PSEG-2012 10K EX 4a(33)






Exhibit 4a(33)
SUPPLEMENTAL MORTGAGE


Supplemental Indenture
Dated June 1, 2012 
SUPPLEMENTAL TO 
FIRST AND REFUNDING MORTGAGE 
DATED AUGUST 1, 1924
PUBLIC SERVICE ELECTRIC AND GAS COMPANY 
TO 
U.S. BANK NATIONAL ASSOCIATION 
Trustee 
21 South Street 
Morristown, New Jersey 07960
PROVIDING FOR THE ISSUE OF 
FIRST AND REFUNDING MORTGAGE BONDS, 
POLLUTION CONTROL SERIES AG
RECORD IN MORTGAGE BOOK AND RETURN TO: 
M. COURTNEY McCORMICK, ESQ. 
80 PARK PLAZA, T5B 
P.O. BOX 570 
NEWARK, N.J. 07101
This instrument prepared by
(EDWARD C. FEDAK, ESQ.)









TABLE OF CONTENTS
Page
RECITALS     1
FORM OF BOND     2
FORM OF CERTIFICATE OF AUTHENTICATION     4
GRANTING CLAUSES     5
ARTICLE I.
BONDS OF THE POLLUTION CONTROL SERIES AG.
Description of Pollution Control Series AG     5 
ARTICLE II.
REDEMPTION OF BONDS—POLLUTION CONTROL SERIES AG.
SECTION 2.01. Redemption—Redemption Prices     6
SECTION 2.02. Notice of Redemption     8
SECTION 2.03. Interest on Called Bonds to Cease     8
SECTION 2.04. Bonds Called in Part     9
SECTION 2.05. Provisions of Indenture Not Applicable     9
ARTICLE III.
CREDITS WITH RESPECT TO THE BONDS OF THE POLLUTION CONTROL SERIES AG.
SECTION 3.01. Credits     9
SECTION 3.02. Certificate of the Company     9
ARTICLE IV.
MISCELLANEOUS.
SECTION 4.01. Authentication of Bonds of Pollution Control
Series AG     9 SECTION 4.02. Additional Restrictions on Authentication
of Additional Bonds Under Indenture     9
SECTION 4.03. Restriction on Dividends     10
SECTION 4.04. Use of Facsimile Seal and Signatures     10
SECTION 4.05. Effective Period of Supplemental Indenture     10
SECTION 4.06. Time for Making of Payment     10 SECTION 4.07. Effect of Approval of Board of Public Utilities
of the State of New Jersey     10
SECTION 4.08. Execution in Counterparts     10
Acknowledgments     11
Certificate of Residence     13









SUPPLEMENTAL INDENTURE, dated the 1st day of June, 2012, 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 U.S. BANK NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States of America, as successor 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 (U S. Bank National Association, successor trustee), 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:
	
				
	County
	Office
	Book Number
	Page
Number

	Atlantic
	Clerk's
	1955 of Mortgages
	160

	Bergen
	Clerk's
	94 of Chattel Mortgages
	123 etc.

	Burlington
	Clerk's
	693 of Mortgages
52 of Chattel Mortgages
	88 etc.
Folio 8 etc.

	Camden
	Register's
	177 of Mortgages
45 of Chattel Mortgages
	Folio 354 etc.
184 etc.

	Cumberland
	Clerk's
	239 of Mortgages
786 of Mortgages
	1 etc.
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.

	Hudson
	Register's
	142 of Mortgages
453 of Chattel Mortgages
	7 etc.
9 etc.

	 
	 
	1245 of Mortgages
	484, etc.

	Hunterdon
	Clerk's
	151 of Mortgages
	344

	Mercer
	Clerk's
	67 of Chattel Mortgages
	1 etc.

	Middlesex
	Clerk's
	384 of Mortgages
113 of Chattel Mortgages
	1 etc.
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 etc.

	Somerset
	Clerk's
	46 of Chattel Mortgages
	207 etc.

	Sussex
	Clerk's
	N-10 of Mortgages
123 of Mortgages
	1 etc.
10 & c.

	Union
	Register's
	  9584 of Mortgages
	259 etc.

	Warren
	Clerk's
	124 of Mortgages
	141 etc.






and
WHEREAS, the Indenture has also been recorded in the following counties of the Commonwealth of Pennsylvania, in the offices, and therein in the books and at the pages, as follows:









	
				
	County
	Office
	Book Number
	Page
Number

	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

	Huntington
	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









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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 May 1, 2012, 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 May 1, 2012, the Company has acquired property which, in accordance with the provisions of the Indenture, is subject to the lien thereof and the Company desires to confirm such lien; and
WHEREAS, the Indenture has been amended or supplemented from time to time; and
WHEREAS, it is provided in the Indenture that no bonds other than those of the 51/2% 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 Pollution Control Financing Authority of Salem County (the “Authority”) has previously issued and sold $50,000,000 aggregate principal amount of its Pollution Control Revenue Bonds, 1994 Series A (Public Service Electric and Gas Company Project) (the “1994 Authority Bonds”) to finance the acquisition and construction by the Company of certain pollution control facilities at the Hope Creek Generating Station located in Lower Alloways Creek Township, Salem County, New Jersey (such generating station being sometimes referred to herein as the “Plant” and the pollution control facilities being sometimes referred to herein as the “Project”); and
WHEREAS, the ownership and operation of the Plant and the Project has been transferred by the Company to its affiliate, PSEG Nuclear LLC (“PSEG Nuclear”); and
WHEREAS, the Authority is making provision for the issuance and sale of its Pollution Control Revenue Refunding Bonds, 2012 Series A (Public Service Electric and Gas Company Project) (the “2012 Authority Bonds”) to provide a portion of the funds for the refunding and redemption of the 1994 Authority Bonds; and
WHEREAS, the 2012 Authority Bonds are to be issued under a Trust Indenture to be dated as of June 1, 2012 (the “Authority Indenture”) between the Authority and U.S. Bank National Association, as trustee (the “Authority Trustee”); and
WHEREAS, the Company will enter into a Pollution Control Facilities Loan Agreement dated as of June 1, 2012 (the “Agreement”) with the Authority providing, among other things, for the loan by the Authority to the Company of funds to provide a portion of the funds for the refunding and redemption of the 1994 Authority Bonds, and for the issuance by the Company to the Authority Trustee, as assignee of the Authority, of First and Refunding Mortgage Bonds of the Company to evidence the Company’s obligation to repay said loan, and for such purposes the Company desires to provide for the issue of $50,000,000 aggregate principal amount of bonds secured by the Indenture of a series to be designated as “First and Refunding Mortgage Bonds, Pollution Control Series AG” (hereinafter sometimes called “Pollution Control Series AG”); and
WHEREAS, the text of the bonds of the Pollution Control Series AG and of the certificate of authentication to be borne by the bonds of the Pollution Control Series AG shall be substantially of the following tenor:


[FORM OF BOND]
This Bond is not transferable except as provided in the Trust Indenture dated as of June 1, 2012 between The Pollution Control Financing Authority of Salem County and U.S. Bank National Association, as Trustee (the “Authority Indenture”). Capitalized terms used herein, not otherwise expressly defined herein, shall have the meanings ascribed to them in the Authority Indenture.



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REGISTERED    REGISTERED
NUMBER    AMOUNT
R-    $50,000,000
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
FIRST AND REFUNDING MORTGAGE BOND, 
POLLUTION CONTROL SERIES AG
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 U.S. Bank National Association, as trustee under the Authority Indenture, or registered assigns, the principal sum of Fifty Million Dollars, on April 1, 2046, and to pay interest thereon from the date hereof, at the rate of 15.0% per annum, and until payment of said principal sum, provided, however, that the Company shall receive certain credits against such obligations to the extent that interest payable by the Authority from time to time for the Authority’s Pollution Control Revenue Refunding Bonds, 2012 Series A (Public Service Electric and Gas Company Project) (the “2012 Authority Bonds”) issued pursuant to the Authority Indenture is less than interest calculated pursuant to the foregoing rate. Such interest to be payable at such times and in such manner as interest is payable on the 2012 Authority Bonds.
Both the principal hereof and interest hereon shall be paid at the corporate trust office of U.S. Bank National Association in the City of Morristown, State of New Jersey, or at the corporate trust office of any paying agent appointed by the Company, in such coin or currency of the United States of America as at the time of payment shall constitute legal tender for the payment of public and private debts.
This Bond is one of the First and Refunding Mortgage Bonds of the Company issued and to be issued under and pursuant to, and all equally secured by, an indenture of mortgage or deed of trust dated August 1, 1924, between the Company and U.S. Bank National Association, a national banking association, as successor Trustee, as supplemented and amended by the supplemental indentures thereto, including the supplemental indenture dated June 1, 2012. This Bond is one of the Bonds of the Pollution Control Series AG, which series is limited to the aggregate principal amount of $50,000,000 and is issued pursuant to said supplemental indenture dated June 1, 2012. 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 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, interest payment dates, 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 affects the Bonds of one or more series but less than all series then outstanding, a like percentage of the then outstanding Bonds of each series affected by such change, and excluding Bonds owned or controlled by the Company or by the parties owning at least 10% of the outstanding voting stock of the Company, as more fully specified in said indenture) consent in writing thereto, all as more fully set forth in said indenture, as amended and supplemented.
First and Refunding Mortgage Bonds issuable under said indenture are issuable in series, and the Bonds of any series may be for varying principal amounts and in the form of coupon Bonds and of registered Bonds without coupons, and the Bonds of any one series may differ from the Bonds of any other series as to date, maturity, interest rate and otherwise, all as in said indenture provided and set forth. The Bonds of the Pollution Control Series AG, in which this Bond is included, are designated “First and Refunding Mortgage Bonds, Pollution Control Series AG”.
In case of the happening of an event of default as specified in said indenture and in the supplemental indenture dated March 1, 1942 supplemental thereto, the principal sum of the Bonds of this issue may be declared or may become due and payable forthwith, in the manner and with the effect in said indenture provided.
The Bonds of this series are subject to redemption as provided in said supplemental indenture dated June 1, 2012.





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This Bond is transferable, but only as provided in the Authority Indenture upon surrender hereof, by the registered owner in person or by attorney duly authorized in writing, at the office of the Trustee; upon any such transfer a new Bond similar hereto will be issued to the transferee. No service charge shall be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The Company and the Trustee and any paying agent may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of or on account of the principal hereof and the interest hereon and for all other purposes; and neither the Company nor the Trustee nor any paying agent shall be affected by any notice to the contrary.
The Bonds of this series are issuable only in fully registered form, in any denomination authorized by the Company.
No recourse under or upon any obligation, covenant or agreement contained in said indenture or in any indenture supplemental thereto, or in any Bond or coupon issued thereunder, or because of any indebtedness arising thereunder, shall be had against any incorporator, or against any past, present or future stockholder, officer or director, as such, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise; it being expressly agreed and understood that said indenture, any indenture supplemental thereto and the obligations issued thereunder, are solely corporate obligations, and that no personal liability whatever shall attach to, or be incurred by, such incorporators, stockholders, officers or directors, as such, of the Company, or of any successor corporation, or any of them, because of the incurring of the indebtedness thereby authorized, or under or by reason of any of the obligations, covenants or agreements contained in the indenture or in any indenture supplemental thereto or in any of the Bonds or coupons issued thereunder, or implied therefrom.
This Bond shall not be entitled to any security or benefit under said indenture, as amended and supplemented, and shall not become valid or obligatory for any purpose, until the certificate of authentication, hereon endorsed, shall have been signed by U.S. Bank National Association, as Trustee, or by its successor in trust under said indenture.
IN WITNESS WHEREOF, the Company has caused this Bond to be duly executed by its proper officers under its corporate seal.
Dated
PUBLIC SERVICE ELECTRIC AND GAS COMPANY,
                                                                                                     By. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
                                                                                                                            (Vice) President
(Seal)
Attest:


. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
(Assistant) Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION] 
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the series designated therein which are described in the within-mentioned indenture and supplemental indenture dated June 1, 2012, as secured thereby.
U.S. BANK NATIONAL ASSOCIATION, TRUSTEE,
By. . . . . . . . . . . . . . . . . . . . . . . . . . . . Authorized Signatory



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WHEREAS, the execution and delivery of this supplemental indenture have been duly authorized by the Board of Directors of the Company; and
WHEREAS, the Company represents that all things necessary to make the bonds of the Pollution Control Series AG hereinafter described, when duly authenticated by the Trustee and issued by the Company, valid, binding and legal obligations of the Company, and to make this supplemental indenture a valid and binding agreement supplemental to the Indenture, have been done and performed:


NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH that the Company, in consideration of the premises and the execution and delivery by the Trustee of this supplemental indenture, and in pursuance of the covenants and agreements contained in the Indenture and for other good and valuable consideration, the receipt of which is hereby acknowledged, has granted, bargained, sold, aliened, remised, released, conveyed, confirmed, assigned, transferred and set over, and by these presents does grant, bargain, sell, alien, remise, release, convey, confirm, assign, transfer and set over unto the Trustee, its successors and assigns, forever, all the right, title and interest of the Company in and to all property of every kind and description (except cash, accounts and bills receivable and all merchandise bought, sold or manufactured for sale in the ordinary course of the Company’s business, stocks, bonds or other corporate obligations or securities, other than such as are described in Part V of the Granting Clauses of the Indenture, not acquired with the proceeds of bonds secured by the Indenture, and except as in the Indenture and herein otherwise expressly excluded) acquired by the Company since the execution and delivery of the supplemental indenture dated May 1, 2012, supplemental to the Indenture (except any such property duly released from, or disposed of free from, the lien of the Indenture, in accordance with the provisions thereof) and all such property which at any time hereafter may be acquired by the Company;
All of which property it is intended shall be included in and granted by this supplemental indenture and covered by the lien of the Indenture as heretofore and hereby amended and supplemented;
UNDER AND SUBJECT to any encumbrances or mortgages existing on property acquired by the Company at the time of such acquisition and not heretofore discharged of record; and
SUBJECT, also, to the exceptions, reservations and provisions in the Indenture and in this supplemental indenture recited, and to the liens, reservations, exceptions, limitations, conditions and restrictions imposed by or contained in the several deeds, grants, franchises and contracts or other instruments through which the Company acquired or claims title to the aforesaid property; and subject, also, to existing leases, to liens on easements or rights of way, to liens for taxes, assessments and governmental charges not in default or the payment of which is deferred, pending appeal or other contest by legal proceedings, pursuant to Section 4 of Article Five of the Indenture, or the payment of which is deferred pending billing, transfer of title or final determination of amount, to easements for alleys, streets, highways, rights of way and railroads that may run across or encroach upon the said property, to joint pole and similar agreements, to undetermined liens and charges, if any, incidental to construction, and other encumbrances permitted by the Indenture as heretofore and hereby amended and supplemented;
TO HAVE AND TO HOLD the property hereby conveyed or assigned, or intended to be conveyed or assigned, unto the Trustee, its successor or successors and assigns, forever;
IN TRUST, NEVERTHELESS, upon the terms, conditions and trusts set forth in the Indenture as heretofore and hereby amended and supplemented, to the end that the said property shall be subject to the lien of the Indenture as heretofore and hereby amended and supplemented, with the same force and effect as though said property had been included in the Granting Clauses of the Indenture at the time of the execution and delivery thereof;
AND THIS SUPPLEMENTAL INDENTURE FURTHER WITNESSETH that for the considerations aforesaid, it is hereby
covenanted between the Company and the Trustee as follows: ARTICLE I.
BONDS OF THE POLLUTION CONTROL SERIES AG.
The series of bonds authorized by this supplemental indenture to be issued under and secured by the Indenture shall be designated “First and Refunding Mortgage Bonds, Pollution Control Series AG”; shall be limited to the aggregate principal amount of $50,000,000; shall be issued initially to the Authority Trustee, as assignee of the





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Authority, to evidence the Company’s obligation to repay the loan to refinance a portion of the costs of the Project made pursuant to the Pollution Control Facilities Loan Agreement; and shall mature and bear interest as set forth in the form of bond hereinbefore described; provided, however, that the Company shall receive certain credits against principal and interest obligations as set forth in Section 3.01 hereof. The date of each bond of the Pollution Control Series AG shall be the interest payment date next preceding the date of authentication, unless such date of authentication be an interest payment date, in which case the date shall be the date of authentication, or unless such date of authentication be prior to the first interest payment date, in which case the date shall be June 1, 2012.
Bonds of the Pollution Control Series AG shall be issued as fully registered bonds in any denomination authorized by the Company. Interest on bonds of the Pollution Control Series AG shall be payable at such time and in such manner as interest is payable on the 2012 Authority Bonds, subject to certain credits against principal and interest as set forth in Section 3.01 hereof and shall be payable as to both principal and interest in such coin or currency of the United States of America as at the time of payment shall constitute legal tender for the payment of public and private debts, at the principal office of the Trustee, or at the corporate trust office of any paying agent appointed by the Company.
Bonds of the Pollution Control Series AG shall be transferable (but only as provided in the Authority Indenture) upon surrender thereof for cancellation by the registered owner in person or by attorney duly authorized in writing at said office of the Trustee.
The Company hereby waives any right to make a charge for any transfer of bonds of the Pollution Control Series AG, 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.
ARTICLE II.


REDEMPTION OF BONDS—POLLUTION CONTROL SERIES AG.
SECTION 2.01. Redemption—Redemption Prices. Bonds of the Pollution Control Series AG shall be subject to redemption prior to maturity, under the conditions and upon the payment of the amounts specified in the following subsections, together, in each case, with interest accrued to the redemption date:
(a) At the option of the Company:
(i)whenever the Interest Rate Mode for the 2012 Authority Bonds is the Daily Rate, the Weekly Rate, or the Semi-Annual Rate ,in whole or in part on any date, at a redemption price of 100% of the principal amount thereof;
(ii)whenever the Interest Rate Mode for the 2012 Authority Bonds is the Commercial Paper Rate, in whole or in part, at a redemption price of 100% of the principal amount thereof on the Interest Payment Date for each Commercial Paper Rate Period for a 2012 Authority Bond or Bonds, such redemption to be in the same principal amount of such 2012 Authority Bond or Bonds;
(iii)whenever the Interest Rate Mode for the 2012 Authority Bonds is the Auction Rate, in whole or in part, at a redemption price of 100% of the principal amount thereof on the final Interest Payment Date for each Auction Period;
(iv)whenever the Interest Rate Mode for the 2012 Authority Bonds is the Term Rate, in whole or in part, on the final Interest Payment Date for the then current Term Rate Period at a redemption price of 100% of the principal amount thereof plus accrued interest, if any, to the redemption date, and, prior to the end of the then current Term Rate Period, at any time during the redemption periods and at the redemption prices set forth below, plus accrued interest, if any, to the redemption date:





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	Original Length of 
 Current Term  Rate Period (Years)  
	

Commencement of 
Redemption Period
	Redemption Price 
as Percentageof Principal  

	More than 15 years
	Tenth anniversary of   commencement of  
Term Rate Period
	100%

	Greater than 10 years but equal to or less than 15 years
	Fifth anniversary of commencement of Term Rate Period
	

100%

	

Equal to or less than 10 years
	

Non-callable
	

Non-callable








If, at the time of the Company’s notice of a change in the Term Rate Period pursuant to Section 2.02(d) of the Authority Indenture, or its notice of Conversion of the Interest Rate Mode for the 2012 Authority Bonds to the Term Rate pursuant to Section 2.02(e) of the Authority Indenture, or, when the Interest Rate Mode for the 2012 Authority Bonds is the Term Rate, at least 35 days prior to the Purchase Date for the 2012 Authority Bonds pursuant to Section 3.01 (b)(i) of the Authority Indenture, the Company provides a certification of the Remarketing Agent to the Authority Trustee and the Authority that the foregoing schedule is not consistent with Prevailing Market Conditions and an opinion of Bond Counsel that a change in the redemption provisions of the 2012 Authority Bonds will not adversely affect the exclusion from gross income of interest on the 2012 Authority Bonds for federal income tax purposes, the foregoing redemption periods and redemption prices may be revised effective as of the date of such change in the Term Rate Period, the Conversion Date, or that Purchase Date, as determined by the Remarketing Agent in its judgment, taking into account the then Prevailing Market Conditions, as stipulated in such certification, which shall be appended by the Trustee to its counterpart of this supplemental indenture. Any such revision of the redemption periods and redemption prices shall not be considered an amendment of or a supplement to this supplemental indenture and shall not require the consent of any other person or entity.


(v)    whenever the Interest Rate Mode for 2012 Authority Bonds is the Annual Rate, in whole or in part, at a redemption price equal to 100% of the principal amount thereof on the final Interest Payment Date for such Annual Rate Period.
(b)    Special Mandatory Redemption:  in whole (or in part, if in the opinion of Bond Counsel such partial redemption will preserve the exclusion from gross income for federal income tax purposes of interest on the 2012 Authority Bonds remaining outstanding after such redemption) at any time at a redemption price of 100% of the principal amount thereof, plus interest accrued to the redemption date, if a "final determination" (as defined in the Authority Indenture) is made that the interest paid or payable on any 2012 Authority Bond to other than a "substantial user" of the Project or a "related person" (within the meaning of Section 147(a) of the Code) is or was includable in the gross income of the owner thereof for federal income tax purposes under the Code as a result of the failure by the Company to observe or perform any covenant, condition or warranty on its part to be observed or performed under the Agreement or the inaccuracy of any representation or warranty by the Company under the Agreement and under the Use of Proceeds Certificate of the Company dated the Closing Date.  Any special mandatory redemption shall be made as soon as practicable but in any event not more than 180 days from the date of such "final determination" and shall be on the date specified by the Company pursuant to Section 8.01(b) of the Authority Indenture or, if no date is so specified, the date established by the Authority Trustee in accordance with Section 8.01(b) of the Authority Indenture.
(c)in whole at 100% of the principal amount thereof whenever the Company receives from the Authority Trustee a copy of a written demand sent to the Trustee stating that the principal of all outstanding 2012 Authority Bonds has been declared to be immediately due and payable because of an Event of Default under the Authority Indenture. In such case, redemption of the bonds of the Pollution Control Series AG shall be any date selected by the Company, not more than 180 days after receipt by the Company of such written demand for redemption.


SECTION 2.02. Notice of Redemption. (a) The election of the Company under subsection (a) of Section 2.01 hereof to redeem any of the bonds of the Pollution Control Series AG shall be evidenced by a resolution of the Board of 



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Directors of the Company calling for redemption on a stated date of all or a stated principal amount thereof. To exercise its option to redeem the bonds of the Pollution Control Series AG under subsection (a) of Section 2.01 hereof, the Company shall deliver to the Trustee, the Authority and the Authority Trustee a certified copy of said resolution calling all or a stated principal amount of the bonds of the Pollution Control Series AG for redemption on a date not less than 20 days (35 days if the Interest Rate Mode is the Term Rate) nor more than 65 days from the date said resolution is delivered. The delivery to the Authority Trustee of a certified copy of such resolution shall constitute notice to the Authority Trustee of the redemption referred to therein, on the terms specified therein. The Company shall on or before such redemption date deposit with the Trustee, as paying agent hereunder, the total applicable redemption price of all the bonds so called, with interest accrued thereon to the redemption date, less any credits to which the Company may be entitled pursuant to Section 3.01 hereof, and the Trustee, as such paying agent, shall apply such funds on the redemption date to the redemption of the bonds so called.
(b)The Company shall, within 10 days after the occurrence of a “final determination” under subsection (b) of Section 2.01 hereof, deliver to the Trustee written notice of such “final determination”. The Company shall, by resolution of its Board of Directors, fix a redemption date for such redemption and shall deliver to the Trustee, the Authority and the Authority Trustee a certified copy of said resolution not later than 60 days after a “final determination” is made and at least 40 days prior to the date so selected for redemption. Such redemption date may be any day not more than 180 days after the occurrence of such “final determination”. If the Trustee does not receive written notice of such selection by the Company within 60 days after the date of the occurrence of such “final determination,” then the redemption date shall be the redemption date established by the Authority Trustee in accordance with Section 8.01(b) of the Authority Indenture. On or before such redemption date, the Company shall deposit with the Trustee, as paying agent hereunder, the total redemption price of the bonds so called, with interest accrued thereon to the redemption date, less any credits to which the Company may be entitled pursuant to Section 3.01 hereof, and the Trustee, as such paying agent, shall apply such funds, on the redemption date, to the redemption of the bonds so called. The delivery to the Authority Trustee of a certified copy of such resolution shall constitute notice to the Authority Trustee of the redemption referred to therein on the terms specified therein.
SECTION 2.03. Interest on Called Bonds to Cease. Each bond or portion thereof of the Pollution Control Series AG called for redemption under Section 2.02 hereof shall be due and payable at the office of the Trustee, as paying agent hereunder, at the applicable redemption price and on the specified redemption date, anything herein or in such bond to the contrary notwithstanding. From and after the date when each bond or portion thereof of the Pollution Control Series AG shall be due and payable as aforesaid (unless upon said date the full amount due thereon shall not be held by or provided to the Trustee, as paying agent hereunder, and be immediately available for payment), all further interest shall cease to accrue on such bond or on such portion thereof, as the case may be.
SECTION 2.04. Bonds Called in Part. If only a portion of any bond of the Pollution Control Series AG shall be called for redemption pursuant to Section 2.02 hereof, the notice of redemption hereinbefore provided for shall specify the portion of the principal amount thereof to be redeemed. Upon payment of the portion so called for redemption, the Trustee, as paying agent hereunder, shall give prompt written notice thereof to the Company.
SECTION 2.05. Provisions of Indenture Not Applicable. The provisions of Article Four of the Indenture, as amended and supplemented, shall not apply to the procedure for the exercise of any right of redemption reserved by the Company, or to any mandatory redemption provided in this Article in respect of the bonds of the Pollution Control Series AG. There shall be no sinking fund for the bonds of the Pollution Control Series AG.


ARTICLE III.
CREDITS WITH RESPECT TO THE BONDS OF THE POLLUTION CONTROL SERIES AG.
SECTION 3.01. Credits. (a) In addition to any other credit, payment or satisfaction to which the Company is entitled with respect to the bonds of the Pollution Control Series AG, the Company shall be entitled to credits against amounts otherwise payable in respect of the bonds of the Pollution Control Series AG in an amount corresponding to the amount by which interest due on the bonds of the Pollution Control Series AG exceeds the interest due on the 2012 Authority Bonds.
(b)The Company shall be entitled to credits against amounts otherwise payable in respect of the bonds of the Pollution Control Series AG in an amount corresponding to (i) the principal amount of any 2012 Authority Bond surrendered to the Authority Trustee by the Company or the Authority, or purchased by the Authority Trustee, for cancellation and (ii) the amount of money held by the Authority Trustee and available and designated for or applied toward the payment of principal or redemption price of and interest on the 2012 Authority Bonds, as the case may 



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be, regardless of the source of payment to the Authority Trustee of such moneys. The Trustee, as paying agent hereunder, shall give prompt written notice to the Company of any such credit with respect to the payment of interest.
(c)The Trustee, as paying agent hereunder, shall (i) promptly notify the Company of each deposit in the Debt Service Fund under the Authority Indenture, (ii) provide evidence to the Company that such deposit has been credited to such Fund and (iii) give prompt written notice to the Company of any credits with respect to payment of principal or redemption price of and interest on the bonds of the Pollution Control Series AG.
SECTION 3.02. Certificate of the Company. A certificate of the Company signed by the President, any Vice President or any Assistant Treasurer, and attested to by the Secretary or any Assistant Secretary, and consented to by the Authority Trustee, stating that the Company is entitled to a credit under Section 3.01 hereof and setting forth the basis therefor in reasonable detail, shall be conclusive evidence of such entitlement, and the Trustee shall accept such certificate as such evidence without further investigation or verification of the matters stated therein.
ARTICLE IV.
MISCELLANEOUS.
SECTION 4.01. Authentication of Bonds of Pollution Control Series AG. None of the bonds of the Pollution Control Series AG, the issue of which is provided for by this supplemental indenture, shall be authenticated by the Trustee except in accordance with the provisions of the Indenture, as amended and supplemented, and this supplemental indenture, and upon compliance with the conditions in that behalf therein contained.
SECTION 4.02. Additional Restrictions on Authentication of Additional Bonds Under Indenture. The Company covenants that from and after the date of execution of this supplemental indenture, no additional bonds (as defined in Section I of Article Two of the Indenture) shall be authenticated and delivered by the Trustee under Subdivision A of Section 4 of said Article Two on account of additions or improvements to the mortgaged property:
(1)unless the net earnings of the Company for the period required by Subdivision C of Section 6 of said Article Two shall have been at least twice the fixed charges (in lieu of 13/4 times such fixed charges, as required by said Subdivision C); and for the purpose of this condition (a) such fixed charges shall in each case include interest on the bonds applied for, notwithstanding the parenthetical provision contained in clause (4) of said Subdivision C, and (b) in computing such net earnings there shall be included in expenses of operation (under paragraph (c) of said Subdivision C) all charges against earnings for depreciation, renewals or replacements, and all certificates with respect to net earnings delivered to the Trustee in connection with any authentication of additional bonds under said Article Two shall so state; and
(2)except to the extent of 60% (in lieu of 75% as permitted by Subdivision A of Section 7 of said Article Two) of the cost or fair value to the Company of the additions or improvements forming the basis for such authentication of additional bonds.
SECTION 4.03. Restriction on Dividends. The Company will not declare or pay any dividend on any shares of its common stock (other than dividends payable in shares of its common stock) or make any other distribution on any such shares, or purchase or otherwise acquire any such shares (except shares acquired without cost to the Company) whenever such action would reduce the earned surplus of the Company to an amount less than $10,000,000 or such lesser amount as may remain after deducting from said $10,000,000 all amounts appearing in the books of account of the Company on December 31, 1948, which shall thereafter, pursuant to any order or rule of any regulatory body entered after said date, be required to be removed, in whole or in part, from the books of account of the Company by charges to earned surplus.
SECTION 4.04. Use of Facsimile Seal and Signatures. The seal of the Company and any or all signatures of the officers of the Company upon any of the bonds of the Pollution Control Series AG may be facsimiles.
SECTION 4.05. Effective Period of Supplemental Indenture. The preceding provisions of Articles I, II and III of this supplemental indenture shall remain in effect only so long as any of the bonds of the Pollution Control Series AG shall remain outstanding.
SECTION 4.06. Time for Making of Payment. All payments of principal or redemption price of and interest on the bonds of the Pollution Control Series AG shall be made to the Authority Trustee in such funds as shall constitute immediately available funds when payment is due. In any case where the date of payment of the principal or redemption price of or interest on the bonds of the Pollution Control Series AG or the date fixed for redemption of any such bonds shall be in the city of payment a Saturday, Sunday or a legal holiday or a day on which banking institutions are authorized 



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by law to close, then such payment need not be made on such date but may be made on the next succeeding business day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest on such payment shall accrue for the period after such date.
SECTION 4.07. Effect of Approval of Board of Public Utilities of the State of New Jersey. The approval of the Board of Public Utilities of the State of New Jersey of the execution and delivery of these presents and of the issue of any bonds of the Pollution Control Series AG shall not be construed as approval of said Board of any other act, matter or thing which requires approval of said Board under the laws of the State of New Jersey.
SECTION 4.08. Execution 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.





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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 U.S. Bank National Association, as Trustee, party hereto of the second part, has caused this supplemental indenture to be signed and acknowledged or proved by its President, one of its Vice Presidents or one of its Assistant Vice Presidents and its corporate seal to be hereunto affixed and to be attested by the signature of one of its Vice Presidents, Assistant Vice Presidents, its Cashier, one of its Assistant Cashiers, or one of its Corporate Trust Officers. Executed and delivered this 11th day of June, 2012.


PUBLIC SERVICE ELECTRIC AND GAS COMPANY
By /s/ B.D. Huntington
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
B. D. Huntington
Vice President
Attest:
/s/ M. Courtney McCormick
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M. Courtney McCormick
Secretary
U.S. BANK NATIONAL ASSOCIATION
By /s/ N. Barnes
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
N. Barnes
Vice President 
Attest:
/s/ P. O'Brien
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P. O’Brien
Vice President





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STATE OF NEW JERSEY    )


SS:)
COUNTY OF ESSEX    )


BE IT REMEMBERED, that on this 11th day of June, 2012, before me, the subscriber, a Notary Public of the State of New Jersey, personally appeared B. D. Huntington who, I am satisfied, is a Vice President of PUBLIC SERVICE ELECTRIC AND GAS COMPANY, one of the corporations named in and which executed the foregoing instrument, and is the person who signed the said instrument as such officer for and on behalf of such corporation, and I having first made known to him the contents thereof, he did acknowledge that he signed the said instrument as such officer, that the said instrument was made by such corporation and sealed with its corporate seal, that the said instrument is the voluntary act and deed of such corporation, made by virtue of authority from its Board of Directors, and that said corporation, the mortgagor, has received a true copy of said instrument.








/s/ Susan Costello
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Susan Costello 
Notary Public of New Jersey
My Commission Expires March 26, 2017


STATE OF NEW JERSEY    )


SS:)
COUNTY OF ESSEX    )


BE IT REMEMBERED, that on this 11th day of June, 2012, before me, the subscriber, a Notary Public of the State of New Jersey, personally appeared N. Barnes who, I am satisfied, is a Vice President of U.S. BANK NATIONAL ASSOCIATION, one of the corporations named in and which executed the foregoing instrument, and is the person who signed the said instrument as such officer, for and on behalf of such corporation, and I having first made known to him the contents thereof, he did acknowledge that he signed the said instrument as such officer, that the said instrument was made by such corporation and sealed with its corporate seal; and that the said instrument is the voluntary act and deed of such corporation, made by virtue of authority from its Board of Directors.




/s/ Melody A. Simpson
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . .
Melody A. Simpson 
Notary Public of New Jersey 
My Commission Expires March 1, 2016



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CERTIFICATE OF RESIDENCE
U.S. Bank National Association, Mortgagee and Trustee within named, hereby certifies that its precise residence is 21 South Street, Morristown, New Jersey 07960
U. S. BANK NATIONAL ASSOCIATION
By  /s/ N. Barnes
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
N. Barnes  
Vice President