Exhibit 4.2
PSEG Power LLC
6.95% Senior Notes Due June 1, 2012
--------------------
Registration Rights Agreement
June 4, 2002
J.P. Morgan Securities Inc.
Salomon Smith Barney Inc.
Banc One Capital Markets, Inc.
Scotia Capital (USA) Inc.
First Union Securities, Inc.
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
and
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into June 4, 2002, among PSEG POWER LLC, a Delaware limited liability company
(the "Company"), PSEG NUCLEAR LLC, a Delaware limited liability company
("Nuclear"), PSEG FOSSIL LLC, a Delaware limited liability company ("Fossil"),
PSEG ENERGY RESOURCES & TRADE LLC, a Delaware limited liability company
("ER&T"), and J.P. MORGAN SECURITIES INC., SALOMON SMITH BARNEY INC., BANC ONE
CAPITAL MARKETS, INC., SCOTIA CAPITAL (USA) INC. and FIRST UNION SECURITIES,
INC. (collectively, the "Initial Purchasers"). Nuclear, Fossil and ER&T are
individually referred to herein as a "Guarantor" and collectively referred to
herein as the "Guarantors," as the context requires.
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This Agreement is made pursuant to the Purchase Agreement dated June 4,
2002, among the Company, as issuer of the Notes (as defined below), Nuclear,
Fossil and ER&T, as Guarantors of the Notes, and the Initial Purchasers (the
"Purchase Agreement"), which provides for, among other things, the sale by the
Company to the Initial Purchasers of an aggregate of $600,000,000 principal
amount of its 6.95% Senior Notes due June 1, 2012 (the "Notes"). Each of
Nuclear, Fossil and ER&T will jointly and severally and unconditionally
guarantee the payment of principal and interest and any make-whole premium on
the Notes (each, a "Guarantee" and collectively, the "Guarantees"). The Notes
and the Guarantees will be issued under an indenture, dated as of April 16, 2001
(the "Indenture"), among the Company, Nuclear, Fossil, ER&T, and The Bank of New
York, a New York banking corporation, as Trustee (the "Trustee"). The Notes will
be issued in accordance with terms set forth in resolutions adopted by the
Company's Sale and Pricing Committee on June 4, 2002.
In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company and each Guarantor has agreed to provide to the Initial
Purchasers and their direct and indirect transferees the registration rights set
forth in this Agreement. The execution of this Agreement is one of the
conditions to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Closing Date" shall mean the Closing Date as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble hereto and
shall also include the Company's successors.
"Effectiveness Period" shall have the meaning set forth in Section 2(b)
hereof.
"ER&T" shall have the meaning set forth in the preamble hereto and shall
include ER&T's successors.
"Exchange Offer" shall mean the exchange offer by the Company and each
Guarantor of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933 Act
effected pursuant to Section 2(a) hereof.
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"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchange Securities" shall mean securities issued by the Company and the
Guarantors under the Indenture containing terms identical to the Securities
(except that (i) interest on the notes issued by the Company pursuant to the
Exchange Offer shall accrue from the last date on which interest was paid on the
Notes or, if no such interest has been paid on the Notes, from June 7, 2002,
(ii) the Exchange Securities will not contain restrictions on transfer under the
1933 Act, and (iii) the Exchange Securities will not provide for any Special
Interest Premium thereon) to be offered to Holders of Securities in exchange for
Securities pursuant to the Exchange Offer.
"Fossil" shall have the meaning set forth in the preamble hereto and shall
include Fossil's successors.
"Guarantee" and "Guarantees" shall have the meanings set forth in the
preamble hereto.
"Guarantor" and "Guarantors" shall have the meanings set forth in the
preamble hereto.
"Holder" shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of their successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term "Holder" shall include Participating Broker-Dealers.
"Indenture" shall have the meaning set forth in the preamble hereto and
shall include any amendments or supplements thereto.
"Initial Purchasers" shall have the meaning set forth in the preamble
hereto.
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Notes; provided that whenever the consent or
approval of Holders of a specified percentage of Notes is required hereunder,
Notes held by the Company, its affiliates or any of its direct or indirect
subsidiaries, including each Guarantor, shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage or amount.
"Notes" shall have the meaning set forth in the preamble hereto.
"Nuclear" shall have the meaning set forth in the preamble hereto and
shall include Nuclear's successors.
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"Participating Broker-Dealer" shall have the meaning set forth in Section
4(a) hereof.
"Person" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
hereto.
"Registrable Securities" shall mean the Securities; provided, however,
that the Securities shall cease to be Registrable Securities (i) when a
Registration Statement with respect to such Securities shall have been declared
effective under the 1933 Act and such Securities shall have been exchanged or
disposed of pursuant to such Registration Statement, (ii) when such Securities
have been sold to the public pursuant to Rule 144 (or any similar provision then
in force, but not Rule 144A) under the 1933 Act or are eligible to be sold
pursuant to Rule 144(k) under the 1933 Act, or (iii) when such Securities shall
have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to the
performance of or compliance by the Company and each Guarantor with this
Agreement, including without limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. registration and filing fees and
expenses, including fees and disbursements of counsel for the Initial Purchasers
or underwriters in connection with any such registration or filing, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) the fees and disbursements of the
Trustee and its counsel and any exchange agent or custodian, (vi) the fees and
disbursements of counsel for the Company and each Guarantor, and, in the case of
a Shelf Registration Statement, the fees and disbursements of one counsel for
the Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and (vii) the fees and
disbursements of the independent public accountants of the Company and each
Guarantor, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, but
excluding fees and expenses of counsel to the underwriters (other than fees and
expenses set forth in clause (ii) above) or the Holders and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by a Holder.
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"Registration Statement" shall mean any registration statement of the
Company and the Guarantors that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, including
an Exchange Offer Registration Statement or a Shelf Registration Statement, and
all amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall mean the Notes and the Guarantees.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company and the Guarantors pursuant to the provisions of Section 2(b) of
this Agreement which covers all of the Registrable Securities (but no other
securities unless approved by the Holders whose Registrable Securities are
covered by such Shelf Registration Statement) on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and
all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Special Interest Premium" shall have the meaning set forth in Section
2(d) hereof.
"Trustee" shall mean the trustee with respect to the Securities under the
Indenture.
"Underwriter" shall have the meaning set forth in Section 3 hereof.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Company and the Guarantors shall use
their best efforts to cause to be filed an Exchange Offer Registration Statement
covering the offer by the Company and the Guarantors to the Holders to exchange
all of the Registrable Securities for Exchange Securities and to have such
Exchange Offer Registration Statement remain effective until the closing of the
Exchange Offer. The Company and the Guarantors shall commence the Exchange Offer
promptly after the Exchange Offer Registration Statement has been declared
effective by the SEC and shall use their best efforts to have the Exchange Offer
consummated not later than 225 days after the Closing Date. The Company and the
Guarantors shall commence the Exchange Offer by mailing the related exchange
offer Prospectus and accompanying documents to each Holder stating, in addition
to such other disclosures as are required by applicable law,:
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(i) that the Exchange Offer is being made pursuant to this Agreement and
that all Registrable Securities validly tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a period of at
least 30 business days from the date such notice is mailed) (collectively, the
"Exchange Dates");
(iii) that any Registrable Security not tendered will remain outstanding
and Notes not tendered will continue to accrue interest, but that any
Registrable Security not tendered will not retain any rights under this
Agreement (except in the case of the Initial Purchasers and Participating
Broker-Dealers as provided herein);
(iv) that Holders electing to have a Registrable Security exchanged for an
Exchange Security pursuant to the Exchange Offer will be required to surrender
such Registrable Security, together with the enclosed letters of transmittal, to
the institution and at the address (located in the Borough of Manhattan, The
City of New York) specified in such notice prior to the close of business on the
last Exchange Date; and
(v) that Holders will be entitled to withdraw their election to exchange a
Registrable Security for an Exchange Security, not later than the close of
business on the last Exchange Date, by sending to the institution and at the
address (located in the Borough of Manhattan, The City of New York) specified in
the notice a telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Registrable Securities delivered
for exchange and a statement that such Holder is withdrawing his election to
have such Registrable Securities exchanged.
As soon as practicable after the last Exchange Date, the Company and each
Guarantor shall:
(i) accept for exchange Registrable Securities or portions thereof
tendered and not validly withdrawn under the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for cancellation
all Registrable Securities or portions thereof so accepted for exchange by the
Company and the Guarantors and issue, and cause the Trustee to promptly
authenticate and mail to each Holder, an Exchange Security equal in principal
amount to the principal amount of the Notes surrendered by such Holder.
The Company and the Guarantors shall use their best efforts to complete the
Exchange Offer as provided above and shall comply with the applicable
requirements of the 1933 Act, the 1934 Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall not
be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the staff of the SEC.
The Company shall inform the Initial Purchasers of the names and addresses of
the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall
have the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer.
(b) In the event that (i) the Company determines that the Exchange Offer
Registration provided for in Section 2(a) above is not available or may not be
consummated as
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soon as practicable after the last Exchange Date because it would violate
applicable law or the applicable interpretations of the staff of the SEC, (ii)
the Exchange Offer is not for any other reason consummated by the 225th day
after the Closing Date, (iii) the Exchange Offer has been completed and, in the
opinion of counsel for the Initial Purchasers, a Registration Statement must be
filed and a Prospectus must be delivered by the Initial Purchasers in connection
with any offering or sale of Registrable Securities, (iv) any Registrable
Securities validly tendered pursuant to the Exchange Offer are not exchanged for
Exchange Securities within 10 days of being accepted in the Exchange Offer, (v)
any Initial Purchaser so requests with respect to Registrable Securities that
are not eligible to be exchanged in the Exchange Offer, (vi) the Exchange Offer
is not available to any Holder, or (vii) any Holder of Registrable Securities
that participates in the Exchange Offer does not receive freely transferable
Exchange Securities in exchange for its Registrable Securities, the Company and
the Guarantors shall use their best efforts to cause to be filed as soon as
practicable after (but in no event more than 45 days after) such determination,
date or notice of such opinion of counsel is given to the Company, as the case
may be, a Shelf Registration Statement providing for the sale by the Holders of
all of the Registrable Securities and to have such Shelf Registration Statement
declared effective by the SEC. In the event the Company and the Guarantors are
required to file a Shelf Registration Statement solely as a result of the
matters referred to in clause (iii) of the preceding sentence, the Company and
the Guarantors shall use their best efforts to file and have declared effective
by the SEC both an Exchange Offer Registration Statement pursuant to Section
2(a) hereof with respect to all Registrable Securities and a Shelf Registration
Statement (which may be a combined Registration Statement with the Exchange
Offer Registration Statement) with respect to offers and sales of Registrable
Securities held by the Initial Purchasers after completion of the Exchange
Offer. The Company and the Guarantors agree to use their best efforts to keep
the Shelf Registration Statement continuously effective for the lesser of two
years from the Closing Date or until all of the Registrable Securities are
eligible for resale pursuant to Rule 144 under the 1933 Act or such shorter
period that will terminate when all of the Registrable Securities covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement (the "Effectiveness Period"). The Company and the Guarantors further
agree to supplement or amend the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used by
the Company and the Guarantors for such Shelf Registration Statement or by the
1933 Act or by any other rules and regulations thereunder for shelf
registrations or if reasonably requested by a Holder with respect to information
relating to such Holder, and to use their best efforts to cause any such
amendment to become effective and such Shelf Registration Statement to become
usable as soon as thereafter practicable. The Company and the Guarantors agree
to furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) The Company and the Guarantors shall pay all Registration Expenses in
connection with the registration of Registrable Securities and/or Exchange
Securities pursuant to Section 2(a) and Section 2(b) hereof. Each Holder shall
pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that, if,
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after such Registration Statement has been declared effective, the offering of
Registrable Securities pursuant to a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement will be
deemed not to have become effective during the period of such interference until
the offering of Registrable Securities pursuant to such Registration Statement
may legally resume. In the event that (i) the Exchange Offer is not consummated
or the Shelf Registration Statement is not declared effective by the SEC on or
prior to the 225th day after the Closing Date, or (ii) the Shelf Registration
Statement has been declared effective by the SEC but thereafter ceases to be
effective without being succeeded within 45 days after the Shelf Registration
Statement cease to be effective by an additional registration statement covering
the Registrable Securities that is declared effective by the SEC, the interest
rate on the Securities will be increased by .50% per annum (the "Special
Interest Premium") until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective or again becomes effective, as the
case may be. All accrued Special Interest Premium shall be paid to the Holders
in the same manner and on the same dates as interest is payable on the Notes.
(e) Without limiting the remedies available to the Initial Purchasers and
the Holders, the Company and each Guarantor acknowledge that any failure by the
Company or any Guarantor to comply with their obligations under Section 2(a) or
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may obtain
such relief as may be required to specifically enforce the obligations of the
Company and each Guarantor under Section 2(a) or Section 2(b) hereof.
3. Registration Procedures.
In connection with the obligations of the Company and each Guarantor with
respect to the Registration Statements under Section 2(a) and Section 2(b)
hereof, the Company and each Guarantor shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by the
Company and the Guarantors and (y) shall, in the case of a Shelf Registration,
be available for the sale of the Registrable Securities by the selling Holders
thereof, and (z) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and use their best efforts to cause
such Registration Statement to become effective and remain effective in
accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause each
Prospectus to be supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the 1933 Act; to keep each
Prospectus current during the period described under Section 4(3) of the 1933
Act and Rule 174 under the 1933 Act that is applicable to transactions by
brokers or dealers with respect to the Registrable Securities or Exchange
Securities;
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(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Initial Purchasers, to counsel for
the Holders and to each Underwriter of an Underwritten Offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and any amendment or supplement thereto, and such
other documents as such Holder or Underwriter may reasonably request, in order
to facilitate the public sale or other disposition of the Registrable
Securities; and the Company and the Guarantors consent to the use of such
Prospectus and any amendment or supplement thereto in accordance with applicable
law by each of the selling Holders of Registrable Securities and any such
Underwriters in connection with the offering and sale of the Registrable
Securities covered by and in the manner described in such Prospectus or any
amendment or supplement thereto in accordance with applicable law;
(d) use their best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement shall reasonably request in writing by the time the applicable
Registration Statement is declared effective by the SEC, to cooperate with such
Holders in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company and each
Guarantor shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general consent to
service of process, or (iii) subject itself to taxation in any such jurisdiction
if it is not already so subject to taxation;
(e) in the case of a Shelf Registration, notify each Holder of Registrable
Securities, counsel for the Holders and counsel for the Initial Purchasers
promptly and, if requested by any such Holder or counsel, confirm such advice in
writing (i) when a Registration Statement has become effective and when any
post-effective amendment thereto has been filed with the SEC and becomes
effective, (ii) of any request by the SEC or any state securities authority for
amendments or supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become effective,
(iii) of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Registration Statement or the initiation
of any proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the Company or any
Guarantor contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to the offering of Registrable
Securities cease to be true and correct in all material respects or if the
Company or any Guarantor receives any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
happening of any event during the period a Shelf Registration Statement is
effective which makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or which requires the making
of any changes in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vi) of any determination by the Company
or any Guarantor that a post-effective amendment to a Registration Statement
would be appropriate;
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(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment and provide immediate notice to each Holder of the withdrawal of
any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and enable such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders may reasonably request at least
one business day prior to the closing of any sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any event
contemplated by Section 3(e)(v) hereof, use their best efforts to prepare and
file with the SEC a supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company and the Guarantors agree to
notify the Holders to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and the Holders hereby agree to suspend
use of the Prospectus until the Company and the Guarantors have amended or
supplemented the Prospectus to correct such misstatement or omission;
(j) a reasonable time prior to the filing of any Registration Statement,
any Prospectus, any amendment to a Registration Statement or amendment or
supplement to a Prospectus or any document which is to be incorporated by
reference into a Registration Statement or a Prospectus after the initial filing
of a Registration Statement, provide copies of such document to the Initial
Purchasers and their counsel (and, in the case of a Shelf Registration
Statement, the Holders and their counsel) and make such of the representatives
of the Company and the Guarantors as shall be reasonably requested by the
Initial Purchasers or their counsel (and, in the case of a Shelf Registration
Statement, the Holders or their counsel) available for discussion of such
document, and shall not at any time file or make any amendment to the
Registration Statement, any Prospectus or any amendment of or supplement to a
Registration Statement or a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus, of
which the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, the Holders and their counsel) shall not have previously
been advised and furnished a copy or to which the Initial Purchasers or their
counsel (and, in the case of a Shelf Registration Statement, the Holders or
their counsel) shall object;
(k) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of the
applicable Registration Statement;
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(l) cause the Indenture to continue to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Securities or Registrable Securities, as the case
may be, cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to continue to be so qualified in
accordance with the terms of the TIA and execute, and use their best efforts to
cause the Trustee to execute, all documents as may be required to effect such
changes and all other forms and documents required to be filed with the SEC to
enable the Indenture to continue to be so qualified;
(m) in the case of a Shelf Registration, make available for inspection by
a representative of the Holders of the Registrable Securities, any Underwriter
participating in any disposition pursuant to such Shelf Registration Statement,
and attorneys and accountants designated by the Holders, at reasonable times and
in a reasonable manner, all financial and other records, pertinent documents and
properties of the Company and the Guarantors, and cause the respective officers,
directors and employees of the Company and the Guarantors to supply all
information reasonably requested by any such representative, Underwriter,
attorney or accountant in connection with a Shelf Registration Statement;
(n) in the case of a Shelf Registration, use their best efforts to cause
all Registrable Securities to be listed on any securities exchange or any
automated quotation system on which similar securities issued by the Company and
the Guarantors are then listed if requested by the Majority Holders, to the
extent such Registrable Securities satisfy applicable listing requirements;
(o) use their best efforts to cause the Exchange Securities or Registrable
Securities, as the case may be, to be rated by at least two nationally
recognized statistical rating organizations (as such term is defined in Rule
436(g)(2) under the 1933 Act);
(p) if reasonably requested by any Holder of Registrable Securities
covered by a Registration Statement, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to a Registration Statement such
information with respect to such Holder as such Holder reasonably requests to be
included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Company or any
Guarantor has received notification of the matters to be incorporated in such
filing; and
(q) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith (including
those requested by the Holders of a majority of the aggregate principal amount
of Notes being sold) in order to expedite or facilitate the disposition of such
Registrable Securities including, but not limited to, an Underwritten Offering
and in such connection, (i) to the extent possible, make such representations
and warranties to the Holders and any Underwriters of such Registrable
Securities with respect to the business of the Company and the Guarantors and
their direct and indirect subsidiaries, the Registration Statement, Prospectus
and documents incorporated by reference or deemed to be incorporated by
reference therein, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested, (ii) obtain opinions of counsel to the
Company and the Guarantors (which counsel and opinions, in form, scope and
substance, shall be reasonably
11
satisfactory to the Holders and such Underwriters and their respective counsel)
addressed to each selling Holder and Underwriter of Registrable Securities,
covering the matters customarily covered in opinions requested in underwritten
offerings, (iii) obtain "cold comfort" letters from the independent certified
public accountants of the Company and the Guarantors (and, if necessary, any
other certified public accountant of any subsidiary of the Company or any
Subsidiary of any Guarantor, or of any business acquired by the Company and the
Guarantors for which financial statements and financial data are or are required
to be included in the Registration Statement) addressed to each selling Holder
and Underwriter of Registrable Securities, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort" letters
in connection with underwritten offerings, and (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of the
aggregate principal amount of the Notes being sold or the Underwriters, and
which are customarily delivered in underwritten offerings, to evidence the
continued validity of the representations and warranties of the Company and the
Guarantors made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company and the
Guarantors may require each Holder of Registrable Securities to furnish to the
Company and the Guarantors such information regarding the Holder and the
proposed distribution by such Holder of such Registrable Securities as the
Company and the Guarantors may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company or any Guarantor of the happening of
any event of the kind described in Section 3(e)(v) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(j) hereof, and, if
so directed by the Company or any Guarantor, such Holder will deliver to the
Company and the Guarantors (at its expense) all copies in its possession, other
than permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company or any Guarantor shall give any such notice to suspend
the disposition of Registrable Securities pursuant to a Registration Statement,
the Company and the Guarantors shall extend the period during which the
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions. The Company and the Guarantors may give any such notice only
twice during any 365 day period and any such suspensions may not exceed 30 days
for each suspension and there may not be more than two suspensions in effect
during any 365 day period.
The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (collectively, the "Underwriters")
that will administer the offering will be selected by the Majority Holders of
the Registrable Securities included in such offering.
12
4. Participation of Broker-Dealers in Exchange Offer.
(a) The staff of the SEC has taken the position that any broker-dealer
that receives Exchange Securities for its own account in the Exchange Offer in
exchange for Securities that were acquired by such broker-dealer as a result of
market-making or other trading activities (a "Participating Broker-Dealer"), may
be deemed to be an "underwriter" within the meaning of the 1933 Act and must
deliver a prospectus meeting the requirements of the 1933 Act in connection with
any resale of such Exchange Securities.
The Company and the Guarantors understand that it is the staff's position
that if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and
the means by which Participating Broker-Dealers may resell the Exchange
Securities, without naming the Participating Broker-Dealers or specifying the
amount of Exchange Securities owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery obligation
under the 1933 Act in connection with resales of Exchange Securities for their
own accounts, so long as the Prospectus otherwise meets the requirements of the
1933 Act.
(b) In light of the above, notwithstanding the other provisions of this
Agreement, the Company and the Guarantors agree that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an Exchange
Offer Registration to the extent, and with such reasonable modifications thereto
as may be, reasonably requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the staff recited
in Section 4(a) above; provided that:
(i) the Company and the Guarantors shall not be required to amend or
supplement the Prospectus contained in the Exchange Offer Registration
Statement, as would otherwise be contemplated by Section 3(j) hereof, for a
period exceeding 90 days after the last Exchange Date (as such period may be
extended pursuant to the penultimate paragraph of Section 3 of this Agreement)
and Participating Broker-Dealers shall not be authorized by the Company and the
Guarantors to deliver and shall not deliver such Prospectus after such period in
connection with resales of Exchange Securities contemplated by this Section 4;
and
(ii) the application of the Shelf Registration procedures set forth in
Section 3 of this Agreement to an Exchange Offer Registration, to the extent not
required by the positions of the staff of the SEC or the 1933 Act and the rules
and regulations thereunder, will be in conformity with the reasonable request to
the Company and the Guarantors by the Initial Purchasers or with the reasonable
request in writing to the Company and the Guarantors by one or more
broker-dealers who certify to the Initial Purchasers, the Company and the
Guarantors in writing that they anticipate that they will be Participating
Broker-Dealers; and provided further that, in connection with such application
of the Shelf Registration procedures set forth in Section 3 hereof to an
Exchange Offer Registration, the Company shall be obligated (x) to deal only
with one entity representing the Participating Broker-Dealers, which shall be
Salomon Smith Barney Inc. unless it elects not to act as such representative,
(y) to pay the fees and expenses of only one counsel representing the
Participating Broker-Dealers, which shall be
13
counsel to the Initial Purchasers unless such counsel elects not to so act, and
(z) to cause to be delivered only one, if any, "cold comfort" letter with
respect to the Prospectus in the form existing on the last Exchange Date and
with respect to each subsequent amendment or supplement, if any, effected during
the period specified in clause (i) above.
(c) The Initial Purchasers shall have no liability to the Company, the
Guarantors or any Holder with respect to any request that they may make pursuant
to Section 4(b) above.
5. Indemnification and Contribution.
(a) The Company and each of the Guarantors, jointly and severally, agree
to indemnify and hold harmless the Initial Purchasers, each Holder and each
Person, if any, who controls any Initial Purchaser or any Holder within the
meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, or
is under common control with, or is controlled by, any Initial Purchaser or any
Holder, from and against all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred by the
Initial Purchaser, any Holder or any such controlling or affiliated Person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto) pursuant to which Exchange
Securities or Registrable Securities were registered under the 1933 Act,
including all documents incorporated therein by reference, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Company or any
Guarantor shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact necessary
to make the statements therein in light of the circumstances under which they
were made not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to the Initial
Purchasers or any Holder furnished to the Company and the Guarantors in writing
through Salomon Smith Barney Inc. or any selling Holder expressly for use
therein. In connection with any Underwritten Offering permitted by Section 3
hereof, the Company and each of the Guarantors will also indemnify the
Underwriters, if any, selling brokers, dealers and similar securities industry
professionals participating in the distribution, their officers and directors
and each Person who controls such Persons (within the meaning of the 1933 Act
and the 1934 Act) to the same extent as provided above with respect to the
indemnification of the Holders, if requested in connection with any Registration
Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company and each of the Guarantors, the Initial Purchasers and the
other selling Holders, and each of their respective directors, officers who sign
the Registration Statement and each Person, if any, who controls the Company or
any Guarantor, any Initial Purchaser and any other selling Holder within the
meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to
the same extent as the foregoing indemnity from the Company and each of the
Guarantors to the Initial Purchasers and the Holders, but only with reference to
information relating to such Holder furnished to the Company or any Guarantor in
writing by such Holder expressly for use
14
in any Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Initial Purchasers and all
Persons, if any, who control any Initial Purchaser within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Company and the Guarantors, their directors, their officers who sign the
Registration Statement and each Person, if any, who controls the Company or any
Guarantor within the meaning of either such Section and (c) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Holders and all Persons, if any, who control any Holders within the meaning
of either such Section, and that all such fees and expenses shall be reimbursed
as they are incurred. In such case involving the Initial Purchasers and Persons
who control the Initial Purchasers, such firm shall be designated in writing by
Salomon Smith Barney Inc. In such case involving the Holders and such Persons
who control Holders, such firm shall be designated in writing by the Majority
Holders. In all other cases, such firm shall be designated by the Company and
the Guarantors. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request, and (ii) such indemnifying party shall not have reimbursed
the indemnified party for such fees and expenses of counsel in accordance with
such request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement
15
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or paragraph (b)
of this Section 5 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or parties on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company, a Guarantor and the Holders
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company, a
Guarantor or by the Holders and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this Section 5(d)
are several in proportion to the respective principal amount of Registrable
Securities of such Holder that were registered pursuant to a Registration
Statement.
(e) The Company, each of the Guarantors and each Holder agree that it
would not be just or equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, no Holder shall be required to indemnify or
contribute any amount in excess of the amount by which the total price at which
Registrable Securities were sold by such Holder exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchasers, any Holder or any Person controlling any Initial
Purchaser or any Holder, or by or on behalf of the Company or any Guarantor,
their officers or directors or any Person controlling either the Company or any
Guarantor, (iii) acceptance of any of the Exchange Securities and (iv) any sale
of Registrable Securities pursuant to a Shelf Registration Statement.
16
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company and each of the Guarantors
have not entered into, and on or after the date of this Agreement will not enter
into, any agreement which is inconsistent with the rights granted to the Holders
of Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's or any Guarantor's other issued and outstanding securities under
any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company and the Guarantors have obtained the written consent of
Holders of at least a majority of the aggregate principal amount of the
outstanding Notes affected by such amendment, modification, supplement, waiver
or consent; provided, however, that no amendment, modification, supplement,
waiver or consent to any departure from the provisions of Section 5 hereof shall
be effective as against any Holder of Registrable Securities unless consented to
in writing by such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company and the Guarantors by means of a notice given in accordance with the
provisions of this Section 6(c), which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase Agreement; and (ii) if
to the Company and the Guarantors, initially at the address for the Company and
each Guarantor set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement,
17
and by taking and holding such Registrable Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof. The Initial Purchasers (in their capacity as
Initial Purchasers) shall have no liability or obligation to the Company or any
Guarantor with respect to any failure by a Holder to comply with, or any breach
by any Holder of, any of the obligations of such Holder under this Agreement.
(e) Third Party Beneficiary. Each Holder and any Participating
Broker-Dealer shall be third party beneficiaries to the agreements made
hereunder among the Company, the Guarantors, and the Initial Purchasers, and the
Initial Purchasers shall have the right to enforce such agreements directly to
the extent it deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PSEG Power LLC
By: /s/ Morton A. Plawner
-------------------------------------------------
Name: Morton A. Plawner
Title: Vice President and Treasurer
PSEG Nuclear LLC
By: /s/ Morton A. Plawner
-------------------------------------------------
Name: Morton A. Plawner
Title: Vice President and Treasurer
PSEG Fossil LLC
By: /s/ Morton A. Plawner
-------------------------------------------------
Name: Morton A. Plawner
Title: Vice President and Treasurer
PSEG Energy Resources & Trade LLC
By: /s/ Morton A. Plawner
-------------------------------------------------
Name: Morton A. Plawner
Title: Vice President and Treasurer
19
Confirmed and accepted as of
the date first above written:
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
BANC ONE CAPITAL MARKETS, INC.
SCOTIA CAPITAL (USA) INC.
FIRST UNION SECURITIES, INC.
By: J.P. MORGAN SECURITIES INC.
By: /s/ Maria Sramek
----------------------------------------
Name: Maria Sramek
Title: Vice President
By: SALOMON SMITH BARNEY INC.
By: /s/ Yukari Saegusa
----------------------------------------
Name: Yukari Saegusa
Title: Vice President
20