Exhibit 1.2
PSEG Power Capital Trust __
_____ % [Trust Preferred Securities], Series _
(liquidation amount $25 per security)
guaranteed to the extent the Trust
has available funds by
PSEG Power LLC
----------
Underwriting Agreement
----------
__________, 200_
[Name and Address of Underwriter(s)]
Dear Sirs:
PSEG Power Capital Trust __, a Delaware statutory trust (the "Trust"), and
PSEG Power LLC, a Delaware limited liability company (the "Company"), 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") _________
_____% [Trust Preferred Securities], Series _ (liquidation amount $25 per
security), representing undivided beneficial interests in the assets of the
Trust (the "Preferred Securities"), guaranteed by the Company as to the payment
of distributions and payments upon liquidation or redemption, and benefiting
from certain additional undertakings of the Company to the extent set forth (i)
in the Guarantee Agreement between the Company and First Union National 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) the Company's _____% Deferrable Interest Subordinated
Debentures, Series _ (the "Subordinated Debentures"), to be executed at the Time
of Delivery, (iii) the Indenture between the Company and The Bank of New York,
as trustee thereunder (the "Debenture Trustee"), dated as of _____________,
2003, relating to the Subordinated Debentures (collectively, the "Indenture")
and (iv) the trust agreement between the Company, 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 the
Company'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 the Company and, to evidence
such loan, the Company will issue and deliver to the Trust the Subordinated
Debentures, which will be issued under the Indenture.
1. Each of the Trust and the Company, 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; such
registration statement, 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 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 the Company'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 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 EDGAR, 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
2
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 the Company 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 the Company 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 the
Company by an Underwriter through the Representatives expressly for use
therein;
(e) Deloitte & Touche LLP are independent public accountants with
respect to the Company as required by the Act and the rules and
regulations of the Commission thereunder;
(f) The financial statements of the Company 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 the Company and its consolidated subsidiaries as at the dates
indicated and the results of operations, member's equity and cash flows of
the Company and its consolidated subsidiaries for the periods specified.
3
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. The Company's
ratios of earnings to fixed charges included in the Prospectus and in
Exhibit 12 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;
(g) Neither the Trust nor the Company 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 the Company and its 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 the Company or any of its subsidiaries, other
than those arising in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise; (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its membership
interests; and (D) there has not been any material change in the
membership interests or long-term debt of the Company and its
subsidiaries;
(h) 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;
(i) The Company has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, with due authority to own and operate its properties and conduct
its business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not result in
a Material Adverse
4
Change; all of the issued and outstanding membership interests in the
Company 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;
(j) Each "significant subsidiary" of the Company (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
organized and is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction of its
organization, has power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
is duly qualified as a foreign corporation/limited liability company to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
to so qualify 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 membership interests
of each Subsidiary has been duly authorized and is validly issued, fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. None of the outstanding membership
interests of any Subsidiary was issued in violation of preemptive or other
similar rights of any security holder of such Subsidiary;
(k) If the Prospectus contains a "Capitalization" section, the
authorized, issued and outstanding membership interests of the Company 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 membership interests have been duly authorized
and validly issued by the Company and are fully paid and non-assessable,
and none of such membership interests was issued in violation of
preemptive or other similar rights of any security holder of the Company;
(l) This Agreement has been duly authorized, executed and delivered
by the Company and the Trust;
(m) 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 the Company 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
5
Securities will be directly owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
(n) The Trust Agreement has been duly authorized and when duly
executed and delivered by the Administrative Trustee named therein and the
Company, and assuming due authorization, execution and delivery by the
Property Trustee and the Delaware Trustee, will be a valid and binding
obligation of the Company 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;
(o) The Guarantee Agreement has been duly authorized by the Company
and, when validly executed and delivered by the Company 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 the Company, enforceable against the Company 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;
(p) The Indenture has been duly authorized and, when validly
executed and delivered by the Debenture Trustee and the Company, will
constitute a valid and binding agreement of the Company, enforceable
against the Company 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;
(q) The Subordinated Debentures have been duly authorized and, at
the Closing Time, will have been validly executed and delivered by the
Company 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 the Company, enforceable against the Company 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;
(r) 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 the Company, 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
6
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;
(s) The issuance and sale of the Preferred Securities and the Common
Securities by the Trust, the issuance by the Company of the Subordinated
Debentures and the Guarantee, the compliance by the Company and the Trust
with all of the provisions of this Agreement, the execution, delivery and
performance by the Company of the Trust Agreement, the Guarantee, the
Indenture and the Subordinated Debentures (collectively, the "Company
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 the Company is a party
or by which the Company is bound or to which any of the property or assets
of the Company is subject, nor will such action result in any violation of
the provisions of the organizational documents or by-laws of the Company
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties;
(t) Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Formation, Limited Liability Company Agreement,
other organizational 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
the Company 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 the Company 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 the Company 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 the
Company 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 the
Company or any of its subsidiaries pursuant to, any Agreements and
Instruments, nor will such action result in any violation
7
of the provisions of the organizational documents, Limited Liability
Company Agreement or by-laws of the Company 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 the Company 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 the
Company or any of its subsidiaries;
(u) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Trust or the Company 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 the Company of the Subordinated
Debentures and the Guarantee, the purchase of the Subordinated Debentures
by the Trust from the Company, 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 the Company of the Company
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 the
Company of the Subordinated Debentures and the Guarantee, registration of
the Registered Securities 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;
(v) Other than as set forth in or contemplated by the Prospectus,
there are no legal or governmental proceedings pending to which the
Company is a party or of which any property of the Company is the subject
which is reasonably likely to result in a Material Adverse Change; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(w) The Company 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 the Company, its Subsidiaries and their businesses;
(x) Neither the Trust nor the Company is and, after giving effect to
the offering and sale of the Preferred Securities and the Common
Securities and the application of the proceeds thereof as described in the
Prospectus, neither the Trust nor the Company will be required to register
as an "investment company," as such term is defined in the Investment
Company Act of 1940, as amended; and
8
(y) 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 the Company 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) the Company 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 the Company 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 the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
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 the
Company, the Company 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
9
account of [________________] at DTC. The time, date and location of such
delivery and payment (the "Time of Delivery") shall be 10:00 a.m., New Jersey
time, on __________, 200_, or at such other time and date as the
Representatives, the Trust and the Company may agree upon in writing at the
office of the Trust, 80 Park Plaza, Newark, New Jersey.
At the Time of Delivery, the Company 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 the Company, jointly and severally, agrees with
each of the Underwriters:
(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 the Company, 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 the Company 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
10
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,
(d) In the case of the Company, 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 the Company'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 the Company 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 the Company's stock option or
other benefit or incentive plans maintained for its officers, directors,
or employees);
(f) In the case of the Company, 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 the Company, 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 the Company'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
11
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 fees and disbursements of counsel
for the Underwriters (not to exceed [$___________]) in connection with such
qualification and in connection with the Blue Sky Memoranda; (iv) any fees
charged by Standard & Poor's Ratings Services, Moody's Investors Service, Inc.
or Duff & Phelps Credit Rating Co. (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, 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 the Company herein are, at and as of the Time
of Delivery, true and correct, the condition that the Trust and the Company
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) Sidley Austin Brown & Wood LLP, counsel for the Underwriters,
shall have furnished to the Representatives their written opinion, dated
the Time of Delivery, with respect to the matters referred to in clauses
(v), (vi), (ix), (x) and (xvi) of Section 7(c) hereof (it being understood
that such counsel may rely as to all matters of Delaware law and legal
conclusions based thereon upon the opinion of special Delaware counsel for
the Company and the Trust and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters);
(c) R. Edwin Selover, Esq. or James T. Foran, Esq., counsel to the
Company and the Trust, shall have furnished to the Representatives his
written opinion, dated the Time of Delivery, to the effect that:
12
(i) The Company has been duly organized and is validly
existing as a limited liability company in good standing under the
laws of the State of Delaware, with due authority to own and operate
its properties and conduct its business as described in the
Prospectus; all of the issued and outstanding membership interests
in the Company 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;
(ii) The Company is duly qualified as a foreign entity to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not
result in a Material Adverse Change;
(iii) Each Subsidiary has been duly organized and is validly
existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its organization, has
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation/ limited liability company to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify 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 membership interests of each Subsidiary has been duly
authorized and is validly issued, fully paid and non-assessable and,
to the best of such counsel's knowledge, is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. None
of the outstanding membership interests of any Subsidiary was issued
in violation of preemptive or other similar rights of any security
holder of such Subsidiary;
(iv) If the Prospectus contains a "Capitalization" section,
the authorized, issued and outstanding membership interests of the
Company 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 membership interests
have been duly authorized and validly issued by the Company and are
fully paid and non-assessable, and none of such membership interests
was issued in violation of preemptive or other similar rights of any
security holder of the Company.
(v) The Company Agreements each have been duly authorized,
executed and delivered by the Company and constitute valid
instruments or obligations, as the case may be, legally binding upon
and enforceable against the
13
Company (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;
(vi) The Trust Agreement, the Indenture and the Guarantee have
been duly qualified under the TIA;
(vii) This Agreement has been duly authorized, executed and
delivered by each of the Trust and the Company;
(viii) 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 the Company, 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;
(ix) The issuance and sale of the Preferred Securities and the
Common Securities by the Trust, the issuance by the Company of the
Guarantee and the Subordinated Debentures, the compliance by the
Company and the Trust with all of the provisions of this Agreement,
the execution, delivery and performance by the Company of the
Company 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 the Company
is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such action
result in any violation of the provisions of the organizational
documents or by-laws of the Company 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 Company or
any of its properties;
(x) The Registered Securities conform as to legal matters to
the statements concerning them in the Prospectus; and the summaries
of the Company Agreements contained in the Prospectus constitute
correct summaries thereof for use therein;
14
(xi) The statements set forth in the Prospectus under the
captions "Description of the Preferred Securities," "Certain Terms
of the Series _ Preferred Securities," "Description of the
Guarantee," "Description of the Debentures," "Certain Terms of the
Series _ Debentures," and "Relationship among the Preferred
Securities, the Debentures and the Guarantee," insofar as they
constitute summaries or matters of law or legal conclusions, fairly
present the information set forth therein;
(xii) The statements made in the Company's Form 10-K under
___________________________ fairly present the information set forth
therein;
(xiii) 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;
(xiv) To the best of such counsel's knowledge, there is not
pending or threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any of its subsidiaries
thereof is a party or to which the assets, properties or operations
of the Company 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 the Company of its obligations hereunder;
(xv) The documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by the Trust or
the Company 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
the Commission thereunder; and, on the basis of a general review and
discussion with certain officers and employees of the Company 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;
(xvi) 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 my knowledge, no stop order
suspending the effectiveness of the Registration
15
Statement has been issued under the Act and no proceedings for that
purpose have been initiated or are pending or threatened by the
Commission; and
(xvii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Trust or the
Company 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; and on the basis of a general review and
discussion with certain officers and employees of the Company but
without independent check or verification except as indicated in
Subsections (x) and (xi) of this Section 7(c), such counsel has no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Trust or the
Company prior to the Time of Delivery (including the filing of the
Company's Annual Report on Form 10-K with the Commission) or at the
date of this Agreement) (other than the financial statements and
related schedules therein and other financial data therein, as to
which such counsel need express no opinion) 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, as of its date or as of the Time of
Delivery, the Prospectus or any further amendment or supplement
thereto made by the Trust or the Company prior to the Time of
Delivery (other than the financial statements and related schedules
therein and other financial data therein, as to which such counsel
need express no opinion) contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
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) Ballard Spahr Andrews & Ingersoll LLP, special counsel for the
Trust and the Company, 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) Neither the Trust nor the Company is an "investment
company" or an entity "controlled" by an "investment company"
required to be registered under the Investment Company Act of 1940,
as amended;
(ii) The Subordinated Debentures will be classified for United
States federal income tax purposes as the indebtedness of the
Company;
(iii) 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
16
association that is taxable as a corporation, or a publicly traded
partnership taxable as a corporation; and
(iv) The statements made in the Prospectus under the caption
"United States Taxation," 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) Richards, Layton & Finger P.A., special Delaware counsel for the
Trust and the Company, 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 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 the Company and the Trustees, and is enforceable
against the Company 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 herein, fully
paid and non-assessable undivided beneficial interests in the assets
of the
17
Trust; the holders of the Preferred 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
18
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 (x), 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
the Company 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 income and retained earnings,
and the unaudited consolidated statements of cash flows, of the
Company and its subsidiaries included in the Company's quarterly
reports on Form 10-Q filed with the Commission under Section 13 of
the Exchange Act (the "Form 10-Q's") subsequent to the Form 10-K,
(2) a reading of the latest available unaudited financial statements
of the Company, (3) a reading of the latest Consent of the Sole
Shareholder in Lieu of Annual Meeting, the minutes of Meetings of
the Board of Directors of the Company as set forth in the minute
books for the current year and certain draft resolutions for
subsequent meetings and (4) inquiries of the officers of the Company
who have responsibility for financial and accounting matters (it
being understood that the foregoing procedures do not constitute an
audit made in accordance with generally accepted auditing standards
and would not necessarily reveal matters of significance with
respect to the comments made in such letter, and accordingly that
Deloitte & Touche LLP makes no representation as to the sufficiency
of such procedures for the purposes of the 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 Form 10-Q's for
them to be in conformity with generally accepted accounting
principles; (B) the unaudited consolidated financial statements
included in the Form 10-Q's do not comply as to
19
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 the Company's
business) of the Company or any decrease in the consolidated net
assets of the Company (except as occasioned by the declaration of
dividends), in each case as compared with the amounts shown on the
most recent consolidated balance sheet of the Company incorporated
by reference in the Registration Statement and the Prospectus or,
during the period from the date of such balance sheet to a specified
date not more than three business days prior to the date of such
letter, upon inquiries of the appropriate officers of the Company,
there were any decreases, as compared with the corresponding period
in the preceding year, in consolidated revenues or net income of the
Company, except in each such case as set forth in or contemplated by
the Registration Statement and the Prospectus or except for such
exceptions enumerated in such letter as shall have been agreed to by
the Representatives and the Company; and
(iv) in addition to the audit referred to in their report
appearing in the Form 10-K 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 the Company 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 Moody's Investor's Service Inc. and ____ by Standard &
Poor's Ratings Group, a division of McGraw-Hill, Inc., and the Company
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
20
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 the Company,
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 the
Company contained herein are true and correct as if made at and as
of the Time of Delivery;
(iii) the Trust and the Company 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 latest audited financial statements
included or incorporated by reference in the Prospectus, there has
not been a Material Adverse Change.
8. (a) The Trust and the Company, 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, 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, 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
21
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 the Company; 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 the Company 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 the Company 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 the Company 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 the Company, 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 the Company, 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 the
Company, as the case may be, and one or more Underwriters and any such
Underwriter shall have been advised by counsel chosen
22
by it and satisfactory to the Trust or the Company, as the case may be,
that there may be one or more legal defenses available to it which are
different from or additional to those available to the Trust or the
Company, as the case may be, neither the Trust nor the Company shall have
the right to assume the defense of such action on behalf of such
Underwriter and the Trust or the Company, 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 the Company 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 the Company agree to notify the Representatives promptly
after the assertion of any claim against them, any of their directors, any
of their officers who signed the Registration Statement, or any person who
controls them 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 the Company, 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 the Company
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 the Company 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 the Company, and the Trust and the Company 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 the Company, 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
23
or body, commenced or threatened, or any claim whatsoever in respect of
which 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, the Company 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, the Company and one or more of the
Underwriters, in such proportions that the Underwriters are responsible
for that portion represented by the percentage that the underwriting
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 the Company, 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 director of the Company,
each officer of the Company or Trustee of the Trust who signed the
Registration Statement, and each person, if any, who controls the Trust or
the Company 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 the Company. 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 the Company 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 the Company that they have so
arranged for the purchase of such Preferred Securities, or the Trust or the
Company notifies the Representatives that it has so arranged for the purchase of
such Preferred Securities, the Representatives or the Trust and the Company
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 the Company agree to file promptly
any amendments to the Registration Statement or the Prospectus which in the
opinion of the
24
Representatives may thereby be made necessary. The term "Underwriter," as used
in this Agreement, shall include any person substituted under this 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 the Company 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
the Company 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 the Company 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 the
Company 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
the Company, except for the expenses to be borne by the Trust, the Company 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 the
Company 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 the
Company 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
25
declared by either Federal or New York authorities or (v) if the rating accorded
the Preferred Securities or any debt securities or other security of the Company
or any of its subsidiaries, including, without limitation, any trust
subsidiaries of the Company 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, the Company 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, the Company or any officer or director or controlling person of the Trust
or the Company, 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 the Company 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 the Company 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 the Company 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 the Company 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
the Company by mail to it at the address of the Trust or the Company at 80 Park
Plaza, P.O. Box 570, Newark, New Jersey 07101, Attention: James T. Foran,
Esquire. 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, the Company and, to the extent provided in
Sections 8 and 11 hereof, the officers and directors of the Trust or the Company
and each person who controls the Trust or the Company 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.
26
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 York (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.
27
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 the Company, 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,
PSEG Power Capital Trust __
By: PSEG Power LLC,
as Depositor
By:
------------------------
Name:
Title:
PSEG Power LLC
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
28
SCHEDULE I
Total Number
of Securities
Underwriters to be Purchased
- ------------ ---------------