MORTGAGE

 

NEW JERSEY NATURAL GAS
COMPANY

 

To 

 

U.S. BANK NATIONAL
ASSOCIATION, 
As Trustee 

______________________________

 

SECOND SUPPLEMENTAL
INDENTURE 

Dated as of June 1, 2016


______________________________

 

Supplemental to
Amended and Restated Indenture of Mortgage, 
Deed of Trust and Security
Agreement Dated as of September 1, 2014, 
As Supplemented and Amended

 

	 	 		
	Prepared
      by:   	William M.
      Libit	Record and Return
      to:   	Richard Reich,
      Esq.
		Chapman and
      Cutler LLP		NJR Service
      Corporation
		111 W. Monroe
      Street	 	1415 Wyckoff
      Road
		Chicago, Illinois
      60603		Wall, New Jersey
      07719









MORTGAGE 

SECOND SUPPLEMENTAL
INDENTURE, dated as of June 1, 2016, between NEW JERSEY NATURAL GAS COMPANY, a
corporation organized and existing under the laws of the State of New Jersey
(hereinafter called the “Company”), having its
principal office at 1415 Wyckoff Road, Wall, New Jersey, and U.S. BANK NATIONAL
ASSOCIATION, a national banking association (hereinafter called the
“Trustee”), having a principal office at 21 South Street,
Morristown, New Jersey 07960, as Trustee under the Amended and Restated
Indenture of Mortgage, Deed of Trust and Security Agreement hereinafter
mentioned. 

WHEREAS, the Company has
heretofore executed and delivered to the Trustee its Amended and Restated
Indenture of Mortgage, Deed of Trust and Security Agreement, dated as of
September 1, 2014 (the “Amended
and Restated Indenture” and, as
originally executed or as the same may from time to time be supplemented,
modified or amended by any supplemental indenture entered into pursuant to the
provisions thereof, the “Indenture”), to secure the
payment of the principal of and the interest and premium (if any) on all Bonds
at any time issued and outstanding thereunder, and to declare the terms and
conditions upon which Bonds are to be issued thereunder; and 

WHEREAS, the Amended and
Restated Indenture completely restated and amended the Indenture of Mortgage and
Deed of Trust, dated April 1, 1952, as heretofore supplemented and amended (the
“Original
Indenture”) without any
interruption of the Lien of the Original Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $10,300,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series II due 2023,”
herein sometimes called “2023
Series II Bonds,” have been
designated as Existing Bonds in Section 3.01 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $10,500,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series JJ due 2024,”
herein sometimes called “2024
Series JJ Bonds,” have been
designated as Existing Bonds in Section 3.02 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $15,000,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series KK due 2040,”
herein sometimes called “2040
Series KK Bonds,” have been
designated as Existing Bonds in Section 3.03 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $125,000,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series LL due 2018,”
herein sometimes called “2018
Series LL Bonds,” have been designated as Existing Bonds in
Section 3.04 of the Indenture and are outstanding at the date hereof and secured
by the Indenture; and 







WHEREAS, Bonds in the
aggregate principal amount of $9,545,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series MM due 2027,”
herein sometimes called “2027
Series MM Bonds,” have been
designated as Existing Bonds in Section 3.05 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $41,000,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series NN due 2035,”
herein sometimes called “2035
Series NN Bonds,” have been
designated as Existing Bonds in Section 3.06 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $46,500,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series OO due 2041,”
herein sometimes called “2041
Series OO Bonds,” have been
designated as Existing Bonds in Section 3.07 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $50,000,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series PP due 2028,”
herein sometimes called “2028
Series PP Bonds,” have been
designated as Existing Bonds in Section 3.08 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $70,000,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series QQ due 2024,”
herein sometimes called “2024
Series QQ Bonds,” have been
designated as Existing Bonds in Section 3.09 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, Bonds in the
aggregate principal amount of $55,000,000, originally issued under and in
accordance with the terms of the Original Indenture, as supplemented and
amended, as a series designated “First Mortgage Bonds, Series RR due 2044,”
herein sometimes called “2044
Series RR Bonds,” have been
designated as Existing Bonds in Section 3.10 of the Indenture and are
outstanding at the date hereof and secured by the Indenture; and 

WHEREAS, the Amended and
Restated Indenture provides that, subject to certain exceptions not presently
relevant, such changes in or additions to the provisions of the Indenture (terms
used herein having the meanings assigned thereto in the Amended and Restated
Indenture except as herein expressly modified) may be made to add to the
covenants and agreements of the Company in the Indenture contained other
covenants and agreements thereafter to be observed by the Company; and to
provide for the creation of any series of Bonds, designating the series to
be created and specifying the form and
provisions of the Bonds of such series as in the Indenture provided or
permitted; and 

-2- 







WHEREAS, the Indenture
further provides that the Company and the Trustee may enter into indentures
supplemental to the Indenture to assign, convey, mortgage, pledge, transfer and
set over unto the Trustee and to subject to the lien of the Indenture additional
property of the Company; and 

WHEREAS, pursuant to the
Amended and Restated Indenture as amended by the First Supplemental Indenture,
dated as of April 1, 2015, between the Company and the Trustee, the Company
determined to amend certain provisions of the Amended and Restated Indenture and
to create an eleventh and a twelfth series of Bonds under the Indenture, known
as (i) “First Mortgage Bonds, Series SS due 2025,” herein sometimes called
“2025 Series SS
Bonds,” and (ii) “First Mortgage
Bonds, Series TT due 2045,” herein sometimes called “2045 Series TT Bonds,” respectively; and 

WHEREAS, the 2025 Series SS
Bonds were issued in and are currently outstanding under the Indenture in the
aggregate principal amount of $50,000,000 and the 2045 Series TT Bonds were
issued in and are currently outstanding under the Indenture in the aggregate
principal amount of $100,000,000; and 

WHEREAS, the Company has
entered into a Note Purchase Agreement dated as of June 21, 2016 (the
“Note Purchase
Agreement”) with the Purchasers
identified in Schedule A attached thereto, pursuant to which the Company issued
its senior notes designated “3.63% Senior Notes due June 21, 2046” in the
aggregate principal amount of $125,000,000 (the “Senior Notes due June 21, 2046”); and 

WHEREAS, the Company has
duly determined to create a thirteenth series of Bonds under the Indenture, to
be known as “First Mortgage Bonds, Series UU due 2046,” herein sometimes called
“2046 Series UU
Bonds”, to be delivered and
pledged to U.S. Bank National Association, as collateral agent (the
“Collateral Agent”) pursuant to the Note Purchase Agreement for the
benefit and security of the holders of the Senior Notes due June 21, 2046, all
as herein provided and as provided in the Note Purchase Agreement, and to add to
the covenants and agreements contained in the Indenture, the covenants and
agreements hereinafter set forth; and 

WHEREAS, the Company, in
the exercise of the powers and authority conferred upon and reserved to it under
the provisions of the Indenture and pursuant to appropriate resolutions of its
Board of Directors, has duly resolved and determined to make, execute and
deliver to the Trustee a Second Supplemental Indenture in the form hereof for
the purposes herein provided; and 

WHEREAS, all conditions and
requirements necessary to make this Second Supplemental Indenture a valid,
binding and legal instrument have been done, performed and fulfilled and the
execution and delivery hereof have been in all respects duly authorized.


-3- 







NOW, THEREFORE, THIS
INDENTURE WITNESSETH: 

That NEW JERSEY NATURAL GAS COMPANY, by way of further
assurance and in consideration of the premises and of the acceptance by the
Trustee of the trusts hereby created and of One Dollar to it duly paid by the
Trustee at or before the ensealing and delivery of these presents, the receipt
whereof is hereby acknowledged, and in order to secure the payment of principal
of and any premium which may be due and payable on and the interest on all Bonds
at any time issued and outstanding under the Indenture according to their tenor
and effect, and the performance and observance by the Company of all the
covenants and conditions herein and therein contained, has granted, bargained,
sold, warranted, aliened, remised, released, conveyed, assigned, transferred,
mortgaged, pledged, set over and confirmed, and by these presents does grant,
bargain, sell, warrant, alien, remise, release, convey, assign, transfer,
mortgage, pledge, set over and confirm, unto the Trustee, and to its successors
in the trust, and to it and its assigns forever, and has granted and does hereby
grant thereunto a security interest in, all of the property, real, personal and
mixed, now owned by the Company and situated in the Counties of Burlington,
Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Sussex in the State of
New Jersey, or wherever situate (except Excepted Property and property released
from the lien of the Indenture by the terms of the Indenture) and also all of
the property, real, personal and mixed, hereafter acquired by the Company
wherever situate (except Excepted Property and property released from the lien
of the Indenture by the terms of the Indenture), including both as to property
now owned and property hereafter acquired, without in any way limiting or
impairing the enumeration of the same, the scope and intent of the foregoing or
of any general or specific description contained in the Indenture, the
following: 

I. FRANCHISES


All and singular, the
franchises, grants, permits, immunities, privileges and rights of the Company
owned and held by it at the date of the execution hereof or hereafter acquired
for the construction, maintenance, and operation of the gas plants and systems
now or hereafter subject to the lien hereof, as well as all certificates,
franchises, grants, permits, immunities, privileges, and rights of the Company
used or useful in the operation of the property now or hereafter mortgaged
hereunder, including all and singular the franchises, grants, permits,
immunities, privileges, and rights of the Company granted by the governing
authorities of any municipalities or other political subdivisions and all
renewals, extensions and modifications of said certificates, franchises, grants,
permits, privileges, arid rights or any of them. 

II.
GAS DISTRIBUTION SYSTEMS
AND RELATED
PROPERTY 

All gas generating plants,
gas storage plants and gas manufacturing plants of the Company, all the
buildings, erections, structures, generating and purifying apparatus, holders,
engines, boilers, benches, retorts, tanks, instruments, appliances, apparatus,
facilities, machinery, fixtures, and all other property used or provided for use
in the generation, manufacturing and purifying of gas, together with the land on
which the same are situated, and all other lands and easements, rights-of-way,
permits, privileges, and sites forming a part of such plants or any of them or
occupied, enjoyed or used in connection therewith. 

-4- 







All gas distribution or gas
transmission systems of the Company, all buildings, erections, structures,
generating and purifying apparatus, holders, engines, boilers, benches, retorts,
tanks, pipe lines, connections, service pipes, meters, conduits, tools,
instruments, appliances, apparatus, facilities, machinery, fixtures, and all
other property used or provided for use in the construction, maintenance, repair
or operations of such distribution or transmission systems, together with all
the certificates, rights, privileges, rights-of-way, franchises, licenses,
easements, grants, liberties, immunities, permits of the Company, howsoever
conferred or acquired, under, over, or upon any private property or any public
streets or highways within as well as without the corporate limits of any
municipal corporation. Without limiting the generality of the foregoing, there
are expressly included the gas distribution or gas transmission systems located
in the Counties of Burlington, Middlesex, Monmouth, Morris, Ocean, Passaic,
Somerset and Sussex in the State of New Jersey, and in the following
municipalities in said State and Counties: Aberdeen Township (formerly Matawan
Township), Allenhurst Borough, City of Asbury Park, Atlantic Highlands Borough,
Avon By the Sea Borough, Barnegat Light Borough, Barnegat Township (formerly
named Union Township), Bay Head Borough, Beach Haven Borough, Beachwood Borough,
Belmar Borough, Berkeley Township, Boonton Town, Boonton Township, Bradley Beach
Borough, Brick Township, Brielle Borough, Colts Neck Township, Deal Borough,
Denville Township, Dover Town, Dover Township, Eagleswood Township, East
Brunswick Township, Eatontown Borough, Englishtown Borough, Fair Haven Borough,
Farmingdale Borough, Franklin Township in Somerset County, Freehold Borough,
Freehold Township, Hanover Township, Harvey Cedars Borough, Hazlet Township,
Highlands Borough, Holmdel Township, Hopatcong Borough, Howell Township,
Interlaken Borough, Island Heights Borough, Jackson Township, Jefferson
Township, Keansburg Borough, Keyport Borough, Lacey Township, Lakehurst Borough,
Lakewood Township, Lavallette Borough, Lincoln Park Borough, Little Egg Harbor
Township, Little Silver Borough, Loch Arbour Village, Long Beach Township, Long
Branch City, Manalapan Township, Manasquan Borough, Manchester Township,
Mantoloking Borough, Marlboro Township, Matawan Borough, Middletown Township,
Milltown Borough, Mine Hill Township, Monmouth Beach Borough, Monroe Township,
Montville Township, Morris Plains Borough, Mount Arlington Borough, Mount Olive
Township, Mountain Lakes Borough, Neptune City Borough, Neptune Township,
Netcong Borough, New Brunswick City, North Brunswick Township, Ocean Township in
Monmouth County, Ocean Township in Ocean County, Ocean Gate Borough, Oceanport
Borough, Old Bridge Township (formerly named Madison Township), Parsippany-Troy
Hills Township, Pine Beach Borough, Point Pleasant Borough, Point Pleasant Beach
Borough, Randolph Township, Red Bank Borough, Rockaway Borough, Rockaway
Township, Roxbury Township, Rumson Borough, Sayreville Borough, Sea Bright
Borough, Sea Girt Borough, Seaside Heights Borough, Seaside Park Borough, Ship
Bottom Borough, Shrewsbury Borough, Shrewsbury Township, South Belmar Borough,
South Brunswick Township, South River Borough, South Toms River Borough, Spring
Lake Borough, Spring Lake Heights Borough, Stafford Township, Surf City Borough,
Tinton Falls Borough (formerly named New Shrewsbury Borough), Tuckerton Borough,
Union Beach Borough, Union Township, Victory Gardens Borough, Wall Township,
Washington Township in Burlington County, Washington Township in Morris County,
West Long Branch Borough, West Milford Township and Wharton Borough. 

III. CONTRACTS


All of the Company’s right,
title and interest in and under all contracts, licenses or leases for the
purchase of gas, either in effect at the date of execution hereof or hereafter
made and any extension or renewal thereof. 

-5- 







TOGETHER WITH ALL AND
SINGULAR the tenements, hereditaments and appurtenances belonging or in anywise
appertaining to the Trust Estate, or any part thereof, with the reversion or
reversions, remainder and remainders, rents, issues, income and profits thereof,
and all the right, title, interest and claim whatsoever, at law or in equity,
which the Company now has or which it may hereafter acquire in and to the Trust
Estate and every part and parcel thereof, 

TO HAVE AND TO HOLD the
Trust Estate and all and singular the lands, properties, estates, rights,
franchises, privileges and appurtenances hereby mortgaged, conveyed, pledged or
assigned, or intended so to be, together with all the appurtenances thereto
appertaining, unto the Trustee and its successors and assigns forever;


SUBJECT, HOWEVER, as to
property hereby conveyed, to Permitted Encumbrances; 

BUT IN TRUST, NEVERTHELESS,
under and subject to the terms and conditions hereafter set forth, for the equal
and proportionate use, benefit, security and protection of each and every person
who may be or become the holders of the Bonds hereby secured without preference,
priority or distinction as to the lien or otherwise of one Bond over or from the
others by reason of priority in the issue or negotiation thereof, or by reason
of the date of maturity thereof, or otherwise (except as any sinking,
amortization, improvement, renewal or other analogous fund, established in
accordance with the provisions of the Indenture, may afford additional security
for the Bonds of any particular series), and for securing the observance and
performance of all the terms, provisions and conditions of the Indenture.


THIS INDENTURE FURTHER
WITNESSETH, that the Company has agreed and covenanted, and hereby does agree
and covenant, with the Trustee and its successors and assigns and with the
respective holders from time to time of the Bonds, or any thereof, as follows:


ARTICLE
I 

CERTAIN
AMENDMENTS OF INDENTURE 

§ 1.1. The Indenture be and it hereby is amended in the following respects, the
section numbers specified below being the sections of the Indenture in which
such amendments occur: 

§ 1.01. The following definitions were added to the end
of § 1.01 in error in the First Supplemental Indenture, dated as of April 1,
2015, and such definitions be and they hereby are removed from § 1.01 and are
added at the end of § 1.02: 

“(mmmm) “First Supplemental
Indenture” shall mean the First Supplemental Indenture, dated as of April 1,
2015, supplemental to the Indenture.” 

“(nnnn) “2025 Series SS
Bond” shall mean one of the First Mortgage Bonds, Series SS due 2025, issued
hereunder.” 

“(oooo) “2045 Series TT
Bond” shall mean one of the First Mortgage Bonds, Series TT due 2045, issued
hereunder.” 

-6- 







§ 1.02. The following definitions be and they hereby are
added at the end of § 1.02: 

“(pppp) “Second
Supplemental Indenture” shall mean the Second Supplemental Indenture, dated as
of June 1, 2016, supplemental to the Indenture.” 

“(qqqq) “2046 Series UU
Bond” shall mean one of the First Mortgage Bonds, Series UU due 2046, issued
hereunder.” 

§ 2.11. The following be and it hereby is added at the
end of § 2.11: 

“No charge except for taxes
or governmental charges shall be made against any holder of any 2046 Series UU
Bond for the exchange, transfer or registration of transfer thereof.”


§ 8.08. The period at the end of the first paragraph of §
8.08 be and it hereby is deleted and the following words and figures be and they
hereby are added thereto: 

“, and the 2046 Series UU
Bonds shall be redeemed at the redemption price specified in § 10.30.”


ARTICLE
II 

2046 SERIES
UU BONDS 

§ 2.1. There shall be a thirteenth series of Bonds under the Indenture, known
as and entitled “First Mortgage Bonds, Series UU due 2046” or “First Mortgage
Bonds, Series UU” (herein and in the Indenture referred to as the
“2046 Series UU
Bonds”), and the form thereof
shall contain suitable provisions with respect to the matters hereinafter in
this Section specified and shall in other respects be substantially as set forth
in Exhibit A to the Indenture. 

The aggregate principal
amount of 2046 Series UU Bonds which may be authenticated and delivered and
outstanding under the Indenture is $125,000,000. 

The 2046 Series UU Bonds
shall be payable to the Collateral Agent, and shall be nontransferable except to
a successor of the Collateral Agent, in accordance with the Note Purchase
Agreement. 

The 2046 Series UU Bonds
shall bear interest at the rate of 3.63% per annum, computed on the basis of a
360-day year of twelve 30-day months, until the principal thereof is paid or
made available for payment, and shall mature on June 21, 2046, subject to prior
redemption as described herein; provided that any principal, Make-Whole Amount
(as defined in the Note Purchase Agreement), and any such installment of
interest which is overdue shall bear interest at a rate of interest that is the
greater of (i) 5.63% per annum or (ii) 2.0% per annum over the rate of interest
publicly announced by PNC Bank, National Association as its “base” or “prime”
rate (to the extent that payment of such interest is enforceable under
applicable law). 

-7- 







The 2046 Series UU Bonds
shall be in the form of registered Bonds without coupons of denominations of
$1,000 and any integral multiple thereof which may be authorized by the Company,
the issue of a registered Bond without coupons in any such denomination to be
conclusive evidence of such authorization. Any 2046 Series UU Bonds shall be
dated (i) as of the semi-annual interest payment date (as specified in the first
paragraph of the 2046 Series UU Bonds) next preceding the date on which such
2046 Series UU Bonds shall be authenticated, unless such 2046 Series UU Bonds
are authenticated before December 21, 2016, in which case such 2046 Series UU
Bonds shall be dated June 21, 2016 or, (ii) if such date of authentication shall
be an interest payment date, such 2046 Series UU Bonds shall be dated such
interest payment date; provided,
however, that, if at the time of
authentication of any 2046 Series UU Bonds interest is in default on the 2046
Series UU Bonds, such 2046 Series UU Bonds shall be dated as of the interest
payment date to which interest has previously been paid or made available for
payment on the 2046 Series UU Bonds. All 2046 Series UU Bonds shall bear
interest from their respective dates, such interest to be payable, upon the
terms of and otherwise in accordance with the 2046 Series UU Bonds, on each date
on which interest shall from time to time be payable on the Senior Notes due
June 21, 2046; provided, that the obligation of the Company to make payments
with respect to the principal of, Make-Whole Amount, if any, and interest on the
2046 Series UU Bonds shall be fully or partially, as the case may be, satisfied
and discharged to the extent that at the time any such payment shall be due, the
then due principal of, Make-Whole Amount, if any, and interest on any of the
Senior Notes due June 21, 2046 shall have been fully or partially paid from
payments made by the Company under the Note Purchase Agreement. The principal
of, Make-Whole Amount, if any, and interest on the 2046 Series UU Bonds shall be
payable at the principal office of the Trustee, in Morristown, New Jersey, or,
at the option of the Company, at the “principal office” (as indicated pursuant
to the Note Purchase Agreement) of the Collateral Agent, in any coin or currency
of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts. 

Notwithstanding any other
provision of the Indenture or of the 2046 Series UU Bonds, payments of the
principal of, Make-Whole Amount, if any, and interest on any 2046 Series UU Bond
may be made directly to the registered holder thereof without presentation or
surrender thereof or the making of any notation thereon if there shall be filed
with the Trustee a Certificate of the Company to the effect that such registered
holder (or the person for whom such registered holder is a nominee) and the
Company have entered into a written agreement that payment shall be so made;
provided, however, that before such registered holder transfers or otherwise
disposes of any 2046 Series UU Bond, such registered holder will, at its
election, either endorse thereon (or on a paper annexed thereto) the principal
amount thereof redeemed and the last date to which interest has been paid
thereon or make such Bond available to the Company at the principal office of
the Trustee for the purpose of making such endorsement thereon. 

The 2046 Series UU Bonds
shall be subject to redemption at the option of the Company or otherwise, and
shall be subject to mandatory redemption, in the manner provided in the
applicable provisions of Article Ten of the Indenture, as amended by Article III
of this Second Supplemental Indenture. 

-8- 







The 2046 Series UU Bonds
shall be excluded from the benefits of, and shall not be subject to redemption
through the operation of, a Mandatory Sinking Fund pursuant to § 11.02 of the
Indenture. 

Notwithstanding the
provisions of § 10.02 or any other provision of the Indenture, the selection of
2046 Series UU Bonds to be redeemed shall, in case fewer than all of the
outstanding 2046 Series UU Bonds are to be redeemed, be made by the Trustee pro
rata (to the nearest multiple of One Thousand Dollars ($1,000)) among the
registered holders of the 2046 Series UU Bonds in proportion, as nearly as
practicable, to the respective unpaid principal amounts of 2046 Series UU Bonds
registered in the names of such holders, with adjustments, to the extent
practicable, to compensate for any prior redemption not made exactly in such
proportion (or otherwise as may be specified by a written order signed by the
registered holders of all outstanding 2046 Series UU Bonds). 

The definitive 2046 Series
UU Bonds may be issued in the form of engraved Bonds or Bonds printed or
lithographed on steel engraved borders or Bonds in typed form on normal bond
paper. Subject to the foregoing provisions of this Section and the provisions of
§ 2.11 of the Indenture, all definitive 2046 Series UU Bonds shall be fully
exchangeable for other Bonds of the same series, of like aggregate principal
amounts, and, upon surrender to the Trustee at its principal office, shall be
exchangeable for other Bonds of the same series of a different authorized
denomination or denominations, as requested by the holder surrendering the same.
The Company will execute, and the Trustee shall authenticate and deliver,
registered Bonds without coupons, whenever the same shall be required for any
such exchange. 

§ 2.2. 2046 Series UU Bonds in the aggregate principal amount of $125,000,000
may forthwith upon the execution and delivery of this Second Supplemental
Indenture, or from time to time thereafter, be executed by the Company and
delivered to the Trustee, and shall thereupon be authenticated and delivered by
the Trustee upon compliance by the Company with the provisions of Articles Four,
Five or Six of the Indenture, without awaiting the filing or recording of this
Second Supplemental Indenture. No additional 2046 Series UU Bonds shall be
issued under Article Four, Five or Six of the Indenture without the consent in
writing of the holders of all the outstanding 2046 Series UU Bonds. 

ARTICLE
III 

REDEMPTION
OF THE 2046 SERIES
UU BONDS 

§ 3.1. The following § 10.29 and § 10.30 be and they hereby are added to
Article Ten of the Indenture: 

“§ 10.29. The 2046 Series UU Bonds shall be subject to redemption as follows:
payments of principal of, Make-Whole Amount, if any, and interest on the 2046
Series UU Bonds shall be made to the Collateral Agent to redeem 2046 Series UU
Bonds in such amounts as shall be necessary, in accordance with the provisions
of the Note Purchase Agreement, to provide funds under the Note Purchase
Agreement to (a) make, when due, payment at maturity (including, without
limitation, maturity upon acceleration of
the Senior Notes due June 21, 2046) and (b) make, when due, any prepayment
required or permitted by the Senior Notes due June 21, 2046 in connection with
any prepayment of the Senior Notes due June 21, 2046; provided, however, that
the obligation of the Company to make any redemption payments under this Section
shall be fully or partially, as the case may be, satisfied and discharged to the
extent that at any time such payment shall be due, the then due payment at
maturity or redemption payment on any of the Senior Notes due June 21, 2046
shall have been fully or partially made from payments made by the Company on the
Notes under the Note Purchase Agreement; provided, further, however, that any
principal, Make-Whole Amount, and any interest which is overdue shall bear
interest at a rate of interest that is the greater of (i) 5.63% per annum or
(ii) 2.0% per annum over the rate of interest publicly announced by PNC Bank,
National Association as its “base” or “prime” rate (to the extent that payment
of such interest is enforceable under applicable law). Terms used and not
defined in this Section and in Section 10.30 shall have the respective meanings
given to them in the Second Supplemental Indenture.” 

-9- 







“§ 10.30. In the case of the redemption of 2046 Series UU Bonds out of moneys
deposited with the Trustee pursuant to § 8.08, such 2046 Series UU Bonds shall,
upon compliance with provisions of § 10.02, and subject to the provisions of §
2.1 of the Second Supplemental Indenture, be redeemable at the principal amounts
thereof, together with interest accrued thereon to the date fixed for
redemption, without premium or Make-Whole Amount.” 

ARTICLE
IV 

MISCELLANEOUS


§ 4.1. The Company is lawfully seized and possessed of all the real estate,
franchises and other property described or referred to in the Indenture (except
properties released from the lien of the Indenture pursuant to the provisions
thereof) as presently mortgaged, subject to the exceptions stated therein, such
real estate, franchises and other property are free and clear of any lien prior
to the lien of the Indenture except as set forth in the Granting Clauses of the
Indenture and the Company has good right and lawful authority to mortgage the
same as provided in and by the Indenture. 

§ 4.2. The Trustee assumes no duties, responsibilities or liabilities by reason
of this Second Supplemental Indenture other than as set forth in the Indenture,
and this Second Supplemental Indenture is executed and accepted by the Trustee
subject to all the terms and conditions of its acceptance of the trust under the
Indenture, as fully as if said terms and conditions were herein set forth at
length. 

§ 4.3. The terms used in this Second Supplemental Indenture shall have the
meanings assigned thereto in the Indenture. Reference by number in this Second
Supplemental Indenture to Articles or Sections shall be construed as referring
to Articles or Sections contained in the Indenture, unless otherwise stated.


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§ 4.4. As amended and modified by this Second Supplemental Indenture, the
Indenture is in all respects ratified and confirmed and the Indenture and this
Second Supplemental Indenture shall be read, taken and construed as one and the
same instrument. 

§ 4.5. Neither the approval by the Board of Public
Utilities of the State of New Jersey of the execution and delivery of this
Second Supplemental Indenture nor the approval by said Board of the issue of any
Bonds under the Indenture shall in any way be construed as the approval by said
Board of any other act, matter or thing which requires approval of said Board
under the laws of the State of New Jersey; nor shall approval by said Board of
the issue of any Bonds under the Indenture bind said Board or any other public
body or authority of the State of New Jersey having jurisdiction in the premises
in any future application for the issue of Bonds under the Indenture or
otherwise. 

§ 4.6. This Second Supplemental Indenture may be executed in any number of
counterparts and all said counterparts executed and delivered each as an
original shall constitute but one and the same instrument. 

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NEW JERSEY NATURAL GAS
COMPANY HEREBY DECLARES THAT IT HAS READ THIS SECOND SUPPLEMENTAL INDENTURE, HAS
RECEIVED A COMPLETELY FILLED-IN TRUE COPY OF IT WITHOUT CHARGE AND HAS SIGNED
THIS SECOND SUPPLEMENTAL INDENTURE ON THE DATE CONTAINED IN ITS ACKNOWLEDGEMENT
HEREOF. 

IN WITNESS WHEREOF, NEW
JERSEY NATURAL GAS COMPANY has caused these presents to be signed in its
corporate name by its President or a Vice President and its corporate seal to be
hereunto affixed and attested by its Secretary or an Assistant Secretary, and
U.S. BANK NATIONAL ASSOCIATION, in evidence of its acceptance of the trust
hereby created, has caused these presents to be signed in its corporate name by
one of its Vice Presidents. 


	NEW JERSEY
      NATURAL GAS COMPANY
		  
		  
	By:  	/s/ James W.
Kent
	 	Name:   	James W.
      Kent
		Title: 	Treasurer




	[Corporate Seal]	
	 	
	 	
	ATTEST:	
	 	
	 	
	/s/ Richard Reich	
	Name:   	Richard Reich	 
	Title:	Corporate Secretary	



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	U.S. BANK NATIONAL ASSOCIATION, as Trustee
		 
		 
	By:  	/s/ Christopher E.
      Golabek
	 	Name:  	Christopher E. Golabek
		Title: 	Vice President




	ATTEST:	
	  	
	  	
	/s/ Stephanie
Roche	
	Name:  	Stephanie Roche	
	Title:	Vice
      President	 



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	STATE OF NEW
      JERSEY	)
	 	)
SS:
	COUNTY OF
      MONMOUTH	)



BE IT REMEMBERED that on
this 13th day of June, 2016, before me, the subscriber, an Attorney-at-Law of
the State of New Jersey, and I hereby certify that I am such an Attorney-at-Law
as witness my hand, personally appeared Richard Reich to me known who, being by
me duly sworn according to law, on his oath, does depose and make proof to my
satisfaction that he is the Corporate Secretary of NEW JERSEY NATURAL GAS
COMPANY, the grantor or mortgagor in the foregoing Supplemental Indenture named;
that he well knows the seal of said corporation; that the seal affixed to said
Supplemental Indenture is the corporate seal of said corporation, and that it
was so affixed in pursuance of resolutions of the Board of Directors of said
corporation; that James W. Kent is Treasurer of said corporation; that he saw
said James W. Kent, as such Treasurer, affix said seal thereto, sign and deliver
said Supplemental Indenture, and heard her declare that she signed, sealed and
delivered the same as the voluntary act and deed of said corporation, in
pursuance of said resolutions, and that this deponent signed his name thereto,
at the same time, as attesting witness. 


	/s/ Richard
Reich
	Name:  	Richard
      Reich
	Title:	Corporate
      Secretary




Subscribed and sworn to
before me,
an Attorney-at-Law of the State of 
New Jersey, at Wall, New
Jersey, 
the day and year aforesaid. 

	/s/ Alexander
    Gonzalez	
	Name:  	Alexander Gonzalez	
		  	
		Attorney-at-Law of the	 
		State of New Jersey	



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ACKNOWLEDGEMENT


	STATE OF NEW
      JERSEY	)
	 	)
ss:
	COUNTY OF
      MORRIS	)



I HEREBY CERTIFY that on
this 13th of June, 2016, before me, a Notary Public for the state aforesaid,
personally appeared Christopher E. Golabek, known to me or satisfactorily proven
to be the Person whose name is subscribed to the Second Supplemental Indenture
dated as of June 1, 2016, who acknowledged that he is an authorized signatory
for U.S. Bank National Association, a national banking association, as Trustee;
that he has been duly authorized to execute, and has executed, such instrument
on its behalf for the purposes therein set forth; and that the same is its act
and deed.

IN WITNESS WHEREOF, I have
set my hand and Notarial Seal, the day and year first above written. 


	/s/ Florence M.
  Noll
	Notary Public	
	My commission expires on  	4/13/2017




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