Exhibit 1-4
PSE&G Capital Trust ___
_____ % [Trust Preferred Securities], Series _
(liquidation amount $__ per security)
guaranteed to the extent the Trust
has available funds by
Public Service Electric and Gas Company
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Underwriting Agreement
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__________, 200_
[Name and Address of Underwriter(s)]
Dear Sirs:
PSE&G Capital Trust ___, a Delaware statutory trust (the "Trust"), and
Public Service Electric and Gas Company, a New Jersey corporation ("PSE&G"),
propose, subject to the terms and conditions stated herein, that the Trust issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters"),
for whom ___ and ___ are acting as representatives (the "Representatives"),
_________ _____% [Trust Preferred Securities], Series _ (liquidation amount $__
per security), representing undivided beneficial interests in the assets of the
Trust (the "Preferred Securities"), guaranteed by PSE&G as to the payment of
distributions and payments upon liquidation or redemption, and benefiting from
certain additional undertakings of PSE&G to the extent set forth (i) in the
Guarantee Agreement between PSE&G and Wachovia Bank, National Association, as
trustee thereunder (the "Guarantee Trustee"), to be dated as of the Time of
Delivery (as defined in Section 4 hereof) (the "Guarantee"), (ii) PSE&G's _____%
Deferrable Interest Subordinated Debentures, Series _ (the "Subordinated
Debentures"), to be executed at the Time of Delivery, (iii) the Indenture
between PSE&G and First Union National Bank, National Association (now known as
Wachovia Bank, National Association), as trustee thereunder (the "Debenture
Trustee"), dated as of ____________, as supplemented by the [______]
Supplemental Indenture thereto, dated as of ____________, relating to the
Subordinated Debentures (collectively, the "Indenture") and (iv) the trust
agreement among PSE&G, as depositor, the trustees named therein, and the holders
from time to time, of undivided beneficial interests in the assets of the Trust
(as amended and restated from time to time, the "Trust Agreement").
Concurrently with the issuance of the Preferred Securities and PSE&G's
investment in the common securities of the Trust (the "Common Securities")
representing undivided beneficial interests in the assets of the Trust, the
Trust will loan the proceeds thereof to PSE&G and, to evidence such loan, PSE&G
will issue and deliver to the Trust the Subordinated Debentures, which will be
issued under the Indenture.
1. Each of the Trust and PSE&G, jointly and severally, represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333- ), in
respect of, among other things, the Preferred Securities, the Guarantee
and the Subordinated Debentures (collectively, the "Registered
Securities"), has been filed with the Securities and Exchange Commission
(the "Commission") pursuant to Rule 415 under the Securities Act of 1933,
as amended (the "Act"), and delivered to the Representatives; pursuant to
Rule 429 under the Act, the prospectus contained in the registration
statement is a combined prospectus, which also constitutes post-effective
amendment No. 2 to the registration statement on Form S-3 No. 33-13208 and
post-effective amendment No. 1 to the registration statements on Form S-3
(Nos. 33-50199, 33-51309 and Nos. 333-76020, ▇▇▇-▇▇▇▇▇-▇▇ and
333-76020-02), and any post-effective amendment thereto, each in the form
heretofore delivered to the Representatives, have been declared effective
by the Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission; and
no stop order suspending the effectiveness of such registration statement,
which also constitutes post-effective amendment No. 2 to the registration
statement on Form S-3 No. 33-13208 and post-effective amendment No. 1 to
the registration statements on Form S-3 (33-50199, 33-51309 and Nos.
333-76020, ▇▇▇-▇▇▇▇▇-▇▇ and 333-76020-02), has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or thereafter filed with the Commission pursuant to Rule 424(a)
of the rules and regulations of the Commission under the Act is referred
to herein as a "Preliminary Prospectus"; the various parts of such
registration statement, including (i) all exhibits thereto, (ii) if
applicable, the information contained in the form of prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be
a part of the registration statement at the time it was declared effective
and (iii) the documents incorporated by reference in the prospectus
contained in the registration statement at the time such part of such
registration statement became effective, each as amended at the time such
part of such registration statement became effective, are referred to
herein collectively as the "Registration Statement"; the final prospectus,
as supplemented by the related prospectus supplement, in the form first
filed with respect to the Preferred Securities pursuant to Rule 424(b)
under the Act, is referred to herein collectively as the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include PSE&G's most recent annual report on Form 10-K filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in
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the Registration Statement (the "Form 10-K")); each Preliminary Prospectus
and the Prospectus delivered to the Underwriters for use in connection
with the offering of the Preferred Securities will, at the time of such
delivery, be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T;
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an 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 were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust or PSE&G by an Underwriter
through the Representatives expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
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, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an 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 were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust or PSE&G by an Underwriter
through the Representatives expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "TIA"), and
the rules and regulations of the Commission thereunder and do not and will
not, (i) as of the applicable effective date as to the Registration
Statement and any amendment thereto and (ii) as of the applicable filing
date as to the Prospectus and any amendment or supplement thereto, contain
an 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; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Trust or PSE&G
by an Underwriter through the Representatives expressly for use therein;
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(e) PSE&G 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). All of the issued and outstanding common stock
of PSE&G have been duly and validly authorized and issued, are fully paid
and non-assessable, and are directly owned by Public Service Enterprise
Group Incorporated, free and clear of all liens, encumbrances, equities or
claims;
(f) The franchises of PSE&G are sufficient authority for it to carry
on its business as described in the Prospectus;
(g) All approvals, consents, and orders of the Board of Public
Utilities of the State of New Jersey legally required for the issuance of
the Subordinated Debentures and the Guarantee have been obtained, and no
approval, consent or order of any other commission or other governmental
authority is legally required for such execution, delivery and issuance
and the issuance of the Subordinated Debentures and the Guarantee are in
accordance with the approvals, consents or orders obtained;
(h) Deloitte & Touche LLP are independent public accountants with
respect to PSE&G as required by the Act and the rules and regulations of
the Commission thereunder;
(i) The financial statements of PSE&G included in the Registration
Statement and the Prospectus, together with the related schedules and
notes, present fairly in all material respects the financial position of
PSE&G and its consolidated subsidiaries as at the dates indicated and the
results of operations, stockholder's equity and cash flows of PSE&G and
its consolidated subsidiaries for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules included in the
Registration Statement and the Prospectus present fairly in accordance
with GAAP the information required to be stated therein. PSE&G's ratios of
earnings to fixed charges and of earnings to combined fixed charges and
preference dividends included in the Prospectus and in Exhibits 12-2 and
12-3 to the Registration Statement have been calculated in compliance with
Item 503(d) of Regulation S-K of the Commission. The summary and selected
financial information included in the Prospectus presents fairly the
information shown therein and has been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement and the Prospectus;
(j) Neither the Trust nor PSE&G has sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus any material loss from fire, explosion, flood, accident
or other calamity not fully covered by insurance, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change or any development involving a prospective
material adverse change in the general affairs, financial condition,
earnings or business affairs of PSE&G and its
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subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Change"); (B) there have
been no transactions entered into by PSE&G or any of its subsidiaries,
other than those arising in the ordinary course of business, which are
material with respect to PSE&G and its subsidiaries considered as one
enterprise; (C) except for regular dividends on PSE&G's common stock or
preferred stock, in amounts per share that are consistent with past
practice or the applicable charter document or supplement thereto, there
has been no dividend or distribution of any kind declared, paid or made by
PSE&G on any class of its capital stock; and (D) there has not been any
material change in the capital stock or long-term debt of PSE&G and its
subsidiaries;
(k) The Trust has been duly created and is validly existing as a
statutory trust in good standing under the Delaware Statutory Trust Act
(the "Delaware Statutory Trust Act") with the trust power and authority to
own property and conduct its business as described in the Prospectus, and
has conducted and will conduct no business other than the transactions
contemplated by this Agreement and described in the Prospectus; the Trust
is not a party to or bound by any agreement or instrument other than this
Agreement, the Trust Agreement and the agreements and instruments
contemplated by the Trust Agreement and described in the Prospectus; the
Trust has no liabilities or obligations other than those arising out of
the transactions contemplated by this Agreement and the Trust Agreement
and described in the Prospectus; and the Trust is not a party to or
subject to any action, suit or proceeding of any nature;
(l) PSE&G has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Jersey,
has the power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not result in a Material Adverse Change;
(m) Each "significant subsidiary" of PSE&G (as such term is defined
in Rule 1-02 of Regulation S-X promulgated under the Act) (each, a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly
incorporated or organized, is validly existing as a corporation or limited
liability company in good standing under the laws of the jurisdiction of
its incorporation or organization, has the power and authority to own, its
property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not result in
a Material Adverse Change. Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding shares of
capital stock or membership interests of each Subsidiary have been duly
and validly authorized and issued, are fully paid and non-assessable and
are owned by PSE&G, directly or through subsidiaries, as the case may be,
free and clear of all liens, encumbrances, equities or claims. None of the
outstanding shares of capital stock or membership interests of any
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Subsidiary was issued in violation of preemptive or other similar rights
of any security holder of such Subsidiary;
(n) If the Prospectus contains a "Capitalization" section, the
authorized, issued and outstanding shares of capital stock of PSE&G is as
set forth in the column entitled "Actual" under such section (except for
subsequent issuances thereof, if any, pursuant to reservations, agreements
or employee benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Prospectus). Such shares of capital stock have been duly authorized and
validly issued by PSE&G and are fully paid and non-assessable, and none of
such shares of capital stock was issued in violation of preemptive or
other similar rights of any security holder of PSE&G;
(o) This Agreement has been duly authorized, executed and delivered
by PSE&G and the Trust;
(p) The Preferred Securities and Common Securities have been duly
authorized for issuance by the Trust pursuant to the Trust Agreement and,
when issued and delivered against payment therefor as provided in the
Common Securities Purchase Agreement between PSE&G and the Trust and
herein, will be validly issued and (subject to the terms of the Trust
Agreement) fully paid and non-assessable undivided beneficial interests in
the assets of the Trust and will conform to all statements relating
thereto contained in the Prospectus. The issuance of the Preferred
Securities will not be subject to preemptive or other similar rights. The
Preferred Securities will be in the form contemplated by, and each
registered holder thereof will be entitled to the benefits of, the Trust
Agreement. At the Time of Delivery, all of the issued and outstanding
Common Securities will be directly owned by PSE&G free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
(q) The Trust Agreement has been duly authorized and when duly
executed and delivered by the Administrative Trustee named therein and
PSE&G, and assuming due authorization, execution and delivery by the
Property Trustee and the Delaware Trustee, will be a valid and binding
obligation of PSE&G and the Administrative Trustee, enforceable in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and rights of acceleration and (ii) the
availability of equitable remedies may be limited by equitable principles
of general applicability;
(r) The Guarantee Agreement has been duly authorized by PSE&G and,
when validly executed and delivered by PSE&G assuming due authorization,
execution and delivery of the Guarantee Agreement by the Guarantee
Trustee, the Guarantee Agreement will constitute a valid and binding
agreement of PSE&G, enforceable against PSE&G in accordance with its
terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and rights of acceleration and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability;
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(s) The Indenture has been duly authorized and, upon execution and
delivery of the Supplemental Indenture to be dated as of ___________,
relating to the Subordinated Debentures when validly executed and
delivered by the Debenture Trustee and PSE&G, will constitute a valid and
binding agreement of PSE&G, enforceable against PSE&G in accordance with
its terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and rights of acceleration and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(t) The Subordinated Debentures have been duly authorized and, at
the Closing Time, will have been validly executed and delivered by PSE&G
to the Trust. When the Subordinated Debentures have been issued, executed
and authenticated in accordance with the provisions of the Indenture and
delivered to the Trust against payment for the stated consideration
therefor, they will constitute valid and binding obligations of PSE&G,
enforceable against PSE&G in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and rights of
acceleration and (ii) the availability of equitable remedies may be
limited by equitable principles of general applicability. At the Time of
Delivery, the Subordinated Debentures will conform as to legal matters to
the description thereof contained in the Prospectus;
(u) The issuance and sale of the Preferred Securities and the Common
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement, the purchase of the Subordinated Debentures
by the Trust from PSE&G, the distribution of the Subordinated Debentures
upon the liquidation of the Trust in the circumstances contemplated by the
Trust Agreement and described in the Prospectus, and the consummation by
the Trust of the transactions contemplated herein and in the Trust
Agreement, will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
agreement or instrument to which the Trust is a party or by which the
Trust is bound or to which any of the property or assets of the Trust is
subject, nor will such action result in any violation of the provisions of
the Trust Agreement or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Trust or
any of its properties;
(v) The issuance and sale of the Preferred Securities and the Common
Securities by the Trust, the issuance by PSE&G of the Subordinated
Debentures and the Guarantee, the compliance by PSE&G and the Trust with
all of the provisions of this Agreement, the execution, delivery and
performance by PSE&G of the Trust Agreement, the Guarantee, the Indenture
and the Subordinated Debentures (collectively, the "PSE&G Agreements"),
the distribution of the Subordinated Debentures upon the liquidation of
the Trust in the circumstances contemplated by the Trust Agreement and
described in the Prospectus, and the consummation of the transactions
herein and therein contemplated, will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which PSE&G is a party or by which PSE&G
is bound or to which any of the property or assets of PSE&G is subject,
nor will such action result in any violation of the provisions of the
charter or by-laws of PSE&G or any statute
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or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over PSE&G or any of its properties;
(w) Neither PSE&G nor any of its Subsidiaries is in violation of its
Restated Certificate of Incorporation, as amended, other organization
document or by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which PSE&G or any of its Subsidiaries
is a party or by which it or any of them may be bound, or to which any of
the assets, properties or operations of PSE&G or any of its Subsidiaries
is subject (collectively, "Agreements and Instruments"), except for such
defaults that would not result in a Material Adverse Change. The
execution, delivery and performance of this Agreement and any other
agreement or instrument entered into or issued or to be entered into or
issued by PSE&G in connection with the transactions contemplated hereby or
thereby or in the Registration Statement and the Prospectus and the
consummation of the transactions contemplated herein and in the
Registration Statement and the Prospectus (including the issuance and sale
of the Preferred Securities and the use of the proceeds from the sale of
the Preferred Securities as described under the caption "Use of Proceeds")
and compliance by PSE&G with its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any assets, properties or operations
of PSE&G or any of its subsidiaries pursuant to, any Agreements and
Instruments, nor will such action result in any violation of the
provisions of the organizational documents, Restated Certificate of
Incorporation, as amended, Limited Liability Company Agreement or by-laws
of PSE&G or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
PSE&G or any of its subsidiaries or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by PSE&G or any of its subsidiaries;
(x) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Trust or PSE&G or any of their properties is
required for the issuance and sale of the Preferred Securities and Common
Securities by the Trust, the issuance by PSE&G of the Subordinated
Debentures and the Guarantee, the purchase of the Subordinated Debentures
by the Trust from PSE&G, the distribution of the Subordinated Debentures
upon the liquidation of the Trust in the circumstances contemplated by the
Trust Agreement and described in the Prospectus, the execution, delivery
and performance by PSE&G of the PSE&G Agreements, or the consummation of
the transactions contemplated herein or therein, except the approval,
consent and order of the Board of Public Utilities of the State of New
Jersey with respect to the issuance by PSE&G of the Subordinated
Debentures and the Guarantee, registration of the Registered Securities
8
under the Act, registration of the Preferred Securities under the Exchange
Act, the qualification of the Trust Agreement, the Indenture and the
Guarantee under the TIA and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the issuance and sale, as the case may
be, of the Registered Securities and except as such as have been already
made, obtained or rendered, as applicable;
(y) Other than as set forth in or contemplated by the Prospectus,
there are no legal or governmental proceedings pending to which PSE&G is a
party or of which any property of PSE&G is the subject which is reasonably
likely to have a Material Adverse Change; and, to the best of PSE&G's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(z) PSE&G and its Subsidiaries have in full force and effect
insurance with reputable insurers covering their assets, properties,
operations, personnel and business against such losses, damage, risks and
hazards as are adequate in accordance with customary industry practice to
protect PSE&G, its Subsidiaries and their businesses;
(aa) Neither the Trust nor PSE&G is and, after giving effect to the
offering and sale of the Preferred Securities and the Common Securities
and the application of the net proceeds thereof as described in the
Prospectus, neither the Trust nor PSE&G will be an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act");
(bb) Except as otherwise stated in the Registration Statement and
the Prospectus and except as would not, singly or in the aggregate, result
in a Material Adverse Change, (A) neither PSE&G nor any of its
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) PSE&G and its
subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against PSE&G or any of its subsidiaries
and (D) there are no events or circumstances that might reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or
agency, against or affecting PSE&G or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws;
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(cc) No labor dispute with the employees of PSE&G or any of its
Subsidiaries exists or, to the knowledge of PSE&G, is imminent, and PSE&G
is not aware of any existing or imminent labor disturbance by the
employees of any of its or any Subsidiary's principal suppliers,
manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Change;
(dd) There are no contracts or documents which are required to be
described in the Registration Statement, the Prospectus or the documents
incorporated by reference therein or to be filed as exhibits thereto which
have not been so described and filed as required;
(ee) PSE&G and its Subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them. PSE&G and its Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, result in a
Material Adverse Change. All of the Governmental Licenses are valid and in
full force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not result in a Material Adverse Change. Neither PSE&G
nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Change;
(ff) PSE&G and its Subsidiaries have good and marketable title to
all real property owned by PSE&G and its Subsidiaries and good title to
all other properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind, except (A) as otherwise stated in the
Registration Statement and the Prospectus or (B) those which do not,
singly or in the aggregate, materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by PSE&G or any of its Subsidiaries. All of the leases and
subleases material to the business of PSE&G and its Subsidiaries
considered as one enterprise, and under which PSE&G or any of its
Subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither PSE&G nor any of its Subsidiaries has
received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of PSE&G or any of its
Subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of PSE&G or such Subsidiary of the
continued possession of the leased or subleased premises under any such
lease or sublease;
(gg) The mechanical, electrical and other operating systems in
PSE&G's transmission and distribution facilities are in good working order
and repair and are adequate in all material respects for the present
operation of the transmission and distribution facilities by PSE&G as
described in the Prospectus;
10
(hh) The Preferred Securities being sold pursuant to this Agreement,
will be excluded or exempted under, or beyond the purview of, the
Commodity Exchange Act, as amended (the "Commodity Exchange Act"), and the
rules and regulations of the Commodity Futures Trading Commission under
the Commodity Exchange Act (the "Commodity Exchange Act Regulations"); and
(ii) PSE&G will apply the net proceeds received from the offering as
provided in the section captioned "Use of Proceeds" in the Prospectus and,
to the best of the PSE&G's knowledge, none of the proceeds received from
the offering will be used to further any action in violation or
contravention of the U.S.A. Patriot Act or otherwise violate or contravene
the rules, regulations or policies of the U.S. Office of Foreign Assets
Control.
2. Subject to the terms and conditions herein set forth, the Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase, at a purchase price per share of
$25.00 per Preferred Security, the number of Preferred Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
As compensation to the Underwriters for their commitments hereunder, and
in view of the fact that the proceeds of the sale of the Preferred Securities
will be used by the Trust. to purchase the Subordinated Debentures of PSE&G,
PSE&G hereby agrees to pay at the Time of Delivery to [_______________], for the
accounts of the several Underwriters, an amount equal to $______ per share for
the Preferred Securities, except that such commission will be $____ per
Preferred Security sold to certain institutions.
3. Upon the authorization by the Representatives of the release of the
Preferred Securities, the several Underwriters propose to offer the Preferred
Securities for sale upon the terms and conditions set forth in the Prospectus.
4. The Preferred Securities to be purchased by each Underwriter hereunder
will be represented by a global certificate or certificates in book-entry form
which will be deposited by of on behalf of the Trust with The Depository Trust
Company ("DTC") or its designated custodian and registered in the name of Cede &
Co., as nominee of DTC. The Trust will deliver the Preferred Securities to
[__________________], for the account of each Underwriter, against payment by or
on behalf of such Underwriter of the purchase price therefor by wire transfer of
immediately available funds to the Trust, by causing DTC to credit the Preferred
Securities to the account of [________________] at DTC. The time, date and
location of such delivery and payment (the "Time of Delivery") shall be 9:00
A.M. (Eastern time), on __________, 200_, or at such other time and date as the
Representatives, the Trust and PSE&G may agree upon in writing at the office of
the Trust, ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇.
At the Time of Delivery, PSE&G will pay, or cause to be paid, the
compensation payable to the Underwriters under Section 2 hereof by wire transfer
of immediately available funds to [_________________], on behalf of the
Underwriters.
5. Each of the Trust and PSE&G, jointly and severally, agrees with each of
the Underwriters:
11
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act within the time prescribed under Rule 424(b) or Rule 430A(a)(3),
as the case may be, under the Act; to make no further amendment or any
supplement to the Registration Statement or the Prospectus prior to the
Time of Delivery which shall be reasonably disapproved by the
Representatives promptly after reasonable notice thereof; to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Representatives with copies thereof; in
the case of PSE&G, prior to the termination of the offering of the
Preferred Securities, to file promptly all reports and any definitive
proxy or information statements required to be filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act; to
advise the Representatives, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
Prospectus, of the suspension of the qualification of the Registered
Securities for offering or sale in any jurisdiction of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event
of the issuance of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Registered Securities or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To use its best efforts to qualify the Registered Securities for
offering and sale under the securities laws of such jurisdictions of the
United States as the Representatives may designate and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Preferred Securities, provided that in connection therewith neither
the Trust nor PSE&G shall be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in
such quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required in connection with the offering or
sale of the Preferred Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would contain an 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 under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such Period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon the request of the
Representatives to file such document and to prepare and furnish without
charge to each underwriter and to any dealer in securities as many copies
as the Representatives may reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or
omission or effect such compliance,
12
(d) In the case of PSE&G, to 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 Act) covering the
12-month period beginning not later than the first day of PSE&G's fiscal
quarter next following the effective date (as defined in Rule 158) of the
Registration Statement;
(e) During the period beginning from the date hereof and continuing
to and including the earlier of (i) the date, after the Time of Delivery,
on which the distribution of the Preferred Securities ceases, as
determined by the Representatives or (ii) 30 days after the Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of any
Preferred Securities, any other preferred beneficial interests in the
Trust or any securities of PSE&G which are substantially similar to the
Subordinated Debentures, the Guarantee or the Preferred Securities, or any
securities convertible into or exchangeable for or representing the right
to receive any of the aforementioned securities, without the prior written
consent of the Representatives (other than the Preferred Securities or
securities issued pursuant to PSE&G's stock option or other benefit or
incentive plans maintained for its officers, directors, or employees);
(f) In the case of PSE&G, to issue the Guarantee and the
Subordinated Debentures concurrently with the issuance and sale of the
Preferred Securities as contemplated herein; and
(g) To use its best efforts to list, subject to notice of issuance,
(i) the Preferred Securities and (ii) the Subordinated Debentures, upon
any distribution upon the liquidation of the Trust to holders of the
Preferred Securities, in each case on the New York Stock Exchange.
6. The Trust and PSE&G, jointly and severally, covenant and agree with the
several Underwriters that they will pay the following: (i) the fees,
disbursements and expenses of the Trust's and PSE&G's counsel and accountants in
connection with the registration of the Registered Securities under the Act and
all other expenses in connection with the preparation, printing and filing of
the registration Statement, any Preliminary Prospectus and the Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement Among Underwriters, this Agreement, the Blue Sky Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Registered Securities: (iii) all expenses in connection with the
qualification of the Registered Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky Memoranda; (iv) any fees
charged by Standard & Poor's Ratings Services, ▇▇▇▇▇'▇ Investors Service, Inc.
or Fitch, Inc. (each, a "Rating Agency") for rating the Preferred Securities;
(v) the reasonable costs and charges of the transfer agent or registrar; (vi)
the costs of any depositary arrangements for the Preferred Securities with DTC
or any successor depositary; all fees and reasonable expenses of the Trustees,
the Debenture Trustee and the Guarantee Trustee and any agent thereof and the
fees and disbursements of their counsel; (viii) all fees and expenses in
connection with the listing of the Preferred Securities and, if applicable,
13
the Subordinated Debentures on the New York Stock Exchange and the cost of
registering the Preferred Securities under Section 12 of the Exchange Act; (ix)
the printing of the Preferred Securities and the Subordinated Debentures in
certificated form, if required; and (x) all other costs and expenses incident to
the performance of obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 12 hereof, the Underwriters will
pay all of their own costs and expenses including the fees of their counsel,
stock transfer taxes on resale of any of the preferred Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Trust and PSE&G herein are, at and as of the Time of
Delivery, true and correct, the condition that the Trust and PSE&G shall have
performed all of their obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) and Rule 430A(a)(3), if applicable, within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 5(a) hereof; and
no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission;
(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters,
shall have furnished to the Representatives their written opinion, dated
the Time of Delivery, with respect to the issuance and sale of the
Preferred Securities, the Registration Statement, the Prospectus and other
related matters as the Underwriters may reasonably require (it being
understood that such counsel may rely as to all matters of New Jersey law
and legal conclusions based thereon upon the opinion of counsel for PSE&G
referred to in Section 7(c) hereof) and such counsel shall have received
such papers and information as they may reasonably request to enable them
to pass upon such matters);
(c) ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire, Senior Vice President and General
Counsel, or ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire, General Corporate Counsel, of PSE&G,
shall have furnished to the Representatives his written opinion, dated the
Time of Delivery, to the effect that:
(i) PSE&G has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of New
Jersey, with the power and authority to own its property and conduct
its business as described in the Prospectus;
(ii) PSE&G 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). All of the issued and outstanding
common stock of PSE&G have been duly and validly authorized and
issued, are fully paid and non-assessable,
14
and are directly owned by Public Service Enterprise Group
Incorporated, free and clear of all liens, encumbrances, equities or
claims;
(iii) PSE&G is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not result in a Material
Adverse Change;
(iv) Each Subsidiary has been duly incorporated or organized
and is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction of its
incorporation or organization, has the power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not result in a Material Adverse Change. Except
as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock or
membership interests of each Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable and are
owned by PSE&G, directly or through subsidiaries, as the case may
be, free and clear of all liens, encumbrances, equities or claims.
None of the outstanding shares of capital stock or membership
interests of any Subsidiary was issued in violation of preemptive or
other similar rights of any security holder of such Subsidiary;
(v) If the Prospectus contains a "Capitalization" section, the
authorized, issued and outstanding shares of capital stock of PSE&G
is as set forth in the column entitled "Actual" under such section
(except for subsequent issuances thereof, if any, pursuant to
reservations, agreements or employee benefit plans referred to in
the Prospectus or pursuant to the exercise of convertible securities
or options referred to in the Prospectus). Such shares of capital
stock have been duly authorized and validly issued by PSE&G and are
fully paid and non-assessable, and none of such shares of capital
stock was issued in violation of preemptive or other similar rights
of any security holder of PSE&G;
(vi) The PSE&G Agreements each have been duly authorized,
executed and delivered by PSE&G and constitute valid instruments or
obligations, as the case may be, legally binding upon and
enforceable against PSE&G (except as limited by bankruptcy,
insolvency or other laws or equitable principles affecting
creditors' rights generally); and the Subordinated Debentures are
entitled to the benefits provided by the Indenture;
(vii) The Trust Agreement, the Indenture and the Guarantee
have been duly qualified under the TIA;
15
(viii) This Agreement has been duly authorized, executed and
delivered by each of the Trust and PSE&G;
(ix) The franchises of PSE&G are sufficient authority for it
to carry on its business as described in the Prospectus;
(x) All approvals, consents and orders of the Board of Public
Utilities of the State of New Jersey legally required for the
issuance by PSE&G of the Guarantee and the Subordinated Debentures
have been obtained and are in full force and effect; any approval,
consent or order of any other commission or other governmental
authority legally required for the issuance and sale, as the case
may be, of the Registered Securities has been obtained (except that
such issuance and sale may be subject to the provisions of the
securities laws of certain states); and such issuance and sale is in
accordance with the approvals, consents and orders obtained;
(xi) The issuance and sale of the Preferred Securities and the
Common Securities by the Trust, the compliance by the Trust with all
of the provisions of this Agreement, the purchase of the
Subordinated Debentures by the Trust from PSE&G, the distribution of
the Subordinated Debentures upon the liquidation of the Trust in the
circumstances contemplated by the Trust Agreement and described in
the Prospectus, and the consummation of the transactions
contemplated herein and in the Trust Agreement, will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any agreement or
instrument known to such counsel to which the Trust is a party or by
which the Trust is bound or to which any of the property or assets
of the Trust is subject, nor will such action result in any
violation of the provisions of the Trust Agreement or any statute or
any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Trust or
any of its properties;
(xii) The issuance and sale of the Preferred Securities and
the Common Securities by the Trust, the issuance by PSE&G of the
Guarantee and the Subordinated Debentures, the compliance by PSE&G
and the Trust with all of the provisions of this Agreement, the
execution, delivery and performance by PSE&G of the PSE&G
Agreements, the distribution of the Subordinated Debentures upon the
liquidation of the Trust in the circumstances contemplated by the
Trust Agreement and described in the Prospectus and the consummation
of the transactions herein and therein contemplated, will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any agreement or
instrument known to such counsel to which PSE&G is a party or by
which PSE&G is bound or to which any of the property or assets of
PSE&G is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of PSE&G or any statute or
any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over PSE&G or any of
its properties;
16
(xiii) The Registered Securities conform as to legal matters
to the statements concerning them in the Prospectus; and the
summaries of the PSE&G Agreements contained in the Prospectus
constitute correct summaries thereof for use therein;
(xiv) The statements set forth in the Prospectus under the
captions "Description of the Preferred Securities," "Description of
the Guarantees," "Description of the Debentures," and "Relationship
among the Preferred Securities, the Debentures and the Guarantees,"
insofar as they constitute summaries or matters of law or legal
conclusions, fairly present the information set forth therein;
(xv) The statements made in PSE&G's Form 10-K under
"Regulatory Issues" and "Environmental Matters" in Item 1 "Business"
and under Item 3 "Legal Proceedings," as amended by subsequent
Exchange Act filings made by PSE&G, fairly present the information
set forth therein;
(xvi) To the best of such counsel's knowledge, neither PSE&G
nor any of its Subsidiaries is in violation of its charter or
by-laws and no default by PSE&G or any of its Subsidiaries exists in
the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement
or instrument that is described or referred to in the Registration
Statement or the Prospectus or filed or incorporated by reference as
an exhibit to the Registration Statement;
(xvii) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Trust is a party or of
which any property of the Trust is the subject; and, to such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities;
(xviii) To the best of such counsel's knowledge, there is not
pending or threatened any action, suit, proceeding, inquiry or
investigation to which PSE&G or any of its subsidiaries thereof is a
party or to which the assets, properties or operations of PSE&G or
any of its subsidiaries thereof is subject, before or by any court
or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Change or
which might reasonably be expected to materially and adversely
affect the assets, properties or operations thereof or the
consummation of the transactions contemplated under this Agreement
or the performance by PSE&G of its obligations hereunder;
(xix) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by
the Trust or PSE&G prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act, as applicable, and the rules and
regulations of
17
the Commission thereunder; and, on the basis of a general review and
discussion with certain officers and employees of PSE&G but without
independent check or verification, such counsel has no reason to
believe that any of such documents, when such documents were so
filed, contained an untrue statement of a material fact or omitted
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;
(xx) The Registration Statement has been declared effective
under the Act. Any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b). To the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings for that
purpose have been initiated or are pending or threatened by the
Commission;
(xxi) PSE&G is not an "investment company" or an entity
"controlled" by an "investment company" required to be registered
under the 1940 Act, as amended;
(xxii) All descriptions in the Prospectus of contracts and
other documents to which PSE&G or its subsidiaries are a party are
accurate in all material respects. To the best of such counsel's
knowledge, there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Prospectus or to be
filed as exhibits to the Registration Statement other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects;
(xxiii) To the best of such counsel's knowledge, there are no
statutes or regulations that are required to be described in the
Prospectus that are not described as required;
(xxiv) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court
or governmental authority or agency, domestic or foreign, is
necessary or required for the due authorization, execution (if
applicable) or delivery by PSE&G of this Agreement, the Guarantee,
the Indenture and the Subordinated Debentures or for the performance
by PSE&G of the transactions contemplated under the Prospectus, this
Agreement, the Guarantee, the Indenture and the Subordinated
Debentures, other than under the Act and the rules and regulations
of the Commission thereunder, and the TIA and the rules and
regulations of the Commission thereunder, which have already been
made, obtained or rendered, as applicable and other than as
addressed in paragraph (x) hereof.
(xxv) The Preferred Securities being sold pursuant to this
Agreement, will be excluded or exempted under, or beyond the purview
of, the Commodity Exchange Act and the Commodity Exchange Act
Regulations; and
18
(xxvi) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Trust or
PSE&G prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Act and the TIA and the rules and
regulations thereunder.
Nothing has come to such counsel's attention that would lead such counsel
to believe that the Registration Statement or any post-effective amendment
thereto (except for financial statements and supporting schedules and other
financial data included therein or omitted therefrom, as to which such counsel
makes no statement), at the time the Registration Statement or any
post-effective amendment thereto (including the filing of PSE&G's Annual Report
on Form 10-K with the Commission) became effective or at the date of this
Agreement, 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 or any amendment or
supplement thereto (except for financial statements and supporting schedules and
other financial data included therein or omitted therefrom, as to which such
counsel need make no statement), at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the Time of
Delivery, 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.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent he deems proper, on
certificates of responsible officers of PSE&G and public officials. Such opinion
shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
Such counsel may rely as to all matters of Pennsylvania law and legal
conclusions based thereon upon the opinion of such counsel referred to in
Section 7(d) hereof and as to all matters of Delaware law and legal conclusions
based thereon upon the opinion of such counsel referred to in Section 7(e)
hereof.
(d) ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, special counsel for the
Trust and PSE&G, shall have furnished to the Representatives their written
opinion, dated the Time of Delivery, in form and substance satisfactory to
the Representatives, to the effect that:
(i) The Subordinated Debentures will be classified for United
States federal income tax purposes as the indebtedness of PSE&G;
(ii) The Trust will be classified for United States federal
income tax purposes as a grantor trust and will not be subject to
tax as a partnership, an association that is taxable as a
corporation, or a publicly traded partnership taxable as a
corporation; and
19
(iii) The statements made in the Prospectus under the captions
"U.S. Federal Income Tax Consequences" and "ERISA Considerations,"
to the extent they constitute matters of law or legal conclusions,
have been reviewed by such counsel and are accurate, complete and
correct and fairly present the information set forth therein.
(e) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., special Delaware counsel for
the Trust and PSE&G, shall have furnished to the Representatives their
written opinion, dated the Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a statutory trust under the Delaware Statutory
Trust Act, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the
Trust as a statutory trust have been made;
(ii) Under the Delaware Statutory Trust Act and the Trust
Agreement, the Trust has the trust power and authority to own
property and conduct its business all as described in the
Prospectus;
(iii) Under the Delaware Statutory Trust Act and the Trust
Agreement, the Trust has the trust power and authority (a) to
execute and deliver, and to perform its obligations under, this
Agreement and (b) to issue and perform its obligations under the
Preferred Securities and the Common Securities;
(iv) Under the Delaware Statutory Trust Act and the Trust
Agreement, the execution and delivery by the Trust of this
Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary trust action
on the part of the Trust;
(v) The Trust Agreement constitutes a valid and binding
obligation of PSE&G and the Trustees, and is enforceable against
PSE&G and the Trustees, in accordance with its terms, subject, as to
enforcement, to the effect upon the Trust Agreement of (a)
bankruptcy, insolvency, moratorium, receivership, liquidation,
fraudulent conveyance, reorganization and other similar laws
relating to or affecting the remedies and rights of creditors, (b)
principles of equity, including applicable law relating to fiduciary
duties (regardless of whether considered or applied in a proceeding
in equity or at law) and (c) the effect of applicable public policy
on the enforceability of provisions relating to indemnification or
contribution;
(vi) The Preferred Securities have been duly authorized by the
Trust Agreement and, when issued, executed and delivered in
accordance with the terms of the Trust Agreement against payment
therefor as set forth in this Agreement, will be duly and validly
issued and, subject to the qualifications set forth in this
paragraph (vi) below, fully paid and non-assessable undivided
beneficial interests in the assets of the Trust. The holders of the
Preferred
20
Securities, as beneficial owners of the Trust (the
"Securityholders"), are entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware. Such counsel may note that the Securityholders may be
obligated, pursuant to the Trust Agreement, to (a) provide indemnity
and/or security in connection with and pay a sum sufficient to cover
any taxes or governmental charges arising from transfers or
exchanges of Preferred Securities certificates and the issuance of
replacement Preferred Securities certificates and (b) provide
security, and/or indemnity in connection with requests of or
directions to the Property Trustee (as defined in the Trust
Agreement) to exercise its rights and powers under the Trust
Agreement;
(vii) Under the Delaware Statutory Trust Act and the Trust
Agreement, the issuance of the Preferred Securities is not subject
to preemptive or other similar rights;
(viii) The Common Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and fully paid
undivided beneficial interests in the assets of the Trust; and under
the Delaware Statutory Trust Act and the Trust Agreement, the
issuance of the Common Securities is not subject to preemptive or
other similar rights;
(ix) The issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the execution, delivery and
performance by the Trust of this Agreement, the consummation by the
Trust of the transactions contemplated herein and the compliance by
the Trust with its obligations hereunder do not violate (a) any of
the provisions of the Certificate of Trust of the Trust or the Trust
Agreement or (b) any applicable Delaware law or Delaware
administrative regulation;
(x) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware trustee as required
by the Delaware Statutory Trust Act and the filing of documents with
the Secretary of State of the State of Delaware) or employees in the
State of Delaware, no authorization, approval, consent or order of
any Delaware court or Delaware governmental authority or Delaware
agency is required to be obtained by the Trust solely as a result of
the issuance and sale of the Preferred Securities, the consummation
by the Trust of the transactions contemplated herein or the
compliance by the Trust of its obligations hereunder; and
(xi) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware trustee as required
by the Delaware Statutory Trust Act and the filing of documents with
the Secretary of State of the State of Delaware) or employees in the
State of Delaware, and assuming that the Trust is treated as a
grantor trust for federal income tax purposes, the Securityholders
(other than
21
those holders of the Preferred Securities who reside or are
domiciled in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result of
their participation in the Trust, and the Trust will not be liable
for any income tax imposed by the State of Delaware (in rendering
the opinion expressed in this paragraph (xi), such counsel need
express no opinion concerning the securities laws of the State of
Delaware).
(f) On the date of this Agreement and also at the Time of Delivery,
Deloitte & Touche LLP shall have furnished to the Representatives a
letter, dated the respective date of delivery thereof, in form and
substance satisfactory to the Representatives, to the effect that:
(i) they are independent public accountants with respect to
PSE&G and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder (the "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 Form 10-K comply as to form in all material respects
with the applicable accounting requirements of the Act, the Act
Regulations, the Exchange Act and the applicable published rules and
regulations thereunder (the "Exchange Act Regulations");
(iii) on the basis of (1) the performance of the procedures
specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in
Statement on Auditing Standards No. 100, Interim Financial
Information, on the unaudited consolidated balance sheets, the
unaudited consolidated statements of operations and retained
earnings, and the unaudited consolidated statements of cash flows,
of PSE&G and its subsidiaries incorporated by reference in the
Registration Statement and the Prospectus and included in PSE&G's
Form 10-Q Quarterly Reports filed with the Commission under Section
13 of the Exchange Act (the "Forms 10-Q") subsequent to the most
recent Form 10-K, (2) a reading of the latest available unaudited
financial statements of PSE&G, (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 PSE&G 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 PSE&G 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 several Underwriters), nothing
has come to their attention which caused them to believe that (A)
any material modifications should be made to the unaudited
consolidated financial statements included in the Forms 10-Q for
them to be in conformity with generally accepted accounting
principles; (B) the unaudited consolidated financial statements
included in the
22
Forms 10-Q do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as they
apply to Form 10-Q and Exchange Act Regulations or (C) at the date
of the latest available consolidated 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 PSE&G's business) of PSE&G or any decreases in the consolidated
net assets, consolidated net current assets, or stockholder's equity
of PSE&G (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 PSE&G 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 business days prior to the date of such letter, upon inquiries
of the appropriate officers of PSE&G, there were any decreases, as
compared with the corresponding period in the preceding year, in
consolidated revenues, operating income, or net income of PSE&G,
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 Representatives and PSE&G; and
(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 Representatives, and have
found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records
of PSE&G and its subsidiaries identified in such letter, provided
that said letter may vary from the requirements specified above in
such manner as you may deem not to be material or as may be
acceptable to the Representatives with the consent of Underwriters
who have agreed to purchase in the aggregate 50% or more of the
Preferred Securities.
(g) The Trust Agreement, the Guarantee and the Indenture shall have
been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives:
(h) At the Time of Delivery, the Preferred Securities shall be rated
at least _____ by ▇▇▇▇▇'▇ Investor's Service Inc. and ____ by Standard &
Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc., and PSE&G shall
have delivered to the Representatives a letter dated the Time of Delivery,
from each such rating agency, or other evidence satisfactory to the
Representatives, confirming that the Preferred Securities have such
ratings; and subsequent to the execution and delivery of this
23
Agreement and prior to the Time of Delivery, there shall not have been a
Material Adverse Change;
(i) The Preferred Securities shall have been duly listed, subject to
official notice of issuance, on the New York Stock Exchange; and
(j) At the Time of Delivery, the Representatives shall have received
certificates of duly authorized officers of the Trust and PSE&G, dated the
Time of Delivery, to the effect that:
(i) the Prospectus has been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with the provisions of this Agreement; and no stop order suspending
the effectiveness of the Registration Statement or any part thereof
has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission;
(ii) the representations and warranties of the Trust and PSE&G
contained herein are true and correct as if made at and as of the
Time of Delivery;
(iii) the Trust and PSE&G have performed all agreements
contained herein to be performed by them at or prior to the Time of
Delivery; and
(iv) Since the date of the most recent financial statements
included or incorporated by reference in the Prospectus, there has
not been a Material Adverse Change.
8. (a) The Trust and PSE&G, jointly and severally, agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information deemed to be part
thereof, if applicable, 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;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any
24
such untrue statement or omission or any alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Trust and PSE&G; and
(iii) against any and all expense whatsoever, as incurred,
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any
governmental agency or body, 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.
provided, however, that this indemnity agreement shall not apply (i) to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the Trust
or PSE&G by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto) or (ii) to any Underwriter in connection with any
Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results solely from the fact that such Underwriter
sold Preferred Securities to a person to whom it is established that there was
not sent or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus (excluding documents incorporated by reference) in any case
where such delivery is required by the Act, if the Trust and PSE&G has
previously furnished to the Representatives on behalf of the Underwriters,
including such Underwriter, the copies thereof theretofore requested by the
Representatives, and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained in the
Preliminary Prospectus that was corrected in the Prospectus.
(b) In no case shall the Trust or PSE&G be liable under the
indemnity agreement set forth in Section 8(a) hereof with respect to any
claim made against any Underwriter or any such controlling person unless
such party shall be notified in writing of the nature of the claim
promptly after the assertion thereof, but failure to so notify such party
shall not relieve it from any liability which it may have otherwise than
on account of said indemnity agreement. The Trust or PSE&G, as the case
may be, 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 Trust or PSE&G, as the case may be, 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 Trust or PSE&G, as
the case may be, and one or more Underwriters and any such Underwriter
shall have been advised by counsel chosen by it and satisfactory to the
Trust or PSE&G, as the case may be, that there may be one or more legal
defenses available to
25
it which are different from or additional to those available to the Trust
or PSE&G, as the case may be, neither the Trust nor PSE&G shall have the
right to assume the defense of such action on behalf of such Underwriter
and the Trust or PSE&G, as the case may be, 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 neither the Trust nor PSE&G shall, 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 by the Representatives in writing. The Trust and
PSE&G agree to notify the Representatives promptly after the assertion of
any claim against them, any of their directors, any of their officers or
any Trustee who signed the Registration Statement, or any person who
controls PSE&G or the Trust within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, in connection with the issuance and sale,
as the case may be, of the Preferred Securities, the Guarantee and the
Subordinated Debentures.
(c) Each Underwriter severally agrees that to indemnify and hold
harmless PSE&G, its directors, each of its officers who signed the
Registration Statement, the Trust, the Trustees who signed the
Registration Statement and each person, if any, who controls PSE&G or the
Trust within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this
Section, but only with respect to statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable 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
Trust or PSE&G by such Underwriter expressly for use in the Registration
Statement, such Preliminary Prospectus, or the Prospectus (or any
amendment or supplement thereto), or any amendment or supplement thereto.
In case any action shall be brought against the Trust or any person so
indemnified based on the Registration Statement, 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 Trust and PSE&G,
and the Trust and PSE&G and each person so indemnified shall have the
rights and duties given to the Underwriters by the provisions of Section 8
(b) hereof.
(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 Trust or PSE&G, or any
Underwriter or any controlling person, and shall survive the delivery and
settlement of the Preferred Securities to the Underwriters.
(e) No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which
26
indemnification or contribution could be sought under this Section 8
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(f) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in this
Section 8 is not legally available to the indemnified parties although
applicable in accordance with its terms, the Trust, PSE&G and the
Underwriters shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreements incurred by the Trust, PSE&G 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
commission appearing on the cover page of the Prospectus relating to the
Preferred Securities bears to the initial public offering price appearing
thereon and the Trust and PSE&G, jointly and severally, is responsible for
the balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 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 Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each trustee of the Trust or
director of PSE&G, each officer of PSE&G or Trustee of the Trust who
signed the Registration Statement, and each person, if any, who controls
the Trust or PSE&G within the meaning of Section 15 of the Act or Section
20 of the Exchange Act shall have the same rights to contribution as the
Trust and PSE&G. The Underwriters' respective obligations to contribute
pursuant to this Section 8(f) are several in proportion to the aggregate
principal amount of Preferred Securities set forth opposite their
respective names in Schedule I hereto and not joint.
9. (a) If any Underwriter shall default in its obligation to purchase the
Preferred Securities which it has agreed to purchase hereunder at the Time of
Delivery, the Representatives may in their discretion arrange for the
Underwriters or another party or other parties to purchase such Preferred
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Preferred Securities, then the Trust and PSE&G shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Preferred
Securities on such terms. In the event that, within the respective prescribed
periods, the Representatives notify the Trust and PSE&G that they have so
arranged for the purchase of such Preferred Securities, or the Trust or PSE&G
notifies the Representatives that it has so arranged for the purchase of such
Preferred Securities, the Representatives or the Trust and PSE&G shall have the
right to postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Trust and PSE&G agree to file promptly any amendments to
the Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter," as used
in this Agreement, shall include any person substituted under this
27
Section with like effect as if such person had originally been a Party to this
Agreement with respect to such Preferred Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Preferred Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and PSE&G as provided in Section 9(a) hereof, the
aggregate number of such Preferred Securities which remains unpurchased does not
exceed one-tenth of the aggregate number of all the Preferred Securities to be
purchased at the Time of Delivery, then the Trust and PSE&G shall have the right
to require each non-defaulting Underwriter to purchase the number of Preferred
Securities which such Underwriter agreed to purchase hereunder at the Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Preferred Securities which
such Underwriter agreed to purchase hereunder) of the Preferred Securities of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Preferred Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and PSE&G as provided in Section 9(a) hereof, the
aggregate number of such Preferred Securities which remains unpurchased exceeds
one-tenth of the aggregate number of all the Preferred Securities to be
purchased at the Time of Delivery, or if the Trust and PSE&G shall not exercise
be right described in Section 9(b) hereof to require non-defaulting Underwriters
to purchase Preferred Securities of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter, the Trust or PSE&G, except for the expenses to
be borne by the Trust, PSE&G and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. This Agreement may be terminated by notice to the Trust and PSE&G by
the Representatives at any time prior to the Time of Delivery (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any Material Adverse
Change, or (ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Underwriters, impracticable or inadvisable to market the
Preferred Securities or to enforce contracts for the sale of the Preferred
Securities, or (iii) if trading in any securities of PSE&G has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or a material disruption has occurred in
commercial banking or settlement or clearance services in the United States, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities or (v) if the rating accorded the Preferred Securities or any debt
securities or preferred stock of PSE&G or any of its subsidiaries,
28
including, without limitation, any trust subsidiaries of PSE&G or any of its
subsidiaries, by any Rating Agency shall have been decreased or withdrawn or a
Rating Agency has publicly announced or given notice of any intended or
potential decrease in or withdrawal of any such rating or of a possible change
in any such rating that does not indicate the direction of the possible change.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, PSE&G and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Trust,
PSE&G or any officer or director or controlling person of the Trust or PSE&G,
and shall survive delivery of and payment for the Preferred Securities.
12. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Trust nor PSE&G shall be under any liability to any Underwriter
except as provided in Section 6 and Section 8 hereof; but if, for any other
reason the transactions contemplated herein are not consummated, the Trust and
PSE&G will reimburse the Underwriter for all out-of-pocket expenses, including
fees and disbursements of counsel, reasonably incurred by the Underwriter in
making preparations for the purchase, sale and delivery of the Preferred
Securities, but the Trust and PSE&G shall then be under no further liability to
the Underwriter in respect of the Preferred Securities not so delivered except
as provided in Section 6 and Section 8 hereof. Except as provided above, neither
the Trust nor PSE&G shall be liable to the Underwriters for damages on account
of any other consequential damages or loss of anticipated profits.
In all dealings hereunder, the Representatives shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, voice or agreement on behalf of any Underwriter
made or given by the Representatives jointly or by [________________] on behalf
of the Representatives.
13. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Representatives in care of
[___________________________________________________]; and if to the Trust or
PSE&G by mail to it at the address of the Trust or PSE&G at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.
Box 570, Newark, New Jersey 07101, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General
Corporate Counsel. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Trust, PSE&G and, to the extent provided in Sections 8
and 11 hereof, the officers and directors of the Trust or PSE&G and each person
who controls the Trust or PSE&G or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Preferred Securities from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
29
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey (without regard to conflict of laws
principles).
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
30
If the foregoing is in accordance with your understanding. please sign and
return to us two counterparts hereof, and upon the acceptance hereof by the
Representatives, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Underwriters, on the one hand, and the Trust and PSE&G, on the other hand. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement Among
Underwriters, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
PSE&G Capital Trust ____
By: Public Service Electric and Gas Company,
as Depositor
By:
-----------------------------------------
Name:
Title:
Public Service Electric and Gas Company
By:
-----------------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name of Representatives]
By: Name of Lead Manager
By:__________________________
Name:
Title:
On behalf of themselves and as Representatives
for each of the Underwriters named in Schedule I hereto
31
SCHEDULE I
Total Number
of Preferred
Securities
Underwriters to be Purchased
