-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G0+c+dN3Sy7zsyhAMH4rBBDeZ9L3l6cllP1JagpOJo81lT4A7lgd7bpvEmT1qIxY 07xPFMK1A0apgWMHbMQODg== 0001035216-02-000008.txt : 20021104 0001035216-02-000008.hdr.sgml : 20021104 20021104163125 ACCESSION NUMBER: 0001035216-02-000008 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20021104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTH JERSEY GAS CO/NEW CENTRAL INDEX KEY: 0001035216 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 210398330 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-98411 FILM NUMBER: 02808530 BUSINESS ADDRESS: STREET 1: NUMBER ONE SOUTH JERSEY PLAZA STREET 2: ROUTE 54 CITY: FOLSOM STATE: NJ ZIP: 08037 BUSINESS PHONE: 6095619000 MAIL ADDRESS: STREET 1: NUMBER ONE SOUTH JERSEY PLAZA STREET 2: ROUTE 54 CITY: FOLSOM STATE: NJ ZIP: 08037 S-3/A 1 regstmt.txt AMENDMENT 1 TO FORM S-3 As filed with the Securities and Exchange Commission on November 4, 2002 Registration No. 333-98411 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------------------ AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------------ SOUTH JERSEY GAS COMPANY ------------------------------ (Exact name of registrant as specified in its charter) New Jersey 21-0398330 -------------------- -------------------- (State of incorporation) (I.R.S. Employer Identification Number) 1 South Jersey Plaza, Route 54 Folsom, New Jersey 08037 (609) 561-9000 ------------------------------ (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Richard H. Walker South Jersey Gas Company 1 South Jersey Plaza, Route 54 Folsom, New Jersey 08037 (609) 561-9000 ------------------------------ (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies of communications to: Richard J. Busis, Esquire Jonathan A. Koff, Esquire Cozen O'Connor Chapman and Cutler 1900 Market Street 111 West Monroe Philadelphia, Pennsylvania 19103 Chicago, Illinois 60603 (215) 665-2000 (312) 845-3000 - Page - Approximate date of commencement of proposed sale to the public: From time to time after the effective date of the registration statement, as determined by the registrant. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering: [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [_] If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act of 1933, please check the following box: [_] - ------------------------------------------------------------------------------- The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - ------------------------------------------------------------------------------- - Page - THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. Subject to Completion, dated November 4, 2002 $150,000,000 South Jersey Gas Company Medium Term Notes, Series B ------------------------------ We may sell from time to time medium term notes with an aggregate offering price of up to $150,000,000. All of the notes issued under this prospectus will be secured by first mortgage bonds issued under our Indenture of First Mortgage. We will provide specific terms of these medium term notes in supplements to this prospectus. You should read this prospectus and any prospectus supplement carefully before you invest. ------------------------------ Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ------------------------------ This prospectus is dated _______, 2002. - Page - You should rely only on the information contained in or incorporated by reference in this prospectus or any accompanying supplemental prospectus. We have not authorized anyone to provide you with different information or make any additional representations. We are not making an offer of these medium term notes in any state where the offer is not permitted. You should not assume that the information contained in or incorporated by reference in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of each of such documents. TABLE OF CONTENTS About this Prospectus.......................................................3 Where You Can Find More Information.........................................3 Incorporation of Certain Documents by Reference.............................3 Special Note Regarding Forward-Looking Statements...........................4 Ratio of Earnings to Fixed Charges..........................................5 South Jersey Gas............................................................6 Use of Proceeds.............................................................6 Description of Debt Securities..............................................6 Description of Note Indenture...............................................8 Description of the Pledged Bonds............................................18 Plan of Distribution........................................................27 Legal Matters...............................................................28 Experts.....................................................................28 - 2 - ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission utilizing a "shelf" registration process. Under this shelf registration process, we may sell the debt securities described in this prospectus in one or more offerings up to a total dollar amount of $150,000,000. This prospectus provides you with a general description of the debt securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the next heading, "Where You Can Find More Information." WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports and other information with the Securities and Exchange Commission. You may read and copy any document we file at the Commission's public reference room at 450 Fifth Street, N.W., Washington, DC 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms. Our Commission filings are also available to the public through the Internet on the Commission's web site at http://www.sec.gov. The Commission allows us to "incorporate by reference" some information into this document, which means that we can disclose important information to you by referring you to another document we have filed separately with the Commission. The information incorporated by reference is deemed to be part of this document, except for any information superseded by information contained directly in this document. This prospectus incorporates by reference the documents set forth under "Incorporation of Certain Documents by Reference" that we have previously filed with the Commission. These documents contain important information about us and our financial condition. We have filed a registration statement and related exhibits with the Commission under the Securities Act of 1933. The registration statement contains additional information about us and the debt securities. A copy of the registration statement, including exhibits, may be read and copied from the places listed above. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by us with the Commission are incorporated herein by reference: 1. Our Annual Report on Form 10-K for the year ended December 31, 2001. 2. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002. 3. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002. - 3 - In addition, all documents filed by us with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this prospectus and prior to the termination of this offering shall be deemed to be incorporated by reference in and shall be a part of this prospectus from the date of the filing of such documents. The information incorporated by reference is considered to be part of this prospectus, and later information filed with the Commission will modify or supersede this information. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. This prospectus does not contain all the information contained in the registration statement and its exhibits which we have filed with the Commission under the Securities Act with respect to the debt securities offered hereby and to which reference is hereby made. We will provide without charge to each person to whom this prospectus is delivered, upon request, a copy of any document incorporated by reference in this prospectus or in the registration statement, other than exhibits to such documents. Requests should be made to Richard H. Walker, Corporate Secretary, South Jersey Gas Company, 1 South Jersey Plaza, Route 54, Folsom, New Jersey 08037, telephone: (609) 561-9000. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains or incorporates certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Such statements may be preceded by, followed by or include words such as "anticipate," "believe," "expect," "intend," "estimate" or similar expressions. These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting South Jersey Gas and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and actual results could differ materially from those expressed or implied in the forward-looking statements. In making forward-looking statements, we assume no duty to update these statements should expectations change or actual results and events differ from current expectations. A number of factors could cause our actual results to differ materially from those anticipated, including, but not limited to, the following: * weather conditions in our marketing areas; * changes in commodity costs; * regulatory and court decisions; * competition in our utility activities; * the availability and cost of capital; * costs and effects of legal proceedings and environmental liabilities; - 4 - * the failure of our customers or suppliers to fulfill their contractual obligations; and * changes in business strategies. RATIO OF EARNINGS TO FIXED CHARGES Our ratio of earnings to fixed charges for each of the periods indicated is as follows: Twelve Months Ended Year Ended December 31, June 30, ------------------------------------ ------------ 1997 1998 1999 2000 2001 2002 ---- ---- ---- ---- ---- ---- Ratio of earnings to fixed charges 2.6x 2.2x 2.5x 2.6x 2.6x 2.7x The ratio of earnings to fixed charges represents, on a pre-tax basis, the number of times earnings cover fixed charges. Earnings consist of net income, to which has been added fixed charges and taxes based on our income. Fixed charges consist of interest charges and preferred securities dividend requirements and an interest factor in rentals. - 5 - SOUTH JERSEY GAS South Jersey Gas Company is a regulated New Jersey public utility and is the principal subsidiary of South Jersey Industries, Inc. We are a gas distribution utility that supplies natural gas to residential, commercial and industrial customers on a retail basis in the southern part of New Jersey. We provide gas to some customers which use gas as their sole source of fuel (firm customers). We also sell gas to some industrial and commercial customers which have the ability to use other fuels as well as natural gas on an "interruptible" basis. Service to these customers is called interruptible because we supply natural gas to them only after we have fulfilled the needs of our firm customers, and then only to the extent we still have gas available. We also sell natural gas and transportation capacity on a wholesale basis to various customers on the interstate pipeline system and transport natural gas purchased by some of our customers directly from producers or suppliers. Our wholesale activities, or off-system sales, are regulated by the Federal Energy Regulatory Commission and are the result of our maintenance of some gas supplies and transportation capacity on interstate gas pipelines for the purpose of serving our customers in extreme cold or hot weather. Consequently, when we find that natural gas or transportation capacity will not be utilized by our retail customers, we seek buyers on a wholesale basis outside of the utilities service territory. In addition, we service appliances such as natural gas water heaters, washers, dryers, dishwashers and ranges as well as electric central air conditioners through the sale of appliance warranty programs as well as on a time and materials basis. At June 30, 2002, we served approximately 292,000 residential, commercial and industrial customers throughout 112 municipalities in Atlantic, Cape May, Cumberland, and Salem Counties and portions of Burlington, Camden and Gloucester Counties. Our service territory covers approximately 2,500 square miles and has an estimated permanent population of 1.2 million people. Gas sales, transportation and transportation capacity release for fiscal year 2001 amounted to 108,935 MMcf (thousand cubic feet), of which approximately 48,786 MMcf were firm sales and transportation, 2,845 MMcf were interruptible sales and transportation and 57,304 MMcf were off-system sales and capacity release. For fiscal 2001, the breakdown of firm sales consisted of 35.6% residential, 15.5% commercial, 3.1% cogeneration and electric generation, 0.5% industrial and 45.3% transportation. Interruptible sales, as opposed to firm sales, represent customer relationships in which we may cease the delivery of gas on short notice, causing the customer to utilize an alternative fuel source. We are regulated as to rates and other matters by the New Jersey Board of Public Utilities. Our executive offices are located at 1 South Jersey Plaza, Route 54, Folsom, New Jersey 08037, and our telephone number is (609) 561-9000. USE OF PROCEEDS Unless otherwise specified in the applicable prospectus supplement, the net proceeds from the sale of the debt securities will be used by us to retire short-term and long-term debt and to fund capital expenditure requirements. At June 30, 2002, we had $102.9 million of short-term debt outstanding with a - 6 - weighted-average interest cost of 2.63%, with maturities not exceeding forty-five days. DESCRIPTION OF DEBT SECURITIES This prospectus describes certain general terms and provisions of our debt securities. When we offer to sell a particular series of debt securities, we will describe the specific terms of the series in a supplement to this prospectus. We intend to offer and sell from time to time our secured debt securities (the Notes), in an aggregate principal amount up to $150,000,000 with maturities ranging from one year to 40 years from their respective dates of issue. The Notes will be issued only in fully registered form, in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. Unless otherwise indicated in the applicable prospectus supplement, interest on each Note will be payable semiannually in arrears on May 1 and November 1. The purchase price, aggregate principal amount, interest rate, stated maturity date, optional redemption provisions and any other material terms of each issue of Notes not described in this prospectus will be set forth in an accompanying prospectus supplement. The Notes will be issued under an indenture of trust dated as of October 1, 1998, as supplemented on June 29, 2000, July 5, 2000 and July 9, 2001 (the Note Indenture), between us and The Bank of New York, as the Note Trustee. The material provisions of the Note Indenture are described below under the caption "Description of Note Indenture." A series of first mortgage bonds designated as "South Jersey Gas Company First Mortgage Bonds, 10% Medium Term Notes, Series B" (the Pledged Bonds) will be issued under the Indenture of First Mortgage, dated October 1, 1947, as supplemented and amended by supplemental indentures, including a new Twenty-Third Supplemental Indenture (the Indenture of First Mortgage, as amended and supplemented, is referred to as the Mortgage), from us to The Bank of New York, the Mortgage Trustee. The Pledged Bonds to be issued under the Mortgage are described below under the caption "Description of the Pledged Bonds." All first mortgage bonds issued or issuable under the Mortgage are sometime called Bonds. Until the Substitution Date, the Notes will be secured by Pledged Bonds in an aggregate principal amount equal to the principal amount of Notes issued. The "Substitution Date" is the date that all of our first mortgage bonds issued and outstanding under the Mortgage, other than the first mortgage bonds pledged and delivered by us to the Note Trustee under the Note Indenture, have been retired at, before or after their maturity. On the Substitution Date, the Note Trustee shall deliver to us for cancellation the Pledged Bonds, and we will cause the Note Trustee to provide notice to all holders of Notes of the occurrence of the Substitution Date. As a result, on the Substitution Date, the Pledged Bonds will cease to secure the Notes, and, at our option, the Notes either will become our unsecured general obligations or will be secured by first mortgage bonds (Substituted Pledged Bonds) issued under a new mortgage indenture (a Substituted Mortgage). See "Description of Note Indenture-General." The Pledged Bonds will be pledged to the Note Trustee. Prior to the Substitution Date, the principal amount of the Pledged Bonds deemed outstanding will at all times be equal to the outstanding principal amount of the Notes then outstanding. The Pledged Bonds will be deemed to bear interest corresponding to - 7 - the required payments of interest on the Notes. Payments of principal and interest in respect of the Notes will constitute payments on the Pledged Bonds. The Pledged Bonds constitute a separate series of our first mortgage bonds, all of which are secured by a lien on substantially all of the property owned by us. See "Description of the Pledged Bonds." Each Note will be represented by a global note registered in the name of The Depository Trust Company, as depository, or its nominee, unless otherwise specified in the applicable prospectus supplement. Beneficial interests in global notes will be shown on, and transfers of global notes will be effected only through, records maintained by the depository and its participants. Global notes will not be issuable in certificated form except under the limited circumstances described below. See "Book-Entry System." There is no requirement under either the Note Indenture or the Mortgage that future issues of debt securities of South Jersey Gas be issued under the Note Indenture or the Mortgage. Subject to certain restrictions following the Substitution Date which are described in "Description of Note Indenture-Limitations on Liens," we will be free to use other indentures or documentation, containing provisions different from those included in the Note Indenture and the Mortgage, in connection with future issues of such other debt securities. The Notes will be offered on a continuing basis by us through one or more agents, each of which has agreed to use its reasonable best efforts to solicit offers to purchase the Notes. We also may sell Notes to an agent, as principal, for resale to one or more investors or other purchasers. The Notes will not be listed on any securities exchange, and we can make no assurance that any Notes will be sold or that there will be a secondary market for them. We reserve the right to withdraw, suspend, cancel or modify the offer of Notes without notice. We or an agent, if it solicits such offer, may reject any offer to purchase Notes, in whole or in part. See "Plan of Distribution." Our timely payment of the principal and interest on an issuance of Notes may be insured by a financial guaranty insurance policy issued by Ambac Assurance Corporation. We will disclose in the prospectus supplement relating to an issuance of Notes if we have elected to insure the issuance of those Notes. See "Description of Note Indenture-Insured Notes." DESCRIPTION OF NOTE INDENTURE The following summary of certain provisions of the Note Indenture is not complete and is subject to, and qualified in its entirety by, all of the provisions of the Note Indenture, which is incorporated herein by reference and is an exhibit to the registration statement of which this prospectus is a part. References to section numbers under this caption are references to the section numbers of the Note Indenture. General The Note Indenture provides that notes may be issued thereunder in one or more series, may be issued at various times, may have differing maturity dates and may bear interest at differing rates. The prospectus supplement applicable to each issue of Notes will set forth the specific terms of such - 8 - Notes as well as any variation in the terms and provisions of such Notes from those described in this prospectus. Until the Substitution Date, the Notes will be secured by Pledged Bonds. See "Description of the Pledged Bonds." On the Substitution Date, the Note Trustee shall deliver to us for cancellation the Pledged Bonds, and we will cause the Note Trustee to provide notice to all holders of Notes of the occurrence of the Substitution Date. As a result, on the Substitution Date, the Pledged Bonds will cease to secure the Notes, and, at our option, the Notes either will become our unsecured general obligations or will be secured by Substituted Pledged Bonds. (Section 4.10) Registration, Transfer and Exchange With the exception of Notes issued in the form of global notes, Notes of any issue will be exchangeable for one or more Notes of the same series and issue of any authorized denominations and in the same aggregate principal amount. (Section 2.6) Unless otherwise indicated in the applicable prospectus supplement, Notes may be presented for transfer at the office of the Note Trustee without service charge but upon the payment of any taxes and other certain governmental charges. Such transfer or exchange will be effected upon the satisfaction of certain requirements relating to documentation of title and indemnification. (Section 2.6) If any Notes are redeemed, the Note Trustee will not be required to exchange or register a transfer of any Notes selected, called or being called for redemption except, in the case of any Note to be redeemed in part, the portion not to be redeemed. (Section 2.6) See "Book-Entry System." Certificated Notes Each Note will be represented by a global note registered in the name of the depository or its nominee unless otherwise specified in the applicable prospectus supplement. The Notes represented by the global note are exchangeable for similar certificated Notes in denominations of $1,000 and integral multiples thereof if: * the depository notifies us that it is unwilling or unable to continue as depositary for the global note or if at any time the depository ceases to be a clearing agency registered under the Exchange Act; or * we determine not to have all of the Notes represented by the global note. The global note is not exchangeable except for a global note of the same aggregate denomination to be registered in the name of the depository or its nominee. (Section 2.13) Payment and Paying Agents Principal of and interest on Notes issued in the form of global notes will be paid in the manner described below under the caption "Book-Entry System." Unless otherwise indicated in the applicable prospectus supplement, - 9 - interest on Notes that are in the form of certificated securities will be paid by wire transfer of clearinghouse or similar next day funds or by check mailed to the person entitled thereto. However, a holder of notes of one or more series under the Note Indenture in the aggregate principal amount of $10,000,000 or more having the same interest payment dates will be entitled to receive payments of interest on such series by wire transfer of immediately available funds to a bank located within the continental United States if an appropriate request has been received by the Note Trustee on or prior to the applicable regular record date. Unless otherwise indicated in the applicable prospectus supplement, the principal of and interest on Notes in the form of certificated notes will be payable at maturity in immediately available funds at the office of the Note Trustee upon proper presentment and surrender of the Notes. (Section 2.12) All moneys paid by us to a paying agent for the payment of principal or interest which remain unclaimed at the end of one year will be repaid to us, and the holder of such Note must thereafter look only to us for payment. (Section 5.4) Insured Notes The Note Indenture provides that we may issue notes covered by a financial guaranty insurance policy issued by Ambac Assurance Corporation, which policy will insure payment when due of the principal and interest on such notes. If we issue insured notes, so long as Ambac is not in default under the policy, it shall be entitled to control and direct the enforcement of all rights and remedies with respect to such notes. No amendment to the Note Indenture which requires noteholder consent or which affects the rights of Ambac may be made without the prior written consent of Ambac. Limitations on Liens Following the Substitution Date, we will cause the Mortgage to be terminated, and we will not issue any additional bonds under the Mortgage. In addition, following the Substitution Date, except as described below and unless Substituted Pledged Bonds are issued to secure notes issued under the Note Indenture, we may not create, assume or incur any mortgage, pledge, lien or security interest (collectively referred to in this context as "mortgages") upon any real property interest or other depreciable asset used in our gas utility business, whether owned at the Substitution Date or thereafter acquired, to secure any indebtedness for money borrowed (Debt) other than indebtedness with maturities of twelve months or less (other than the Notes), without effectively securing all notes (other than any notes, which shall by their terms be expressly excluded from such provision) equally and ratably with such Debt. This restriction will not apply to: * any mortgage upon property existing at the time of acquisition, including acquisition by means of merger or consolidation, subject to certain exceptions; * any mortgage to secure the payment of all or part of the purchase price of property or to secure any Debt incurred prior to, at the time of or within 180 days after the acquisition of such property for the purpose of financing all or part of the purchase price of such property; - 10 - * any mortgage existing as of the Substitution Date; * certain liens or other encumbrances permitted under the Note Indenture; and * any extension, refinancing, renewal or replacement, in whole or in part, of any mortgage referred to above; provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt (plus related premiums or fees) so secured at the time of such extension, refinancing, renewal or replacement; and provided further that such mortgage shall be limited to all or such part of the property which was subject to the mortgage so extended, refinanced, renewed or replaced (plus improvements on such property). Notwithstanding the foregoing restriction, we may create, assume or incur any mortgage not excepted above without equally and ratably securing the notes if the aggregate amount of all Debt then outstanding and secured by such mortgage or any other mortgage not excepted above does not exceed 15% of our total consolidated capitalization as shown on the audited consolidated balance sheet contained in our latest annual report filed with the Commission. For purposes of this provision, certain mortgages in favor of government entities to secure payments pursuant to the provisions of any contract or statute, or any mortgage securing industrial development, pollution control or similar revenue bonds, shall not be deemed to create a mortgage to secure any Debt. (Section 6.8) Redemption The prospectus supplement relating to each Note will indicate whether we have the right to redeem such Note prior to its stated maturity. If we have the right to redeem a Note, such Note will be redeemable at our option in whole or in part on any date on or after the date specified in such prospectus supplement at prices declining from a specified premium, if any, to par, together with accrued interest to the date of redemption. In addition, the Notes shall be subject to redemption upon payment of all or a part of the principal amount thereof from proceeds available under the Mortgage upon redemption of the Pledged Bonds from the condemnation of property subject to the lien of the Mortgage or from the sale of such property to a governmental body or agency having the power of eminent domain made as a result of the threat of condemnation of such property. See "Description of the Pledged Bonds-Redemption." (Section 3) The Note Indenture allows us to issue Notes that are subject to redemption at the request of representatives of deceased noteholders under certain conditions (RHO Notes). The Note Indenture provides that unless an RHO Note has been declared due and payable prior to its maturity by reason of an event of default or unless an RHO Note has been defeased, the representative of a deceased beneficial owner has the right to request redemption of an RHO Note prior to maturity. RHO Notes are redeemable at 100% of their principal amount plus any accrued but unpaid interest in integral multiples of $1,000 principal amount, subject to any limitations that will be set forth in the applicable prospectus supplement. - 11 - In the case of any redemption request which is presented on behalf of a deceased beneficial owner and which has not been fulfilled at the time we give notice of our election to partially redeem RHO Notes, the interests in the RHO Notes which are the subject of such redemption request shall not be eligible for redemption pursuant to our option to redeem but shall remain subject to redemption pursuant to the redemption request . Events of Default Each of the following constitutes an event of default under the Note Indenture: * default in the payment of interest on any note issued under the Note Indenture when due which continues for 30 days; * default in the payment of principal or premium, if any, on any note issued under the Note Indenture when due and payable which continues for five days; * our default in the performance or breach of any other covenant or agreement in the Note Indenture or any note issued under the Note Indenture which continues for 90 days after written notice to us; * prior to the Substitution Date, the occurrence of a default under the Mortgage, of which default the Mortgage Trustee or the holders of a majority in aggregate principal amount of the outstanding notes issued under the Note Indenture have given written notice to the Note Trustee; * if any Substituted Pledged Bonds are outstanding, the occurrence of a default under the Substituted Mortgage, of which default the trustee under such Substituted Mortgage or the holders of a majority in aggregate principal amount of the outstanding notes issued under the Note Indenture have given written notice to the Note Trustee; and * certain events of bankruptcy, insolvency or reorganization of South Jersey Gas. (Section 8.1) If an event of default under the Note Indenture occurs and is continuing (other than an event of default related to a default under the Mortgage or the Substituted Mortgage), either the Note Trustee or the registered holders of a majority in aggregate principal amount of the outstanding notes issued under the Note Indenture of such series may declare the principal amount of all notes of such series to be immediately due and payable. At any time after an acceleration of the notes of such series has been declared but before a judgment or decree for the immediate payment of the principal amount of such notes has been obtained and so long as all of our Bonds have not been accelerated, the registered holders of a majority in aggregate principal amount of the outstanding notes of such series may, under certain circumstances, rescind such acceleration. If an event of default occurs relating to a default under the Mortgage or the Substituted Mortgage and the acceleration of the principal of the related first mortgage bonds (see "Description of the Pledged Bonds-Defaults and Notice Thereof"), the principal of all of the outstanding notes issued under the Note Indenture, together with interest shall become - 12 - immediately due and payable; provided, however, a rescission of the acceleration of the related first mortgage bonds shall constitute a waiver of such event of default under the Note Indenture. (Section 8.1) The Note Indenture provides that the Note Trustee generally will be under no obligation to exercise any of its rights or powers under the Note Indenture at the request or direction of any of the holders unless such holders have offered to the Note Trustee reasonable security or indemnity against the liabilities and costs which may be incurred by such exercise. (Section 9.2) The holders of a majority in principal amount of the outstanding notes generally will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Note Trustee, or of exercising any trust or power conferred on the Note Trustee, with respect to the Notes. (Section 8.7) Each holder of a Note has the right to institute a proceeding with respect to the Note Indenture subject to certain conditions specified in the Note Indenture. (Section 8.4) The Note Indenture provides that the Note Trustee, within 90 days after the occurrence of a default with respect to the Notes, is required to give the holders of the Notes notice of such default, unless cured or waived. However, except in the case of default in the payment of principal, premium or interest on any Notes, the Note Trustee may withhold such notice if it determines in good faith that it is in the interest of such holders to do so. (Section 8.8) We are required to deliver to the Note Trustee each year a certificate as to whether or not, to the knowledge of the officers signing such certificate, we are in compliance with the conditions and covenants under the Note Indenture. (Section 6.6) We are required to notify the Note Trustee within five days of becoming aware of an event of default. (Section 6.7) Modification The Note Indenture may be modified and amended by us and the Note Trustee with the consent of the holders of a majority in principal amount of the outstanding notes affected thereby; provided that no modification or amendment may, without the consent of the holder of each outstanding note affected thereby: * change the maturity date of any Note; * reduce the rate or extend the time of payment of interest on any Note; * reduce the principal amount of, or premium payable on, any Note; * change the currency of any payment on any Note; * change the date on which any Note may be redeemed; * adversely affect the rights of a holder to institute suit for the enforcement of any payment on or with respect to any Note; * impair the interest of the Note Trustee in the Pledged Bonds or Substituted Pledged Bonds held by it or reduce the principal amount of the Pledged Bonds (except as permitted on the Substitution Date) or Substituted Pledged Bonds securing the Notes to an amount less than the principal amount of the related series of Notes or alter - 13 - the payment provisions of such Pledged Bonds or Substituted Pledged Bonds in a manner adverse to the holders of the Notes; or * modify the foregoing requirements or reduce the percentage of outstanding notes necessary to modify or amend the Note Indenture or to waive any past default to less than a majority. The Note Indenture may be modified and amended by us and the Note Trustee without the consent of the holders of the notes: * to add to the covenants of South Jersey Gas for the benefit of the holders or to surrender a right conferred on us in the Note Indenture; * to add further security for the Notes; * to make certain ministerial or immaterial modifications; or * to make certain other modifications which are not prejudicial to the interests of the holders of the notes. (Sections 13.1 and 13.2) Defeasance and Discharge The Note Indenture provides that, subject to certain exceptions, we will be discharged from any and all obligations in respect of the Notes and the Note Indenture if, among other things, we irrevocably deposit with the Note Trustee, in trust for the benefit of holders of Notes, money or certain United States government obligations which through the payment of interest thereon and principal thereof will provide money in an amount sufficient to make all payments of principal of and any premium and interest on the Notes on the dates such payments are due. Thereafter, the holders of Notes must look only to such deposit for payment of the principal of and interest and any premium on the Notes. (Section 5.1) Consolidation, Merger and Sale or Disposition of Assets We may not consolidate with or merge into any other corporation or sell, transfer or otherwise dispose of all or substantially all of our assets unless the successor or transferee corporation assumes by supplemental indenture the due and punctual payment of the principal of and premium and interest on all of the Notes and the performance of every covenant of the Note Indenture to be performed or observed by us, and: * if such transaction occurs prior to the Substitution Date, unless the successor or transferee corporation assumes our obligations under the Mortgage with respect to the Pledged Bonds; and * if such transaction occurs on or after the Substitution Date and if Substituted Pledged Bonds are outstanding, unless the successor or transferee corporation assumes our obligations under the Substituted Mortgage with respect to the Substituted Pledged Bonds. - 14 - Upon any such consolidation, merger, sale, transfer or other disposition of all or substantially all of our assets, the successor corporation formed by such consolidation or into which we are merged or to which such transfer is made shall succeed to and be substituted for, and may exercise every right and power of, South Jersey Gas under the Note Indenture and we will be released from all obligations under the Note Indenture. The Note Indenture defines all or substantially all of our assets as being 50% or more of our total assets as shown on our balance sheet as of the end of the prior year and specifically permits any sale, transfer or other disposition during a calendar year of less than 50% of our total assets without the consent of the holders of the Notes and without the assumption by the transferee of our obligations on the Notes and covenants contained in the Note Indenture. (Sections 12.1 and 12.2) Voting of the Pledged Bonds Held by Note Trustee The Note Trustee, as a holder of the Pledged Bonds, may attend any meeting of bondholders under the Mortgage to which it receives due notice or, at its option, may deliver its proxy in connection therewith. Either at such meeting or where any action, amendment, modification, waiver or consent to or in respect of the Mortgage or Bonds issued under the Mortgage is sought without a meeting, the Note Trustee will vote the Pledged Bonds held by it or will consent with respect thereto as described below. The Note Trustee may agree to any proposed action without the consent of or notice to holders of notes of a series where such proposed action would not adversely affect the holders of the notes of such series. In the event that the proposed action would adversely affect the holders of the notes of a series, the Note Trustee shall not vote the Pledged Bonds that secured such series without notice to and the approval of holders of at least a majority in aggregate principal amount of the notes of such series then outstanding. (Section 4.3) Resignation or Removal of Note Trustee The Note Trustee may resign at any time upon written notice to us specifying the day upon which the resignation is to take effect. Such resignation will take effect immediately upon the later of the appointment of a successor Note Trustee and the specified resignation date. (Section 9.10) The Note Trustee may be removed at any time by the holders of at least a majority in principal amount of the then outstanding notes issued under the Note Indenture. In addition, so long as no event of default or event which, with the giving of notice or lapse of time or both, would become an event of default has occurred and is continuing, we may remove the Note Trustee upon notice to the holder of each outstanding note and to the Note Trustee and the appointment by us of a successor Note Trustee. (Section 9.10) Book-Entry System Each Note will be represented by either a permanent global note registered in the name of, or a nominee of, the depository or a certificate issued in definitive registered form, without coupons, as set forth in the applicable prospectus supplement. Each Note represented by a global note is referred to below as a "Book-Entry Note." Except as set forth below, Book-Entry Notes will not be issuable in certificated form. So long as the depository or - 15 - its nominee is the registered holder of any permanent global note, the depository or its nominee will be considered the sole holder of the Book-Entry Notes or Notes represented by the applicable permanent global note for all purposes under the Note Indenture and the Notes. For a further description of the respective forms, denominations and transfer and exchange procedures for any such permanent global note and the Book-Entry Notes, refer to the following discussion and to the applicable prospectus supplement. Upon issuance, all Book-Entry Notes of like tenor and having the same date of issue will be represented by a single permanent global note. Each permanent global note representing Book-Entry Notes will be deposited with, or on behalf of, the depository, as depositary, located in the Borough of Manhattan, the City of New York, and will be registered in the name of the depository or a nominee of the depository. Currently, the depository will accept the deposit of only permanent global notes denominated in U.S. dollars. Ownership of beneficial interests in a permanent global note representing Book-Entry Notes will be limited to institutions that have accounts with the depository or its nominee (such institutions are referred to as participants) or persons that may hold interests through participants. In addition, ownership of beneficial interests by participants in such a permanent global note will be evidenced only by, and the transfer of that ownership interest will be effected only through, records maintained by the depository or its nominee for such permanent global note. Ownership of beneficial interests in such a permanent global note by persons that hold through participants will be evidenced only by, and the transfer of that ownership interest within such participant will be effected only through, records maintained by such participant. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in such a permanent global note. We have been advised by the depository that upon the issuance of a permanent global note representing Book-Entry Notes, and upon the deposit of such permanent global note with the depository, the depository will immediately credit, on its book-entry registration and transfer system, the respective principal amounts of the Book-Entry Notes represented by such permanent global note to the accounts of participants. The accounts to be credited shall be designated by the soliciting agent or, to the extent that the Book-Entry Notes are offered and sold directly, by us. Payment of principal of and any premium and interest on Book-Entry Notes represented by any permanent global note registered in the name of or held by the depository or its nominee will be made to the depository or its nominee, as the case may be, as the registered owner and holder of the permanent global note representing such Book-Entry Notes. Neither South Jersey Gas, the trustee, nor any agent of the trustee, will have any responsibility or liability for any aspect of the depository's records or any participant's records relating to or payments made on account of beneficial ownership interests in a permanent global note representing such Book-Entry Notes or for maintaining, supervising or reviewing any of the depository's records or any participant's records relating to such beneficial ownership interests. - 16 - We have been advised by the depository that upon receipt of any payment of principal of or any premium or interest in respect of a permanent global note, the depository will immediately credit, on its book-entry registration and transfer system, accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of such permanent global note as shown on the records of the depository. Payments by participants to owners of beneficial interests in a permanent global note held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in "street name," and will be the sole responsibility of such participants. No permanent global note described above may be transferred except as a whole by the depository for such permanent global note to a nominee of the depository or by a nominee of the depository to the depository or another nominee of the depository. A permanent global note representing Book-Entry Notes is exchangeable for definitive notes registered in the name of, and a transfer of a permanent global note may be registered to, any person other than the depository or its nominee, only if: * we are notified by the depository that it is unwilling or unable to continue as depositary for such permanent global note or if at any time the depository ceases to be a clearing agency registered under the Exchange Act; or * we, in our sole discretion, at any time determine not to have all of the Notes represented by the permanent global note. Any permanent global note that is exchangeable pursuant to the preceding sentence shall be exchangeable in whole for definitive notes in registered form, of like tenor and of an equal aggregate principal amount, in denominations of $1,000 and integral multiples of $1,000 in excess thereof. Such definitive notes shall be registered in the name or names of such person or persons as the depository shall instruct the trustee. It is expected that such instructions may be based upon directions received by the depository from its participants with respect to ownership of beneficial interests in such permanent global note. Except as provided above, owners of beneficial interests in a permanent global note will not be entitled to receive physical delivery of notes in definitive form and will not be considered the holders thereof for any purpose under the Note Indenture, and no permanent global note representing Book-Entry Notes shall be exchangeable, except for another permanent global note of like denomination and tenor to be registered in the name of the depository or its nominee. Accordingly, each person owning a beneficial interest in a permanent global note must rely on the procedures of the depository and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the Note Indenture. The Note Indenture provides that the depository, as a holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the Note Indenture. We understand that, under existing industry practices, in the event that we request any action of holders of notes or an owner of a beneficial interest in such permanent global note desires to give or take any action that a holder of a note is entitled to give or take under the Note Indenture, the depository would - 17 - authorize the participants holding the relevant beneficial interests to give or take such action, and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instructions of beneficial owners owning through them. The Depository Trust Company, or DTC, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments that DTC's participants (Direct Participants) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (DTCC). DTCC, in turn, is owned by a number of the Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly. The DTC rules applicable to its Participants are on file with the Commission. More information about DTC can be found at www.dtcc.com. The information in this section concerning DTC and DTC's book-entry system has been obtained from DTC, and South Jersey Gas and any underwriters, dealers or agents take no responsibility for the accuracy thereof. The underwriters, dealers or agents of any Notes may be Direct Participants of DTC. Concerning the Note Trustee The Bank of New York is the Note Trustee under the Note Indenture. The Note Trustee also acts as trustee for our Bonds. We also currently maintain other banking relationships with the Note Trustee in the ordinary course of business. DESCRIPTION OF THE PLEDGED BONDS General - 18 - The Pledged Bonds are to be issued under and secured by the Mortgage and the Twenty-Third Supplemental Indenture providing for the Pledged Bonds. The Pledged Bonds constitute the Twenty-First Series of our first mortgage bonds and are designated as "South Jersey Gas Company First Mortgage Bonds, 10% Medium Term Notes, Series B." The Twenty-Third Supplemental Indenture provides that we may issue Pledged Bonds in an aggregate principal amount not to exceed $150,000,000. However, the Mortgage limits the amount of new debt, such as the Notes, that can be ratably secured under the Mortgage. The limit is determined by a formula based on the value of certain property additions as provided in the Mortgage. As of the date of this prospectus, the maximum principal amount of Pledged Bonds that can be issued (and, therefore, the maximum principal amount of Notes that can be secured under the Mortgage through Pledged Bonds) is approximately $99,746,000. We may issue from time to time one or more additional Pledged Bonds when so permitted under the Mortgage. Prior to the Substitution Date, we will not issue Notes so that there are Notes outstanding in an aggregate amount greater than the then outstanding Pledged Bonds. The following is a brief summary of certain provisions of the Mortgage. For a complete statement of such provisions, reference is made to the Mortgage. A copy of the Mortgage, including the Twenty-Third Supplemental Indenture, may be inspected at the office of the Mortgage Trustee at 101 Barclay Street, Floor 21 West, New York, New York 10286 or at the office of the Commission, 450 Fifth Street, N.W., Washington, D.C. References to articles and sections under this caption are reference to articles and sections of the Mortgage. The Pledged Bonds will be issued initially to the Note Trustee and will be issuable only in fully registered form in any denomination authorized by us. The Pledged Bonds are transferable, and the several denominations thereof are exchangeable for Bonds of other authorized denominations but of the same series and aggregate principal amount, upon compliance with the Mortgage and the Note Indenture. No service fee will be charged for any such transfer or exchange, but we may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The Pledged Bonds have not been registered under the Securities Act. Interest, Maturity and Payment Interest on the Pledged Bonds shall accrue at the rate of 10% per annum computed on the basis of a 360-day year of twelve 30-day months and shall be payable semi-annually in arrears on May 1 and November 1 of each year. Interest is payable initially on May 1, 2003, subject to receipt of certain credits against principal and interest and such obligations as set forth below. In addition to any other credit, payment or satisfaction to which we are entitled with respect to the Pledged Bonds, we shall be entitled to credits against amounts otherwise payable in respect of the Pledged Bonds in an amount corresponding to: * the principal amount of any of the Notes surrendered to the Note Trustee by us, or purchased by the Note Trustee, for cancellation; - 19 - * the amount of money held by the Note Trustee and available and designated for the payment of principal of and/or interest on the Notes secured thereby, regardless of the source of payment to the Note Trustee of such moneys; and * the amount by which principal of and interest due on the Pledged Bonds exceeds principal of and interest due on the Notes secured thereby. (Section 2.1, 23rd Supp.) Lien and Security The Pledged Bonds are secured by the lien of the Mortgage equally and proportionately with all other Bonds. Subject to certain exceptions, the Mortgage constitutes a first lien on substantially all of the property and franchises we currently own or hereafter acquire. The Mortgage excepts from its lien materials and supplies consumable in the operation of our business, certain merchandise and products, motor vehicles, and cash, accounts receivable, stocks, bonds, notes and securities which are neither specifically pledged with the Mortgage Trustee nor required by the Mortgage to be pledged. (Granting Clause) There are certain conditions which must be complied with relating to the lien of the Mortgage in the case of a merger, consolidation or sale of all the assets of South Jersey Gas. (Section 5) Issuance of Additional Bonds Additional Bonds, ranking equally with all outstanding Bonds, may be issued under the Mortgage without limit as to aggregate principal amount upon compliance with the Mortgage and after obtaining the approval of the New Jersey Board of Public Utilities. In general, additional Bonds may be issued in principal amount not exceeding: * 60% of the cost or fair value (whichever is less) of property additions, which consist of real and personal property constructed or acquired by us subject to the lien of the Mortgage and not previously utilized under the Mortgage as the basis for additional bonds or certain other purposes, located in the State of New Jersey, and used or useful by us in connection with our business, after deducting from such cost or fair value the excess of the cost of mortgaged property retired and certain amounts relating to depreciation of the mortgaged property; provided that: - our net earnings (as defined in the Mortgage) for 12 consecutive months within the preceding 15 months shall have been at least two times the annual interest charges on all prior lien obligations and all Bonds to be outstanding after the authentication of those about to be authenticated; and - if such property additions are subject to a prior lien: (x) 166 2/3% of the principal amount of the outstanding obligations secured by such prior lien shall be deducted from the cost or fair value of such property additions (unless such deduction has been made previously); and (y) if the deduction referred to in clause (x) has not previously been made, then the aggregate principal amount of all outstanding prior lien obligations upon all property additions used as the basis for authentication of Bonds, - 20 - withdrawal of money, or release of property under the Mortgage or as a credit against a payment to any improvement or sinking fund for Bonds of a particular series, or the replacement fund hereinafter referred to, shall not exceed 10% of the principal amount of all Bonds to be outstanding after authentication of those about to be authenticated (Section 3.04); * the principal amount of other Bonds acquired, paid, retired, or with respect to which payment has been provided for, excluding, however, any such Bonds paid or retired by the operation of any sinking, replacement, purchase or other analogous fund or otherwise used as a credit against the obligations of South Jersey Gas, with certain specified exceptions; provided that if such Bonds were not bona fide issued and bear interest at a lower rate than the Bonds to be authenticated, the net earnings condition specified in the bullet point above must be complied with (Sections 3.04 and 3.06); and * the amount of money deposited with the Mortgage Trustee for that purpose. (Sections 3.03, 3.06 and 3.07) Money so deposited may be withdrawn by us upon the same conditions as would entitle us to obtain the authentication of Bonds of an equal principal amount under the first two bullet points above. However, if the net earnings condition specified in the first bullet point was complied with at the time of the deposit of such money and included all interest charges on prior lien obligations existing at the time of the requested withdrawal, it need not again be complied with upon the withdrawal thereof. (Sections 3.08 and 3.09) If the additional Bonds are to be issued on the basis of property additions, the Mortgage requires that we deliver to the Mortgage Trustee a certificate of an engineer, appraiser or other expert as to the fair value of such additions as of a specified date. If any additions were acquired from another gas utility, the initial appraisal must be performed by an engineer, appraiser or other expert who is independent of South Jersey Gas. (Section 3.04, as amended by 17th Supp.) Upon the earlier to occur of (a) the date as of which no Bonds remain outstanding that were part of a series of Bonds initially issued prior to the Nineteenth Series and (b) the date as of which a Supplemental Indenture is executed amending Section 3.06 of the Mortgage, we will be permitted to use the collateral underlying Bonds that are retired, acquired, paid or surrendered by us as collateral for subsequently issued Bonds. Replacement Fund The Mortgage requires that, on or before April 1 of each year, we deliver a replacement fund certificate and pay to the Mortgage Trustee for a replacement fund an amount equal to $198,000 plus 2% of the cost of all additions made to our depreciable public utility property during the period from October 1, 1947, to the end of the preceding calendar year, less 2% of the cost of all depreciable public utility property retired by us during such period. We may take as a credit against such payment 166 2/3% of the principal amount of Bonds which could then be issued on the basis of property additions and the principal amount of Bonds paid, acquired or retired by us, to the extent that - 21 - the same have not been otherwise included in a prior Replacement Fund Certificate filed with the Mortgage Trustee. So long as any Bonds of the Fourteenth Series, Fifteenth Series, Sixteenth Series, Seventeenth Series, Eighteenth Series, Nineteenth Series, Twentieth Series or Twenty-First Series remain outstanding, we will satisfy our obligations under the replacement fund through the use of cash only if we have first used all available property additions and retired Bonds, and then only to the extent such amounts are not sufficient to satisfy such obligations. All money in the replacement fund shall, upon our request, be applied as described below under "Release and Substitution of Property" in the case of proceeds from the sale of released property. (Sections 5.19 and 6.07; 15th Supp., Section 3.2; 16th Supp., Section 3.2; 18th Supp., Section 3.2.; 19th Supp., Section 3.2.; 20th Supp., Section 3.2; 21st Supp., Section 3.2; 22nd Supp., Section 3.2; and 23rd Supp., Section 3.2) Release and Substitution of Property Upon substitution of other property of equal value, we may dispose of, free from the lien of the Mortgage, any machinery, tools, implements, fixtures, or equipment unsuitable or not required for the conduct of our business. (Section 6.03) Any property no longer necessary for the proper conduct of our business may be sold, exchanged or disposed of by us, and released from the lien of the Mortgage upon receipt by us of consideration, which shall be paid or delivered to the Mortgage Trustee (unless required to be paid or delivered to the trustee of a prior lien), equal to at least the fair value of such property and which shall consist of: * money; * obligations of any federal, state, municipal or other governmental body or agency purchasing such property; * obligations maturing within 15 years, secured by a purchase money mortgage on such property and constituting not more than 60% of such consideration; and/or * property additions (not otherwise utilized under the Mortgage) which might have formed the basis for the authentication of additional Bonds. (Sections 6.04 and 6.05) Property taken by eminent domain proceedings or under governmental power of purchase shall be released from the Mortgage and the proceeds of such taking or purchase shall be paid to the Trustee. (Section 6.08) Proceeds received by the condemnation or from the sale of property released from the Mortgage: * may be withdrawn by us upon compliance with the same conditions that would authorize the authentication of Bonds of an equal principal amount, except that no earnings condition shall be applicable and except that money may be withdrawn on the basis of property additions up to 100% of the cost or fair value (whichever is less) thereof after deducting the required amount on account of any prior lien obligations and without any deduction for the cost of property retired; * may be temporarily invested by the Mortgage Trustee in obligations of the United States; or - 22 - * may be applied to the purchase or redemption of Bonds; provided that all such proceeds (including proceeds temporarily invested as aforesaid) not withdrawn or applied for five years after receipt by the Mortgage Trustee shall be applied to the purchase or redemption of Bonds. (Section 6.07) Proceeds of insurance on mortgaged property, except on losses of less than $10,000, are payable to the Mortgage Trustee and may be applied by it to reimburse us for the cost of repairing, renewing or replacing property damaged or destroyed or as above provided in the case of proceeds of the sale of property released from the Mortgage. (Section 5.12) No prior notice is required in connection with any releases or substitutions of property, but Section 8.03 contains provisions relating to the transmission by the Mortgage Trustee to Bondholders, from time to time, of reports of such releases or substitutions and the consideration received therefor. Restrictions on Dividends So long as any Bonds of the Twenty-First Series shall remain outstanding, we will not declare or pay any dividend on any shares of our common stock (other than dividends payable in shares of our common stock) or make any distribution on such shares, or purchase or otherwise acquire any such shares (except shares acquired without cost to us), or advance any amount to or invest any amount in the property, securities or indebtedness of, or guarantee any indebtedness of, any subsidiary (as defined in the Mortgage) if, after giving effect to such action, the sum of the aggregate amounts so declared, paid, distributed, purchased, acquired, advanced, invested or guaranteed after December 31, 2001, would exceed the aggregate net income of South Jersey Gas available for dividends on our common stock earned after such date plus the sum of $69,000,000 (Section 3.1, 23rd Supp.). The method of calculating net income is specified in the Mortgage. Redemption The Pledged Bonds are subject to redemption, either as a whole or in part, from time to time upon payment of the principal amount thereof from proceeds available under the Mortgage resulting from the condemnation of property subject to the lien of the Mortgage or from the sale of such property to a governmental body or agency having the power of eminent domain made as a result of the threat of condemnation of such property in accordance with the terms of the Mortgage, which provides that if less than all Bonds of all series are redeemed, then proceeds from the sale of such property will be applied to the redemption of all Bonds, including the Pledged Bonds, on a pro rata basis based on the amount of the Bonds then outstanding. (Section 1.7, 23rd Supp.) Consolidation, Merger or Sale Subject to the approval of the New Jersey Board of Public Utilities, the Mortgage does not prevent our consolidation or merger with or into any other corporation or a conveyance and transfer of all of our property and franchises to any other corporation if: - 23 - * the consolidation, merger or conveyance and transfer is subject to the continuing lien of the Mortgage on the mortgaged property and will not impair the lien or any of the rights or powers of the Trustee or Bondholders; * the corporation formed by the consolidation or into which we are merged or which acquires the mortgaged property assumes and agrees in writing to pay the Bondholders the principal of and interest on all the Bonds, as and when due; * any such successor corporation executes and delivers a supplemental indenture which contains, among other things: (a) an agreement to perform all of our obligations under the Mortgage; (b) a stipulation that such consolidation, merger or conveyance and transfer is not a waiver or release of any rights or powers of the Mortgage Trustee or the Bondholders; (c) a grant confirming the lien of the Mortgage Trustee upon the mortgaged property; and (d) a grant to the Mortgage Trustee subjecting to the lien of the Mortgage property additions to be used in the future and certain after-acquired property; and * the Mortgage Trustee shall have consented to the consolidation, merger or conveyance and transfer, which consent the Mortgage Trustee is required to give upon receiving an opinion of counsel that the foregoing conditions in the Mortgage have been satisfied, unless in the Mortgage Trustee's opinion the transaction would be prejudicial to the interests of the Bondholders. (Section 7.01) Modifications of Mortgage Any of the provisions of the Mortgage or of the Bonds may be altered, amended or eliminated, and additional provisions added, with the written consent of the holders of 66 2/3% in principal amount of the Bonds outstanding. If such change pertains only to the Bonds of one or more series but less than all series, only the written consent of the holders of 66 2/3% in principal amount of the then outstanding Bonds of each series to which such change pertains is needed. However, no such change may: * alter or modify the right of any Bondholder to receive payment of the principal of and interest on its Bonds on or after the respective due dates thereof; * change any of the provisions of any Bond with respect to the time, terms, manner, or amount of any payment of the principal thereof or interest thereon without the consent of the holder of such Bonds; or * reduce the percentage of Bondholders whose consent shall be required for the execution of any subsequent supplemental indenture. The consent of the Board of Public Utilities may be required before certain of the above actions may be taken. (Section 10.02) Certain other modifications and amendments described in the Mortgage may be made without the consent of the Bondholders. (Section 10.01) - 24 - Percentage of Bondholders Required to Take Certain Action Upon the occurrence of an event of default under the Mortgage, the Mortgage Trustee or the holders of 25% in principal amount of the Bonds then outstanding may accelerate the maturity of the principal of all the Bonds (Section 9.03); but if we cure all events of default under the Mortgage, the holders of a majority in principal amount of the Bonds then outstanding may rescind, or require the Mortgage Trustee to rescind, such acceleration. (Section 9.13) The holders of 66 2/3% in principal amount of the Bonds then outstanding may waive any past default under the Mortgage consequences except for a default in the payment of principal of or interest on any of the Bonds. (Section 9.13) No Bondholder may enforce the lien of the Mortgage unless the holders of 25% in principal amount of the Bonds then outstanding have requested the Mortgage Trustee to do so and have offered to indemnify it against expenses and liabilities in connection therewith, and unless the Mortgage Trustee has failed to take such action within 60 days. (Section 9.15) The holders of a majority in principal amount of the Bonds then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Mortgage Trustee or exercising any trust or power conferred on it, unless such action would be contrary to law or the provisions of the Mortgage or would, in the opinion of the Mortgage Trustee, be unjustly prejudicial to the other Bondholders. (Section 9.18) Defaults and Notice Thereof The following constitute events of default under the Mortgage: * defaults in the payment of principal of any Bond or prior lien obligation; * default for 60 days in the payment of interest on any Bond or any prior lien obligation, or in the payment of any sinking, replacement, purchase or analogous fund; * default for 60 days after notice in the performance of any other covenant in the Mortgage; * default in observing or performing any covenant or condition in any mortgage constituting a prior lien on mortgaged property and the mortgagee or trustee thereunder institutes proceedings to invoke rights or remedies available by reason of such default; and * certain events of bankruptcy, insolvency or reorganization. (Section 9.02) The 15th, 16th, 18th, 19th, 20th, 21st, 22nd and 23rd Supplements provide that the following also constitute events of default under the Mortgage: * default in the payment of principal of any Bond of the Fourteenth through Twenty-First Series, respectively, at maturity or upon redemption pursuant to the provisions of any sinking, replacement, purchase or analogous fund or pursuant to any optional or other redemption or otherwise; and - 25 - * default for ten days in the payment of interest on any Bond of the Fourteenth through Twenty-First Series, respectively. (15th Supp., Section 6.1; 16th Supp., Section 6.1; 18th Supp., Section 6.1; 19th Supp., Section 6.1; 20th Supp., Section 7.1; 21st Supp., Section 7.1, 22nd Supp., Section 7.1 and 23rd Supp., Section 7.1) The 15th, 16th, 18th, 19th, 20th, 21st, 22nd and 23rd Supplements also provide that it shall be an event of default under the Mortgage if we default in the performance of or compliance with any covenant, condition or term in the Mortgage or the 15th, 16th, 18th, 19th, 20th, 21st, 22nd or 23rd Supplements, respectively, and such default shall continue for 30 days after we have knowledge thereof. Within 90 days after the occurrence thereof, the Mortgage Trustee shall give notice of any defaults to the Bondholders; provided that in the case of default in the payment of principal of or interest on any Bond or of any sinking fund or purchase fund installment, the Mortgage Trustee is not required to give notice to the Bondholders of any default under the Mortgage if the Mortgage Trustee in good faith determines that the withholding of such notice is in the interest of the Bondholders. (Section 11.05) Periodic evidence of compliance with certain provisions of the Mortgage is required to be submitted to the Mortgage Trustee. (Sections 5.09, 5.12, 5.18 and 5.19) The Mortgage Trustee is entitled to be indemnified to its satisfaction against all its prospective costs, expenses, and liability in connection therewith. (Sections 11.01 and 11.02) Discharge and Satisfaction Whenever all amounts due or to become due on all outstanding Bonds shall have been paid or provision for the payment thereof shall have been made (as discussed below) and all amounts payable by us to the Mortgage Trustee under the Mortgage shall have been paid, the Mortgage Trustee shall, upon our request and at our expense, satisfy or discharge the Mortgage of record wherever recorded and convey, transfer, assign and deliver the mortgaged property to us. At such time, all the title, estate, rights and powers of the Mortgage Trustee shall cease and the mortgaged property shall revert to us, and all responsibility of the Mortgage Trustee and all of our obligations under the Mortgage (except as expressly provided therein) shall then cease. (Section 12.01). Provision for payment of a Bond shall be deemed to have been made if: * when the principal of such Bond shall have become due and payable, all amounts due shall have been paid or shall have been deposited in trust with and be held by the Mortgage Trustee for the account of the holder thereof; or * at any time in advance of the maturity thereof, we (a) shall have either (1) deposited with the Mortgage Trustee in trust all amounts to become due up to and upon the maturity date thereof or (2) duly called such Bond for redemption on a date specified, given all notices required to make such call effective or made provision satisfactory to the Mortgage Trustee for giving all such notices, and deposited with the Mortgage Trustee in trust all amounts to become due upon such Bond up to and upon such redemption date, and (b) shall have irrevocably authorized the Mortgage Trustee to pay to the holder thereof, out of the funds deposited with it, all amounts to become due on such Bond up to the maturity date or the redemption - 26 - date, as the case may be, such payment to be made upon such Bond whenever it shall be presented for that purpose without awaiting the maturity date or the redemption date, and shall have given at least one notice by publication of such deposit and authorization or shall have made provision satisfactory to the Mortgage Trustee for giving such notice. (Article I) PLAN OF DISTRIBUTION The Notes are being offered on a continuing basis by us through agents. The prospectus supplement will identify those agents and will describe the plan of distribution, including commissions to be paid. It is anticipated that the agents will agree to use reasonable efforts to solicit purchases of the Notes. The Notes may also be sold to an agent as principal for reoffering as described below. We will have the sole right to accept offers to purchase Notes and may reject any proposed purchase of Notes in whole or in part. Each agent will have the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes through it in whole or in part. Unless otherwise specified in a prospectus supplement, we will pay a commission to an agent, depending upon the length of maturity of the Notes then being offered, ranging from 0.15% to 0.75% of the principal amount of any Notes sold through such agent. Unless otherwise specified in the applicable prospectus supplement, any Notes sold to an agent as principal will be purchased by such agent at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to any agency sale of a Note of identical maturity. Such Note may be resold by an agent to investors and other purchasers from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale or may be resold to certain dealers. Resales of notes by an agent to a dealer may be made at a discount, which will not be in excess of the discount to be received by such agent from us. After the initial public offering of Notes, the public offering price (in the case of Notes to be resold on a fixed public offering price basis), the commission and the discount may be changed. We reserve the right to withdraw, cancel or modify the offer made hereby without notice and may reject orders in whole or in part placed through an agent. Unless otherwise specified in an applicable prospectus supplement, payment of the purchase price of the Notes will be required to be made in immediately available funds in New York City on the date of settlement. No Note will have an established trading market when issued. The Notes will not be listed on any securities exchange. Each agent may from time to time purchase and sell Notes in the secondary market, but no agent is obligated to do so, and there can be no assurance that there will be a secondary market for the Notes or liquidity in the secondary market if one develops. From time to time, the agents may make a market in the Notes but are not obligated to do so and may discontinue such market-making activity at any time. In connection with certain offerings of the Notes, the agents may engage in overallotment, stabilizing transactions and syndicate covering transactions in accordance with Regulation M under the Exchange Act. - 27 - Overallotment involves sales in excess of the offering size which create a short position for the agents. Stabilizing transactions involve bids to purchase the Notes in the open market for the purpose of pegging, fixing or maintaining the price of the Notes. Syndicate covering transactions involve purchases of the Notes in the open market after the distribution has been completed in order to cover short positions. Stabilizing transactions and syndicate covering transactions may cause the price of the Notes to be higher than it would otherwise be in the absence of those transactions. Those activities, if commenced, may be discontinued at any time. Neither we nor any of the agents makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above might have on the price of the Notes. In addition, neither we nor any of the agents make any representation that they will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice. The agents may be deemed to be "underwriters" within the meaning of the Securities Act of 1933. We have agreed to indemnify the agents against certain liabilities, including liabilities under the Securities Act, and to contribute to payments the agents may be required to make in respect thereof. In addition, we have agreed to reimburse the agents for certain expenses related to the offering made hereby. LEGAL MATTERS The validity of the securities being offered will be passed upon for us by Cozen O'Connor, Philadelphia, Pennsylvania. Certain legal matters will be passed upon for the agents by Chapman and Cutler, Chicago, Illinois. EXPERTS The financial statements and the related financial statement schedules included in our Annual Report on Form 10-K incorporated in this prospectus by reference have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. - 28 - PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. SEC Registration Fee.....................................$13,800 Legal Fees and Expenses..................................200,000 Accounting Fees and Expenses.............................110,000 Rating Agency Fees.......................................105,000 Printing.................................................150,000 Miscellaneous (including Blue Sky Fees and Expenses)......21,200 -------- Total...................................................$600,000 -------- Each amount set forth above, except for the SEC registration fee, is estimated. Item 15. Indemnification of Directors and Officers. Under Section 14A:3-5 of the New Jersey Business Corporation Act, South Jersey Gas: (1) has the power to indemnify each director and officer of South Jersey Gas (as well our employees and agents) against expenses and liabilities in connection with any proceeding involving him or her by reason of his or her being or having been a director or officer, other than a proceeding by or in the right of South Jersey Gas, if (a) such director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interests, and (b) with respect to any criminal proceeding, such director or officer had no reasonable cause to believe his conduct was unlawful; (2) has the power to indemnify each director and officer of South Jersey Gas against expenses in connection with any proceeding by or in the right of South Jersey Gas to procure a judgment in our favor which involves such director or officer by reason of his or her being or having been a director or officer if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to our best interest; however, in such proceeding no indemnification may be provided in respect to any claim, issue or matter as to which such director or officer shall have been adjudged to be liable to South Jersey Gas, unless and only to the extent that the court determines that the director or officer is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper; (3) must indemnify each director and officer against expenses to the extent that he or she has been successful on the merits or otherwise in any proceeding referred to in (1) and (2) above or in defense of any claim, issue or matter therein; and (4) has the power to purchase and maintain insurance on behalf of a director or officer against any expenses incurred in any proceeding and any liabilities asserted against him or her by reason of his or her being or having been a director or officer, whether or not we would have the power to indemnify him or her against such expenses and liabilities under the statute. - 29 - As used in the statute, "expenses" means reasonable costs, disbursements and counsel fees, "liabilities" means amounts paid or incurred in satisfaction of settlements, judgments, fines and penalties, and "proceedings" means any pending, threatened or completed civil, criminal, administrative or arbitrative action, suit or proceeding, and any appeal therein and any inquiry or investigation which could lead to such action, suit or proceeding. Indemnification may be awarded by a court under (1) or (2) as well as under (3) above, notwithstanding a prior determination by us that the director or officer has not met the applicable standard of conduct. Indemnification under the statute does not exclude any other rights to which a director or officer may be entitled under a certificate of incorporation, bylaws, or otherwise. Article VII of our Bylaws provides, in pertinent part, as follows: (1) we shall indemnify any corporate agent against his or her expenses and liabilities in connection with any proceedings involving the corporate agent by reason of his or her being or having been such a corporate agent to the extent that (a) such corporate agent is not otherwise indemnified and (b) the power to do so has been or may be granted by statute; and for this purpose our board of directors may, and on request of any such corporate agent shall be required to, determine in each case whether or not the applicable standards in any such statute have been met, or such determination shall be made by independent legal counsel if the board so directs or if the board is not empowered by statute to make such determination; (2) to the extent that the power to do so has been or may be granted by statute, we shall pay expenses incurred by a corporate agent in connection with a proceeding in advance of the final disposition of the proceeding upon receipt of an undertaking by or on behalf of such corporate agent to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified as provided by statute; (3) the indemnification provided in our Bylaws shall not be exclusive of any other rights to which a corporate agent may be entitled, both as to any action in his or her official capacity or as to any action in another capacity while holding such office, and shall inure to the benefits of the heirs, executors, or administrators of any such corporate agent; and (4) our board of directors shall have the power to (a) purchase and maintain, at our expense, insurance on our behalf and on behalf of others to the extent that power to do so has been or may be granted by statute and (b) give other indemnification to the extent permitted by law. We maintain and pay all premiums on directors and officers liability insurance policies with a primary liability limit of $35,000,000. - 30 - Item 16. Exhibits. Exhibit Number Description 1* Form of Distribution Agreement. 4(a)(i) Indenture of Trust dated as of October 1, 1998 between South Jersey Gas and The Bank of New York (incorporated by reference from exhibit 4(e) of Form S-3 of South Jersey Gas (333-62019)). 4(a)(ii) First Supplement to Indenture of Trust dated as of June 29, 2000 (incorporated by reference from exhibit 4.1 of Form 8-K of South Jersey Gas dated July 12, 2001). 4(a)(iii) Second Supplement to Indenture of Trust dated as of July 5, 2000 (incorporated by reference from exhibit 4.2 of Form 8-K of South Jersey Gas dated July 12, 2001). 4(a)(iv) Third Supplement to Indenture of Trust dated as of July 9, 2001 (incorporated by reference from exhibit 4.3 of Form 8-K of South Jersey Gas dated July 12, 2001). 4(b)(i) First Mortgage Indenture dated October 1, 1947 (incorporated by reference from Exhibit 4(b)(i) of Form 10-K of South Jersey Industries, Inc. for the year ended December 31, 1987). 4(b)(ii) Twelfth Supplemental Indenture dated as of June 1, 1980 (incorporated by reference from Exhibit 5(b) of Form S-7 of South Jersey Industries, Inc.). 4(b)(iii) Sixteenth Supplemental Indenture dated as of April 1, 1989 (incorporated by reference from Exhibit 4(b)(xv) of Form 10-Q of South Jersey Industries, Inc. for the quarter ended March 31, 1988). 4(b)(iv) Seventeenth Supplemental Indenture dated as of May 1, 1989 (incorporated by reference from Exhibit 4(b)(xv) of Form 10-K of South Jersey Industries, Inc. for the year ended December 31, 1989). 4(b)(v) Eighteenth Supplemental Indenture dated as of Mach 1, 1990 (incorporated by reference from Exhibit 4(e) of Form S-3 of South Jersey Gas (33-36581)). 4(b)(vi) Nineteenth Supplemental Indenture dated as of April 1, 1992 (incorporated by reference from Exhibit 4(b)(xvii) of Form 10-K of South Jersey Industries, Inc. for the year ended December 31, 1992). 4(b)(vii) Twentieth Supplemental Indenture dated as of June 1, 1993 (incorporated by reference from Exhibit 4(b)(xviii) of Form10-K of South Jersey Industries, Inc. for the year ended December 31, 1993). 4(b)(viii) Twenty-First Supplemental Indenture dated as of March 1, 1997 (incorporated by reference from Exhibit 4(b)(xviv) of Form 10-K of South Jersey Industries, Inc. for the year ended December 31, 1997). - 31 - 4(b)(ix) Twenty-Second Supplemental Indenture dated as of October 1, 1998 (incorporated by reference from exhibit 4(b)(ix) of Form S-3 of South Jersey Gas (333-62019)). 4(b)(x)** Form of Twenty-Third Supplemental Indenture. 5** Opinion of Cozen O'Connor. 12* Statement regarding computation of earnings to fixed charges. 23(a)** Consent of Deloitte & Touche LLP. 23(b)** Consent of Cozen O'Connor (included in Exhibit 5). 24* Power of Attorney. 25 Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939 (incorporated by reference from Exhibit 25(a) of Form S-3 of South Jersey Gas (333-62019)). ------------------------ * Previously filed. ** Filed herewith. Item 17. Undertakings. The undersigned registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; (2) that, for the purpose of determining any liability under the Securities Act of 1933 each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, - 32 - suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. - 33 - SIGNATURES Pursuant to the requirements of the Securities Act of 1933, South Jersey Gas Company has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Folsom, New Jersey, on the 4th day of November, 2002. SOUTH JERSEY GAS COMPANY By: /s/ Charles Biscieglia --------------------------------------- Charles Biscieglia President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Name Capacity Date /s/ Charles Biscieglia Director, President and Chief November 4, 2002 - -------------------------- Executive Officer (principal Charles Biscieglia executive officer) * Executive Vice President and November 4, 2002 - -------------------------- Chief Financial Officer David A. Kindlick (principal financial and accounting officer) - 34 - * Director November 4, 2002 - -------------------------- Shirli M. Billings * Director November 4, 2002 - -------------------------- Sheila Hartnett-Devlin * Director November 4, 2002 - -------------------------- Clarence D. McCormick * Director November 4, 2002 - -------------------------- Frederick R. Raring * Director November 4, 2002 - -------------------------- William J. Hughes * By: /s/ Charles Biscieglia ---------------------------- Charles Biscieglia Attorney-In-Fact - 35 - EXHIBIT INDEX Exhibit Number Description 1* Form of Distribution Agreement 4(a)(i) Indenture of Trust dated as of October 1, 1998 between South Jersey Gas and The Bank of New York (incorporated by reference from exhibit 4(e) of Form S-3 of South Jersey Gas (333-62019)). 4(a)(ii) First Supplement to Indenture of Trust dated as of June 29, 2000 (incorporated by reference from exhibit 4.1 of Form 8-K of South Jersey Gas dated July 12, 2001). 4(a)(iii) Second Supplement to Indenture of Trust dated as of July 5, 2000 (incorporated by reference from exhibit 4.2 of Form 8-K of South Jersey Gas dated July 12, 2001). 4(a)(iv) Third Supplement to Indenture of Trust dated as of July 9, 2001 (incorporated by reference from exhibit 4.3 of Form 8-K of South Jersey Gas dated July 12, 2001). 4(b)(i) First Mortgage Indenture dated October 1, 1947 (incorporated by reference from Exhibit 4(b)(i) of Form 10-K of South Jersey Industries, Inc. for the year ended December 31, 1987). 4(b)(ii) Twelfth Supplemental Indenture dated as of June 1, 1980 (incorporated by reference from Exhibit 5(b) of Form S-7 of South Jersey Industries, Inc.). 4(b)(iii) Sixteenth Supplemental Indenture dated as of April 1, 1989 (incorporated by reference from Exhibit 4(b)(xv) of Form 10-Q of South Jersey Industries, Inc. for the quarter ended March 31, 1988). 4(b)(iv) Seventeenth Supplemental Indenture dated as of May 1, 1989 (incorporated by reference from Exhibit 4(b)(xv) of Form 10-K of South Jersey Industries, Inc. for the year ended December 31, 1989). 4(b)(v) Eighteenth Supplemental Indenture dated as of Mach 1, 1990 (incorporated by reference from Exhibit 4(e) of Form S-3 of South Jersey Gas (33-36581)). 4(b)(vi) Nineteenth Supplemental Indenture dated as of April 1, 1992 (incorporated by reference from Exhibit 4(b)(xvii) of Form 10-K of South Jersey Industries, Inc. for the year ended December 31, 1992). 4(b)(vii) Twentieth Supplemental Indenture dated as of June 1, 1993 (incorporated by reference from Exhibit 4(b)(xviii) of Form10-K of South Jersey Industries, Inc. for the year ended December 31, 1993). - 36 - 4(b)(viii) Twenty-First Supplemental Indenture dated as of March 1, 1997 (incorporated by reference from Exhibit 4(b)(xviv) of Form 10-K of South Jersey Industries, Inc. for the year ended December 31, 1997). 4(b)(ix) Twenty-Second Supplemental Indenture dated as of October 1, 1998 (incorporated by reference from exhibit 4(b)(ix) of Form S-3 of South Jersey Gas (333-62019)). 4(b)(x)** Form of Twenty-Third Supplemental Indenture. 5** Opinion of Cozen O'Connor. 12* Statement regarding computation of earnings to fixed charges. 23(a)** Consent of Deloitte & Touche LLP. 23(b)** Consent of Cozen O'Connor (included in Exhibit 5). 24* Power of Attorney. 25 Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939 (incorporated by reference from Exhibit 25(a) of Form S-3 of South Jersey Gas (333-62019)). -------------------------- * Previously filed. ** Filed herewith. - 37 - EX-4.B.X 4 supind.txt 23RD SUPPLEMENTAL INDENTURE Exhibit 4(b)(x) This instrument was prepared by ------------------------------- Ira G. Megdal, Esquire MORTGAGE - ------------------------------------------------------------------------------- SOUTH JERSEY GAS COMPANY TO THE BANK OF NEW YORK, Trustee ------------------------------ TWENTY-THIRD SUPPLEMENTAL INDENTURE Dated as of September 1, 2002 ------------------------------ Providing for the Issuance of First Mortgage Bonds, 10% Medium Term Notes Series B and Further Supplementing the Indenture of Mortgage Dated October 1, 1947 ------------------------------- (This Instrument Contains After-Acquired Property Provisions) - ------------------------------------------------------------------------------- - Page - THIS TWENTY-THIRD SUPPLEMENTAL INDENTURE dated as of September 1, 2002 between SOUTH JERSEY GAS COMPANY, a New Jersey corporation with principal offices at One South Jersey Plaza, Route 54, Folsom, New Jersey 08037, party of the first part, hereinafter called the "Company," and The Bank of New York (successor trustee to Guarantee Bank), a New York banking corporation with a corporate trust office at 101 Barclay Street, Floor 21 West, New York, New York 10286, party of the second part, hereinafter called "Trustee," as Trustee under the Indenture of Mortgage hereinafter mentioned, Witnesseth that: Whereas, the Company has heretofore duly executed, acknowledged and delivered to Guarantee Bank and Trust Company (name later changed to Guarantee Bank), as Trustee, a certain Indenture of Mortgage dated October 1, 1947 (hereinafter called the "Original Indenture") to provide for the issuance of, and to secure, its First Mortgage Bonds (the "Bonds"), issuable in series and without limit as to aggregate principal amount (except as provided under Article III of the Original Indenture), and by the Original Indenture granted and conveyed unto the Trustee, upon the trusts and for the uses and purposes therein specifically set forth, certain real estate, franchises and other property therein described or which might be thereafter acquired by it, to secure the payment of the principal of and interest on the Bonds from time to time issued thereunder, and pursuant to which the Company provided for the creation of an initial series of First Mortgage Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 4 1/8% Series due 1977" (herein and in the Original Indenture sometimes called the "Bonds of the Initial Series"); and Whereas, the Original Indenture provides that Bonds may be issued thereunder from time to time and in one or more series, upon conditions therein fully provided, the Bonds of each series to be substantially in the forms therein recited for the Bonds of the Initial Series but with such omissions, variations and insertions as are authorized or permitted by the Original Indenture and determined and specified by the Board of Directors of the Company; and Whereas, the Company has heretofore duly executed, acknowledged and delivered to the Trustee a First Supplemental Indenture dated as of October 1, 1952, a Second Supplemental Indenture dated as of February 1, 1961, a Third Supplemental Indenture dated as of July 1, 1963, a Fourth Supplemental Indenture dated as of August 1, 1966, a Fifth Supplemental Indenture dated as of September 1, 1968, a Sixth Supplemental Indenture dated as of July 1, 1969, a Seventh Supplemental Indenture dated as of July 1, 1971, an Eighth Supplemental Indenture dated as of June 1, 1973, a Ninth Supplemental Indenture dated as of July 1, 1974, a Tenth Supplemental Indenture dated as of November 10, 1976, an Eleventh Supplemental Indenture dated as of December 1, 1979, a Twelfth Supplemental Indenture dated as of June 1, 1980, a Thirteenth Supplemental Indenture dated as of August 1, 1981, a Fourteenth Supplemental Indenture dated as of August 1, 1984, a Fifteenth Supplemental Indenture dated as of July 1, 1986, a Sixteenth Supplemental Indenture dated as of April 1, 1988, a Seventeenth Supplemental Indenture dated of as May 1, 1989, an Eighteenth Supplemental Indenture dated as of March 1, 1990, a Nineteenth Supplemental Indenture dated as of April 1, 1992, a Twentieth Supplemental Indenture dated as of June 1, 1993, a Twenty-First Supplemental Indenture dated as of March 1, 1997, and a Twenty-Second Supplemental Indenture dated as of October 1, 1998 (hereinafter called, respectively, the "First Supplement," the "Second Supplement," the "Third Supplement," the "Fourth Supplement," the "Fifth Supplement," the "Sixth Supplement," the "Seventh Supplement," the "Eighth - 2 - Supplement," the "Ninth Supplement," the "Tenth Supplement," the "Eleventh Supplement," the "Twelfth Supplement," the "Thirteenth Supplement," the "Fourteenth Supplement," the "Fifteenth Supplement," the "Sixteenth Supplement," the "Seventeenth Supplement," the "Eighteenth Supplement," the Nineteenth Supplement," the "Twentieth Supplement," the "Twenty-First Supplement" and the "Twenty-Second Supplement") (the Original Indenture, all such supplemental indentures and this Twenty-Third Supplemental Indenture hereinafter collectively referred to as the "Indenture"), pursuant to which the Company provided for the creation of a second series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 3 7/8% Series due 1977" (herein and in the First Supplement sometimes called the "Bonds of the Second Series"), a third series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 5% Series due 1986" (herein and in the Second Supplement sometimes called the "Bonds of the Third Series"), a fourth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 4 1/2% Series due 1988" (herein and in the Third Supplement sometimes called the "Bonds of the Fourth Series"), a fifth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 5.70% Series due 1991" (herein and in the Fourth Supplement sometimes called the "Bonds of the Fifth Series"), a sixth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 7% Series due 1993" (herein and in the Fifth Supplement sometimes called the "Bonds of the Sixth Series"), a seventh series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 7 7/8% Series due 1994" (herein and in the Sixth Supplement sometimes called the "Bonds of the Seventh Series"), an eighth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 8 1/4% Series due 1996" (herein and in the Seventh Supplement sometimes called the "Bonds of the Eighth Series"), a ninth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 8 1/4% Series due 1998" (herein and in the Eighth Supplement sometimes called the "Bonds of the Ninth Series"), a tenth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 9 1/2% Series due 1989" (herein and in the Ninth Supplement sometimes called the "Bonds of the Tenth Series"), an eleventh series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 8% Series due 1995" (herein and in the Twelfth Supplement sometimes called the "Bonds of the Eleventh Series"), a twelfth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 15 3/4% Series due 1996" (herein and in the Thirteenth Supplement sometimes called the "Bonds of the Twelfth Series"), a thirteenth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 14 3/8% Series due 1996" (herein and in the Fourteenth Supplement sometimes called the "Bonds of the Thirteenth Series"), a fourteenth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 9.20% Series due 1998" (herein and in the Fifteenth Supplement sometimes called the "Bonds of the Fourteenth Series"), a fifteenth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 10 1/4% Series due 2008" (herein and in the Sixteenth Supplement sometimes called the "Bonds of the Fifteenth Series"), a sixteenth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 9% Series due 2010" (herein and in the Eighteenth Supplement sometimes called the "Bonds of the Sixteenth Series"), a seventeenth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 8.19% Series due 2007" (herein and in the Nineteenth Supplement sometimes called the "Bonds of the Seventeenth Series"), an eighteenth series of Bonds designated "South Jersey Gas Company First Mortgage Bonds, 6.95% Series due 2013" (herein and in the Twentieth Supplement sometimes - 3 - called the "Bonds of the Eighteenth Series"), a nineteenth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 7.70% Series due 2027" (herein and in the Twenty-First Supplement sometimes called the "Bonds of the Nineteenth Series") and a twentieth series of Bonds designated as "South Jersey Gas Company First Mortgage Bonds, 10% Series A due October 1, 2043" (herein and in the Twenty-Second Supplement sometimes called the "Bonds of the Twentieth Series"); and Whereas, pursuant to the Indenture there have been executed, authenticated and issued, and there are outstanding as of the date of execution hereof by the Company, First Mortgage Bonds of series and in principal amounts as follows: Series Issued Now Outstanding Bonds of the Initial Series $4,000,000 -0- Bonds of the Second Series $4,500,000 -0- Bonds of the Third Series $4,500,000 -0- Bonds of the Fourth Series $5,000,000 -0- Bonds of the Fifth Series $5,000,000 -0- Bonds of the Sixth Series $6,000,000 -0- Bonds of the Seventh Series $6,000,000 -0- Bonds of the Eighth Series $4,000,000 -0- Bonds of the Ninth Series $6,000,000 -0- Bonds of the Tenth Series $6,000,000 -0- Bonds of the Eleventh Series $1,000,000 -0- Bonds of the Twelfth Series $20,000,000 -0- Bonds of the Thirteenth Series $10,000,000 -0- Bonds of the Fourteenth Series $20,000,000 -0- Bonds of the Fifteenth Series $25,000,000 $7,385,000 Bonds of the Sixteenth Series $35,000,000 -0- Bonds of the Seventeenth Series $25,000,000 $11,362,000 Bonds of the Eighteenth Series $35,000,000 $35,000,000 Bonds of the Nineteenth Series $35,000,000 $35,000,000 Bonds of the Twentieth Series $100,000,000 $100,000,000 ; and Whereas, said Bonds of the Fifteenth Series, Bonds of the Seventeenth Series, Bonds of the Eighteenth Series, Bonds of the Nineteenth Series and Bonds of the Twentieth Series constitute the only Bonds outstanding under the Indenture; and Whereas, the Company is making provisions for the issuance and sale of its Medium Term Notes, Series B (the "Notes"), to be issued under an Indenture of Trust (as amended, the "Note Indenture") between the Company and The Bank of New York, as trustee (the "Note Trustee") and to be secured by Bonds of the Twenty-First Series (as defined below); and Whereas, in order to secure the Company's obligations to pay principal, premium, if any, and interest on the Notes prior to the Substitution Date, the Company desires to provide for the issuance under the Mortgage to the Note Trustee of a new series of Bonds; and - 4 - Whereas, the Company, by appropriate resolutions adopted by its Board of Directors pursuant to the terms of the Original Indenture, has duly determined to create a new series of Bonds to be issued under the Indenture, including this Twenty-Third Supplemental Indenture dated as of September 1, 2002 (hereinafter called the "Twenty-Third Supplement"), to be designated as "South Jersey Gas Company First Mortgage Bonds, 10% Medium Term Notes Series B (hereinafter sometimes called the "Bonds of the Twenty-First Series"), and has duly determined that the terms and form of the Bonds of the Twenty-First Series, which will be fully registered bonds, and the form of the Trustee's Certificate of Authentication to be set forth on the Bonds of the Twenty-First Series, shall be substantially as follows respectively: - 5 - [FORM OF BOND] This Bond is not transferable except as provided in the Indenture (as hereinafter defined) and in the Indenture of Trust dated as of October 1, 1998, as supplemented on June 29, 2000, July 5, 2000 and July 9, 2001 ("Note Indenture") between the Company and The Bank of New York, as Trustee (the "Note Trustee"). REGISTERED REGISTERED NUMBER AMOUNT R $150,000,000 SOUTH JERSEY GAS COMPANY FIRST MORTGAGE BOND, 10% MEDIUM TERM NOTES SERIES B South Jersey Gas Company, a New Jersey corporation (hereinafter called the "Company"), for value received, promises to pay on ________, 20__ to the Note Trustee or registered assigns, on the surrender hereof, the principal sum of __________________________ Dollars, and to pay interest thereon from the date hereof, at the rate of 10% per annum (computed on the basis of a 360 day year of twelve 30 day months), such interest to be payable May 1 and November 1 in each year until the obligation of the Company with respect to the payment thereof shall be discharged; provided, however, that the Company shall receive certain credits against such obligations as set forth in the Twenty-Third Supplemental Indenture dated as of September 1, 2002 referred to below. All payments of principal hereof and interest hereon shall be paid at the corporate trust office of The Bank of New York (the "Trustee"), or its successor as trustee under the Indenture, or at such other places as the Company may agree, 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; provided, however, that any such payments of principal and interest shall be subject to receipt of certain credits against such payment obligations as set forth in the Twenty-Third Supplemental Indenture dated as of September 1, 2002 referred to below. This Bond is one of an authorized issue of Bonds of the Company, designated as its First Mortgage Bonds, without specified limit as to aggregate authorized principal amount and issuable in one or more series (each of which is hereinafter referred to as a "Series"), all issued or to be issued under and (except in respect of any sinking, replacement, purchase, or other analogous fund provided in said indenture or in any supplement thereto for any one or more particular Series of Bonds) equally and ratably secured by an indenture dated October 1, 1947 (hereinafter called the "Original Indenture") between the Company and Guarantee Bank and Trust Company, as predecessor trustee, as supplemented by indentures supplemental thereto, including a Twenty-Third Supplemental Indenture dated as of September 1, 2002 (hereinafter called the "Twenty-Third Supplement"), duly executed by the Company to the Trustee, to which Original Indenture and all indentures supplemental thereto (herein sometimes collectively called the "Indenture") reference is hereby made for a description of the property mortgaged and pledged and the respective rights of the Company, the Trustee and the Bondholders in respect thereof, and for a specification of the principal amount of said Bonds from time to time issuable - 6 - thereunder and the conditions upon which said Bonds may be issued and shall be secured. The Bonds of the 10% Medium Term Notes Series B, of which this Bond is one, are of similar tenor hereto, and are limited to the aggregate authorized principal amount of $150,000,000, except as provided in Section 2.11 of the Original Indenture (relating to replacement of mutilated, lost, destroyed or stolen Bonds). On certain defaults by the Company, as provided in the Indenture, the principal of said Bonds may become payable in advance of the expressed maturity thereof. As more fully provided in the Indenture, the Bonds of this Series are subject to redemption, either as a whole or in part from time to time, on not more than 60 nor less than 30 days' written notice in advance of the date fixed for redemption through the application of proceeds from the condemnation of property subject to the lien of the Indenture, or proceeds of the sale of such property to a governmental body or agency having the power of eminent domain made as the result of the threat (evidenced in writing by such body or agency) of condemnation of such property, but not through the application of funds from any other source, upon payment of the principal amount thereof together with accrued interest to the date fixed for redemption. Except as set forth in this paragraph, the Bonds of this Series are not subject to redemption. This Bond is transferable, but only as provided in the Indenture and the Note Indenture, upon surrender hereof, by the registered owner in person or by attorney duly authorized in writing, at either of said offices where the principal hereof and interest hereon are payable. Upon any such transfer, a new fully registered Bond similar hereto will be issued to the transferee. This Bond may in like manner be exchanged for one or more new fully registered Bonds of the same Series of other authorized denominations but of the same aggregate principal amount. No service charge shall be made for any such transfer or exchange, 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 hereunder 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 hereunder 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. As more fully provided in the Indenture, any of the provisions of the Indenture or any Bonds issued pursuant thereto may be altered, amended or eliminated, or additional provisions added, with the consent of the holders or registered owners (evidenced as provided in the Indenture) of at least 66 2/3% in principal amount of the Bonds issued thereunder and then outstanding, or, if such change pertains only to the Bonds of one or more Series but less than all Series of Bonds outstanding, the holders or registered owners of at least 66 2/3% in principal amount of the then outstanding Bonds of each Series to which such change pertains; provided, however, that none of the provisions of any Bond with respect to the time, terms, manner, or amount of any payment of the principal thereof or interest thereon shall be changed without the consent of - 7 - the holder or registered owner of such Bond nor shall there be reduced the percentage of Bonds the holders of which are required to consent to the execution of any supplemental indenture. No recourse under or upon any obligation, covenant or agreement contained in the Indenture or in any indenture supplemental thereto, or in any Bond issued under the Indenture or coupon thereby secured or because of any indebtedness thereby secured, 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 or law, statue 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 the Indenture and any indenture supplemental thereto, and the obligations thereby secured, 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 thereby secured, or implied therefrom. The execution by the Trustee, or by its successor in trust under the Indenture, of the Trustee's certificate of authentication set forth hereon is essential to the validity of this Bond. IN WITNESS WHEREOF, SOUTH JERSEY GAS COMPANY has caused this Bond to be duly executed by the manual or facsimile signatures of its proper officers under its corporate seal or a facsimile thereof Date: __________________ SOUTH JERSEY GAS COMPANY By: ________________________________ [CORPORATE SEAL] , President Attest: ____________________________________ Secretary - 8 - [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] The within Bond is one of the Bonds of the Series designated therein, which are described or provided for in the within-mentioned Indenture. The Bank of New York, Trustee By ____________________________________ Authorized Signatory Dated: ; and WHEREAS, the Company deems it advisable and has determined pursuant to the provisions of the Original Indenture, to convey, transfer and assign to the Trustee and to subject to the lien of the Indenture with the same effect as though included in the granting clauses of the Original Indenture certain additional property now owned by the Company; and WHEREAS, the execution and delivery of the Twenty-Third Supplement have been duly authorized by the Board of Directors of the Company at a meeting duly called and held according to the 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 Bonds of the Twenty-First Series, when executed by the Company and authenticated by the Trustee as in the Indenture provided, valid, binding and legal obligations of the Company, and to make the Twenty-Third 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 TWENTY-THIRD SUPPLEMENT WITNESSETH, that by way of further assurance and in consideration of the premises and of the acceptance by the Trustee of the trusts hereby created, and in order to secure further payment of the principal of, the premium, if any, and the interest on all Bonds at any time issued and outstanding under the Indenture, according to their tenor and effect, and the performance and observance by the Company of the covenants and conditions contained in the Indenture and in said Bonds, the Company has executed and delivered the Twenty-Third Supplement, and has granted, bargained, sold, conveyed, aliened, enfeoffed, mortgaged, pledged, released, confirmed, assigned, transferred and set over, and by these presents does grant, bargain, sell, convey, alien, enfeoff, mortgage, pledge, release, confirm, assign, transfer and set over unto the Trustee, its successors in the trust and its and their assigns, the following described property: 1. All and singular its lands, real estate and any and every interest in lands or real estate wheresoever situate. - 9 - 2. All buildings, structures, machinery, apparatus and equipment situate upon the premises referred to above or appurtenant thereto or used in connection therewith, and all property of the Company used or useful in and about the business of manufacturing, transmitting and disposing of gas for light, heat, power or other purposes and consisting of, inter alia, gas works and plants, engines, furnaces, boilers generators, machinery, shafting, belting, retorts, tanks, condensers, pumps, steam holders, gas holders, purifiers, scrubbers, tar extractors, separators, dehydrators, pressure regulators, blowers, compressors, motors, exhausters, tracks and sidings, oil-gas generators, expansions tanks, gas mains, pipes, gas transmissions systems, gas distribution systems, tunnels, service pipes, pipe line fittings, gates, valves, connections, implements, gas meters, lamps and all other appliances, instruments, equipment, stores, repair parts and the like, now owned by the Company, and all other property for similar uses hereafter in any way acquired by the Company or to which it may hereafter be entitled, it being hereby expressly agreed that any and all personal property covered by the foregoing description, whether or not located in or upon the real property of the Company, shall be considered as fixtures and appurtenances constituting part of the real property of the Company. 3. All easements, rights of way, rights, franchises, contracts, permits, leases, licenses, privileges and appurtenances belonging or in any way appertaining to the premises and property hereinbefore referred to, or to any other property now owned by the Company or hereafter acquired by it, and every part thereof, or derived or acquired by the Company in any manner whatsoever; and all the reversions, remainders, revenues, rents, issues, and profits of all property at any time subject hereto and all the estate, right, title, interest, property, possession, claim, and demand whatsoever, as well at law as in equity, of the Company, of, in, and to the same and every part thereof. 4. All other property of whatever kind and description, whether real or personal, now owned or which may at any time hereafter be acquired by the Company, and whether or not specifically described or referred to herein, excepting, however, all materials and supplies consumable in the operation of the properties of the Company, all merchandise and products acquired, manufactured, produced, or held for sale in the usual course of business, all automobiles and motor vehicles, and all cash, accounts receivable, stocks, bonds, notes, and other securities which are neither specifically pledged with the Trustee nor required by any provision of the Indenture to be pledged with the Trustee. 5. All money, securities, or property of any kind which may at any time be paid, conveyed, assigned, transferred or delivered to the Trustee by the Company or any other person, to be held hereunder as additional security for all the Bonds, which money, securities, or property the Trustee is hereby authorized to receive and accept. UNDER AND SUBJECT to any excepted encumbrances of the character defined in Subdivision A of Section 3.04 of the Original Indenture. TO HAVE AND TO HOLD the same unto the Trustee, its 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 - 10 - 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; PROVIDED, HOWEVER, and these presents are upon the condition that if the Company, its successors or assigns shall pay or cause to be paid the principal of and interest on all said Bonds, or shall provide, as permitted by the Indenture, for the payment thereof by depositing with the Trustee the entire amount due or to become due thereon for principal, interest and premium, if any, and if the Company shall also pay or cause to be paid all other sums payable under the Indenture by it, then the Indenture, including this Twenty-Third Supplement, and the estate and rights thereby granted shall cease, determine and be void, otherwise to be and remain in full force and effect. IT IS HEREBY FURTHER COVENANTED, DECLARED AND AGREED by and between the Company and the Trustee for the benefit of those who shall hold Bonds of the Twenty-First Series, or any of them, as follows: ARTICLE I DESCRIPTION OF BONDS OF THE TWENTY-FIRST SERIES SECTION 1.1 The Bonds of the Twenty-First Series shall be designated as "South Jersey Gas Company First Mortgage Bonds, 10% Medium Term Notes Series B," and shall be issuable as fully registered Bonds, substantially in the form hereinbefore recited, but they may bear and contain such legends and modifications as may be required by law or as may be necessary to comply with requirements of any stock exchange or of any regulatory board, body or official and shall be issued initially to the Note Trustee. Except as provided in Section 2.11 of the Original Indenture, the aggregate principal amount of Bonds authorized by the Twenty-Third Supplement is limited to $150,000,000, and except as aforesaid, and except for exchanges and transfers, the Company shall not execute and the Trustee shall not authenticate or deliver Bonds of the Twenty-First Series in excess of such aggregate principal amount. SECTION 1.2 Except as otherwise provided in Section 2.11 of the Original Indenture, Bonds of the Twenty-First Series shall be dated and shall bear interest from the May 1 or November 1 next preceding the date of authentication thereof by the Trustee, except that if the authentication date is an interest payment date, such Bonds shall be dated, and shall bear interest from, the authentication date; provided, however, that if upon authentication of any Bonds of the Twenty-First Series upon transfer or in exchange for other such Bonds, interest on the Bonds of the Twenty-First Series shall be in default, the date from which such Bond shall bear interest shall be the date to which interest shall have been paid upon the Bonds transferred or surrendered in exchange for the Bond so authenticated; and provided further, however, that in the case of the authentication of Bonds of the Twenty-First Series upon an original issue hereunder, such Bonds may be dated the date of authentication thereof and in such case shall bear interest from such date of authentication. SECTION 1.3 Bonds of the Twenty-First Series shall mature _______, 20__, and shall bear interest on the unpaid principal amount thereof at the rate - 11 - of 10% per annum (computed on the basis of a 360-day year of twelve 30-day months), payable on May 1 and November 1 in each year, until the obligation of the Company with respect to the payment thereof shall be discharged; provided, however, that the Company shall receive certain credits against principal and interest as set forth in Section 2.1 hereof. Subject to the provisions of Section 2.1 below, all payments of principal and interest shall be made at the corporate trust office of the Trustee, or at such other places as the Company may agree, 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. SECTION 1.4 Bonds of the Twenty-First Series shall be issuable only in the form of fully registered Bonds in any denomination authorized by the Company. SECTION 1.5 Bonds of the Twenty-First Series shall be transferable and exchangeable, but only as provided in the Indenture and the Note Indenture, upon surrender thereof for cancellation by the registered owner in person or by attorney duly authorized in writing at either of said offices. The Company hereby waives any right to make a charge for any transfer or exchange of Bonds of the Twenty-First Series, but the Company may require payment of a sum sufficient to cover any tax or any other governmental charge that may be imposed in relation thereto. SECTION 1.6 On the Substitution Date (as defined below), the Trustee will deliver to the Company for cancellation all Bonds of the Twenty-First Series. The Company will cause the Trustee to provide notice to all holders of Bonds of the Twenty-First Series prior to the occurrence of the Substitution Date. "Substitution Date" shall mean the date that all Bonds issued and outstanding under the Indenture, other than any Bonds pledged and delivered by the Company to the Note Trustee under the Note Indenture, have been retired through payment, redemption or otherwise (including those Bonds deemed to be paid within the meaning of the Indenture) at, before or after the maturity thereof. SECTION 1.7 Bonds of the Twenty-First Series shall be subject to redemption, either as a whole or in part from time to time, upon payment of the principal amount thereof through the application pursuant to Subdivision C of Section 6.07 of the Original Indenture of proceeds from the condemnation of property subject to the lien of the Indenture, or proceeds of sale of such property to a governmental body or agency having the power of eminent domain made as a result of the threat (evidenced in writing by such body or agency) or condemnation of such property, but not through the application of money from any other source, together with accrued interest to the date fixed for redemption. Except as set forth in this Section 1.7, the Bonds of the Twenty-First Series are not subject to redemption. The election of the Company to redeem any of the Bonds of the Twenty-First Series shall be evidenced by a resolution of its Board of Directors calling all or a stated principal amount thereof for redemption on a stated date. At least 40 days prior to such redemption date (or at such later time as shall be satisfactory to the Trustee), the Company shall file with the Trustee a certified copy of such resolution. The Company shall on or before such redemption date deposit with the Trustee the total redemption price of all Bonds so called, with accrued interest thereon to the redemption date. - 12 - If the Company elects to redeem less than all of the Bonds of the Twenty-First Series, the particular Bonds to be redeemed shall be selected by the Trustee in the manner set forth in this Section 1.7 of the Twenty-Third Supplement from the Bonds of the Twenty-First Series then outstanding. The Trustee shall certify to the Company the numbers of the Bonds selected and the portion of the principal amount of each Bond that is to be redeemed. The Trustee shall, not more than 60 nor less than 30 days in advance of such redemption date, give, in the name of the Company, written notice that Bonds of the Twenty-First Series bearing the serial numbers specified have been called for redemption, that they will be due and payable on such redemption date at the corporate trust office of the Trustee at a stated amount (which shall be the applicable redemption price), and that all interest thereon will cease to accrue after said date (unless the Company shall default in payment of the amount necessary to effect such redemption). If all the Bonds of the Twenty-First Series are called, the notice shall so state and may omit the numbers thereof. The notice shall state that the Bonds will be payable at the stated redemption price, plus accrued interest to the redemption date. If the redemption date is an interest payment date, the notice may state that the interest payment due on such date will be paid in the usual manner. Such notice of redemption shall be given to the registered owners of Bonds which, or portions of which, are to be redeemed by mailing the same to such registered owners, at their respective addresses as the same appear on the aforementioned registry books. Before any money shall be applied by the Trustee to the redemption of Bonds under this Section, the Company shall deliver to the Trustee a certificate of the President or a Vice President of the Company stating that all conditions precedent provided for herein (including compliance with all applicable covenants) relating to such redemption have been complied with. Each Bond so called for redemption shall be due and payable at the places and price and on the date specified in such notice. Subject to any agreement as described below, beginning on the date when each Bond shall be due and payable as aforesaid, the holder thereof may present the same for redemption, in negotiable form, and the Trustee shall, out of the money deposited with it under the provisions of this Section, cause the same to be paid and redeemed; after said date (unless upon such presentation on or after the due date the Trustee shall have refused or failed to make such payment), all further interest shall cease to accrue thereon. In any case where the redemption date is an interest payment date, the interest payment due on such date on Bonds called for redemption may be paid in the usual manner. Whenever less than all of the outstanding Bonds of the Twenty-First Series are to be redeemed, the principal amount of Bonds of the Twenty-First Series to be redeemed shall be prorated among the holders of the Bonds of the Twenty-First Series in the proportion, as nearly as practicable, that their respective holdings bear to the aggregate principal amount of Bonds of the Twenty-First Series outstanding on the date of selection. In making any proration pursuant to this provision, the Trustee may make such adjustment as it may determine, with the approval of the Company, to the end that the principal amount prorated to each holder of Bonds shall be in each instance $1,000 or an integral multiple thereof. If only a part of any fully registered Bond shall be selected by the Trustee in the manner set forth above, the notice of redemption hereinbefore provided for shall specify the distinctive number of such Bond and the portion of the principal amount thereof to be redeemed. Upon surrender of such Bond for - 13 - partial redemption and upon payment of the portion so called for redemption, a new Bond or Bonds of the Twenty-First Series, in aggregate principal amount equal to the unredeemed portion of such surrendered Bond, shall be executed by the Company, authenticated by the Trustee, and delivered to the registered owner thereof, without expense to such holder. The Company may enter into an agreement with the registered owners of any Bond of the Twenty-First Series (or prospective registered owner of any such Bond) providing for the payment without the surrender of such Bond to such registered owner (or to such prospective registered owner, upon becoming a registered owner of any such Bond) of the principal of and the premium, if any, and interest on such Bond or any part thereof at a place other than the offices or agencies therein specified, and for the making of notation as to principal payments, if any, on such Bond by such registered owner or by any agent of the Company or of the Trustee. A copy of any such agreement shall be filed with the Trustee. The Trustee is authorized to approve any such agreement, and shall thereafter make all payments on such Bond as provided in such agreement. The Trustee shall not be liable for any act or omission to act on the part of the Company, any such registered owner or any agent of the Company in connection with any such agreement. So long as any of the Bonds of the Twenty-First Series shall remain outstanding, upon any application by the Trustee of funds from sources described in this Section 1.7 of this Twenty-Third Supplement to the redemption of Bonds pursuant to Subdivision C of Section 6.07 of the Original Indenture, if less than all Bonds of all Series then outstanding are to be redeemed, a principal amount of Bonds of the Twenty-First Series shall be redeemed by the application of a portion of such funds, such portion to be determined by multiplying the total amount of such funds so to be applied by a fraction the numerator of which shall be the aggregate amount required for the redemption, pursuant to Subdivision C of Section 6.07 (exclusive of accrued interest, if any), of all of the Bonds of the Twenty-First Series outstanding on the date of the selection for such redemption and the denominator of which shall be the aggregate amount required for the redemption, pursuant to such Subdivision C of Section 6.07 (exclusive of accrued interest, if any), of all of the Bonds of all Series outstanding on such date; provided, however, that nothing in this Section 1.7 shall restrict the manner (pro rata, by lot or otherwise) by which the remaining balance of such funds shall be applied to the redemption of Bonds of any Series other than the Twenty-First Series. ARTICLE II CREDITS WITH RESPECT TO BONDS OF THE TWENTY-FIRST SERIES SECTION 2.1 In addition to any other credit, payment or satisfaction to which the Company is entitled with respect to the Bonds of the Twenty-First Series, the Company shall be entitled to credits against amounts otherwise payable in respect of the Bonds of the Twenty-First Series in an amount corresponding to (a) the principal amount of any of the Notes surrendered to the Note Trustee by the Company, or purchased by the Note Trustee, for cancellation, (b) the amount of money held by the Note Trustee and available and designated for the payment of principal of, and/or interest on, the Notes, - 14 - regardless of the source of payment to the Note Trustee of such moneys and (c) the amount by which principal of and interest due on the Bonds of the Twenty-First Series exceeds principal of and interest due on the Notes. SECTION 2.2 A certificate of the Company signed by the President or any Vice President, and attested to by the Secretary or any Assistant Secretary, and consented to by the Note Trustee, stating that the Company is entitled to a credit under Section 2.1 hereof or that Bonds of the Twenty-First Series have been canceled, 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. SECTION 2.3 Notwithstanding anything in this Twenty-Third Supplemental Indenture to the contrary, the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on the Bonds of the Twenty-First Series shall be deemed satisfied and discharged (a) on the Substitution Date or (b) if at any time: (i) the Company shall have paid or caused to be paid the principal of and premium, if any, and interest on all the outstanding Notes, as and when the same shall have become due and payable (ii) the Company shall have delivered to the Note Trustee for cancellation all outstanding Notes; or (iii) the Company shall have irrevocably deposited or caused to be irrevocably deposited with the Note Trustee as trust funds the entire amount in (A) cash, (B) U.S. Government obligations maturing as to principal and interest in such amounts and at such times as will insure the availability of cash, or (C) a combination of cash and U.S. Government obligations, in any case sufficient, without reinvestment, as certified by an independent public accounting firm of national reputation in a written certification delivered to the Trustee, to pay at maturity or the applicable redemption date (provided that notice of redemption shall have been duly given or irrevocable provision satisfactory to the Note Trustee shall have been duly made for the giving of any notice of redemption) all outstanding Notes, including principal and any premium and interest due or to become due to such date of maturity, as the case may be. When the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on the Bonds of the Twenty-First Series shall be satisfied or deemed satisfied pursuant to this Section 2.3 hereof, the holders of Bonds of the Twenty-First Series shall, upon written request of the Company, deliver without cost to the Company all of the Bonds of the Twenty-First Series, together with such appropriate instruments of transfer or release as may be reasonably requested by the Company. All Bonds of the Twenty-First Series delivered to the Company in accordance with this Section 2.3 shall be delivered by the Company to the Trustee for cancellation. ARTICLE III ADDITIONAL COVENANTS OF THE COMPANY SECTION 3.1 So long as any Bonds of the Twenty-First Series shall remain outstanding, 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 distribution on such shares, or purchase or otherwise acquire any such shares (except shares acquired without cost to the Company), or advance any amount to or invest any amount in the property, securities or indebtedness - 15 - of, or guarantee any indebtedness of, any subsidiary if, after giving effect to such action, the sum of the aggregate amounts so declared, paid, distributed, purchased, acquired, advanced, invested or guaranteed after December 31, 2001 would exceed the aggregate net income of the Company available for dividends on its Common Stock earned after such date plus the sum of $69,000,000. For the purposes of this Section 3.1, "subsidiary" shall mean any corporation directly or indirectly controlled by or under common control with the Company. For the purpose of calculating the requirements of this Section 3.1, the net income of the Company available for dividends on its Common Stock shall be determined in accordance with such system of accounts as may be prescribed by any governmental authority having jurisdiction in the premises or in the absence thereof in accordance with generally accepted accounting principles as in effect at such time; provided, however, that (a) the deductions for depreciation or renewal or replacement reserves in respect of each year shall be the amount taken therefor on the accounts of the Company or the amount required to be stated in item (1) of the Replacement Fund Certificate to be filed under Section 5.19 of the Original Indenture with respect to the period ending at the close of such year, whichever be greater, and (b) no deduction or adjustment shall be made from gross income for or in respect of (i) expenses in connection with the redemption or retirement of any securities issued by the Company, including any amount paid in excess of the principal or par or stated value of securities redeemed or retired, and, if such redemption or retirement is effected with the proceeds of sale of other securities of the Company, interest on the securities redeemed or retired from the date on which the funds required for such redemption or retirement shall be deposited in trust for such purpose to the date of such -redemption or retirement, (ii) profits or losses from sales of capital assets or taxes in respect of such profits, (iii) any adjustments to retained earnings (including tax adjustments) applicable to any period prior to January 1, 2002, (iv) charges for the write-off of unamortized debt discount and expense carried on the books of the Company at December 31, 2001, or (v) charges for the write-off or write-down of the amount at which any property of the Company was carried on its books at December 31, 2001, to the extent that the same shall be approved by, or be made pursuant to any rule, regulation, or order of, any governmental authority having jurisdiction in the premises and shall not be required by such authority to be charged against earnings accumulated after December 31, 2001. SECTION 3.2 So long as any Bonds of the Twenty-First Series shall remain outstanding, the Company will satisfy its obligations under the Replacement Fund provided for in Section 5.19 of the Original Indenture first through the use of all available property additions and retired Bonds of any Series and then, if and only to the extent that said property additions and retired Bonds are not sufficient to satisfy such obligations, through the use of cash. SECTION 3.3 So long as any Bonds of the Twenty-First Series remain outstanding, in the event that the Company shall consolidate or merge with or into any corporation or corporations, or the Company shall transfer all of its property and franchises to any other corporation, the corporation formed by any such consolidation, or into which the Company shall be so merged, or which shall acquire such property of the Company, shall be a corporation incorporated under the laws of the United States, any State or the District of Columbia. - 16 - SECTION 3.4 So long as any Bonds of the Twenty-First Series shall remain outstanding, no owner of any portion of the mortgaged property will be entitled to any credit against interest payable on any Bonds by reason of the payment of any tax on such property. ARTICLE IV ISSUE AND AUTHENTICATION OF BONDS OF THE TWENTY-FIRST SERIES Upon compliance by the Company with the requirements of the Indenture, including this Twenty-Third Supplement, for the issuance of additional Bonds, Bonds of the Twenty-First Series up to an aggregate principal amount of $150,000,000 may forthwith, or, at the election of the Company, in stages from time to time, be executed by the Company and delivered to the Trustee, and the Trustee shall thereupon authenticate and make available for delivery said Bonds in accordance with the provisions of Article III of the Original Indenture. The signature of the officers of the Company on Bonds of the Twenty-First Series may be by facsimile if so authorized by the Company's Board of Directors. ARTICLE V AMENDMENT TO THE ORIGINAL INDENTURE SECTION 5.1 Section 3.06 of the Original Indenture shall be amended and restated in its entirety, so that such Section shall thereafter read in full as follows: "SECTION 3.06. ADDITIONAL BONDS - CONDITIONS FOR AUTHENTICATION - ACQUISITION OR REFUNDING OF BONDS ISSUED HEREUNDER. Whenever any Bonds shall have been acquired, paid, or retired by the Company, or whenever the Company shall have made provision for the payment of any Bonds (as such provision for payment is defined in Article I), or shall surrender any Bonds to the Trustee, thereupon or at any time thereafter additional Bonds shall be authenticated and delivered by the Trustee in a principal amount not exceeding the principal amount of the Bonds so acquired, paid, retired, surrendered, or for the payment of which such provision shall have been made, upon application by the Company and upon compliance with the following conditions, in addition to those specified in Section 3.03: A. Any Bonds so acquired, paid, retired or surrendered, or for which payment shall have been so provided, may, when deposited with the Trustee as below provided in Subdivision B (to the extent so required to be deposited), be uncancelled or additional Bonds may be issued in an aggregate principal amount not exceeding the aggregate principal amount of any Bonds so acquired, paid, retired or surrendered, or for which payment shall have been so provided; provided, however, that in respect of any Bond which shall have been cancelled prior to or concurrently with the application for such authentication (and, for the purposes of this Subdivision A, in case payment shall have been so provided for such Bonds, the same shall be deemed to have been cancelled upon the date of such provision for payment), no Bonds shall be authenticated in lieu thereof or in exchange therefor in an - 17 - aggregate principal amount exceeding the aggregate principal amount of such Bonds less the amount of any money withdrawn hereunder in connection with such acquisition, payment, retirement, cancellation, or provision. B. There shall be delivered to the Trustee the following documents: (1) The Bonds so acquired, paid, retired, or surrendered. Any of such Bonds which shall be uncancelled shall be in negotiable form or accompanied by proper instruments of assignment and transfer, and shall be accompanied by all unmatured coupons, if any, appertaining thereto. In the case of any Bonds for which payment shall have been so provided, such Bonds shall not then be required to be deposited, but in lieu thereof the Company shall deliver to the Trustee a statement describing the same; thereafter, upon payment of such Bonds, the same shall forthwith be delivered to the Trustee for cancellation. In the case of any Bonds which shall have been paid or retired or surrendered and which shall have theretofore been cancelled and cremated by the Trustee, such Bonds shall not be required to be deposited, but in lieu thereof the Company shall deliver to the Trustee a statement describing the same and specifying the date upon which the same were paid or retired or surrendered and were cancelled and cremated. (2) If the Bonds so deposited shall be cancelled Bonds, or if in lieu of such deposit of Bonds a statement by the Company shall be delivered as provided in subparagraph (1) of this Subdivision B, a certificate by the President or a Vice-President of the Company, stating such facts in connection therewith as may reasonably be required to show compliance with the conditions specified in Subdivision A. C. If the Bonds so acquired, paid, retired, surrendered, or the payment of which has been so provided for, shall not at any time theretofore have been bona fide issued by the Company, and if they shall bear interest at a lower rate per annum than the new Bonds the authentication of which is then applied for, the net earnings condition specified in Subdivision C of Section 3.04 shall be complied with, and the Company shall deliver to the Trustee (i) a net earnings certificate, conforming to the provision of Subdivision E(3) of Section 3.04, showing the fixed charges and net earnings of the Company in such reasonable detail as may be required to show compliance with said condition, (ii) an opinion of counsel conforming to the provisions of Subdivision E(4)(b) of Section 3.04, and (iii) a certificate by the trustee or mortgagee of each prior lien conforming to the provisions of Subdivision E(5) of Section 3.04." SECTION 5.2 The foregoing amendment to Section 3.06 of the Original Indenture shall become effective upon the earlier to occur of the following: - 18 - (a) the date as of which no Bonds remain outstanding that were part of a series of Bonds initially issued prior to the issuance of Bonds of the Nineteenth Series; (b) the date as of which a supplemental indenture to the Indenture is executed by the Company and the Trustee setting forth the foregoing amendment to Section 3.06 of the Original Indenture, after the holders of at least 66 2/3% of the Bonds then outstanding have consented to and approved the execution of such supplemental indenture, all in accordance with Article X and the other relevant provisions of the Original Indenture. SECTION 5.3 Each holder of any Bonds of the Twenty-First Series, by the acceptance by such holder of such Bonds, (a) consents to and approves the foregoing amendment to Section 3.06 of the Original Indenture, and consents to and approves the execution by the Company and the Trustee of a supplemental indenture to the Indenture setting forth such amendment, and (b) agrees to execute such instrument or instruments as may be requested by the Company or the Trustee to evidence such consent and approval in accordance with Section 10.02 of the Original Indenture. ARTICLE VI CONCERNING THE TRUSTEE SECTION 6.1 The Trustee, for itself and its successors in said trusts, hereby accepts the trust hereby provided and agrees to perform the same upon the terms and conditions contained in the Indenture, including this Twenty-Third Supplement. The Trustee shall not be responsible in any manner whatsoever for the recitals in this Twenty-Third Supplement. SECTION 6.2 So long as any Bonds of the Twenty-First Series shall remain outstanding, any successor trustee to the Trustee shall at all times be a corporation which shall have at all times a combined capital and surplus of not less than $100,000,000. If any such successor trustee publishes reports of condition annually, pursuant to law or to the requirements of a supervising or examining authority, the combined capital and surplus of such successor trustee at any time for the purposes of this Section shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. ARTICLE VII CONCERNING EVENTS OF DEFAULT SECTION 7.1 So long as any Bonds of the Twenty-First Series shall remain outstanding, the following shall constitute events of default within the meaning of Section 9.02 of the Original Indenture (in addition to the events of default set forth in Section 9.02 of the Original Indenture): (a) If the Company shall default in the payment of any portion of the principal of any Bond of the Twenty-First Series, as and when the same shall have become due, whether at the stated maturity thereof or upon proceedings for redemption (pursuant to the provisions of any sinking, replacement, purchase or other analogous fund established in the Original Indenture or pursuant to any optional or other redemption) or otherwise; - 19 - provided, however, that in the event the Company and the Trustee shall have taken all action required to be taken so that each such payment of principal by means of wire transfer could reasonably be expected to be effective on the due date thereof, but nevertheless, any such transfer shall not have been credited to the account of a registered owner of Bonds of the Twenty-First Series to whom such payment is required to be made effective as of the due date, the Company shall not be deemed to have defaulted upon the obligation to make such payment until the expiration of five days following said due date; (b) if the Company shall default in the payment of any installment of interest due on any Bond of the Twenty-First Series and such default shall continue for a period of 10 days; or (c) if the Company shall default in the performance of or compliance with any other covenant, condition or term contained in the Indenture, including this Twenty-Third Supplement, and such default shall continue for 30 days after the Company shall have knowledge thereof. SECTION 7.2 So long as any Bonds of the Twenty-First Series shall remain outstanding, the Company covenants that if at any time or times or from time to time an event of default referred to in Section 6.1 of this Twenty-Third Supplement shall occur, the Company will, on demand of the Trustee, forthwith pay to the Trustee, for the benefit of all holders of Bonds then outstanding under the Indenture, a sum equal to the total amount then due for principal and interest on all Bonds then outstanding under the Indenture, with interest thereon (to the extent that payment of such interest is enforceable under applicable law) in accordance with the terms of the respective Bonds. Should said sum not be so paid to the Trustee, it shall be entitled, at any time or times and from time to time, in its own name and as Trustee of an express trust and without the possession or production of any Bonds of any Series or coupons, to recover judgment for the same against the Company or any other obligor upon such Bonds. ARTICLE VIII MISCELLANEOUS SECTION 8.1 As supplemented by this Twenty-Third Supplement, the Indenture is in all respects ratified and confirmed, and the Indenture, including the Twenty-Third Supplement, shall be read as one instrument. All terms used in the Twenty-Third Supplement shall have the same meaning as used elsewhere in the Indenture except where the context clearly indicates otherwise. SECTION 8.2 This Twenty-Third Supplement has been dated as of September 1, 2002 for convenience. The date of actual execution hereof by each of the parties is the date shown by the acknowledgment of execution hereof by its officers. - 20 - SECTION 8.3 This Twenty-Third Supplement may be executed in several counterparts, each of which shall be considered an original and all collectively as but one instrument. SECTION 8.4 The approval of the New Jersey BPU of the execution and delivery of these presents, and of the issue of any Bonds of the Twenty-First Series, shall not be construed as approval of said New Jersey BPU of any other act, matter or thing which requires approval of said New Jersey BPU under the laws of the States of New Jersey; nor shall the approval of said New Jersey BPU of the issue of any such Bonds bind said New Jersey BPU or any other public body or authority of the State of New Jersey having jurisdiction in the premises in any future application for the issuance of Bonds under the Indenture. IN WITNESS WHEREOF, the Company and the Trustee have caused these presents to be duly executed under the respective corporate seals by their respective proper officers, all duly authorized thereunto, and have caused these presents to be dated as of the day and year first above written. SOUTH JERSEY GAS COMPANY By: _______________________________________ Charles Biscieglia President ATTEST: [SEAL] _______________________________ Richard H. Walker Secretary THE BANK OF NEW YORK By: _______________________________________ ATTEST: [SEAL] _______________________________ - 21 - STATE OF NEW JERSEY : : ss: COUNTY OF ATLANTIC : Be it remembered, that on September 1, 2002, before me, a Notary Public of New Jersey, personally appeared Charles Biscieglia, who, I am satisfied, is President of South Jersey Gas Company, one of the corporations named in the foregoing deed or instrument, and I having first made known to him the contents thereof, he acknowledged that he had signed the same as such officer for and on behalf of such corporation, that the same was made by such corporation as its voluntary act and deed, and sealed with its corporate seal, by virtue of authority of its board of directors, and that he has received, without charge, a true copy of said foregoing deed or instrument. All of which is hereby certified. _______________________________________ Notary Public of New Jersey My Commission Expires: STATE OF NEW YORK : : ss: COUNTY OF NEW YORK : Be it remembered, that September 1, 2002, before me, a Notary Public of New York, personally appeared _______________________, who, I am satisfied, is __________________ of The Bank of New York, one of the corporations named in the foregoing deed or instrument, and I having first made known to him the contents thereof, he acknowledged that he had signed the same as such officer for and on behalf of such corporation, that the same was made by such corporation as its voluntary act and deed, and sealed with its corporate seal, by virtue of authority of its board of directors. All of which is hereby certified. ______________________________________ Notary Public of New Jersey My Commission Expires: - 22 - The within Twenty-Third Supplemental Indenture has been recorded and filed as follows: County Date of Recordation Book Page New Jersey: Atlantic Burlington Camden Cape May Cumberland Gloucester Salem - 23 - EX-5 5 cozen.txt OPINION OF COZEN & O'CONNOR Exhibit 5 November 4, 2002 South Jersey Gas Company One South Jersey Plaza Route 54 Folsom, NJ 08037 Re: Registration Statement on Form S-3, File No. 333-98411 Ladies and Gentlemen: We have acted as counsel to South Jersey Gas Company, a New Jersey corporation (the "Company"), in connection with the preparation and filing of a Registration Statement (the "Registration Statement") on Form S-3 (File No. 333-98411) filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933 in connection with the proposed issuance of up to $150,000,000 aggregate principal amount of medium term notes (the "Notes") of the Company. The Notes are to be issued pursuant to the terms of the Indenture of Trust dated as of October 1, 1998 between the Company and The Bank of New York, as Trustee (as amended and supplemented, the "Indenture"). In connection herewith, we have examined the originals or copies of the Registration Statement, the Indenture, the Certificate of Incorporation and By-laws of the Company and records of certain corporate proceedings of the Company relating to, among other things, the Notes. In addition, we have made such examinations of law and fact as we have deemed necessary in order to form a basis for the opinion hereinafter expressed. In making our examination, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity of all individuals who have executed any documents, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. We also have assumed that the Indenture is a valid and legally binding obligation of the Trustee and that the Company is validly existing under the laws of the State of New Jersey. As to matters of fact that have not been independently established, we have relied on representations of officers of the Company. We have also assumed that (a) the definitive terms of any Notes offered pursuant to a prospectus supplement will have been established in accordance with the authorizing resolutions of the Board of Directors of the Company and November 4, 2002 Page 2 applicable law, (b) the Registration Statement and any amendments thereto will have become effective, (c) a prospectus supplement will have been filed with the Commission describing the Notes offered thereby, (d) all Notes will be issued in compliance with federal and state securities laws, (e) the Indenture (including each supplement thereto) has been duly executed and delivered by the Trustee, and (f) the Notes will have been duly created, executed, authenticated by the Trustee, issued and delivered against receipt of consideration therefor approved by the Company and as provided in the Indenture. Based on and subject to the foregoing and subject to the assumptions, limitations, qualifications and exceptions set forth below, it is our opinion that the Notes, when so issued and delivered, will constitute legal, valid and binding obligations of the Company. The opinion set forth above is subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors' rights and remedies generally, and (b) general principles of equity including, without limitation, standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity. The opinion expressed herein is limited to the federal laws of the United States of America, the laws of the State of New Jersey and, to the extent relevant to the opinion expressed herein regarding the Notes being binding obligations of the Company, the applicable laws of the State of New York. The opinion expressed herein is rendered for your benefit in connection with the transaction contemplated herein. The opinion expressed herein may not be used or relied on by any other person, nor may this letter or any copies thereof be furnished to a third party, filed with a government agency, quoted, cited or otherwise referred to without our prior written consent, except as noted below. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the prospectus contained therein under the caption "Legal Matters." In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules or regulations of the Commission thereunder. Very truly yours, /s/ Cozen O'Connor ------------------------------- Cozen O'Connor EX-23.A 6 deloitte.txt IDEPENDENT AUDITORS CONSENT Exhibit 23(a) INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Amendment No. 1 to the Registration Statement of South Jersey Gas Company on Form S-3 (File No. 333-98411) of our report dated February 13, 2002 appearing in the Annual Report on Form 10-K of South Jersey Gas Company for the year ended December 31, 2001, and to the reference to us under the heading "Experts" in the Prospectus which is part of this Amendment No. 1 to the Registration Statement. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Philadelphia, Pennsylvania November 4, 2002 -----END PRIVACY-ENHANCED MESSAGE-----