Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Public Service Electric and
Gas Company
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NEW JERSEY 22-1212800
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
80 Park Plaza, T4B, P.O. Box 570, Newark, New Jersey 07101-0570
(973) 430-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
<TABLE>
<S> <C>
JAMES T. FORAN, Esq. ROBERT C. MURRAY
General Corporate Counsel Executive Vice President -- Finance
80 Park Plaza, T5B, P.O. Box 570 80 Park Plaza, T4B, P.O. Box 570
Newark, New Jersey 07101 Newark, New Jersey 07101
(973) 430-6131 (973) 430-5630
</TABLE>
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
Please send copies of all communications to:
HOWARD G. GODWIN, JR., Esq.
Brown & Wood LLP
One World Trade Center
New York, New York 10048
Approximate date of commencement of proposed sale to the public: At such time
after the effective date of this Registration Statement as may be warranted by
market conditions and other factors.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, please 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 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, 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,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
[CAPTION]
<TABLE>
<S> <C> <C> <C> <C>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Unit Offering Price Fee
First and Refunding Mortgage Bonds $485,000,000 100%* $485,000,000* $143,075
</TABLE>
* Estimated solely for the purpose of calculating the registration fee.
THE PROSPECTUS INCLUDED AS A PART OF THIS REGISTRATION STATEMENT CONTAINS
THE INFORMATION REQUIRED BY RULE 429 OF THE COMMISSION UNDER THE SECURITIES ACT
OF 1933 WITH RESPECT TO FIRST AND REFUNDING MORTGAGE BONDS OF THE COMPANY
COVERED BY REGISTRATION NO. 333-27547.
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>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, DATED JANUARY 27, 1998
PROSPECTUS
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
FIRST AND REFUNDING MORTGAGE BONDS
------------------------
This Prospectus is to be used by Public Service Electric and Gas Company
(the "Company") in connection with its sale from time to time in one or more
series of not more than $500,000,000 principal amount of its First and Refunding
Mortgage Bonds. Such First and Refunding Mortgage Bonds will be offered for sale
pursuant to the competitive bidding procedures set forth in the Company's
Statement of Terms and Conditions Relating to Bids for such First and Refunding
Mortgage Bonds, copies of which are available from the Company. The principal
amount of such First and Refunding Mortgage Bonds to be issued after a bidding
therefor is referred to herein as the "New Bonds".
Pursuant to said Terms and Conditions, at least 24 hours prior to the time
designated for the opening of bids for each series of New Bonds by the Company,
the Company will notify prospective bidders or, in the case of a group of
bidders, the representative of the group, in writing of (1) the date and time
for the receipt of bids, (2) whether bids will be received in writing, by
telephone confirmed in writing, or either in writing or by telephone confirmed
in writing, (3) the principal amount of such New Bonds, (4) the series
designation of such New Bonds, (5) the minimum and maximum percentages of
principal amount which may be specified in the bid as the purchase price for the
New Bonds, (6) the term of such New Bonds, which shall not be less than one year
nor more than 40 years, (7) the terms and conditions upon which such New Bonds
may be redeemed, either at the option of the Company, pursuant to any sinking or
improvement fund for the New Bonds, or otherwise, and (8) such other provisions
as may be necessary or desirable to establish the terms and conditions of such
New Bonds and the terms of bidding therefor. Thereafter, the Company may also
notify such bidders or representative, orally, confirmed in writing, not less
than 30 minutes prior to the time designated for receiving bids, of any reduced
principal amount of New Bonds for which the Company may elect to receive bids.
The specific designation, aggregate principal amount, purchase price,
maturity date, times of payment of interest, and redemption or other particular
terms of each series of New Bonds will be set forth in an accompanying
Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS FEBRUARY , 1998.
<PAGE>
AVAILABLE INFORMATION
Public Service Electric and Gas Company (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 (the "1934
Act") and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Such reports and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. and at
its regional offices at 500 West Madison Street, Chicago, Illinois and Seven
World Trade Center, New York, New York. Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549-1004 at prescribed rates. Such information
may also be accessed electronically by means of the Commission's home page on
the Internet (http://www.sec.gov). Such material can also be inspected at the
New York Stock Exchange, Inc. where certain of the Company's securities are
listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, filed pursuant to the 1934 Act.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997, filed pursuant to the
1934 Act.
3. The Company's Current Reports on Form 8-K dated January 24, 1997
and January 29, 1997, filed pursuant to the 1934 Act.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act prior to the termination of the offering of
the New Bonds shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents. Any
statements contained in a document incorporated or deemed to be incorporated by
reference herein shall be modified or superseded for the purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein or in the accompanying Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon written or oral request of such person, a copy of any or all of the
documents referred to above which have been or may be incorporated by reference
in this Prospectus, other than exhibits to such documents not specifically
incorporated by reference herein. Requests for such copies should be directed to
the Director -- Investor Relations, Public Service Electric and Gas Company, 80
Park Plaza, T6B, P. O. Box 570, Newark, New Jersey 07101, telephone (973)
430-6503.
2
<PAGE>
THE COMPANY
The Company is an operating public utility company, providing electric and
gas service in areas of New Jersey in which about 70% of its population resides.
The Company is the principal subsidiary of Public Service Enterprise Group
Incorporated ("Enterprise"), which owns all of the Company's common stock.
The Company's service area is a corridor of approximately 2,600 square
miles running diagonally across the State of New Jersey from Bergen County in
the northeast to an area below the City of Camden in the southwest. The
territory is heavily populated and includes New Jersey's six largest cities and
many residential communities as well as commercial and industrial areas. The
Company's executive offices are located at 80 Park Plaza, P. O. Box 570, Newark,
New Jersey 07101-0570, telephone (973) 430-7000.
USE OF PROCEEDS
The net proceeds from the sale of the New Bonds will be added to the
general funds of the Company and will be used for general corporate purposes,
including the refunding and redemption of certain of its higher cost and
maturing debt obligations, the reimbursement of its treasury for funds expended
therefor and/or the payment of its short-term obligations incurred for such
purposes.
COVERAGE RATIOS
The Company's Ratio of Earnings to Fixed Charges for each of the periods
indicated is as follows:
<TABLE>
<CAPTION>
12 MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
- ---------------------------------------- -------------
<S> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1997
- ---- ---- ---- ---- ---- -------------
2.70 3.30 3.35 3.25 2.83 2.74
</TABLE>
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 have been added fixed charges and taxes based on income of the Company and
its subsidiaries. Fixed charges consist of interest charges and an interest
factor in rentals.
DESCRIPTION OF THE NEW BONDS
The New Bonds are to be issued under and secured by the indenture (the
"First and Refunding Mortgage") dated August 1, 1924, between the Company and
First Union National Bank (formerly Fidelity Union Trust Company), as Trustee
(the "Trustee"), as amended and supplemented by the ninety-seven supplemental
indentures now in effect and by the proposed supplemental indentures to be dated
the first day of the month in which each series of the New Bonds are issued (the
"New Supplements") providing for the New Bonds, which indenture and supplemental
indentures are hereinafter collectively called the "Mortgage" and are filed as
Exhibits 4a(1) through 4a(99) to the Registration Statement. The following
statement includes brief summaries of certain provisions of the Mortgage. For a
complete statement of such provisions reference is made to the above-mentioned
Exhibits, and to the particular Articles and Sections of the First and Refunding
Mortgage and of certain supplements. Bonds issued or issuable under the Mortgage
are hereinafter sometimes called "Bonds". A copy of the Mortgage including a
proposed New Supplement may be inspected at the office of the Trustee at 765
Broad Street, Newark, New Jersey or at the office of the Commission, 450 Fifth
Street, N.W., Washington, D.C.
3
<PAGE>
The New Bonds will be issuable only in fully registered form in
denominations of $1,000 and any multiple thereof. The New Bonds will be
transferable, and the several denominations thereof will be exchangeable for New
Bonds of other authorized denominations, upon compliance with the applicable
provisions of the Mortgage. No service charge will 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 Mortgage does not contain any covenant or other provision that
specifically is intended to afford holders of the New Bonds special protection
in the event of a highly leveraged transaction.
INTEREST, MATURITY AND PAYMENT
See the accompanying Prospectus Supplement.
REDEMPTION
See the accompanying Prospectus Supplement.
LIEN AND SECURITY
The New Bonds will be secured by the lien of the Mortgage equally and
proportionately with all other Bonds. The Mortgage is a first lien on all the
property and franchises of the Company now owned or hereafter acquired (except
cash, accounts and bills receivable, merchandise bought, sold or manufactured
for sale in the ordinary course of business, stocks, bonds or other corporate
obligations or securities, other than those now or hereafter specifically
pledged thereunder, not acquired with the proceeds of Bonds) (the effectiveness
of the after-acquired property clause being subject to certain possible
exceptions under New Jersey law which are not regarded by the Company as of
practical importance), subject only (i) to liens for taxes, assessments and
governmental charges and other liens, encumbrances, and rights, none of which
liens, encumbrances or rights, in the opinion of the Company, materially affects
the use of the mortgaged property or the value thereof as security for the
Bonds, (ii) to the lien of the Trustee for compensation, expenses and indemnity
to which it may be entitled under the Mortgage, and (iii) as to after-acquired
property, to encumbrances, if any, existing thereon at the time of acquisition.
Under New Jersey law, the State of New Jersey owns in fee simple for the
benefit of the public schools all lands now or formerly flowed by the tide up to
the mean high-water line, unless it has made a valid conveyance of its interest
in such property. In 1981, because of uncertainties raised as to possible claims
of State ownership, the New Jersey Constitution was amended to provide that
lands formerly tidal-flowed, but which were not then tidal-flowed at any time
for a period of forty years, were not subject to State claims unless the State
specifically defined and asserted a claim within the one year period ending
November 2, 1982. As a result, the State published maps of the eastern
(Atlantic) coast of New Jersey depicting claims to portions of many properties,
including certain properties owned by the Company. The Company believes it has
good title to such properties and will vigorously defend its title, or will
obtain such grants from the State as may ultimately be required. The cost to
acquire any such grants may be covered by title insurance policies. Assuming
that all of such State claims were determined adversely to the Company, they
would relate to land, which, together with the improvements thereon, would
amount to less than 1% of net utility plant. No maps depicting State claims to
property owned by the Company on the western (Delaware River) side of New Jersey
were published within the one year period mandated by the Constitutional
Amendment. Nevertheless, the Company believes it has obtained all necessary
grants from the State for its improved properties along the Delaware River.
4
<PAGE>
The after-acquired property clause may not be effective as to property
acquired subsequent to the filing of a petition with respect to the Company
under the Federal Bankruptcy Code.
The property of the Company subject to the lien of the Mortgage consists
principally of its electric generating facilities, transmission lines,
distribution lines, switching stations and substations, and its gas production
plants and gas distribution facilities, and includes the Company's undivided
interests as a tenant in common without right of partition in jointly-owned
electric generating and gas production facilities and electric transmission
lines.
ISSUANCE OF ADDITIONAL BONDS
Additional Bonds may be authenticated and delivered in a principal amount
not exceeding 60% of the cost or fair value to the Company (whichever is less)
of additions or permanent improvements to the mortgaged property within 250
miles of Newark, New Jersey, after deducting the cost of property permanently
abandoned and the difference between the cost and the net amount realized on the
sale of property sold at a price to net less than half of its cost; but only if
the net earnings of the Company (before income taxes, amortization of debt
discount and expense, and fixed charges), for twelve consecutive months within
the fifteen months preceding the application for the authentication of such
additional Bonds, shall have been at least twice the fixed charges of the
Company, including interest on the Bonds applied for. As of July 1, 1997,
additions or improvements against which Bonds may be authenticated amounted to
$5.505 billion. No additional Bonds may be authenticated and delivered on the
basis of the Company's 22.84% undivided interest in the Keystone Generating
Station and 22.5% undivided interest in the Conemaugh Generating Station (both
in western Pennsylvania) because such stations are not within 250 miles of
Newark, New Jersey. The principal amount of additional Bonds which may be issued
on account of the acquisition of property subject to prior liens is that amount
which might be issued if there were no such liens, less the principal amount of
obligations secured by such liens and not then deposited with the Trustee.
Additional Bonds may also be authenticated and delivered under the Mortgage
from time to time, in a principal amount equal to the principal amount of Bonds
(excluding Bonds retired through a sinking fund or by the application of the
proceeds of released property) or certain prior debt bonds purchased, paid,
refunded, or retired by the Company and deposited with the Trustee, upon such
deposit.
Additional Bonds may also be issued (a) in a principal amount not exceeding
the amount of cash deposited by the Company with the Trustee, to be subsequently
withdrawn on account of additions or improvements or as otherwise permitted by
the Mortgage, upon compliance with the conditions which, at the time of
withdrawal, would authorize the authentication of Bonds in an amount equal to
the cash withdrawn, or (b) in a principal amount not exceeding the principal
amount of matured or maturing Bonds or prior debt bonds, to provide for the
payment or purchase thereof, within 12 months before maturity (including a
maturity resulting from a call for redemption) or at or after maturity, provided
that cash equal to the principal amount of the Bonds so issued is simultaneously
deposited with the Trustee in exchange therefor.
The New Bonds will be issued under the above provisions.
MAINTENANCE AND DEPRECIATION PROVISIONS
The Company must maintain the useful physical property subject to the
Mortgage in good and businesslike working order and condition and make all
needful and proper repairs, replacements, and improvements thereto. It must also
maintain a reserve for renewals and replacements, reasonable according to the
current standard practice
5
<PAGE>
of gas and electric utility companies or as approved or fixed by the Board of
Public Utilities of the State of New Jersey.
The New Supplements will contain no maintenance provisions with respect to
the New Bonds.
DIVIDEND RESTRICTIONS
So long as there remain outstanding any of the New Bonds or any of the
Bonds of any series now outstanding (other than the Bonds of the 5% Series due
2037 and the 8% Series due 2037), the Company may not pay any dividend on its
common stock other than dividends payable in such stock, or make any other
distribution thereon or purchase or otherwise acquire for value any such stock
if such action would reduce its earned surplus below $10,000,000 less all
amounts on the books of the Company on December 31, 1948, which shall have been
thereafter required to be removed therefrom by charges to earned surplus
pursuant to any order or rule of any regulatory body thereafter entered.
AMENDMENT OF MORTGAGE
The Mortgage may be modified by the Company and the Trustee with the
consent of the holders of 85% in principal amount of the Bonds then outstanding
(as defined in the Mortgage for such purposes), including, if the modification
affects less than all series of Bonds outstanding, the holders of 85% in
principal amount of the outstanding Bonds of each series affected. No such
change, however, may alter the interest rate, redemption price or date, maturity
date, or amount payable at maturity of any outstanding Bond or conflict with the
Trust Indenture Act of 1939 as then in effect.
RELEASE AND SUBSTITUTION OF PROPERTY
Cash proceeds of released property held by the Trustee (i) may be paid to
the Company to reimburse it for the full cost or fair value, whichever be less,
of additions or improvements permitted under the Mortgage to be used as the
basis for the issuance of additional Bonds, without any net earnings
requirement; (ii) may be paid to the Company in an amount equal to the principal
amount of Bonds or certain prior debt bonds purchased, paid, refunded, or
retired by the Company and deposited with the Trustee; (iii) may be invested in
obligations of the United States; or (iv) may be utilized by the Trustee for the
purchase or redemption of Bonds at the lowest prices obtainable. The Trustee
must release pledged prior debt bonds of any issue if all prior debt bonds of
such issue have been pledged and there is no lien on any of the mortgaged
property senior to the lien of the Mortgage but junior to the lien of the prior
debt bonds to be released. The Trustee must release franchises surrendered and
structures removed or abandoned by the Company pursuant to a legal requirement
or an agreement with a state or political subdivision thereof.
Certain additional provisions as to the release of property are referred to
above under Issuance of Additional Bonds and Maintenance and Depreciation
Provisions.
DEFAULTS
The following constitute events of default under the Mortgage: (i) default
in the payment of the principal of any Bonds or prior debt bonds; (ii) default,
continued for three months, in the payment of interest on any Bonds or in the
payment of any installment of any sinking fund provided for any series of Bonds;
(iii) default, continued for three months after written notice to the Company
from the Trustee or the holders of 5% in principal amount of the outstanding
Bonds, in the observance or performance of any other covenant or condition in
the Mortgage; and (iv) the adjudication of the Company as a bankrupt, the
appointment of a receiver for the Company or its property
6
<PAGE>
or the approval of a petition for the reorganization of the Company under the
Federal Bankruptcy Code, if no appeal from such action is taken within 30 days,
or on the same becoming final. The Mortgage does not require the Company to
furnish to the Trustee any periodic evidence as to the absence of default or as
to compliance with the terms of the Mortgage.
The holders of 25% in principal amount of the Bonds then outstanding (or a
majority in principal amount of the Bonds of any series in default, if default
occurs in payments due with respect to Bonds of less than all series) may
require the Trustee to take all steps needful for the protection and enforcement
of the rights of the Trustee and of the holders of Bonds. The holders of 76% in
principal amount of the Bonds then outstanding have the right to direct and
control the action of the Trustee in any judicial or other proceedings to
enforce the Mortgage.
If a default in the payment of principal interest or sinking fund
installment affects exclusively the Bonds of one or more series, the holders of
a majority of the outstanding Bonds of the series so affected may require the
Trustee to accelerate the maturity of such Bonds and also may require the
Trustee to take other action for the protection of such bondholders.
CERTIFICATE OF COMPLIANCE
Pursuant to the provisions of the Trust Indenture Act of 1939, as amended,
the Company is required to certify to the Trustee, not less than annually, the
Company's compliance with all conditions and covenants under the Mortgage.
CONCERNING THE TRUSTEE
First Union National Bank, Trustee, is a paying agent under the Mortgage
and a trustee under other indentures of the Company. The Company also maintains
other normal banking relationships with First Union National Bank.
PLAN OF DISTRIBUTION
The Company will sell each series of the New Bonds through the competitive
bidding procedures set forth in the Company's Terms and Conditions Relating to
Bids for the New Bonds (the "Terms and Conditions") filed as Exhibit 1a to the
Registration Statement. Notice of the bidding for the New Bonds will be
provided, in accordance with the Terms and Conditions, to prospective bidders
or, in the case of a group of bidders, to the representative of the group, who
have notified the Company that they intend to submit a bid and wish to be
provided notice of the time and date of bidding.
Upon the acceptance of a bid for each series of the New Bonds, a Purchase
Agreement, substantially in the form of Exhibit 1b to the Registration
Statement, will become effective providing for the issuance and sale of such New
Bonds pursuant to a firm commitment underwriting on the terms set forth therein.
The purchase price of each series of the New Bonds and the proceeds to the
Company from such sale and the terms of any re-offering of such New Bonds,
including the name or names of any underwriters, any underwriting discounts and
other terms constituting underwriters' compensation, any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
will be set forth in an accompanying Prospectus Supplement. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
7
<PAGE>
The form of Purchase Agreement provides that the consummation of the
purchase of each series of the New Bonds will be subject to certain conditions
precedent and that the Company will indemnify each underwriter or purchaser for
certain civil liabilities, including liabilities under the Securities Act of
1933 (the "1933 Act").
LEGAL OPINIONS
The legality of the New Bonds will be passed on for the Company by James T.
Foran, Esq., General Corporate Counsel, or R. Edwin Selover, Esq., Senior Vice
President and General Counsel, of the Company, who may rely on the opinion of
Ballard Spahr Andrews & Ingersoll, of Philadelphia, Pennsylvania, as to matters
of Pennsylvania law. Brown & Wood LLP, of New York, New York, will pass on the
legality of the New Bonds for the Underwriters and may rely on the opinion of
Counsel of the Company as to matters of New Jersey law and on the opinion of
Ballard Spahr Andrews & Ingersoll as to matters of Pennsylvania law.
EXPERTS
Mr. Foran has reviewed the statements in this Prospectus as to the lien of
the Mortgage securing the New Bonds under Description of the New Bonds -- Lien
and Security (except insofar as they relate to the lien of the Mortgage on
property of the Company located in Pennsylvania). Such statements insofar as
they relate to the lien of the Mortgage on property of the Company located in
Pennsylvania have been reviewed by Ballard Spahr Andrews & Ingersoll of
Philadelphia, Pennsylvania. The statements as to liens and encumbrances on the
property of the Company are based in part on title insurance policies and
reports and searches obtained from companies engaged in the business of insuring
title to real estate in New Jersey and from a company engaged in the business of
insuring title to real estate in Pennsylvania, and on certificates or opinions
of local counsel in Pennsylvania deemed by Ballard Spahr Andrews & Ingersoll to
be reliable and competent. All the statements made or referred to in this
paragraph, as to matters of law and legal conclusions, are made in reliance on
the authority of Mr. Foran and of Ballard Spahr Andrews & Ingersoll,
respectively, as experts.
The consolidated financial statements and the related consolidated
financial statement schedule incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended December 31, 1996,
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 on the report of such firm, given upon their authority
as experts in accounting and auditing.
8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee........................................... $143,075
* Printing, engraving and mailing......................................................... 80,000
Fees and expenses of Trustee............................................................ 16,000
* Accountants' fee........................................................................ 26,000
* Counsel fees............................................................................ 20,000
* Miscellaneous expenses.................................................................. 14,925
Total.............................................................................. $300,000
</TABLE>
* Estimated
Item 15. Indemnification of Directors and Officers.
Under Section 14A:3-5 of the New Jersey Business Corporation Act, the
Company
(1) has power to indemnify each director and officer of the Company
(as well as its employees and agents) against expenses and liabilities in
connection with any proceeding involving him by reason of his being or
having been such director or officer, other than a proceeding by or in the
right of the Company, if (a) such director or officer acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interest of the Company, and (b) with respect to any criminal proceeding,
such director or officer had no reasonable cause to believe his conduct was
unlawful;
(2) has power to indemnify each director and officer of the Company
against expenses in connection with any proceeding by or in the right of
the Company to procure a judgment in its favor which involves such director
or officer by reason of his being or having been such director or officer,
if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interest of the Company; 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 the Company, 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 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 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 by reason of his being or having been a
director or officer, whether or not the Company would have the power to
indemnify him against such expenses and liabilities under the statute.
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 the Company that the
director or officer has not meet the applicable standard of conduct.
Indemnification under the statute does not include any other rights to
which a director or officer may be entitled under a certificate of
incorporation, by-law, or otherwise.
II-1
<PAGE>
Subdivision 1 of Article VI of the Company's Restated Certificate of
Incorporation, as amended, provides as follows:
1. Indemnification of Directors, Officers and Employees:
The corporation shall indemnify to the full extent from time to time
permitted by law any person made, or threatened to be made, a party to 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) by reason of the fact that he is or was a director, officer or
employee of the corporation or serves or served any other enterprise as a
director, officer or employee at the request of the corporation. Such right
of indemnification shall inure to the benefit of the legal representative
of any such person.
Subdivision 5 of Article VI of the Company's Restated Certificate of
Incorporation, as amended, provides as follows:
5. Limitation of Liability:
To the full extent from time to time permitted by law, directors and
officers of the corporation shall not be personally liable to the
corporation or its shareholders for damages for breach of any duty owed to
the corporation or its shareholders. No amendment or repeal of this
provision shall adversely affect any right or protection of a director or
officer of the corporation existing at the time of such amendment or
repeal.
The form of Purchase Agreement between the Company and the Underwriters of
the New Bonds contains a provision under which each Underwriter agrees to
indemnify the directors of the Company and each of its officers who signed the
registration statement against certain liabilities which might arise under the
1933 Act from information furnished to the Company in writing by or on behalf of
such Underwriter.
The directors and officers of the Company are insured under policies of
insurance, within the limits and subject to the limitations of the policies,
against claims made against them for acts in the discharge of their duties, and
the Company is insured to the extent that it is required or permitted by law to
indemnify the directors and officers for such loss. The premiums for such
insurance are paid by the Company.
Item 16. Exhibits.
An Exhibit Index, containing a list of all exhibits filed with this
registration statement commences on page II-5.
Item 17. Undertakings.
(1) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the 1934 Act) that is incorporated by reference in
the 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.
(2) Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions set forth in Item 15 (other than the policies of
insurance), or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer, or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company 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
II-2
<PAGE>
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
(3) The undersigned Company hereby undertakes:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
1933 act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs 3(a)(i) and 3(a)(ii) shall not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the 1934 Act that are
incorporated by reference in the registration statement;
(b) that, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(c) 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Newark, State of New Jersey, on this 27th day of
January, 1998.
PUBLIC SERVICE ELECTRIC AND GAS
COMPANY
By: E. JAMES FERLAND
E. James Ferland
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
E. JAMES FERLAND Chairman of the Board and January 27, 1998
E. James Ferland Chief Executive Officer
and Director
(Principal Executive Officer)
ROBERT C. MURRAY Executive Vice President -- January 27, 1998
Robert C. Murray Finance
(Principal Financial Officer)
PATRICIA A. RADO Vice President and Controller January 27, 1998
Patricia A. Rado (Principal Accounting Officer)
</TABLE>
This Registration Statement has also been signed by Robert C. Murray,
Attorney-in-Fact, on behalf of the following Directors on January 27, 1998.
<TABLE>
<S> <C>
LAWRENCE R. CODEY
Lawrence R. Codey
RAYMOND V. GILMARTIN By: ROBERT C. MURRAY
Raymond V. Gilmartin Robert C. Murray
Attorney-in-Fact
IRWIN LERNER
Irwin Lerner
FORREST J. REMICK
Forrest J. Remick
CONRAD K. HARPER
Conrad K. Harper
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
Certain Exhibits previously filed with the Commission are incorporated
herein by reference, and are indicated as follows:
(a) Filed by the Company with Form 8-A under the Securities Exchange
Act of 1934, on the respective dates indicated, File No. 1-973.
(b) Filed with registration statement of the Company under the
Securities Exchange Act of 1934, File No. 1-973, effective July 1, 1935,
relating to the registration of various issue of securities.
(c) Filed with registration statement of the Company under the
Securities Act of 1933, No. 2-4995, effective May 20, 1942, relating to the
issuance of $15,000,000 First and Refunding Mortgage Bonds, 3% Series due
1972.
(d) Filed with registration statement of the Company under the
Securities Act of 1933, No. 2-8381, effective April 18, 1950, relating to
the issuance of $26,000,000 First and Refunding Mortgage Bonds, 2 3/4%
Series due 1980.
(e) Filed with registration statement of the Company under the
Securities Act of 1933, No. 2-12906, effective December 4, 1956, relating
to the issuance of 1,000,000 shares of Common Stock.
(f) Filed with registration statement of the Company under the
Securities Act of 1933, No. 2-59675, effective September 1, 1977, relating
to the issuance of $60,000,000 First and Refunding Mortgage Bonds, 8 1/8%
Series I due 2007.
(g) Filed with registration statement of the Company under the
Securities Act of 1933, No. 2-60925, effective March 30, 1978, relating to
the issuance of 750,000 shares of Common Stock through an Employee Stock
Purchase Plan.
(h) Filed with registration statement of the Company under the
Securities Act of 1933, No. 2-65521, effective October 10, 1979, relating
to the issuance of 3,000,000 shares of Common Stock.
(i) Filed by the Company with Form 8-K under the Securities Exchange
Act of 1934, on the respective dates indicated, File No. 1-973.
(j) Filed by the Company with Form 10-Q under the Securities Exchange
Act of 1934, on the respective dates indicated, File No. 1-973.
(k) Filed by the Company with Form 10-K under the Securities Exchange
Act of 1934, on the respective dates indicated, File No. 1-973.
(l) Filed with registration statement of the Company under the
Securities Act of 1933, No. 33-13209 filed April 9, 1987, relating to the
registration of $575,000,000 First and Refunding Mortgage Bonds pursuant to
Rule 415.
(m) Filed with registration statement of the Company under the
Securities Act of 1933, No. 33-50197 filed September 9, 1993, relating to
the registration of $400,000,000 First and Refunding Mortgage Bonds
pursuant to Rule 415.
(n) Filed with registration statement of the Company under the
Securities Act of 1933, No. 333-27547 filed May 21, 1997, relating to
registration of $150,000,000 First and Refunding Mortgage Bonds pursuant to
Rule 415.
II-5
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number
This Filing Previous Filing
<S> <C> <C>
1a Terms and Conditions Relating to Bids
1b Bid with Form of Purchase Agreement attached
2 Inapplicable
4a(1) (b) B-1 Indenture between the Company and Fidelity Union Trust Company, (now First Union
National Bank), as Trustee, dated August 1, 1924, securing First and Refunding
Mortgage Bonds.
Supplemental Indentures between the Company and First Union National Bank, as Trustee,
supplemental to Exhibit 4a(1), dated as follows:
4a(2) (d) 7(1a) April 1, 1927
4a(3) (f) 2b(3) June 1, 1937
4a(4) (f) 2b(4) July 1, 1937
4a(5) (f) 2b(5) December 19, 1939
4a(6) (c) B-10 March 1, 1942
4a(7) (f) 2b(7) June 1, 1949
4a(8) (f) 2b(8) May 1, 1950
4a(9) (f) 2b(9) October 1, 1953
4a(10) (f) 2b(10) May 1, 1954
4a(11) (e) 4b(16) November 1, 1956
4a(12) (f) 2b(12) September 1, 1957
4a(13) (f) 2b(13) August 1, 1958
4a(14) (f) 2b(14) June 1, 1959
4a(15) (f) 2b(15) September 1, 1960
4a(16) (f) 2b(16) August 1, 1962
4a(17) (f) 2b(17) June 1, 1963
4a(18) (f) 2b(18) September 1, 1964
4a(19) (f) 2b(19) September 1, 1965
4a(20) (f) 2b(20) June 1, 1967
4a(21) (f) 2b(21) June 1, 1968
4a(22) (f) 2b(22) April 1, 1969
4a(23) (f) 2b(23) March 1, 1970
4a(24) (f) 2b(24) May 15, 1971
4a(25) (f) 2b(25) November 15, 1971
4a(26) (f) 2b(26) April 1, 1972
4a(27) (a) 2 March 1, 1974
3/29/74
4a(28) (a) 2 October 1, 1974
10/11/74
4a(29) (a) 2 April 1, 1976
4/6/76
4a(30) (a) 2 September 1, 1976
9/16/76
4a(31) (f) 2b(31) October 1, 1976
4a(32) (a) 2 June 1, 1977
6/29/77
4a(33) (g) 2b(33) September 1, 1977
4a(34) (a) 2 November 1, 1978
11/21/78
4a(35) (a) 2 July 1, 1979
7/25/79
4a(36) (h) 2d(36) September 1, 1979 (No. 1)
4a(37) (h) 2d(37) September 1, 1979 (No. 2)
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number
This Filing Previous Filing
<S> <C> <C>
4a(38) (a) 2 November 1, 1979
12/3/79
4a(39) (a) 2 June 1, 1980
6/10/80
4a(40) (a) 2 August 1, 1981
8/19/81
4a(41) (i) 4e April 1, 1982
4/29/82
4a(42) (a) 2 September 1, 1982
9/17/82
4a(43) (a) 2 December 1, 1982
12/21/82
4a(44) (j) 4(ii) June 1, 1983
7/26/83
4a(45) (a) 4 August 1, 1983
8/19/83
4a(46) (j) 4(ii) July 1, 1984
8/14/84
4a(47) (j) 4(ii) September 1, 1984
11/2/84
4a(48) (i) 4(ii) November 1, 1984 (No. 1)
1/4/85
4a(49) (i) 4(ii) November 1, 1984 (No. 2)
1/4/85
4a(50) (a) 2 July 1, 1985
8/2/85
4a(51) (k) 4a(51) January 1, 1986
2/11/86
4a(52) (a) 2 March 1, 1986
3/28/86
4a(53) (a) 2(a) April 1, 1986 (No. 1)
5/1/86
4a(54) (a) 2(b) April 1, 1986 (No. 2)
5/1/86
4a(55) (l) 4a(55) March 1, 1987
4/9/87
4a(56) (a) 4 July 1, 1987 (No. 1)
8/17/87
4a(57) (j) 4 July 1, 1987 (No. 2)
11/13/87
4a(58) (a) 4 May 1, 1988
5/17/88
4a(59) (a) 4 September 1, 1988
9/27/88
4a(60) (a) 4 July 1, 1989
7/25/89
4a(61) (a) 4 July 1, 1990 (No. 1)
7/25/90
4a(62) (a) 4 July 1, 1990 (No. 2)
7/25/90
4a(63) (a) 4 June 1, 1991 (No. 1)
7/1/91
4a(64) (a) 4 June 1, 1991 (No. 2)
7/1/91
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number
This Filing Previous Filing
<S> <C> <C>
4a(65) (a) 4 November 1, 1991 (No. 1)
12/2/91
4a(66) (a) 4 November 1, 1991 (No. 2)
12/2/91
4a(67) (a) 4 November 1, 1991 (No. 3)
12/2/91
4a(68) (a) 4 February 1, 1992 (No. 1)
2/27/92
4a(69) (a) 4 February 1, 1992 (No. 2)
2/27/92
4a(70) (a) 4 June 1, 1992 (No. 1)
6/17/92
4a(71) (a) 4 June 1, 1992 (No. 2)
6/17/92
4a(72) (a) 4 June 1, 1992 (No. 3)
6/17/92
4a(73) (a) 4 January 1, 1993 (No. 1)
2/2/93
4a(74) (a) 4 January 1, 1993 (No. 2)
2/2/93
4a(75) (a) 4 March 1, 1993
3/17/93
4a(76) (a) 4 May 1, 1993
3/17/93
4a(77) (a) 4 May 1, 1993 (No. 2)
5/25/93
4a(78) (a) 4 May 1, 1993 (No. 3)
5/25/93
4a(79) (m) July 1, 1993
4a(80) (a) 4 August 1, 1993
8/3/93
4a(81) (i) 4 September 1, 1993
12/1/93
4a(82) (i) 4 September 1, 1993 (No. 2)
12/1/93
4a(83) (i) 4 November 1, 1993
12/1/93
4a(84) (i) 4 February 1, 1994
2/3/94
4a(85) (a) 4 March 1, 1994 (No. 1)
3/15/94
4a(86) (a) 4 March 1, 1994 (No. 2)
3/15/94
4a(87) (j) 4 May 1, 1994
11/8/94
4a(88) (j) 4 June 1, 1994
11/8/94
4a(89) (j) 4 August 1, 1994
11/8/94
4a(90) (j) 4 October 1, 1994 (No. 1)
11/8/94
4a(91) (j) 4 October 1, 1994 (No. 2)
11/8/94
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number
This Filing Previous Filing
<S> <C> <C>
4a(92) (n) 4a(92) October 1, 1995 (No. 1)
5/21/97
4a(93) (n) 4a(93) October 1, 1995 (No. 2)
5/21/97
4a(94) (a) 4 January 1, 1996 (No. 1)
1/26/96
4a(95) (a) 4 January 1, 1996 (No. 2)
1/26/96
4a(96) (k) 4 December 1, 1996
2/26/97
4a(97) (n) 4a(97) April 1, 1997
5/21/97
4a(98) (a) 4(a)(2) June 1, 1997
6/17/97
4a(99) Form of Supplemental Indenture between the Company and First Union National Bank, as
Trustee, providing for $485,000,000 of New Bonds, supplemental to Exhibit 4a(1)
4b (i) 4 Indenture of Trust between the Company and The Chase Manhattan Bank (National
12/1/93 Association), as Trustee, providing for Secured Medium-Term Notes dated July 1, 1993
5 Opinion of James T. Foran, Esq., as to the legality of the New Bonds to be registered
hereby
8 Inapplicable
12 (j)12(A)) Ratio of Earnings to Fixed Charges
11/14/97
15 Inapplicable
23a Independent Auditors' Consent
23b Consent of Ballard Spahr Andrews & Ingersoll
23c Consent of James T. Foran, Esq. (included in Exhibit 5 above)
24 Power of Attorney
25 Statement of Eligibility of First Union National Bank, as Trustee under the Indenture
referred to in Exhibit 4a(1) and Supplemental Indentures referred to in
4a(2) -- 4a(99) (Form T-1)
26 Inapplicable
27 Inapplicable
28 Inapplicable
99 Inapplicable
</TABLE>
II-9
<PAGE>
EXHIBIT 1A
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
FIRST AND REFUNDING MORTGAGE BONDS
TERMS AND CONDITIONS RELATING TO BIDS
BID WITH FORM OF PURCHASE AGREEMENT ATTACHED
<PAGE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
TERMS AND CONDITIONS RELATING TO BIDS
FOR THE PURCHASE OF
FIRST AND REFUNDING MORTGAGE BONDS
Public Service Electric and Gas Company ("the Company") expects to issue
from time to time in several series not more than $500,000,000 principal amount
of its First and Refunding Mortgage Bonds. The Company will invite competitive
bids, in accordance with the notice provisions and the other terms and
conditions hereof, for the purchase of all or a portion of such First and
Refunding Mortgage Bonds. The principal amount of such First and Refunding
Mortgage Bonds to be issued after a bidding therefor is referred to herein as
the "Bonds". Proposals for the purchase of the Bonds may be transmitted to the
Company only in accordance with the terms and conditions hereof. Any
communication received by the Company relating to the purchase of the Bonds
other than as contemplated herein shall be treated as market information and not
as a proposal.
1. INFORMATION CONCERNING THE COMPANY AND THE BONDS.
Prospective bidders may examine at the office of the Company, 80 Park
Plaza, Newark, N.J., at any time during business hours, copies of the following:
(a) the First and Refunding Mortgage of the Company, dated August 1,
1924, and such of the indentures supplemental thereto as have not
heretofore been cancelled, and the form of the Supplemental Indenture
thereto to be dated the first day of the month in which the Bonds are
issued (all hereinafter collectively referred to as the "Mortgage") to
First Union National Bank (successor Trustee to Fidelity Union Trust
Company) as Trustee, under which the Bonds are to be issued;
(b) the Registration Statement (including exhibits, the Prospectus and
the documents incorporated therein by reference), and any further
amendments thereto relating to the Bonds, filed with the Securities and
Exchange Commission under the Securities Act of 1933;
(c) the Petitions, and any amendments or supplements thereto
(including exhibits), of the Company relating to the issuance and sale of
the Bonds, as filed with the Board of Public Utilities of the State of New
Jersey, and the Order or Orders of such Board authorizing the sale of the
Bonds through competitive bidding;
(d) the Form of Bid to be used by bidders in offering to purchase the
Bonds, which includes the form of Purchase Agreement for the purchase of
the Bonds (the "Purchase Agreement");
(e) (1) a survey by Brown & Wood LLP, which is the firm referred to in
Section 8 hereof, with respect to the legality of the Bonds as investments
for savings banks, life and certain other insurance companies and
fiduciaries in certain states and (2) a preliminary survey by that firm
with respect to the qualification of the Bonds for sale under the
securities laws of various states; and
(f) a statement, when available, with respect to the bidding for the
Bonds and the terms of the Bonds, which statement shall specify (1) the
date and time for the receipt of bids for the Bonds, (2) whether bids will
be received (i) in writing, (ii) by telephone confirmed in writing or (iii)
either in writing or by telephone confirmed in writing, (3) the principal
amount of the Bonds, (4) the series designation of the Bonds, (5) the
minimum and maximum percentages of principal amount which may be specified
in the Bid as the purchase price for the Bonds, (6) the term of the Bonds,
which shall not be less than one year nor more than 40 years, (7) the terms
and conditions upon which the Bonds may be redeemed, either at the option
of the Company, pursuant to any sinking or improvement fund for the Bonds,
or otherwise, and (8) such other provisions as may be necessary or
desirable to establish the terms and conditions of the Bonds and the terms
of bidding therefor.
Copies of items (d) and (e), copies of the First and Refunding Mortgage (in
composite form as amended by the supplemental indenture thereto dated March 1,
1942), of all uncanceled subsequent supplemental indentures and of the form of
the Supplemental Indenture to be dated the first day of the month in which the
Bonds are
<PAGE>
issued, and copies of the Prospectus relating to the Bonds, will be supplied in
reasonable quantities to prospective bidders on request. The Company will make
copies of item (f) above available to prospective bidders as soon as
practicable, but in no event later than 24 hours prior to the time for the
opening of bids.
The Company reserves the right to amend the Registration Statement and
Prospectus and the aforesaid Petition, and to make changes in the form of the
Supplemental Indenture to be dated the first day of the month in which the Bonds
are issued, including the form of Bond and the redemption provisions therein set
forth, and in the form of any other documents relating to the issuance and sale
of the Bonds, at any time and from time to time with the approval of Brown &
Wood LLP prior to the time the Purchase Agreement becomes effective, or as may
be provided in such agreement after it has become effective. The Company will
give telephonic notice confirmed in writing of the date and time for the receipt
of bids and of any such amendments and changes, which in its opinion are
material, made prior to the opening of bids, to any person who intends to submit
a bid and who notifies the Company at its office, 80 Park Plaza, T6B, P.O. Box
570, Newark, N.J. 07101, attention Mr. M.A. Plawner, Vice President and
Treasurer, that it desires such notice and furnishes the name, address and
telephone number of the person to whom such notice shall be given. The notice of
any such amendment or change need not include the text thereof, but the text
thereof may be examined at said office.
The Bonds will be issuable only in fully registered form.
2. FORM AND CONTENT OF BIDS.
Each bid must be for the purchase of the entire principal amount of Bonds
for which bids are being received, and shall specify (i) the interest rate
(which shall be stated in the manner specified in the statement referred to in
Section 1(f) hereof) on the Bonds and (ii) the price to be paid to the Company
for the Bonds, which price shall be stated as a percent of the principal amount
of the Bonds and shall be not less than nor more than the minimum and maximum
percentages of the principal amount thereof specified in the statement referred
to in Section 1(f) hereof, plus accrued interest from the first day of the month
in which the Bonds are issued, to the date of delivery of and payment for the
Bonds.
Bids may be made by a single bidder or by a group of bidders. No bidder who
bids singly may participate in a group bid, and no bidder who participates in
one group bid may participate in another group bid.
In the case of a bid by a group of bidders, the several members of the
group shall act through a duly authorized representative or representatives
(herein referred to as the "Representative"), who shall be named as
Representative in the bid by the group for the purchase of the Bonds and who may
be included in the group. If a bid of a group of bidders is accepted, the
obligations of the members of the group shall be several and not joint,
including the obligation to purchase the principal amounts of Bonds set forth
opposite the respective names of such members in Schedule A to the bid.
If a bid is submitted by a Representative on behalf of a group of bidders,
and the principal amount of Bonds to be purchased by any member of the group is
incorrectly stated in Schedule A to such bid, the Representative may correct any
such error or errors forthwith upon discovery thereof. If no such correction is
made, or if after all such corrections are made, the total of the amounts set
forth in said Schedule A is more or less than the principal amount of Bonds for
which bids are being received, then the amount of Bonds offered to be purchased
by the Representative shall be deemed to be increased or decreased, as the case
may be, to the extent of the discrepancy.
All bids must be signed by a single bidder, or in the case of a bid by a
group of bidders, by their Representative on behalf of the group, and should be
submitted in duplicate.
3. CERTAIN REPRESENTATIONS BY THE BIDDERS TO BE FURNISHED TO THE COMPANY.
By submitting a bid for the Bonds, each bidder shall be deemed to represent
to the Company, as of the date of the bidding for the Bonds, that, except as
stated to the Company in writing prior to the time for receipt of bids for the
Bonds:
(a) neither such bidder nor any of its directors, officers or partners
have a material relationship with the Company or its parent Public Service
Enterprise Group Incorporated ("Enterprise");
2
<PAGE>
(b) such bidder and its directors and officers or partners, as a
group, do not own beneficially 10% or more of any class of capital stock of
the Company or Enterprise;
(c) such bidder is not a "holding company", a "subsidiary" of a
"holding company", or an "affiliate" of a "holding company" or of a "public
utility company", each as defined in the Public Utility Holding Company Act
of 1935;
(d) such bidder has not prepared any report or memorandum for external
use in connection with the proposed offering;
(e) such bidder's commitment to purchase the Bonds will not result in
a violation of the financial responsibility requirements of Rule 15c3-1
under the Securities Exchange Act of 1934, and is not prohibited or
restricted by any action of the Securities and Exchange Commission or of
any national securities exchange applicable to such bidder; and
(f) such bidder has not assumed or guaranteed any securities of others
and has no securities outstanding other than those issued in its present
name.
4. SUBMISSION OF BIDS.
As set forth below and in the statement to be furnished to prospective
bidders pursuant to Section 1(f) hereof, the Company will receive bids in
writing and/or by telephone confirmed in writing.
(a) WRITTEN BIDS. Each bid in writing must be delivered to the Company on
the Form of Bid with Schedule A completed, at the Blake Room, Fourth Floor, 80
Park Plaza, Newark, N.J. 07101, on the date and at the time specified by the
Company pursuant to Section 1 hereof, enclosed and sealed in an envelope
addressed as follows: "Public Service Electric and Gas Company, 80 Park Plaza,
Newark, N.J. 07101 -- Private and Confidential -- Not to be opened except in
accordance with the Terms and Conditions Relating to Bids, dated February ,
1998 for the purchase of Bonds." Each such envelope, when delivered, must
indicate the name and address of the bidder or, in the case of a group of
bidders, of the Representative, and shall bear no indication of the amount of
the bid or any inscription other than herein permitted.
(b) TELEPHONIC BIDS CONFIRMED IN WRITING. Each telephonic bid confirmed in
writing for the Bonds must be received by the Company on the date and no later
than the time designated by the Company in the statement furnished to bidders
pursuant to Section 1(f) hereof. Such telephonic bids must be directed to the
person and telephone number specified by the Company to each prospective bidder
and must provide the Company with (i) the name of any single bidder, the name(s)
of the Representative(s) and the names of all members of a group of bidders,
(ii) a telephone number at which such bid may be immediately confirmed and the
name of the individual who will provide confirmation, (iii) the interest rate to
be borne by the Bonds and (iv) the price to be paid to the Company for the
Bonds. Such telephonic bids must be confirmed in writing by means of a duly
executed bid in writing on the Form of Bid (with Schedule A thereto completed)
or by other similar written instrument acceptable to the Company and providing
the information required in this paragraph to be set forth, which must either be
delivered to the offices of Brown & Wood LLP, One World Trade Center, New York,
N.Y., or to the Company, 80 Park Plaza, Newark, New Jersey, to the attention of
the persons designated in the statement furnished to bidders pursuant to Section
1(f) hereof or telecopied to the offices of the Company at the telephone number
specified by the Company in the statement furnished to bidders pursuant to
Section 1(f) hereof, as soon as possible, but in no event more than one hour
after the time specified as the deadline for receipt of bids. Except as set
forth in the fourth paragraph of Section 2 hereof, any failure by a bidder to
confirm a telephonic bid in a timely manner by a duly executed bid in writing on
the Form of Bid or other similar written instrument acceptable to the Company,
with all information properly specified therein, may result in such telephonic
bid being rejected as not in the proper form as specified by the Company.
(c) The Company reserves the right, in its discretion from time to time, to
postpone the time or date for delivery and opening of bids, and will give
telephonic notice confirmed in writing of any such postponement to any
prospective bidder who shall have furnished its name to the Company for such
purpose pursuant to Section 1 hereof.
3
<PAGE>
(d) The Company reserves the right to designate, not less than 30 minutes
prior to the time, or postponed time, specified for delivery and opening of
bids, a principal amount less than the principal amount originally specified for
the Bonds as the principal amount of the Bonds, in which event the principal
amount so designated shall be deemed to be the principal amount of the Bonds.
5. ACCEPTANCE OR REJECTION OF BIDS.
Subject to the reservations set forth below, all bids will be announced or
opened by the Company at its office, 80 Park Plaza, Newark, N.J., on the date
and at the time designated for receipt of bids specified by the Company in the
statement furnished to bidders pursuant to Section 1(f) hereof, or at such later
time or date as may be fixed by the Company as provided in Section 4(c) hereof.
Within three hours of the receipt of bids, the Company will (subject to the
provisions and reservations stated below) accept the bid which will provide the
Company with the lowest "annual cost of money". Said "annual cost of money" in
respect of each bid shall be determined by the Company in accordance with the
method specified in the statement referred to in Section 1(f) hereof. The
decision of the Company with respect to the lowest "annual cost of money" shall
in all cases be final.
Each bid will be accepted or rejected in its entirety. All bids shall be
irrevocable until three hours after the receipt of bids, unless sooner returned
unopened or rejected. In case two or more such bids provide an identical lowest
"annual cost of money" to the Company, the Company (unless it shall reject all
bids) shall by oral announcement give the makers of such identical bids the
opportunity (the duration of which shall be in the Company's discretion, but
shall not extend beyond three hours after the opening of bids) to improve their
bids. The Company will accept, subject to the reservations stated below, the
improved bid which will provide the lowest "annual cost of money" to the
Company. If no improved bid is so made, or if on rebidding two or more bids
providing an identical lowest "annual cost of money" to the Company are again
received, the Company may, in its sole discretion and without liability to the
maker of any other bid, accept any one of the identical bids providing the
lowest "annual cost of money" to the Company.
Notwithstanding the foregoing provisions hereof, the Company reserves the
right
(a) to return all bids unopened either at or prior to the time
specified for the opening thereof,
(b) to reject all bids (at or after the opening thereof irrespective
of the terms named therein), and
(c) to reject the bid of any bidder or of any group of bidders (i) if
such bidder or any member of such group of bidders is in such relationship
with any of the trustees under the Company's indentures as would disqualify
any of said trustees from acting as such trustee, if the bid of such bidder
or group of bidders shall be accepted, (ii) if the Company, in the opinion
of its counsel, may not lawfully sell the Bonds to such bidder or to any
member of such group of bidders, and, in either such event, in the case of
a group of bidders, if within one hour after the opening of bids, the
member or members of such group causing such disqualification or illegality
have not withdrawn from the group and the remaining members, including
substituted members, if any are permitted by the Company, have not agreed
to purchase the Bonds which such withdrawing member or members have offered
to purchase, (iii) if the Company is not reasonably satisfied with the
financial responsibility of such bidder or any member of any such group of
bidders, or (iv) if the acceptance of such bid might, in the judgment of
the Company, bring about the risk of a delay in the sale of the Bonds.
6. DETERMINATION OF REDEMPTION PRICES OF THE BONDS.
As soon as practicable after the acceptance of a bid, any applicable
redemption prices of the Bonds will be determined by the Company in accordance
with the statement referred to in Section 1(f) hereof. Such determination by the
Company shall be final.
7. PURCHASE AGREEMENT.
Upon the acceptance of a bid for the Bonds, the Company will forthwith
signify such acceptance by signing a duplicate, reproduction or facsimile copy
of the bid of the successful bidder, or, in the case of a bid by a group
4
<PAGE>
of bidders, of the Representative on behalf of such group. Upon such acceptance
of a bid, the Purchase Agreement shall become effective without any separate
execution thereof, and thereafter all rights of the Company and of the
successful bidder, or group of bidders, shall be determined solely in accordance
with the terms of the bid and such Purchase Agreement. Forthwith upon such
acceptance of any bid, the successful bidder or, in the case of a bid by a group
of bidders, the Representative on behalf of such group, shall furnish to the
Company in writing an appropriate consent to the filing of any required
Post-Effective Amendment to the Registration Statement and the information which
is (i) required to amend the Registration Statement and/or to supplement the
Prospectus and for the filing thereof, and (ii) required to be filed by the
Company with the Board of Public Utilities of the State of New Jersey.
8. OPINION OF COUNSEL FOR THE PURCHASERS.
Brown & Wood LLP, One World Trade Center, New York, N.Y. 10048 has been
selected by the Company as counsel to give to the successful bidder or bidders
an opinion with respect to the legal matters specified in Section 5(e) of the
Purchase Agreement. Such firm has participated from the standpoint of possible
purchasers of the Bonds in the preparation of the competitive bidding papers and
the documents under which the Bonds are to be issued and has reviewed or will
review the corporate proceedings and the registration procedure with respect to
the authorization and issuance of the Bonds. It has also prepared the surveys
referred to in Section 1(e) hereof. Prospective bidders may confer with Brown &
Wood LLP with respect to any of the foregoing matters. The compensation and
disbursements of such firm are to be paid by the successful bidder or bidders,
except as otherwise provided in the Purchase Agreement, and any prospective
bidder and any Representative of a group of prospective bidders may obtain from
such firm, upon request, a statement of the amount of such compensation and an
estimate of the amount of such disbursements.
9. MISCELLANEOUS.
The Company reserves the right to waive any irregularity, which it deems to
be immaterial, in complying with any of the foregoing terms and conditions.
The validity, construction and interpretation of the Terms and Conditions
and any bid submitted pursuant hereto shall be governed by the laws of the State
of New Jersey.
PUBLIC SERVICE ELECTRIC AND GAS
COMPANY
E. JAMES FERLAND
By ...................................
Chairman of the Board
and Chief Executive Officer
February , 1998
5
<PAGE>
EXHIBIT 1B
BID
FOR THE PURCHASE OF
$* PRINCIPAL AMOUNT OF
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
FIRST AND REFUNDING MORTGAGE BONDS,* SERIES * DUE *
------------------------------------
INTEREST RATE:**
PRICE:** % OF PRINCIPAL AMOUNT
, 19
Public Service Electric and Gas Company
80 Park Plaza
Newark, N.J. 07101
Dear Sirs:
Referring to the Statement of Terms and Conditions Relating to Bids dated
February , 1998 for the purchase in one or more series of not more than
$500,000,000 principal amount of First and Refunding Mortgage Bonds of Public
Service Electric and Gas Company (the "Company"), the persons, firms and
corporations named in Schedule A attached hereto (the "Bidders") submit herewith
the following Bid for the above series of First and Refunding Mortgage Bonds of
the Company (the "Bonds"):
1. Each of the Bidders, severally and not jointly, hereby offers to
purchase from the Company, at the price (expressed as a percentage of the
principal amount of the Bonds) specified in the space provided therefor
above, plus accrued interest from the first day of the month in which the
Bonds are issued to the date of delivery of and payment for the Bonds, and
upon the terms and conditions set forth in the Company's Statement of Terms
and Conditions Relating to Bids for the Bonds dated February , 1998,
including the statement relating to the Bonds furnished to bidders by the
Company pursuant to Section 1(f) thereof (the "Terms and Conditions") and
in the form of Purchase Agreement attached hereto, the principal amount of
Bonds set forth opposite the name of such Bidder in said Schedule A (unless
corrected or deemed to have been corrected as provided in Section 2 of the
Terms and Conditions, in which case said principal amount shall be as so
corrected or deemed to have been corrected). The interest rate for the
Bonds shall be that specified in the space provided therefor above.
2. If this Bid shall be accepted by the Company, the Purchase
Agreement with the Company in the form attached hereto as Schedule B shall
thereupon become effective as of the date of the acceptance of this Bid
without any separate execution thereof, with the blanks therein deemed to
be appropriately filled in, in accordance with the terms of this Bid and
with such modifications therein as may be necessary and as are contemplated
by the Terms and Conditions.
3. This Bid is independent of all other bids which may be presented to
the Company pursuant to the Terms and Conditions.
- ---------------
* Insert the principal amount, the series designation and the year of maturity
of the Bonds designated by the Company pursuant to Section 1 of the Terms and
Conditions.
** Insert the interest rate and price determined in accordance with the
statement furnished to bidders by the Company pursuant to Section 1(f) of the
Terms and Conditions.
<PAGE>
4. Each of the Bidders acknowledges receipt of a copy of the Terms and
Conditions and the Prospectus relating to the Bonds.
5. By making this Bid each of the Bidders confirms its representations
to the Company as set forth in Section 3 of the Terms and Conditions.
The Representative represents and warrants that it has all necessary power
and authority to bid for each of the Bidders in respect of the matters referred
to in this Bid and to act on behalf of each of the Bidders in any purchase of
the Bonds if this Bid is accepted as contemplated by the Terms and Conditions.
Yours very truly,
......................................
Representative(s)
By ...................................
Acting on behalf of the several
bidders named in Schedule A annexed
hereto, including itself; or single
bidder.
Accepted , 19
Public Service Electric and Gas
Company
By ...................................
Vice President
2
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
PRINCIPAL
NAME OF BIDDER AMOUNT
- -------------------------------------------------------------------------------------------------- ------------
<S> <C>
------------
Total..................................................................................... $
------------
------------
</TABLE>
<PAGE>
SCHEDULE B
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
FIRST AND REFUNDING MORTGAGE BONDS
PURCHASE AGREEMENT
AGREEMENT made as of the date of acceptance of the bid (which includes
Schedule A thereto) and to which this Agreement is attached as Schedule B (the
"Bid"), between Public Service Electric and Gas Company, a New Jersey
corporation (the "Company"), and the several Underwriters (hereinafter defined)
of the Company's First and Refunding Mortgage Bonds, of the designated series,
in the principal amount and with the interest rate and maturity specified in the
Bid (the "Bonds").
SECTION 1. REGISTRATION AND ISSUE OF BONDS. (a) The Company proposes to
issue the Bonds under its First and Refunding Mortgage, dated August 1, 1924,
between the Company and Fidelity Union Trust Company (now known as First Union
National Bank), as Trustee (the "Trustee"), as supplemented and amended, and as
to be further supplemented by a supplemental indenture between the Company and
the Trustee, to be dated the first day of the month in which the Bonds are
issued (said First and Refunding Mortgage, as so supplemented and amended and to
be supplemented, being hereinafter referred to as the "Mortgage" and such
supplemental indenture, as executed and delivered, being hereinafter referred to
as the "Supplemental Indenture"), which Bonds and Mortgage are more fully
described in the Prospectus hereinafter referred to.
(b) The Company represents and warrants that it has duly filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (No. 333-27547) and another registration statement on Form S-3 (No.
333- ), such registration statements together relating to $500,000,000
principal amount of the Company's First and Refunding Mortgage Bonds and the
offering thereof from time-to-time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), and has filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof. Such registration statements as so
amended have been declared effective by the Commission. Copies of such
registration statements have been delivered to the Representative hereinafter
referred to, and copies of a post-effective amendment or a prospectus supplement
or prospectus filed pursuant to Rule 424(b) under the Securities Act
satisfactory to Counsel for the Purchasers reflecting the terms of the Bonds
will be similarly delivered. The Company will not file any other amendment to
said registration statements, any prospectus supplement or any documents with
the Commission pursuant to Sections 13, 14, or 15 of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), which modify said registration statements,
unless such amendment, supplement or modification is satisfactory to Counsel for
the Underwriters. Such registration statements as so amended at the date of this
Agreement, and the prospectus constituting a part thereof, as amended or
supplemented to reflect the terms of the offering of the Bonds pursuant to a
post-effective amendment or a prospectus supplement or prospectus filed by the
Company pursuant to Rule 424(b) under the Securities Act (including, in each
case, all documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act), are hereinafter called the "Registration
Statement" and the "Prospectus", respectively, except that if the Company files
any documents pursuant to Sections 13, 14 or 15 of the 1934 Act after the date
of this Agreement and prior to the termination of the offering of the Bonds by
the Underwriters, which documents are deemed to be incorporated by reference in
the Prospectus, the term "Prospectus" shall refer to the Prospectus as
supplemented by the documents so filed from and after the date said documents
are mailed or otherwise delivered for filing to the Commission. The Company will
advise Brown & Wood LLP, who are acting as Counsel for the Underwriters, of the
filing of any amendment to the Registration Statement or any amendment or
supplement to the Prospectus (including any documents incorporated by
reference), prior to any such filing and will not file any such amendment or
supplement to which Counsel for the Underwriters shall reasonably object in
writing.
SECTION 2. PURCHASE AND SALE. Subject to the terms and conditions herein
set forth, the Company agrees to sell to the several persons, firms or
corporations named in the Bid (herein referred to as "Underwriters" or singly as
"Underwriter" and the Underwriter or Underwriters named as Representative(s) in
the Bid being herein referred to as "Representative"), severally and not
jointly, and each of the Underwriters, upon the basis of the representations and
warranties herein set forth, agrees to purchase from the Company, severally and
not jointly, the principal amount of Bonds set forth opposite its name in the
Bid at the price specified in the Bid plus accrued
<PAGE>
interest thereon from the first day of the month in which the Bonds are issued
to the date of delivery of and payment for the Bonds.
SECTION 3. PUBLIC OFFERING. The Company is advised by the Representative
that the Underwriters propose to make a bona fide public offering of the Bonds
as soon as practicable. The Representative is contemporaneously advising the
Company of such details of the offering, including the initial price to the
public and the concessions and discounts, if any, to dealers, brokers and
others, as are needed to complete the filing of any amendment to the
Registration Statement or any supplement to the Prospectus. The Representative
will promptly deliver to the Company its written consent on behalf of all the
Underwriters to the filing of any post-effective amendment filed after the
acceptance of the Bid, and the Representative and the Underwriters will
cooperate fully with the Company towards making such post-effective amendment
effective at the earliest practicable time.
SECTION 4. DELIVERY OF AND PAYMENT FOR THE BONDS. (a) Payment of the
purchase price for the Bonds, including accrued interest at the rate specified
in the Bid from the first day of the month in which the Bonds are issued to the
date of delivery of and payment for the Bonds, shall be made by or on behalf of
the several Underwriters by wire transfer of immediately available funds to the
order of the Company, at the office of the Company, 80 Park Plaza, Newark, N.J.
(or such other place or places of payment as may be agreed upon between the
Company and the Representative), at 9:30 A.M., New York Time, on the date which
is three business days after the date on which the Bid is accepted by the
Company, or at such later time as shall be agreed upon by the Company and the
Representative, upon delivery of the Bonds to the Representative at the office
of First Union National Bank, 765 Broad Street, Newark, N.J. (or such other
place or places of delivery as shall be agreed upon between the Company and the
Representative) for the account of the several Underwriters. The time and date
of such payment and delivery, which may be postponed as provided in paragraph
(c) below, is herein referred to as the "Closing Date".
(b) The Bonds will be delivered to the Depository Trust Company, 55 Water
Street, New York, NY for the respective accounts of the Underwriters in fully
registered form in the dominations of $1,000 and any multiple of $1,000 and
registered in such names as the Representative may reasonably request in writing
not later than 9:30 A.M., New York Time, on the business day next preceding the
Closing Date, or to the extent not so requested, registered in the names of the
respective Underwriters in such denominations as the Company may determine. For
the purpose of examining the Bonds, the Company agrees to make such Bonds
available to the Representative not later than 12 Noon, New York Time, on the
business day next preceding the Closing Date at the above-mentioned office of
First Union National Bank (or such other place or places as shall be agreed upon
between the Company and the Representative).
(c) If any one or more of the Underwriters shall fail or refuse to purchase
and pay for the principal amount of Bonds set forth opposite its or their names
in the Bid in accordance with the terms hereof (the "Defaulted Bonds"), the
Company shall immediately notify the Representative orally, and the
Representative shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted Bonds in
such amounts as may be agreed upon and upon the terms herein set forth. If,
however, during such 24 hours the Representative shall not have completed such
arrangements for the purchase of all of the Defaulted Bonds, then the Company
shall have the right within a further period of 24 hours:
(i) to require each non-defaulting Underwriter to purchase the
Defaulted Bonds of the defaulting Underwriter up to a principal amount
thereof equal to 10% of the principal amount of Bonds which such
non-defaulting Underwriter has otherwise agreed to purchase hereunder, and
(ii) to procure one or more others, members of the National
Association of Securities Dealers, Inc., satisfactory to the
Representative, to purchase, upon the terms herein set forth, the principal
amount of Defaulted Bonds which the non-defaulting Underwriters shall not
be obligated to purchase pursuant to the foregoing clause (i).
In the event of a default by any Underwriter or Underwriters as set forth
in this Section, either the Representative or the Company shall have the right
to postpone the Closing Date for a period of not exceeding seven days in order
that any required changes in the Registration Statement or Prospectus or in any
other documents or arrangements may be effected.
2
<PAGE>
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Bonds are subject to the
following conditions:
(a) Any post-effective amendment filed after the acceptance of the Bid to
reflect the terms thereof shall have become effective no later than 6:30 P.M.,
New York Time, on the day next succeeding the effective date hereof, or at such
later time as shall be agreed upon by the Company and the Representative.
(b) At the Closing Date there shall be in full force and effect an order or
orders of the Board of Public Utilities of the State of New Jersey permitting
the execution and delivery of the Supplemental Indenture and the issuance and
sale of the Bonds substantially in accordance with the terms and conditions
herein set forth and containing no provision unacceptable to the Representative
(it being understood that any such order in effect as of the date of this
Agreement does not contain any such unacceptable provision and that no
subsequent order shall be deemed to contain any such unacceptable provision,
unless the Representative within 24 hours after receiving a copy thereof from
the Company shall have given notice to the Company to the effect that such order
contains an unacceptable provision or unacceptable provisions).
(c) At the Closing Date
(i) no stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for that purpose shall be
pending before, or to the knowledge of the Company threatened by, the
Commission;
(ii) since the respective most recent dates as of which information is
given in the Registration Statement and Prospectus and up to the Closing
Date, there shall have been no material adverse change in the business,
properties or financial condition of the Company, except as reflected in or
contemplated by the Registration Statement and the Prospectus, and since
such dates and up to the Closing Date there shall have been no material
transaction entered into by the Company other than transactions disclosed
in or contemplated by the Registration Statement and the Prospectus and
transactions in the ordinary course of business;
(iii) the Company shall have performed all agreements contained herein
to be performed by it at or prior to such date; and
(iv) the representations and warranties of the Company herein
contained shall be true and correct;
and the Representative shall have received, prior to payment for the Bonds, a
certificate, dated the day of the Closing Date and signed by the Chairman of the
Board, the President or any Vice President of the Company, to such effect.
(d) At the Closing Date the Representative shall be furnished with an
opinion of counsel of the Company, which may be given by James T. Foran, Esq.,
General Corporate Counsel, or by R. Edwin Selover, Esq., Senior Vice President
and General Counsel, of the Company, dated the day of the Closing Date and with
copies thereof for each of the other Underwriters, to the effect that:
(i) the Company has been duly incorporated and is validly existing
under the laws of the State of New Jersey and has due corporate authority
to carry on its business as described in the Prospectus, to own and operate
the properties used and useful in said business and to issue the Bonds and
secure the same by the Mortgage;
(ii) the Company is a subsidiary of Public Service Enterprise Group
Incorporated, which is a public utility holding company exempt from the
provisions of the Public Utility Holding Company Act of 1935 (except
Section 9(a)(2) thereof);
(iii) the Mortgage has been duly authorized, executed and delivered by
the Company and is a valid instrument legally binding upon the Company
(except as limited by principles of equity and by bankruptcy, insolvency or
other laws affecting creditors' rights);
(iv) when the Bonds have been duly executed by the Company,
authenticated by the Trustee and delivered by the Company, and payment
therefor has been received by the Company pursuant to this Agreement, they
will be valid and binding obligations of the Company in accordance with
their terms and entitled to the lien of and the benefits provided by the
Mortgage, subject to the limitation set forth in item (iii);
3
<PAGE>
(v) the Bonds conform as to legal matters to the statements concerning
them in the Prospectus and the summary of certain provisions of the
Mortgage contained in the Prospectus constitutes a correct summary thereof
for use in the Prospectus;
(vi) the franchises of the Company are sufficient authority for it to
carry on its business as described in the Prospectus;
(vii) all approvals, consents, and orders of the Board of Public
Utilities of the State of New Jersey legally required for the execution and
delivery of the Supplemental Indenture and the issuance and sale of the
Bonds have been obtained, and no approval, consent or order of any other
commission or other governmental authority is legally required for such
execution, delivery, issuance and sale (except that the sale of the Bonds
in certain states may be subject to the provisions of the securities laws
of such states) and the execution and delivery of the Supplemental
Indenture and the issuance and sale of the Bonds are in accordance with the
approvals, consents or orders obtained;
(viii) the Mortgage has been duly recorded, or lodged for record, as a
mortgage upon the property covered thereby in such manner as is necessary
to maintain the lien thereof;
(ix) the Mortgage constitutes as security for the Bonds a valid lien
on all the property and franchises owned by the Company (except cash,
accounts and bills receivable and all merchandise bought, sold or
manufactured for sale in the ordinary course of the Company's business,
stocks, bonds, or other corporate obligations or securities, other than
those now or hereafter specifically pledged thereunder, not acquired with
the proceeds of bonds secured by the Mortgage) as described or referred to
in the Prospectus under the heading "Description of the New Bonds"
subheading "Lien and Security", subject to no prior liens or encumbrances
other than those specified or referred to or as otherwise set forth under
said subheading;
(x) this Agreement has been duly authorized, executed and delivered by
the Company;
(xi) the statements in the Registration Statement made upon the
authority of counsel of the Company are in his opinion correct;
(xii) at the time the Registration Statement became effective, the
Registration Statement and, as of the date hereof, the Registration
Statement and Prospectus (except the financial statements and other
financial information included therein or omitted therefrom, as to which
counsel need express no opinion) complied as to form in all material
respects with the requirements of the Securities Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission regarding registration statements on Form S-3 and related
prospectuses;
(xiii) the Mortgage has been duly qualified under the Trust Indenture
Act of 1939, as amended;
(xiv) with respect to matters required to be included in the
Registration Statement, the statements made in the Registration Statement
under the heading "Description of the New Bonds" fairly present the
information called for insofar as such statements constitute summaries of
certain documents referred to therein;
(xv) the statements made in the Company's most recent Annual Report on
Form 10-K under "Rate Matters" and "Environmental Controls" in Item 1.
Business and under Item 3. Legal Proceedings, as such statements may be
modified by the Prospectus, fairly present in all material respects the
matters therein described; and
(xvi) on the basis of a general review and discussion with certain
officers and employees of the Company, but without independent check or
verification except as indicated, nothing has come to the attention of such
counsel that would lead him to believe that the Registration Statement, at
the time it became effective or, if an amendment to the Registration
Statement or an Annual Report on Form 10-K has been filed by the Company
with the Commission subsequent to the effectiveness of the Registration
Statement, then at the time of the most recent such filing, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus at the time it was filed with the
Commission or at the Closing Date included or includes an untrue statement
of a material fact or omitted or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
4
<PAGE>
In giving such opinion, counsel of the Company may rely as to all matters
of Pennsylvania law and legal conclusions based thereon upon the opinion of
Ballard Spahr Andrews & Ingersoll, of Philadelphia, Pennsylvania. As to matters
set forth in subparagraphs (viii) and (ix) above, the opinion of counsel of the
Company may be based in part on title insurance policies and reports and
searches obtained from companies engaged in the business of insuring title to
real estate in New Jersey, and the opinion of Ballard Spahr Andrews & Ingersoll
may be based in part on title insurance policies and reports and searches
obtained from a company engaged in the business of insuring title to real estate
in Pennsylvania, and on certificates or opinions of local counsel deemed by them
to be reliable and competent.
(e) At the Closing Date the Representative shall be furnished with an
opinion, dated the day of the Closing Date, and with copies thereof for each of
the other Underwriters, of Brown & Wood LLP (herein sometimes referred to as
"Counsel for the Underwriters"), stating in substance the matters set forth in
subparagraphs (iii), (iv), (v) (except as to statements under the subheading
"Lien and Security"), (vii), (x), (xii), (xiii), (xiv), and (xvi) of paragraph
(d) of this Section 5; and stating that the opinion given pursuant to paragraph
(d) of this Section 5 is satisfactory to them. In giving such opinion, Counsel
for the Underwriters may rely as to all matters of New Jersey law and legal
conclusions based thereon upon the opinion of counsel of the Company called for
by paragraph (d) of this Section 5 and as to all matters of Pennsylvania law and
legal conclusions based thereon upon the opinion of Ballard Spahr Andrews &
Ingersoll.
(f) At the time of acceptance of the Bid and on the Closing Date, the
Representative shall be furnished with a letter from Deloitte & Touche LLP dated
such respective dates and addressed to the Board of Directors of the Company and
the Representative with copies thereof for each of the Underwriters, to the
effect that: (i) they are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the Securities Act and the
applicable published rules and regulations thereunder (the "Securities Act
Regulations"); (ii) in their opinion, the audited consolidated financial
statements and financial statement schedule(s) incorporated by reference in the
Registration Statement and the Prospectus and included in the Company's most
recent Annual Report on Form 10-K filed with the Commission under Section 13 of
the 1934 Act (the "Form 10-K") comply as to form in all material respects with
the applicable accounting requirements of the Securities Act, the Securities Act
Regulations, the 1934 Act and the applicable published rules and regulations
thereunder (the "1934 Act Regulations"); (iii) on the basis of (1) a reading of
the unaudited balance sheets and related unaudited statements of income,
retained earnings and cash flows of the Company incorporated by reference in the
Registration Statement and the Prospectus and included in the Company's Form
10-Q Quarterly Reports filed with the Commission under Section 13 of the 1934
Act (the "Form 10-Q's") subsequent to the most recent Form 10-K, (2) a reading
of the latest available unaudited financial statements of the Company, (3) a
reading of the latest Consent of the Sole Shareholder in Lieu of Annual Meeting,
the minutes of Meetings of the Board of Directors of the Company as set forth in
the minute books for the current year and certain draft resolutions for
subsequent meetings, and (4) inquiries of the officers of the Company who have
responsibility for financial and accounting matters (it being understood that
the foregoing procedures do not constitute an audit made in accordance with
generally accepted auditing standards and would not necessarily reveal matters
of significance with respect to the comments made in such letter, and
accordingly that Deloitte & Touche LLP makes no representation as to the
sufficiency of such procedures for the purposes of the Underwriters), nothing
has come to their attention which caused them to believe that (A) any material
modifications should be made to the unaudited financial statements included in
the Form 10-Q's for them to be in conformity with generally accepted accounting
principles; (B) the unaudited financial statements included in the Form 10-Q's
do not comply as to form in all material respects with the applicable accounting
requirements of the 1934 Act and the 1934 Act Regulations or (C) at the date of
the latest available financial statements and at a specified date not more than
three business days prior to the date of such letter, there was any change in
the common stock or preferred stock or increase in long-term debt (except for
such stock and long-term debt acquired for sinking fund purposes or redeemed
pursuant to optional redemption or sinking fund provisions, or changes in
capital lease obligations incurred in the ordinary course of the Company's
business) of the Company or any decrease in the consolidated net assets of the
Company (except as occasioned by the declaration of dividends), in each case as
compared with the amounts shown on the most recent consolidated balance sheet of
the Company incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of such balance sheet to a
specified date not more than three
5
<PAGE>
business days prior to the date of such letter, there were any decreases, as
compared with the corresponding period in the preceding year, in consolidated
revenues or net income of the Company, except in each such case as set forth in
or contemplated by the Registration Statement and the Prospectus or except for
such exceptions enumerated in such letter as shall have been agreed to by the
Underwriters and the Company; (iv) in addition to the audit referred to in their
report included or incorporated by reference in the Registration Statement and
the Prospectus, and the limited procedures referred to in clause (iii) above,
they have carried out certain other specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial information
which are included or incorporated by reference in the Registration Statement
and the Prospectus and which are specified by the Underwriters, and have found
such amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company and its
subsidiaries identified in such letter, provided, that said letter may vary from
requirements specified above in such manner as the Representative may deem not
to be material or as may be acceptable to the Representative with the consent of
Underwriters who, together with the Representative, have agreed to purchase in
the aggregate 50% or more of the Bonds.
SECTION 6. CONDITIONS OF COMPANY'S OBLIGATIONS. The obligations of the
Company to issue and sell the Bonds are subject to the following conditions:
(a) Any post-effective amendment filed after the acceptance of the Bid to
reflect the terms thereof shall have become effective not later than the time
specified in or agreed to under paragraph (a) of Section 5 hereof.
(b) At the Closing Date no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for that purpose
shall be pending before, or to the knowledge of the Company threatened by, the
Commission.
(c) At the Closing Date there shall be in full force and effect an order or
orders of the Board of Public Utilities of the State of New Jersey permitting
the execution and delivery of the Supplemental Indenture and the issuance and
sale of the Bonds and the transactions relating thereto substantially in
accordance with the terms and conditions herein set forth and containing no
provision unacceptable to the Company (it being understood that any such order
in effect as of the date of this Agreement does not contain any such
unacceptable provision and that no subsequent order shall be deemed to contain
any such unacceptable provision, unless the Company, within 24 hours after
receiving a copy thereof, shall be given notice by the Representative to the
effect that such order contains an unacceptable provision or unacceptable
provisions).
(d) At the Closing Date the Company shall concurrently sell and receive
payment for all of the Bonds.
SECTION 7. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company agrees as follows:
(a) The Company will file with the Commission a post-effective amendment,
or a prospectus or prospectus supplement pursuant to Rule 424, with such changes
therein as may be approved by Counsel for the Underwriters, as soon as
practicable after the acceptance of the Bid.
(b) As soon as the Company is advised thereof, it will notify the
Representative orally (i) when any post-effective amendment filed after the
acceptance of the Bid has become effective, (ii) when any other amendment to the
Registration Statement has become effective or any supplement thereto has been
filed, and (iii) when any stop order has been issued under the Securities Act
with respect to the Registration Statement or any proceedings therefor have been
instituted or to the knowledge of the Company are threatened; and it will use
its best efforts to prevent the issuance of any such stop order and secure the
prompt removal thereof, if issued. The Company will not, after the acceptance of
the Bid, file any further amendment of or any supplement to the Registration
Statement or the Prospectus unless such amendment or supplement is satisfactory
to Counsel for the Underwriters.
(c) The Company will, at or prior to the Closing Date, deliver to the
Representative and also, on request, to Counsel for the Underwriters:
(i) one certified copy of the Registration Statement as originally
filed electronically and of all amendments or supplements thereto,
heretofore or hereafter made, including any post-effective amendments (in
each case including all documents incorporated by reference therein and all
exhibits filed therewith, except
6
<PAGE>
exhibits incorporated by reference unless specifically requested),
including a certified copy of each consent and certificate included therein
or filed as an exhibit thereto.
(ii) such other documents (including copies of the Registration
Statement of any amendments thereto, in each case including documents
incorporated therein by reference but excluding exhibits), appropriately
certified if so requested, relating to the issuance and validity of the
Bonds as the Representative or Counsel for the Underwriters may reasonably
request.
(d) Promptly after the effective date of any post-effective amendment filed
after acceptance of the Bid, or after the date of any prospectus supplement or
prospectus filed with the Commission to reflect the terms of the Bid, the
Company will furnish to the Underwriters, in accordance with the
Representative's instructions, without charge, as many copies of the Prospectus
(without the documents incorporated therein by reference) as the Representative
may reasonably request for the purposes contemplated by the Securities Act, and
will deliver to the Representative as soon as practicable after the effective
date of the Registration Statement sufficient conformed copies of the
Registration Statement and of all amendments thereto (in each case including
documents incorporated therein by reference but excluding exhibits) for
distribution of one to each Underwriter. If any event relating to or affecting
the Company, or of which the Company shall be advised by the Representative,
shall occur, which in the opinion of the Company or of Counsel for the
Underwriters should be set forth in a supplement to or an amendment of the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances when it is delivered to the Underwriters, the Company will, upon
the occurrence of each such event, forthwith at its expense, (i) prepare and
furnish to the Representative a reasonable number of copies of a supplement or
amendment to the Prospectus, satisfactory to Counsel for the Underwriters, or
(ii) file with the Commission documents to be incorporated by reference in the
Prospectus, satisfactory to Counsel for the Underwriters, in either case so that
statements in the Prospectus as so supplemented, amended or modified will not
include as of the date of such supplement, amendment or modification, any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered, not misleading.
(e) After the acceptance of the Bid, and prior to the termination of the
offering of the Bonds, the Company will file promptly all documents required to
be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the 1934 Act, which documents shall be satisfactory to Counsel for the
Underwriters.
(f) The Company will make generally available to its security holders, as
soon as practicable, but no later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering the 12-month period beginning not
later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in such Rule 158) of the Registration Statement.
(g) The Company will use its best efforts to comply with the conditions
precedent to the obligations of the Underwriters, specified in Section 5 hereof,
or to cause such conditions to be complied with.
(h) The Company will pay all expenses in connection with the preparation
and filing of the Registration Statement and Prospectus, the preparation of the
Supplemental Indenture, the issuance and delivery of the Bonds, and the printing
and delivery of copies of the Registration Statement, the Prospectus, the Terms
and Conditions and the various documents therein referred to; and will pay all
taxes, if any, on the issuance of the Bonds, but will not pay any transfer
taxes. The Company will not, however, be required to pay any amount for any
expenses of the Representative or of any of the Underwriters or compensation and
disbursements of their counsel, except as provided in Section 10(c) hereof, and
except as provided in said Section 10(c), the Underwriters agree to pay such
expenses, compensation, and disbursements.
(i) The Company will use its best efforts to qualify at its expense the
Bonds for offer and sale, and the Company where necessary as a dealer in
securities, under the securities laws in such states as the Representative may
designate, and will pay all fees and expenses including fees and disbursements
of counsel not to exceed $5,000 incurred in connection with the preparation of
surveys relating thereto and to legality for investment provided that the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any state.
7
<PAGE>
SECTION 8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY; INDEMNIFICATION.
(a) The Company represents and warrants to each Underwriter that
(i) when any post-effective amendment reflecting the acceptance of the
Bid shall become effective, or when any prospectus or prospectus supplement
reflecting the acceptance of the Bid is filed with the Commission, the
Registration Statement and Prospectus will comply in all material respects
with the provisions of the Securities Act, and the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission
thereunder, and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except that this representation
and warranty shall not apply to statements in or omissions from the
Registration Statement and Prospectus made in reliance upon and in
conformity with information furnished herein or in writing to the Company
by any Underwriter or by the Representative on behalf of any Underwriter
expressly for use in the Registration Statement or Prospectus, or to any
statements in or omissions from the Statement of Eligibility of the Trustee
under the Mortgage, but nothing contained herein is intended as a waiver of
compliance with the Securities Act or any rule or regulation of the
Commission thereunder.
(ii) the documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, at the time they
were filed with the Commission, complied in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations and, when read
together with the other information in the Prospectus, at the time any
post-effective amendment reflecting the acceptance of the Bid becomes
effective, or when any prospectus or prospectus supplement reflecting the
acceptance of the Bid is filed with the Commission, and at the Closing
Date, will not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
are made, not misleading, and any documents deemed to be incorporated by
reference in the Prospectus will, when they are filed with the Commission,
comply in all material respects with the requirements of the 1934 Act and
the 1934 Act Regulations, and will not include any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading;
(iii) Deloitte & Touche LLP are independent public accountants with
respect to the Company as required by the Securities Act and the rules and
regulations of the Commission thereunder;
(iv) the performance by the Company of the terms of this Agreement
will not result in a breach by the Company of any terms of, or constitute a
default under, any other agreement or undertaking of the Company; and
(v) except as reflected in, or contemplated by, the Registration
Statement and Prospectus, since the respective most recent dates as of
which information is given in the Registration Statement and Prospectus,
there has not been any material adverse change in the business, properties
or financial condition of the Company, and since such dates there has not
been any material transaction entered into by the Company other than
transactions disclosed in or contemplated by the Registration Statement and
Prospectus and transactions in the ordinary course of business, and the
Company has no material contingent obligation which is not disclosed in the
Registration Statement and Prospectus.
(b) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, unless such untrue statement or
omission or such alleged untrue statement or omission was
8
<PAGE>
made in reliance upon and in conformity with written information furnished
to the Company by any Underwriter or by the Representative on behalf of any
Underwriter expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), except for such loss, liability, claim,
damage and expense arising out of any untrue statements or alleged untrue
statements in or omissions or alleged omissions from the Statement of
Eligibility of the Trustee under the Mortgage;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above.
This indemnity agreement is subject to the condition that insofar as it
relates to any untrue statement or omission, or any alleged untrue statement or
omission, made in the Prospectus but eliminated or remedied in a supplement or
amendment thereto, such indemnity agreement shall not inure to the benefit of
any Underwriter from and after the time such supplement or amendment shall have
been furnished unless the Prospectus is used as so supplemented or amended,
provided that such use shall not require delivery of documents incorporated by
reference. In no case shall the Company be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Company shall be notified in writing of the nature of the
claim promptly after the assertion thereof, but failure so to notify the Company
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. The Company shall be entitled to
participate at its own expense in the defense, or, if it so elects, within a
reasonable time after receipt of such notice, to assume the defense of any suit
brought to enforce any such claim, but if it so elects to assume the defense,
such defense shall be conducted by counsel chosen by it and approved by the
Underwriter or Underwriters or controlling person or persons, defendant or
defendants in any suit so brought, which approval shall not be unreasonably
withheld. In the event that the Company elects to assume the defense of any such
suit and retains such counsel, the Underwriter or Underwriters or controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel thereafter retained by them. In the event
that the parties to any such action (including impleaded parties) include both
the Company and one or more Underwriters and any such Underwriter shall have
been advised by counsel chosen by it and satisfactory to the Company that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Company, the Company shall not have the
right to assume the defense of such action on behalf of such Underwriter and
will reimburse such Underwriter and any person controlling such Underwriter as
aforesaid for the reasonable fees and expenses of any counsel retained by them,
it being understood that the Company shall not, in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for all
such Underwriters and controlling persons, which firm shall be designated in
writing by the Representative. The Company agrees to notify the Representative
promptly after the assertion of any claim against it, any of its directors, any
of its officers who signed the Registration Statement, or any person who
controls the Company within the meaning of Section 15 of the Securities Act, in
connection with the sale of the Bonds.
(c) Each Underwriter severally agrees that it will indemnify and hold
harmless the Company, its directors, and each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act to the same extent as the
indemnity contained in subsection (b) of this Section, but only with respect to
statements or omissions made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter or by the Representative on behalf
of such Underwriter expressly for use in the Registration Statement (or
9
<PAGE>
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto). In case any action shall be brought against
the Company or any person so indemnified based on the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) and in respect of which indemnity may be sought
against any Underwriter, such Underwriter shall have the rights and duties given
to the Company, and the Company and each person so indemnified shall have the
rights and duties given to the Underwriters by the provisions of subsection (b)
of this Section.
(d) The indemnity agreements contained in this Section 8 shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Company, or any Underwriter or any controlling person, and
shall survive the delivery of the Bonds to the Underwriters.
SECTION 9. CONTRIBUTION.
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in Section 8 is for any reason held
to be unenforceable by the indemnified parties although applicable in accordance
with its terms, the Company and the Underwriters shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company and one or more
of the Underwriters, in such proportions that the Underwriters are responsible
for that portion represented by the percentage that the underwriting discount
appearing on the cover page of the prospectus supplement bears to the initial
public offering price appearing thereon and the Company is responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as the Company.
SECTION 10. TERMINATION AND SURVIVAL.
(a) This Agreement may be terminated by notice to the Company by the
Representative with the consent of Underwriters who have agreed to purchase in
the aggregate 50% or more of the aggregate principal amount of the Bonds (i) at
any time prior to the expiration of 24 hours after acceptance of the Bid (but
not after the initial public offering of the Bonds) if the market value of
securities in general or political, financial or economic conditions shall have
so materially changed after the time fixed for the delivery and opening of bids
for the Bonds and within the time set forth above as, in the reasonable judgment
of the Representative, to render it inadvisable to proceed with the public
offering of the Bonds, and (ii) at any time prior to the Closing Date if,
subsequent to the time fixed for the delivery and opening of bids, (1) a general
banking moratorium shall have been declared by Federal or New York State
authorities which in the reasonable judgment of the Representative would
materially restrict a free market for the Bonds, (2) there shall have occurred
any new outbreak or unforeseen escalation of hostilities or other national or
international calamity or crisis the effect of which on the financial markets of
the United States shall be such as, in the reasonable judgment of the
Representative, to make it impracticable for the Underwriters to enforce
contracts for the sale of the Bonds, (3) the Company shall have sustained a loss
by fire, flood, accident or other calamity which is substantial with respect to
the property of the Company and constitutes a material adverse change in the
business, properties or financial condition of the Company or (4) a stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the Commission. The time of the initial public offering for the
purposes of this Section 10 shall mean the time of the release by the
Representative for publication of the first newspaper advertisement, if any,
which is subsequently published by or on behalf of the Underwriters or any of
them offering the Bonds for sale or the time at which the Bonds are first
generally offered by the Representative on behalf of the Underwriters to dealers
by letter or telegram, whichever shall first occur.
10
<PAGE>
(b) This Agreement shall terminate:
(i) if, under the conditions, within the time and otherwise as
provided in Section 4(c) hereof, neither the Representative nor the Company
shall procure another party or parties to purchase the Bonds which any one
or more of the Underwriters shall fail or refuse to purchase and pay for,
(ii) if any of the conditions specified in Section 5 hereof shall not
have been fulfilled and the Representative shall give notice to the Company
that this Agreement is terminated by reason thereof, or
(iii) if any of the conditions specified in Section 6 hereof shall not
have been fulfilled and the Company shall give notice to the Representative
that this Agreement is terminated by reason thereof.
(c) Subject to the provisions of paragraph (d) next below, in the event
that this Agreement shall terminate as provided in paragraph (a) or (b) next
above, no Underwriter (other than an Underwriter who shall have failed or
refused to purchase the Bonds which it has agreed to purchase hereunder without
some reason sufficient to justify its termination of its obligations hereunder)
shall be under any liability to the Company, and the Company shall not be under
any liability to any Underwriter, except (i) that the Company shall, unless such
termination shall be under the provisions of paragraph (a) or (b) (i) next
above, pay the Representative, for the account of the Underwriters severally,
the amount of their out-of-pocket expenses (but not exceeding $5,000 in the
aggregate in addition to the fee and disbursements of Counsel for the
Underwriters, a statement of the amount of such fee and estimate of such
disbursements having been furnished to the Company) reasonably incurred by the
Underwriters hereunder, except for those Underwriters who have failed or refused
(without some reason sufficient to justify the termination of their obligations
hereunder) to purchase and pay for the Bonds which such Underwriters have agreed
to purchase hereunder. The Company will not in any event be liable to any of the
several Underwriters for damages on account of loss of anticipated profits.
(d) The agreements and representations and warranties set forth in Sections
1, 7, 8 and 9 hereof shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person or by or on behalf of the Company, and regardless of
acceptance of any payment for the Bonds hereunder, and the agreements and
representations and warranties set forth in Sections 1, 7(h), 8 and 9 hereof
shall remain operative and in full force and effect, regardless of termination
hereof as above provided or otherwise.
SECTION 11. NOTICES. All notices and other communications hereunder shall
be in writing or by telegram (or where oral notice is specified, shall be
promptly confirmed in writing or by telegram) and if to the Company, shall be
mailed or delivered to it at 80 Park Plaza, T6B, P.O. Box 570, Newark, N.J.
07101, attention of Mr. M. A. Plawner, Vice President and Treasurer, or if to
the Representative or Underwriter shall be mailed or delivered to such person at
the address set forth for the Representative or Underwriter in the Bid.
SECTION 12. VALIDITY AND INTERPRETATION. The validity, construction and
interpretation of this Agreement shall be governed by the laws of the State of
New Jersey applicable to agreements made and to be performed in such State. In
the event that the Bid was made by a single person, firm or corporation, as used
herein the term "Underwriter" shall mean such single person, firm or
corporation, the term "Representative" shall mean such Underwriter, the term
"Underwriters" shall be read in the singular to mean such Underwriter, and the
provisions of this Agreement shall be deemed appropriately modified to reflect
that it is an Agreement between the Company and a single Underwriter.
SECTION 13. SUCCESSION. This Agreement shall inure to the benefit of the
Company, of the several Underwriters and, with respect to paragraphs (b), (c)
and (d) of Section 8 and Section 9 hereof, of each controlling person, officer
and director referred to therein, and their respective successors, assigns,
executors and administrators. Nothing in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect to this Agreement or any provision
herein contained. The terms "successors" and "assigns" as used in this Agreement
shall not include any purchaser, as such purchaser, of any of the Bonds from any
of the several Underwriters.
11
<PAGE>
EXHIBIT 4(A)(99)
SUPPLEMENTAL MORTGAGE
- --------------------------------------------------------------------------------
Supplemental Indenture
DATED
------------------
SUPPLEMENTAL TO
FIRST AND REFUNDING MORTGAGE
DATED AUGUST 1, 1924
------------------
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
TO
FIRST UNION NATIONAL BANK
TRUSTEE
765 BROAD STREET
NEWARK, NEW JERSEY 07101
------------------
PROVIDING FOR THE ISSUE OF
$ FIRST AND REFUNDING MORTGAGE BONDS,
% SERIES DUE
- --------------------------------------------------------------------------------
RECORD IN MORTGAGE BOOK AND RETURN TO:
JAMES T. FORAN, ESQ.
80 PARK PLAZA, T5B
P.O. BOX 570
NEWARK, N.J. 07101
PREPARED BY
( , Esq.)
<PAGE>
TABLE OF CONTENTS
------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RECITALS........................................................................... 1
FORM OF BOND [FACE]................................................................ 3
FORMS OF CERTIFICATES OF AUTHENTICATION............................................ 5
FORM OF BOND [REVERSE]............................................................. 6
GRANTING CLAUSES................................................................... 9
</TABLE>
ARTICLE I.
BONDS OF THE SERIES
<TABLE>
<S> <C>
DESCRIPTION OF SERIES.............................................................. 11
</TABLE>
ARTICLE II.
REDEMPTION OF BONDS -- SINKING OR IMPROVEMENT FUND --
OF SERIES
<TABLE>
<S> <C> <C>
SECTION 2.01. Redemption -- Redemption Prices................................ 12
SECTION 2.02. Sinking or Improvement Fund --
Sinking or Improvement Fund Redemptions --
Redemptions Pursuant to Section 4C of
Article Eight of the Indenture............................... 12
SECTION 2.03. Redemption at Election of Company.............................. 14
SECTION 2.04. Called Bonds to be Surrendered -- Interest to Cease............ 15
SECTION 2.05. Bonds Called in Part........................................... 16
SECTION 2.06. Provisions of Indenture Not Applicable......................... 16
</TABLE>
ARTICLE III.
MISCELLANEOUS.
<TABLE>
<S> <C> <C>
SECTION 3.01. Authentication of Bonds of Series.............................. 16
SECTION 3.02. Authenticating Agent........................................... 16
SECTION 3.03. Additional Restrictions on Authentication of Additional Bonds
Under Indenture................................................. 17
SECTION 3.04. Restriction on Dividends....................................... 18
SECTION 3.05. Use of Facsimile Seal and Signatures........................... 18
SECTION 3.06. Time for Making of Payment..................................... 18
SECTION 3.07. Effective Period of Supplemental Indenture..................... 19
SECTION 3.08. Effect of Approval of Board of Public Utilities of the State of
New Jersey...................................................... 19
SECTION 3.09. Execution in Counterparts...................................... 19
Acknowledgments..................................................................... 20
Certificate of Residence............................................................ 21
</TABLE>
<PAGE>
SUPPLEMENTAL INDENTURE, dated the day of for convenience
of reference and effective from the time of execution and delivery hereof,
between PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a corporation organized under
the laws of the State of New Jersey, hereinafter called the "Company", party of
the first part, and FIRST UNION NATIONAL BANK, a national banking association
organized under the laws of the United States of America, as Trustee under the
indenture dated August 1, 1924, below mentioned, hereinafter called the
"Trustee", party of the second part.
WHEREAS, on July 25, 1924, the Company executed and delivered to FIDELITY
UNION TRUST COMPANY (now known as FIRST UNION NATIONAL BANK), a certain
indenture dated August 1, 1924 (hereinafter called the "Indenture"), to secure
and to provide for the issue of First and Refunding Mortgage Gold Bonds of the
Company; and
WHEREAS, the Indenture has been recorded in the following counties of the
State of New Jersey, in the offices, and therein in the books and at the pages,
as follows:
<TABLE>
<CAPTION>
PAGE
COUNTY OFFICE BOOK NUMBER NUMBER
- ----------- ------------ ---------------------------- ----------------
<S> <C> <C> <C>
Atlantic Clerk's 1955 of Mortgages 160
Bergen Clerk's 94 of Chattel Mortgages 123 etc.
693 of Mortgages 85 etc.
Burlington Clerk's 52 of Chattel Mortgages Folio 8, etc.
177 of Mortgages Folio 354, etc.
Camden Register's 45 of Chattel Mortgages 184 etc.
239 of Mortgages 1 etc.
Cumberland Clerk's 786 of Mortgages 638 & c.
Essex Register's 437 of Chattel Mortgages 1-48
T-51 of Mortgages 341-392
Gloucester Clerk's 34 of Chattel Mortgages 123 etc.
142 of Mortgages 7, etc.
Hudson Register's 453 of Chattel Mortgages 9, etc.
1245 of Mortgages 484, etc.
Hunterdon Clerk's 151 of Mortgages 344
Mercer Clerk's 67 of Chattel Mortgages 1 etc.
384 of Mortgages 1 etc.
Middlesex Clerk's 113 of Chattel Mortgages 3 etc.
437 of Mortgages 294, etc.
Monmouth Clerk's 951 of Mortgages 291 & c.
Morris Clerk's N-3 of Chattel Mortgages 446 etc.
F-10 of Mortgages 269 etc.
Ocean Clerk's 1809 of Mortgages 40
Passaic Register's M-6 of Chattel Mortgages 178, etc.
R-13 of Mortgages 268 etc.
Salem Clerk's 267 of Mortgages 249 & c.
</TABLE>
<PAGE>
2
<TABLE>
<CAPTION>
PAGE
COUNTY OFFICE BOOK NUMBER NUMBER
- --------- ------------ --------------------------- ---------
<S> <C> <C> <C>
Somerset Clerk's 46 of Chattel Mortgages 207 etc.
N-10 of Mortgages I etc.
Sussex Clerk's 123 of Mortgages 10 & c.
Union Register's 128 of Chattel Mortgages 28 & c.
664 of Mortgages 259 etc.
Warren Clerk's 124 of Mortgages 141 etc.
</TABLE>
and
WHEREAS, the Indenture has also been recorded in the following counties of
the Commonwealth of Pennsylvania, in the offices, and therein in the books and
at the pages, as follows:
<TABLE>
<CAPTION>
PAGE
COUNTY OFFICE BOOK NUMBER NUMBER
- ------------- ------------ ------------------- ------
<S> <C> <C> <C>
Adams Recorder's 22 of Mortgages 105
Armstrong Recorder's 208 of Mortgages 381
Bedford Recorder's 90 of Mortgages 917
Blair Recorder's 671 of Mortgages 430
Cambria Recorder's 407 of Mortgages 352
Cumberland Recorder's 500 of Mortgages 136
Franklin Recorder's 285 of Mortgages 373
Huntingdon Recorder's 128 of Mortgages 47
Indiana Recorder's 197 of Mortgages 281
Lancaster Recorder's 984 of Mortgages 1
Montgomery Recorder's 5053 of Mortgages 1,221
Westmoreland Recorder's 1281 of Mortgages 198
York Recorder's 31-V of Mortgages 446
</TABLE>
and
WHEREAS, the Indenture granted, bargained, sold, aliened, remised,
released, conveyed, confirmed, assigned, transferred and set over unto the
Trustee certain property of the Company, more fully set forth and described in
the Indenture, then owned or which might thereafter be acquired by the Company;
and
WHEREAS, the Company, by various supplemental indentures, supplemental to
the Indenture, the last of which was dated , has granted, bargained,
sold, aliened, remised, released, conveyed, confirmed, assigned, transferred and
set over unto the Trustee certain property of the Company acquired by it after
the execution and delivery of the Indenture; and
WHEREAS, since the execution and delivery of said supplemental indenture
dated , the Company has acquired property which, in accordance with the
provisions
<PAGE>
3
of the Indenture, is subject to the lien thereof and the Company desires to
confirm such lien; and
WHEREAS, the Indenture has been amended or supplemented from time to time;
and
WHEREAS, it is provided in the Indenture that no bonds other than those of
the 5 1/2% Series due 1959 therein authorized may be issued thereunder unless a
supplemental indenture providing for the issue of such additional bonds shall
have been executed and delivered by the Company to the Trustee; and
WHEREAS, the Company desires to provide for the issue of $
principal amount of bonds secured by said Indenture of a series to be designated
as "First and Refunding Mortgage Bonds, % Series due " (hereinafter
sometimes called "Series "); and
WHEREAS, the text of the bonds of the Series and of the certificates
of authentication to be borne by the bonds of the Series shall be
substantially of the following tenor:
[FORM OF BOND]
[FACE]
REGISTERED REGISTERED
NUMBER AMOUNT
RU $
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
FIRST AND REFUNDING MORTGAGE BOND,
% SERIES DUE .
Public Service Electric and Gas Company (hereinafter called the "Company"),
a corporation of the State of New Jersey, for value received, hereby promises to
pay to , or registered assigns, on the surrender hereof, the
principal sum of
Dollars, on and to pay interest thereon from the date hereof, at the rate
of % per annum, and until payment of said principal sum, such interest to
be payable and in each year.
Both the principal hereof and interest hereon shall be paid at the
corporate trust office of First Union National Bank, in the City of Newark,
State of New Jersey, or (at the option of the registered owner) at the corporate
trust office of First Chicago Trust Company of New York, in the Borough of
Manhattan, City and State of New York, 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.
<PAGE>
4
Reference is hereby made to the further provisions of this Bond set forth
on the reverse hereof and such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This Bond shall not be entitled to any security or benefit under the
indenture mentioned on the reverse hereof, as amended and supplemented, and
shall not become valid or obligatory for any purpose, until the certificate of
authentication, hereon endorsed, shall have been signed by or on behalf of First
Union National Bank, as Trustee, or by or on behalf of its successor in trust
under said indenture.
IN WITNESS WHEREOF, the Company has caused this Bond to be duly executed by
its proper officers under its corporate seal.
Dated
PUBLIC SERVICE ELECTRIC AND GAS
COMPANY,
By ..................................
(Vice) President
(Seal)
Attest:
....................................
(Assistant) Secretary
<PAGE>
5
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the series designated therein which are
described in the within-mentioned indenture and supplemental indenture dated
, as secured thereby.
FIRST UNION NATIONAL BANK, TRUSTEE
By ..................................
Authorized Signatory
[FORM OF ALTERNATE CERTIFICATE OF AUTHENTICATION]
ALTERNATE CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the series designated therein which are
described in the within-mentioned indenture and supplemental indenture dated
, as secured thereby.
FIRST UNION NATIONAL BANK, TRUSTEE
By ..................................
Authenticating Agent
By ..................................
Authorized Signatory
<PAGE>
6
[FORM OF BOND]
[REVERSE]
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
FIRST AND REFUNDING MORTGAGE BOND,
% SERIES DUE
This Bond is one of the First and Refunding Mortgage Bonds of the Company
issued and to be issued under and pursuant to, and all equally secured by, an
indenture of mortgage or deed of trust dated August 1, 1924, as supplemented and
amended by supplemental indentures thereto, including supplemental indentures
dated March 1, 1942, June 1, 1949, May 1, 1950, October 1, 1953, May 1, 1954,
November 1, 1956, September 1, 1957, August 1, 1958, June 1, 1959, September 1,
1960, August 1, 1962, June 1, 1963, September 1, 1964, September 1, 1965, June
1, 1967, June 1, 1968, April 1, 1969, March 1, 1970, May 15, 1971, November 15,
1971, April 1, 1972, March 1, 1974, October 1, 1974. April 1, 1976, September 1,
1976, October 1, 1976, June 1, 1977, September 1, 1977, November 1, 1978, July
1, 1979, September 1, 1979 (No. 1), September 1, 1979 (No. 2), November 1, 1979,
June 1, 1980, August 1, 1981, April 1, 1982, September 1, 1982, December 1,
1982, June 1, 1983, August 1, 1983, July 1, 1984, September 1, 1984, November 1,
1984 (No. 1), November 1, 1984 (No. 2), July 1, 1985, January 1, 1986, March 1,
1986, April 1, 1986 (No. 1), April 1, 1986 (No. 2), March 1, 1987, July 1, 1987
(No. 1), July 1, 1987 (No. 2), May 1, 1988, September 1, 1988, July 1, 1989,
July 1, 1990 (No. 1), July 1, 1990 (No. 2), June 1, 1991 (No. 1), June 1, 1991
(No. 2), November 1, 1991 (No. 1), November 1, 1991 (No. 2), November 1, 1991
(No. 3), February 1, 1992 (No. 1), February 1, 1992 (No. 2), June 1, 1992 (No.
1), June 1, 1992 (No. 2), June 1, 1992 (No. 3), January 1, 1993 (No. 1), January
1, 1993 (No. 2), March 1, 1993, May 1, 1993, May 1, 1993 (No. 2), May 1, 1993
(No. 3), July 1, 1993, August 1, 1993, September 1, 1993, September 1, 1993 (No.
2), November 1, 1993, February 1, 1994, March 1, 1994 (No. 1), March 1, 1994
(No. 2), May 1, 1994, June 1, 1994, August 1, 1994, October 1, 1994 (No. 1),
October 1, 1994 (No. 2), October 1, 1995 (No. 1), October 1, 1995 (No. 2),
January 1, 1996 (No. 1), January 1, 1996 (No. 2), December 1, 1996, April 1,
1997 and June 1, 1997, each duly executed by the Company and First Union
National Bank (formerly known as Fidelity Union Trust Company), a national
banking association organized under the laws of the United States of America, as
Trustee. This Bond is one of the % Series due , which series is limited
to aggregate principal amount of
and is issued pursuant to said supplemental indenture dated .
Reference is hereby made to said indenture and all supplements thereto for a
specification of the principal amount of Bonds from time to time issuable
thereunder, and for a description of the properties mortgaged and conveyed or
assigned to said Trustee or its successors, the
<PAGE>
7
nature and extent of the security, and the rights of the holders of said Bonds
and any coupons appurtenant thereto, and of the Trustee in respect of such
security.
In and by said indenture, as amended and supplemented, it is provided that
with the written approval of the Company and the Trustee, any of the provisions
of said indenture may from time to time be eliminated or modified and other
provisions may be added thereto provided the change does not alter the annual
interest rate, redemption price or date, date of maturity or amount payable on
maturity of any then outstanding Bond or conflict with the Trust Indenture Act
of 1939 as then in effect, and provided the holders of 85% in principal amount
of the Bonds secured by said indenture and then outstanding (including, if such
change affect the Bonds of one or more series but less than all series then
outstanding, a like percentage of the then outstanding Bonds of each series
affected by such change, and excluding Bonds owned or controlled by the Company
or by the parties owning at least 10% of the outstanding voting stock of the
Company, as more fully specified in said indenture) consent in writing thereto,
all as more fully set forth in said indenture, as amended and supplemented.
First and Refunding Mortgage Bonds issuable under said indenture are
issuable in series, and the Bonds of any series may be for varying principal
amounts and in the form of coupon bonds and of registered bonds without coupons,
and the Bonds of any one series may differ from the Bonds of any other series as
to date, maturity, interest rate and otherwise, all as in said indenture
provided and set forth. The Bonds of the % Series due , in
which this Bond is included, are designated "First and Refunding Mortgage Bonds,
% Series due ".
In case of the happening of an event of default as specified in said
indenture and said supplemental indenture dated March 1, 1942, the principal sum
of the Bonds of this series may be declared or may become due and payable
forthwith, in the manner and with the effect in said indenture provided.
Said supplemental indenture dated provides for a sinking or
improvement fund the requirements of which may be satisfied, at the option of
the Company, in whole or in part by payment of cash, by delivery of Bonds of
this Series, or by utilization of additions or improvements, all as more fully
provided therein.
As more fully provided in said supplemental indenture dated ,
the Bonds of this series are subject to redemption prior to maturity, on notice
given as below provided, (a) as a whole at any time or in part on any interest
payment date, at the election of the Company (subject to the approval of the
Board of Public Utilities of the State of New Jersey first applied for and
obtained), upon payment of the percentages of the principal amount thereof
specified below under "Regular Redemption Price" during the respective 12-month
periods beginning of each of the years mentioned below, provided, however,
that prior to no Bonds of this series may be so redeemed, and (b) on
<PAGE>
8
of each year, beginning in , by operation of said sinking or
improvement fund, or at any time by the application of proceeds of released
property or other money held by the Trustee and which, pursuant to the
provisions of said indenture, as amended and supplemented, is applied to the
redemption of Bonds of this series, upon payment of the percentages of the
principal amount thereof specified below under "Special Redemption Price" during
such respective 12-month periods:
<TABLE>
<CAPTION>
12-MONTH 12-MONTH
PERIOD REGULAR SPECIAL PERIOD REGULAR SPECIAL
BEGINNING REDEMPTION REDEMPTION BEGINNING REDEMPTION REDEMPTION
1 PRICE PRICE 1 PRICE PRICE
- ---------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
% % % %
</TABLE>
together in each case with accrued interest to the date fixed for redemption.
Notice of any such redemption shall be given by mailing the same to the
respective registered owners of the Bonds of this series so called for
redemption, not less than 30 nor more than 40 days in advance of the date fixed
for redemption. In the case of redemption of Bonds of this series at the
election of the Company, the notice of redemption may be conditioned upon the
deposit of the total regular redemption price of all the Bonds so called, with
accrued interest thereon to the redemption date, with the Trustee on or before
the date fixed for redemption.
If this Bond or any portion thereof be called for redemption and payment be
duly provided therefor, interest shall cease to accrue on this Bond or such
portion on the date fixed for such redemption.
This Bond is transferable, but only as provided in said 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 Bond similar hereto
will be issued to the transferee. No service charge shall be made for any such
transfer, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto. The
Company and the Trustee and any paying agent may deem and treat the person in
whose name this Bond is registered as the absolute owner hereof for the purpose
of receiving payment of or on account of the principal hereof and the interest
hereon and for all other purposes; and neither the Company nor the Trustee nor
any paying agent shall be affected by any notice to the contrary.
<PAGE>
9
The Bonds of this series are issuable only in fully registered form, in
denominations of $1,000 and any multiple of $1,000. Such fully registered Bonds
of the several denominations may be exchanged for fully registered Bonds of
other authorized denominations, but only as provided in said indenture, upon
surrender thereof, by the registered owner in person or by attorney duly
authorized in writing, at either of said offices where the principal thereof and
interest thereon are payable. No service charge shall all be made for any such
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that my be imposed in relation thereto.
The Company shall not be required to issue or make transfers or exchanges
of Bonds of this series for a period of ten days next preceding any interest
payment date or next preceding the date of any drawing of such Bonds to be
redeemed, and the Company shall not be required to make transfers or exchanges
of any such Bonds drawn in whole or in part for such redemption.
No recourse under or upon any obligation, covenant or agreement contained
in said indenture or in any indenture supplemental thereto, or in any Bond or
coupon issued thereunder, or because of any indebtedness arising thereunder,
shall be had against any incorporator, or against any past, present or future
stockholder, officer, or director, as such, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, it being expressly agreed and understood that said indenture, any
indenture supplemental thereto and the obligations issued thereunder, are solely
corporate obligations, and that no personal liability whatever shall attach to,
or be incurred by, such incorporators, stockholders, officers or directors, as
such, of the Company, or of any successor corporation, or any of them, because
of the incurring of the indebtedness thereby authorized, or under or by reason
of any of the obligations, covenants or agreements contained in the indenture or
in any indenture supplemental thereto or in any of the Bonds or coupons issued
thereunder, or implied therefrom.
------------------------
WHEREAS, the execution and delivery of this supplemental indenture have
been duly authorized by the Board of Directors of the Company; and
WHEREAS, the Company represents that all things necessary to make the bonds
of the series hereinafter described, when duly authenticated by or on behalf of
the Trustee and issued by the Company, valid, binding and legal obligations of
the Company, and to make this supplemental indenture a valid and binding
agreement supplemental to the Indenture, have been done and performed;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH that the Company, in
consideration of the premises and the execution and delivery by the Trustee of
this
<PAGE>
10
supplemental indenture, and in pursuance of the covenants and agreements
contained in the Indenture and for other good and valuable consideration, the
receipt of which is hereby acknowledged, has granted, bargained, sold, aliened,
remised, released, conveyed, confirmed, assigned, transferred and set over, and
by these presents does grant, bargain, sell, alien, remise, release, convey,
confirm, assign, transfer and set over unto the Trustee, its successors and
assigns, forever, all the right, title and interest of the Company in and to all
property of every kind and description (except cash, accounts and bills
receivable and all merchandise bought, sold or manufactured for sale in the
ordinary course of the Company's business, stocks, bonds or other corporate
obligations or securities, other than such as are described in Part V of the
Granting Clauses of the Indenture, not acquired with the proceeds of bonds
secured by the Indenture, and except as in the Indenture and herein otherwise
expressly excluded) acquired by the Company since the execution and delivery of
the supplemental indenture dated subsequent to the Indenture
(except any such property duly released from, or disposed of, free from the lien
of the Indenture, in accordance with the provisions thereof) and all such
property which at any time hereafter may be acquired by the Company;
All of which property it is intended shall be included in and granted by
this supplemental indenture and covered by the lien of the Indenture as
heretofore and hereby amended and supplemented;
UNDER AND SUBJECT to any encumbrances or mortgages existing on property
acquired by the Company at the time of such acquisition and not heretofore
discharged of record; and
SUBJECT also, to the exceptions, reservations and provisions in the
Indenture and in this supplemental indenture recited, and to the liens,
reservations, exceptions, limitations, conditions and restrictions imposed by or
contained in the several deeds, grants, franchises and contracts or other
instruments through which the Company acquired or claims title to the aforesaid
property; and SUBJECT, also, to the existing leases, to liens on easements or
rights of way, to liens for taxes, assessments and governmental charges not in
default or the payment of which is deferred, pending appeal or other contest by
legal proceedings, pursuant to Section 4 of Article Five of the Indenture, or
the payment of which is deferred pending billing, transfer of title or final
determination of amount, to easements for alleys, streets, highways, rights of
way and railroads that may run across or encroach upon the said property, to
joint pole and similar agreements, to undetermined liens and charges, if any,
incidental to construction, and other encumbrances permitted by the Indenture as
heretofore and hereby amended and supplemented;
TO HAVE AND TO HOLD the property hereby conveyed or assigned, or intended
to be conveyed or assigned, unto the Trustee, its successor or successors and
assigns, forever;
<PAGE>
11
IN TRUST, NEVERTHELESS, upon the terms, conditions and trusts set forth in
the Indenture as heretofore and hereby amended and supplemented, to the end that
the said property shall be subject to the lien of the Indenture as heretofore
and hereby amended and supplemented, with the same force and effect as though
said property had been included in the Granting Clauses of the Indenture at the
time of the execution and delivery thereof;
AND THIS SUPPLEMENTAL INDENTURE FURTHER WITNESSETH that for the
considerations aforesaid, it is hereby covenanted between the Company and the
Trustee as follows:
ARTICLE I.
BONDS OF THE SERIES
The series of bonds authorized by this supplemental indenture to be issued
under and secured by the Indenture shall be designated "First and Refunding
Mortgage Bonds, % Series due "; shall be limited to the aggregate
principal amount of $ ; shall mature ; shall bear
interest at the rate of % per annum, payable on and of
each year; shall be payable as to both principal and interest in such coin or
currency of the United States of America as at the time of payment shall
constitute legal tender for the payment of public and private debts, at the
corporate trust office of First Union National Bank, in the City of Newark,
State of New Jersey, or, as may be desired by the persons entitled to receive
such principal and interest respectively, at the corporate trust office of First
Chicago Trust Company of New York, in the Borough of Manhattan, City and State
of New York; shall be issuable only in the form of fully registered bonds in the
denominations of $1,000 and any multiple of $1,000; and the several
denominations shall be interchangeable. The date of each bond of the Series
shall be the semi-annual interest payment date next preceding the date of
authentication, unless such date of authentication be an interest payment date,
in which case the date shall be the date of authentication, or unless such date
of authentication be prior to the first semi-annual interest payment date, in
which case the date shall be .
The Company shall not be required to issue or make transfers or exchanges
of bonds of the Series for a period of ten days next preceding any interest
payment date or next preceding the date of any drawing of such bonds to be
redeemed, and the Company shall not be required to make transfers or exchanges
of any such bonds drawn in whole or in part for such redemption.
<PAGE>
12
ARTICLE II.
REDEMPTION OF BONDS -- SINKING OR IMPROVEMENT FUND -- OF SERIES .
SECTION 2.01. REDEMPTION -- REDEMPTION PRICES. Bonds of the Series
shall be subject to redemption
(a) as a whole at any time or in part on any interest payment date, at
the election of the Company (subject to the approval of the Board of Public
Utilities of the State of New Jersey first applied for and obtained) as
provided in Section 2.03 hereof, upon payment of the percentages of the
principal amount thereof specified under "Regular Redemption Price" in the
tabulation in the Form of Bond hereinbefore set forth during the respective
12-month periods beginning , of each of the years
mentioned in said tabulation, provided, however, that prior to
no bonds of the Series may be so redeemed, and
(b) on of each year, beginning in , by
operation of the sinking or improvement fund as provided in Section 2.02
hereof, or at any time by the application of any proceeds of released
property or other money held by the Trustee and which, pursuant to Section
4C of Article Eight of the Indenture, as amended and supplemented, is
applied to the redemption of bonds of the Series , upon payment of the
percentages of the principal amount thereof specified under "Special
Redemption Price" in the tabulation in the Form of Bond hereinbefore set
forth during the respective 12-month periods beginning of each of
the years mentioned in said tabulation, together in each case with accrued
interest to the date fixed for redemption. The amounts specified in said
tabulation under said heading (exclusive of accrued interest) are herein
referred to, respectively, as "regular redemption prices" and "special
redemption prices".
SECTION 2.02. SINKING OR IMPROVEMENT FUND -- SINKING OR IMPROVEMENT FUND
REDEMPTIONS -- REDEMPTIONS PURSUANT TO SECTION 4C OF ARTICLE EIGHT OF THE
INDENTURE. The Company covenants to pay to the Trustee for a sinking or
improvement fund on of each year, commencing on , an amount equal
to the special redemption price, in effect on such , of % of the
maximum principal amount of bonds of the Series outstanding at any one time
prior to the date of such payment, the amount of such payment, however, to be
reduced by any credit to which the Company may be entitled under the next
succeeding paragraph of this Section.
The Company may, at any time not later than prior to the due date of
each sinking or improvement fund installment, elect to satisfy such installment,
in whole or in part, as provided in the following subdivision (a) or as provided
in the following subdivision (b), or partly as provided in said subdivision (a)
and partly as provided in said subdivision (b):
<PAGE>
13
(a) by delivering to the Trustee outstanding bonds of the Series ,
in negotiable form or registered in the name of the Company, not later than
prior to the due date of such installment, upon receipt of which the
Trustee shall credit the same against such installment at the special
redemption price applicable upon the due date of such installment, or
(b) by delivering to the Trustee not later than the prior to
the due date of such installment, a certificate signed by the President or
a Vice President and by the Treasurer or an Assistant Treasurer of the
Company which shall state the following items:
(1) an amount (to the extent the Company shall elect to include the
same) equal to the cost of any additions or improvements acquired or
constructed by the Company to its property after December 31, 1948,
which shall not have formed the basis for any authentication of bonds,
withdrawal of cash, or release of property under the Indenture, as
supplemented and amended, and which shall not have been included in any
maintenance certificate filed under any indenture supplemental to the
Indenture, or in any certificate filed with the Trustee pursuant to any
sinking or improvement fund under any indenture supplemental to the
Indenture, after deducing from such cost the cost (or the estimated cost
if the actual cost is not ascertainable) of property retired after
December 31, 1948, and which shall not theretofore have been deducted
upon any authentication of bonds, withdrawal of cash, or release of
property under the Indenture, as supplemented and amended, or in any
such maintenance certificate or in any such certificate filed pursuant
to any sinking or improvement fund, and
(2) an amount equal to 60% of the amount stated in item (1) above.
Upon the receipt of such certificate the Trustee shall credit against such
installment an amount determined by multiplying the amount set forth in item (2)
thereof by the percentage specified as the special redemption price applicable
upon the due date of such installment. No additions or improvements included in
item (1) of any such certificate shall thereafter be available as the basis for
authentication of bonds or the withdrawal of cash or the release of property
under any provisions of the Indenture, as supplemented and amended, or be
included in any maintenance certificate filed under any indenture supplemental
to the Indenture, or in any certificate filed with the Trustee pursuant to any
sinking or improvement fund under any Indenture supplemental to the Indenture,
and no retirements deducted in such item (1) shall thereafter be required to be
deducted under Section 7C(3) of Article Two of the Indenture.
The Company shall, not later than prior to the due date of each
sinking or improvement fund installment, deliver to the Trustee a certificate
signed by its President or a Vice President and by its Treasurer or an Assistant
Treasurer specifying the amount,
<PAGE>
14
if any, which the Company will pay to the Trustee on the following
pursuant to the provisions of this Section 2.02.
The Trustee, not later than 30 days prior to the due date of each sinking
or improvement fund installment, shall draw by lot according to such method as
it shall deem proper, from all the bonds of the Series then outstanding, such
principal amount thereof as the balance of such sinking or improvement fund
installment (after crediting against the same any credits to which the Company
shall be entitled under the second paragraph of this Section) shall, at the
special redemption price prevailing on the next ensuing interest payment date,
suffice to redeem.
After such drawing the Trustee shall, beginning not later than 30 nor
earlier than 40 days in advance of the next ensuing interest payment date, give,
in the name of the Company, notice by mail that bonds of the Series bearing
the serial numbers specified have been called for redemption through the sinking
or improvement fund, that they will be due and payable on the next ensuing
interest payment date, at the corporate trust office of the Trustee in Newark,
New Jersey, or (at the option of the holder) at the office or agency of the
Company in the Borough of Manhattan, City and State of New York, at a stated
amount (which shall be the special redemption price applicable upon such
redemption date), and that all interest thereon will cease to accrue after said
date. Such notice shall be mailed to the several registered owners of the bonds
so called, at their respective addresses as the same may appear on the registry
books. Failure duly to give such notice of redemption to the registered owner of
any bond called for redemption in whole or in part shall not affect the validity
of the proceedings for the redemption of any other bond.
If, pursuant to Section 4C of Article Eight of the Indenture, as amended
and supplemented, any proceeds of released property or other money then held by
the Trustee shall be applied to the redemption of bonds of the Series , such
redemption shall be effected in the manner provided in the next two preceding
paragraphs of this Section in respect of redemption of bonds of said series
through the sinking or improvement fund. Bonds of said series so redeemed shall
be cancelled.
All bonds of the Series delivered to the Trustee as a credit against any
sinking or improvement fund installment or redeemed by operation of the sinking
or improvement fund shall be cancelled and such bonds shall not be made the
basis for the authentication and delivery of bonds under the provisions of
Section 5 of Article Three of the Indenture.
SECTION 2.03. REDEMPTION AT ELECTION OF COMPANY. The election of the
Company to redeem any of the bonds of the Series shall be evidenced by a
resolution of the Board of Directors of the Company calling for redemption on a
stated date all or a stated principal amount thereof. Any such call may be
conditioned upon the deposit with the Trustee, on or before such redemption
date, of the total regular redemption price of the bonds so called, with accrued
interest thereon to the redemption date. At least 40 days prior to such
redemption date (or at such later time as shall be satisfactory to the Trustee)
the Company
<PAGE>
15
shall file with the Trustee a certified copy of such resolution. Unless such
call shall be conditioned upon the deposit of the regular redemption price and
accrued interest with the Trustee on or before the redemption date and unless
the notice below provided for shall so state, the Company shall on or before
such redemption date deposit with the Trustee the total regular redemption price
of all the bonds so called, with accrued interest thereon to the redemption
date.
If the Company elects to redeem less than all of the bonds of the Series
, the particular bonds or portions thereof to be redeemed shall, upon request
of the Company, be drawn by lot by the Trustee, according to such method as it
shall deem proper, from the bonds of said series then outstanding. The Trustee
shall certify to the Company the serial numbers of the bonds so drawn.
The Company shall thereupon give notice of such redemption, in the manner
and substantially in the form provided in Section 2.02 hereof to be given in the
case of bonds of the Series called through the sinking or improvement fund,
except that (1) such notice shall state that the bonds specified have been
called for redemption at the election of the Company, and that they will be
payable on the date specified in the resolution of the Board of Directors of the
Company at a stated amount (which shall be the regular redemption price
applicable upon such redemption date), (2) if all the bonds of the Series be
called, the notice shall so state and may omit the serial numbers thereof, (3)
if the date fixed for redemption be other than an interest payment date, the
notice shall state that the bonds will be payable at the stated redemption
price, plus accrued interest to the redemption date, (4) the mailing of such
notice to registered owners of bonds of said series shall take place not less
than 30 nor more than 40 days in advance of the date fixed for redemption, but
failure duly to give such notice of redemption to the registered owner of any
bond called for redemption in whole or in part shall not affect the validity of
the proceedings for the redemption of any other bond, and (5) if the call of
such bonds for redemption shall have been conditioned upon the deposit of the
regular redemption price and accrued interest with the Trustee on or before the
redemption date, as above permitted, the notice shall so state, and shall state
that unless such deposit is made on or before such date the call for redemption
and the notice shall be of no effect.
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 or
opinion by the President or a Vice President of the Company and an opinion of
counsel, stating that all conditions precedent provided for herein (including
any covenants compliance with which constitutes a condition precedent) relating
to such redemption have been complied with.
SECTION 2.04. CALLED BONDS TO BE SURRENDERED -- INTEREST TO CEASE. Each
bond or portion thereof of the Series so called under either Sections 2.02 or
2.03 hereof shall
<PAGE>
16
be due and payable (upon surrender thereof) at the places and price and on the
date specified in such notice, anything herein or in such bond to the contrary
notwithstanding, except that if the call of any bonds or portions thereof under
Section 2.03 hereof shall have been conditioned upon the deposit of the
redemption price with the Trustee on or before the redemption date specified in
such notice, with accrued interest thereon to the redemption date, such bonds or
such portions thereof shall not be due and payable on the specified redemption
date unless such deposit shall have been so made with the Trustee on or before
such date. From and after the date when each bond or portion thereof of the
Series shall be due and payable as aforesaid (unless upon said date the full
amount due thereon shall not be held by the Trustee and be immediately available
for payment), all further interest shall cease to accrue on such bond or on such
portion thereof, as the case may be.
SECTION 2.05. BONDS CALLED IN PART. If only a portion of any bond of the
Series shall be drawn by lot by the Trustee pursuant to Sections 2.02 or 2.03
hereof, the notice of redemption hereinbefore provided for shall specify the
serial number of such bond and the portion of the principal amount thereof to be
redeemed. Upon surrender of such bond for partial redemption and upon payment of
the portion so called for redemption, a new bond or bonds of the Series , in
aggregate principal amount equal to the unredeemed portion of such surrendered
bond, shall be executed by the Company, authenticated by or on behalf of the
Trustee, and delivered to the registered owner thereof, without expense to such
owner.
SECTION 2.06. PROVISIONS OF INDENTURE NOT APPLICABLE. The provisions of
Article Four of the Indenture, as amended and supplemented, shall not apply to
the administration of the sinking or improvement fund provided for in this
Article or to the procedure for the exercise of any right of redemption reserved
by the Company in this Article in respect of the bonds of the Series .
ARTICLE III.
MISCELLANEOUS.
SECTION 3.01. AUTHENTICATION OF BONDS OF SERIES . None of the bonds of
the Series , the issue of which is provided for by this supplemental
indenture, shall be authenticated by or on behalf of the Trustee except in
accordance with the provisions of the Indenture, as amended and supplemented,
and this supplemental indenture, and upon compliance with the conditions in that
behalf therein contained.
SECTION 3.02. AUTHENTICATING AGENT. As long as any of the bonds of the
Series remain outstanding, the Trustee may appoint an authenticating agent to
act on its behalf and subject to its direction in connection with the
authentication of bonds of the Series
<PAGE>
17
. Such authenticating agent shall be appointed by the Trustee by an instrument
in writing and shall have no responsibility or liability for any action taken by
it at the direction of the Trustee. Such authenticating agent shall at all times
be a corporation organized and doing business under the laws of the United
States or of any State or Territory or of the District of Columbia authorized
under such laws to act as authenticating agent, having a combined capital and
surplus of at least $5,000,000, subject to supervision or examination by
Federal, State, Territorial, or District of Columbia authority and, if there be
such a corporation willing and able to act as authenticating agent on reasonable
and customary terms, having its principal office and place of business in The
City of New York. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 3.02 the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion, or consolidation to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate agency business
of any authenticating agent, shall continue to be the authenticating agent
without the execution or filing of any paper or any further act on the part of
the Trustee or the authenticating agent.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible in accordance with the
provisions of this Section 3.02, the Trustee may appoint a successor
authenticating agent. The Trustee shall give written notice of such appointment
to the Company and shall mail notice of such appointment to all registered
owners of the bonds of the Series , at their respective addresses as the same
may appear on the registry books. Any successor authenticating agent, upon
acceptance of its appointment, shall become vested with all the rights, powers,
duties and responsibilities of its predecessor, with like effect as if
originally appointed authenticating agent. No successor authenticating agent
shall be appointed unless eligible under the provisions of this Section 3.02.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services, and the Trustee shall be entitled to
be reimbursed for such payments as provided in the Indenture.
SECTION 3.03. ADDITIONAL RESTRICTIONS ON AUTHENTICATION OF ADDITIONAL BONDS
UNDER INDENTURE. The Company covenants that from and after the date of execution
of this supplemental indenture, no additional bonds (as defined in Section 1 of
Article Two of the
<PAGE>
18
Indenture) shall be authenticated and delivered by the Trustee under Subdivision
A of Section 4 of said Article Two on account of additions or improvements to
the mortgaged property:
(1) unless the net earnings of the Company for the period required by
Subdivision C of Section 6 of said Article Two shall have been at least
twice the fixed charges (in lieu of 1 3/4 times such fixed charges, as
required by said Subdivision C); and for the purpose of this condition (a)
such fixed charges shall in each case include interest on the bonds applied
for, notwithstanding the parenthetical provision contained in clause (4) of
said Subdivision C, and (b) in computing such net earnings there shall be
included in expenses of operation (under paragraph (c) of said Subdivision
C) all charges against earnings for depreciation, renewals or replacements,
and all certificates with respect to net earnings delivered to the Trustee
in connection with any authentication of additional bonds under said
Article Two shall so state; and
(2) except to the extent of 60% (in lieu of 75% as permitted by
Subdivision A of Section 7 of said Article Two) of the cost or fair value
to the Company of the additions or improvements forming the basis for such
authentication of additional bonds.
SECTION 3.04. RESTRICTION ON DIVIDENDS. The Company will not declare or pay
any dividend on any shares of its common stock (other than dividends payable in
shares of its common stock) or make any other distribution on any such shares,
or purchase or otherwise acquire any such shares (except shares acquired without
cost to the Company) whenever such action would reduce the earned surplus of the
Company to an amount less than $10,000,000 or such lesser amount as may remain
after deducting from said $10,000,000 all amounts appearing in the books of
account of the Company on December 31, 1948, which shall thereafter, pursuant to
any order or rule of any regulatory body entered after said date, be required to
be removed, in whole or in part, from the books of account of the Company by
charges to earned surplus.
SECTION 3.05. USE OF FACSIMILE SEAL AND SIGNATURES. The seal of the Company
and any or all signatures of the officers of the Company upon any of the bonds
of the Series may be facsimiles.
SECTION 3.06. TIME FOR MAKING PAYMENT. All payments of principal or
redemption price of, interest on and sinking or improvement fund installments
for, the bonds of the Series shall be made either prior to the due date
thereof, or on the due date thereof in immediately available funds. In any case
where the date of any such payment shall be a Saturday or Sunday or a legal
holiday or a day on which banking institutions in the city of payment are
authorized by law to close, then such payment need not be made on such date but
may be made on the next succeeding business day with the same force and effect
<PAGE>
19
as if made on the due date, and no interest on such payment shall accrue for the
period after such date.
SECTION 3.07. EFFECTIVE PERIOD OF SUPPLEMENTAL INDENTURE. The preceding
provisions of Articles I, II and III of this supplemental indenture shall remain
in effect only so long as any of the bonds of the Series shall remain
outstanding.
SECTION 3.08. EFFECT OF APPROVAL OF BOARD OF PUBLIC UTILITIES OF THE STATE
OF NEW JERSEY. The approval of the Board of Public Utilities of the State of New
Jersey of the execution and delivery of these presents and of the issue of any
bonds of the Series shall not be construed as approval of said Board of any
other act, matter or thing which requires approval of said Board under the laws
of the State of New Jersey.
SECTION 3.09. EXECUTION IN COUNTERPARTS. For the purpose of facilitating
the recording hereof, this supplemental indenture has been executed in several
counterparts, each of which shall be and shall be taken to be an original, and
all collectively but one instrument.
IN WITNESS WHEREOF, Public Service Electric and Gas Company, party hereto
of the first part, after due corporate and other proceedings, has caused this
supplemental indenture to be signed and acknowledged or proved by its President
or one of its Vice Presidents and its corporate seal hereunto to be affixed and
to be attested by the signature of its Secretary or an Assistant Secretary; and
First Union National Bank, as Trustee, party hereto of the second part, has
caused this supplemental indenture to be signed and acknowledged or proved by
one of its Vice Presidents and its corporate seal to be hereunto affixed and to
be attested by the signature of one of its Vice Presidents. Executed and
delivered this day of .
PUBLIC SERVICE ELECTRIC AND GAS
COMPANY
By ..................................
( )
Vice President
Attest:
....................................
( )
Assistant Secretary
(CORPORATE SEAL)
FIRST UNION NATIONAL BANK
By ..................................
( )
Vice President
Attest:
....................................
( )
Vice President
(CORPORATE SEAL)
<PAGE>
20
STATE OF NEW JERSEY )
COUNTY OF ESSEX ) ss.:
BE IT REMEMBERED, that on this day of , before me, the subscriber,
a Notary Public of the State of New Jersey, personally appeared
who, I am satisfied, is a Vice President of PUBLIC SERVICE ELECTRIC AND GAS
COMPANY, one of the corporations named in and which executed the foregoing
instrument, and is the person who signed the said instrument as such officer,
for and on behalf of such corporation, and I having first made known to him the
contents thereof, he did acknowledge that he signed the said instrument as such
officer, that the said instrument was made by such corporation and sealed with
its corporate seal, that the said instrument is the voluntary act and deed of
such corporation, made by virtue of authority from its Board of Directors, and
that said corporation, the mortgagor, has received a true copy of said
instrument.
STATE OF NEW JERSEY )
COUNTY OF ESSEX ) ss.:
BE IT REMEMBERED, that on this day of , before me, the subscriber,
a Notary Public of the State of New Jersey, personally appeared
who, I am satisfied, is a Vice President of FIRST UNION NATIONAL BANK, one of
the corporations named in and which executed the foregoing instrument, and is
the person who signed the said instrument as such officer, for and on behalf of
such corporation, and I having first made known to him the contents thereof, he
did acknowledge that he signed the said instrument as such officer, that the
said instrument was made by such corporation and sealed with its corporate seal,
and that the said instrument is the voluntary act and deed of such corporation,
made by virtue of authority from its Board of Directors.
<PAGE>
21
CERTIFICATE OF RESIDENCE
First Union National Bank, Mortgagee and Trustee within named, hereby
certifies that its precise residence is 765 Broad Street, Newark, New Jersey
07101.
FIRST UNION NATIONAL BANK
By ..................................
( )
VICE PRESIDENT
<PAGE>
EXHIBIT 5
Public Service
Electric and Gas
Company
James T. Foran 80 Park Plaza, Newark, NJ 07101 973-430-6131 Mailing Address:
P.O. Box 570, Newark, NJ 07101
General Corporate Counsel -- T5B
January 27, 1998
Gentlemen:
In connection with the proposed issuance and sale by Public
Service Electric and Gas Company (the "Company") of not more than
$485,000,000 principal amount of its First and Refunding Mortgage
Bonds in one or more series (the "Bonds"), to be issued under its
First and Refunding Mortgage, dated August 1, 1924, made to Fidelity
Union Trust Company (now known as First Union National Bank), Trustee
(the "Trustee"), as supplemented and amended by the supplemental
indentures thereto that have not heretofore been cancelled, and as to
be further supplemented by a separate supplemental indenture thereto
for each series of Bonds to be dated the first day of the month in
which such series of Bonds is issued (the "Supplemental Indenture")
(said First and Refunding Mortgage as so supplemented and amended and
to be supplemented being hereinafter called the "Mortgage"), I have
examined and considered the following:
(1) the Petition, including exhibits and supplements thereto,
relating to certain of the Bonds, as filed by the Company with the
Board of Public Utilities of the State of New Jersey (the "BPU");
(2) the Registration Statement, including the Prospectus and
Exhibits, relating to the Bonds, with which this opinion is being
filed; and
(3) the form of the Supplemental Indenture, including the form
of the Bonds, and the form of Bid with the Purchase Agreement
attached for the sale of the Bonds, filed as Exhibits to said
Registration Statement.
As General Corporate Counsel of the Company, I am familiar with
the Mortgage, and with the corporate organization and by-laws of the
Company and the statutes and decisions applicable thereto and to the
issuance by the Company of its securities.
On the basis of the foregoing, and of my examination and
consideration of such other legal and factual matters as I have deemed
appropriate, I am of the following opinion:
(1) the Company is a corporation duly incorporated and validly
existing under the laws of the State of New Jersey;
(2) the Company, being a public utility company, is subject to
the jurisdiction of the BPU, and the execution of the Supplemental
Indenture and the issuance and sale of the Bonds by the Company
require the authorization of the BPU; and
(3) Upon
(a) the Registration Statement registering the Bonds under
the Securities Act of 1933 becoming effective;
(b) the qualification of the Mortgage under the Trust
Indenture Act of 1939;
(c) the authorization by the BPU of the execution and
delivery of the Supplemental Indenture and the issuance and
sale of the Bonds;
<PAGE>
(d) the adoption of appropriate corporate resolutions
relating to the execution and delivery of the Supplemental
Indenture, to the acceptance of the Bid thereby evidencing the
effectiveness of the Purchase Agreement and to the
authorization, execution, authentication, issuance, sale and
delivery of each series of Bonds;
(e) the acceptance of the Bid related thereto;
(f) the execution and delivery of the Supplemental
Indenture;
(g) the execution of the Bonds of such series by the
Company and the authentication thereof by the Trustee; and
(h) the delivery of the Bonds of such series by the
Company and the receipt by the Company of payment therefor in
accordance with the authorization of the BPU and the provisions
of said Purchase Agreement;
the Bonds of such series will be legally issued and will be binding
obligations of the Company.
This opinion does not cover the necessity of filings under the
provisions of securities laws of any state in which the Bonds may be
sold.
I hereby consent to the use of this opinion as Exhibit 5 to the
above-mentioned Registration Statement relating to the Bonds, and to
the reference to me under the heading "EXPERTS" in the Prospectus
filed as part of said Registration Statement.
Very truly yours,
JAMES T. FORAN
..............................
James T. Foran
General Corporate Counsel
2
<PAGE>
EXHIBIT 23a
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Public Service Electric and Gas Company on Form S-3 of our report dated
February 14, 1997 appearing in the 1996 Annual Report on Form 10-K of Public
Service Electric and Gas Company and to the reference to us under the heading
"Experts" in the Prospectus which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
January 27, 1998
<PAGE>
EXHIBIT 23b
CONSENT OF BALLARD SPAHR ANDREWS & INGERSOLL
Public Service Electric and Gas Company:
We consent to the references to us under the headings "EXPERTS" and "LEGAL
OPINIONS" in the Prospectus filed as a part of the Registration Statement
relating to Mortgage Bonds to which this Consent is attached as an Exhibit.
BALLARD SPAHR ANDREWS & INGERSOLL
Philadelphia, Pennsylvania
January 27, 1998
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
Each Director and each Officer of Public Service Electric and Gas Company
whose signature appears below hereby appoints Robert C. Murray and James T.
Foran, the agents for service named in this Registration Statement, as
attorneys-in-fact, to execute in the name of each such person and to file with
the Securities and Exchange Commission this Registration Statement and any and
all amendments, including post-effective amendments to this Registration
Statement.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
E. JAMES FERLAND Chairman of the Board and Chief January 20, 1998
E. James Ferland Executive Officer and Director
(Principal Executive Officer)
ROBERT C. MURRAY Executive Vice President -- January 20, 1998
Robert C. Murray Finance
(Principal Financial Officer)
PATRICIA A. RADO Vice President and Controller January 20, 1998
Patricia A. Rado (Principal Accounting Officer)
LAWRENCE R. CODEY Director January 20, 1998
Lawrence R. Codey
RAYMOND V. GILMARTIN Director January 20, 1998
Raymond V. Gilmartin
IRWIN LERNER Director January 20, 1998
Irwin Lerner
FORREST J. REMICK Director January 20, 1998
Forrest J. Remick
CONRAD K. HARPER Director January 20, 1998
Conrad K. Harper
</TABLE>
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS A TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) [ X ]
FIRST UNION NATIONAL BANK
(Exact name of trustee as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
22-1147033
(Jurisdiction of incorporation or (I.R.S. employer
organization if not a U.S. national bank) Identification No.)
102 Pennsylvania Avenue, Avondale, Pennsylvania 19311
(Address of principal executive offices) (Zip Code)
</TABLE>
(Name, address and telephone number of agent for service)
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Exact name of obligor as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
New Jersey 22-1212800
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
80 Park Plaza, Newark, New Jersey 07101
(Address of principal executive (Zip Code)
offices)
</TABLE>
First and Refunding Mortgage Bonds*
(Title of the indenture securities)
* The indenture securities are to be issued in one or more series pursuant to a
Registration Statement on Form S-3 filed by the obligor with the Commission
pursuant to Rule 415, to which this Form T-1 is an Exhibit.
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of Federal Reserve System, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities of
the trustee:
As of November 30, 1997
<TABLE>
<CAPTION>
<S> <C>
Col. A Col. B
Title of Class Amount Outstanding
</TABLE>
Not Applicable
Item 4. Trusteeships under Other Indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not Applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the
Act arises as a result of the trusteeship under any such other indenture,
including a statement as to how the indenture securities will rank as
compared with the securities issued under such other indenture.
Not Applicable
Item 5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
<PAGE>
Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
As of November 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Col. A Col. B Col. C Col. D
<CAPTION>
Percentage of
Voting securities
represented by
Amount owned amount given in
Name of owner Title of class beneficially Col. C
</TABLE>
Not Applicable
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
As of November 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Col. A Col. B Col. C Col. D
<CAPTION>
Percentage of
Voting securities
represented by
Amount owned amount given in
Name of owner Title of class beneficially Col. C
</TABLE>
Not Applicable
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned or
held as collateral security for the obligations in default by the trustee.
As of November 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Col. A Col. B Col. C Col. D
<CAPTION>
Whether the
securities are Amount owned beneficially Percent of class
voting or or held as collateral represented by
nonvoting security for obligations amount given in
Title of Class securities in default by Trustee Col. C
</TABLE>
Not Applicable
2
<PAGE>
Item 9. Securities of the Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
As of November 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Col. A Col. B Col. C Col. D
-------- ------- -------- --------
Amount owned beneficially Percent of class
Name of Issuer or held as collateral represented by
and title of Amount security for obligations amount given in
class outstanding in default by Trustee Col. C
</TABLE>
Not Applicable
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
As of November 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Col. A Col. B Col. C Col. D
- ------------ -------- -------- ----------
Amount owned beneficially Percent of class
Name of Issuer or held as collateral represented by
and title of Amount security for obligations amount given in
class outstanding in default by Trustee Col. C
</TABLE>
Not Applicable
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee owns 50 percent or more of the voting securities of the obligor, furnish
the following information as to each class of securities of such person any of
which are so owned or held by the Trustee.
As of November 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Col. A Col. B Col. C Col. D
- ------------- --------- ------- -------
Amount owned beneficially Percent of class
Name of Issuer or held as collateral represented by
and title of Amount security for obligations amount given in
class outstanding in default by Trustee Col. C
</TABLE>
Not Applicable
3
<PAGE>
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
<TABLE>
<CAPTION>
<S> <C> <C>
Col. A Col. B Col. C
-------- -------- -------
Nature of indebtedness Amount outstanding Date due
</TABLE>
Not Applicable
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe any such
affiliation.
Not Applicable
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. List of Exhibits.
<TABLE>
<CAPTION>
<C> <S>
1* -- Copy of Articles of Association of the Trustee as now in effect.
2 -- No certificate of authority of the Trustee to commence business is furnished since this
authority is contained in the Articles of Association of the Trustee.
3* -- Copy of the authorization of the Trustee to exercise corporate trust powers.
4* -- Copy of the existing By-Laws of the Trustee, as now in effect.
5 -- Not Applicable.
6 -- The consent of the Trustee required by Section 321(b) of the Act.
7 -- A copy of the latest report of Condition of the Trustee published pursuant to the law or
the requirements of its supervising or examining authority.
8 -- Not Applicable
9 -- Not Applicable
</TABLE>
* Exhibits thus designated have heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 333-40477).
In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Newark, and State of New Jersey, on the 27th day
of January, 1998.
FIRST UNION NATIONAL BANK
(Trustee)
(CORPORATE SEAL)
F. GALLAGHER
By: ...............................
F. Gallagher
Vice President
5
<PAGE>
T-6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321 (b) of the Trust Indenture Act
of 1939, and in connection with the proposed issue of Public Service Electric
and Gas Company, we hereby consent that reports of examinations by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
FIRST UNION NATIONAL BANK
By: FRANK GALLAGHER
Frank Gallagher
Vice President
Newark, NJ
January 27, 1998
6
<PAGE>
T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Union National
Bank of Avondale in the state of Pennsylvania, at the close of business on
September 30, 1997, published in response to call made by Comptroller of the
Currency, under title 12, United States Code, Section 161. Charter Number 33869
Comptroller of the Currency Northeastern District.
Statement of Resources and Liabilities
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
(Thousands of Dollars)
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin................ 1,342,937
Interest-bearing balances......................................... 284,300
Securities:
Hold-to-maturity securities..................................... 356,998
Available-for-sale securities................................... 3,605,206
Federal funds sold and securities purchased under agreements to
resell ......................................................... 1,741,187
Loans and lease financing receivables:
Loan and leases, net of unearned income............ 18,839,020
LESS: Allowance for loan and lease losses.......... 217,076
LESS: Allocated transfer risk reserve.............. 0
Loans and leases, net of unearned income, allowance, and
reserve ...................................................... 18,621,944
Assets held in trading accounts................................... 0
Premises and fixed assets (including capitalized leases).......... 421,529
Other real estate owned........................................... 30,927
Investment in unconsolidated subsidiaries and associated
companies ...................................................... 33,802
Customer's liability to this bank on acceptances outstanding...... 84,875
Intangible assets................................................. 392,926
Other assets...................................................... 770,806
Total assets...................................................... 27,687,437
LIABILITIES
Deposits:
In domestic offices............................................. 20,725,451
Noninterest-bearing.............................. 3,229,608
Interest-bearing................................. 17,495,843
In foreign offices, Edge and Agreement subsidiaries, and IBFs... 683,105
Noninterest-bearing.............................. 76
Interest-bearing................................. 588,055
Federal funds purchased and securities sold under agreements to
repurchase...................................................... 2,500,263
Demand notes issued to the U.S. Treasury.......................... 75,145
Trading liabilities............................................... 0
Other borrowed money:
With original maturity of one year or less...................... 2,156
With original maturity of more than one year.................... 7,520
Mortgage indebtedness and obligations under capitalized leases.... 5,866
Bank's liability on acceptances executed and outstanding.......... 85,165
Subordinated notes and debentures................................. 447,960
Other liabilities................................................. 863,272
Total liabilities................................................. 25,395,903
Limited-life preferred stock and related surplus.................. 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus..................... 160,540
Common Stock...................................................... 452,156
Surplus........................................................... 1,300,080
Undivided profits and capital reserves............................ 356,154
Net unrealized holding gains (losses) on available-for-sale
securities ..................................................... 22,604
Cumulative foreign currency translation adjustments............... 0
Total equity capital.............................................. 2,291,534
Total liabilities, limited-life preferred stock and equity
capital......................................................... 27,687,437
</TABLE>
7
