its Vice Presidents and its corporate seal hereunto to be affixed and
to be attested by the signature of its Secretary or an Assistant Secretary; and
First Union National Bank, as Trustee, party hereto of the second part, has
caused this supplemental indenture to be signed and acknowledged or proved by
its President, one of its Vice Presidents or one of its Assistant Vice
Presidents and its corporate seal to be hereunto affixed and to be attested by
the signature of one of its Vice Presidents, Assistant Vice Presidents, its
Cashier, one of its Assistant Cashiers, or one of its Corporate Trust Officers.
Executed and delivered this 1st day of April, 1997.
PUBLIC SERVICE ELECTRIC AND GAS
COMPANY
By /s/ X. X. Xxxxx
----------------
X. X. Xxxxx
Vice President
Attest: /s/ X. X. Xxxxxxx, Xx.
---------------------
X. X. Xxxxxxx, Xx.
Secretary
FIRST UNION NATIONAL BANK
By /s/ X. Xxxxxxxxx
----------------
X. Xxxxxxxxx
Vice President
Attest: /s/ X. X. Xxxxxx
----------------
X. X. Xxxxxx
Vice President
23
STATE OF NEW JERSEY }
COUNTY OF ESSEX } ss.:
BE IT REMEMBERED, that on this 1st day of April, 1997, before me, the
subscriber, a Notary Public of the State of New Jersey, personally appeared X.
X. Xxxxx who, I am satisfied, is a Vice President of PUBLIC SERVICE ELECTRIC AND
GAS COMPANY, one of the corporations named in and which executed the foregoing
instrument, and is the person who signed the said instrument as such officer for
and on behalf of such corporation, and I having first made known to him the
contents thereof, he did acknowledge that he signed the said instrument as such
officer, that the said instrument was made by such corporation and sealed with
its corporate seal, that the said instrument is the voluntary act and deed of
such corporation, made by virtue of authority from its Board of Directors, and
that said corporation, the mortgagor, has received a true copy of said
instrument.
/s/ Xxxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxxx X. Xxxxx
A Notary Public of New Jersey
My Commission Expires 5-14-2000
STATE OF NEW JERSEY }
COUNTY OF ESSEX } ss.:
BE IT REMEMBERED, that on this 1st day of April, 1997, before me, the
subscriber, a Notary Public of the State of New Jersey, personally appeared X.
Xxxxxxxxx who, I am satisfied, is a Vice President of FIRST UNION NATIONAL BANK,
one of the corporations named in and which executed the foregoing instrument,
and is the person who signed the said instrument as such officer, for and on
behalf of such corporation, and I having first made known to him the contents
thereof, he did acknowledge that he signed the said instrument as such officer,
that the said instrument was made by such corporation and sealed with its
corporate seal; and that the said instrument is the voluntary act and deed of
such corporation, made by virtue of authority from its Board of Directors.
/s/ Xxxxxxx Xxxxxx
-----------------------------------
Xxxxxxx Xxxxxx
Notary Public of New Jersey
Commission Expires May 10, 2001
24
CERTIFICATE OF RESIDENCE
First Union National Bank, Mortgagee and Trustee within named, hereby certifies
that its precise residence is 000 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000.
FIRST UNION NATIONAL BANK
By /s/ X. Xxxxxxxxx
-------------------
X. Xxxxxxxxx
Vice President
