Exhibit 1.2
PSE&G Capital Trust III
_____ % [Trust Preferred Securities], Series _
(liquidation amount $25 per security)
guaranteed to the extent the Trust
has available funds by
Public Service Electric and Gas Company
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Underwriting Agreement
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__________, 200_
[Name and Address of Underwriter(s)]
Dear Sirs:
PSE&G Capital Trust III, a Delaware statutory business trust (the
"Trust"), and Public Service Electric and Gas Company, a New Jersey corporation
("PSE&G"), propose, subject to the terms and conditions stated herein, that the
Trust issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") _________ _____% [Trust Preferred Securities], Series _
(liquidation amount $25 per security), representing undivided beneficial
interests in the assets of the Trust (the "Preferred Securities"), guaranteed by
PSE&G as to the payment of distributions and payments upon liquidation or
redemption, and benefiting from certain additional undertakings of PSE&G to the
extent set forth (i) in the Guarantee Agreement between PSE&G and 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) PSE&G's _____% Deferrable Interest Subordinated
Debentures, Series _ (the "Subordinated Debentures"), to be executed at the Time
of Delivery, (iii) the Indenture between PSE&G and First Union National Bank,
National Association, as trustee thereunder (the "Debenture Trustee"), dated as
of June 1, 1996, as supplemented by the [______] Supplemental Indenture thereto,
dated as of February 1, 1997, relating to the Subordinated Debentures
(collectively, the "Indenture") and (iv) the trust agreement between PSE&G, as
depositor, and the trustees named therein (as amended and restated from time to
time, the "Trust Agreement").
Concurrently with the issuance of the Preferred Securities and PSE&G's
investment in the common securities of the Trust (the "Common Securities")
representing undivided beneficial interests in the assets of the Trust, the
Trust will loan the proceeds thereof to PSE&G and, to evidence such loan, PSE&G
will issue and deliver to the Trust the Subordinated Debentures, which will be
issued under the Indenture.
1. Each of the Trust and PSE&G, jointly and severally, represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-76020), 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, which also constitutes post-effective amendment
no. 1 to registration statement on Form S-3 (No. 333-2763), and any
post-effective amendment thereto, each in the form heretofore delivered to
the Representatives, have been declared effective by the Commission in
such form; no other document with respect to such registration statement
or document incorporated by reference therein has heretofore been filed,
or transmitted for filing, with the Commission; and no stop order
suspending the effectiveness of such registration statement, which also
constitutes post-effective amendment no. 1 to registration statement on
Form S-3 (No. 333-2763), has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in such registration statement or
thereafter filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Act is referred to herein as a
"Preliminary Prospectus"; the various parts of such registration
statement, including (i) all exhibits thereto, (ii) if applicable, the
information contained in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be a part of the
registration statement at the time it was declared effective and (iii) the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of such registration
statement became effective, each as amended at the time such part of such
registration statement became effective, are referred to herein
collectively as the "Registration Statement"; the final prospectus, as
supplemented by the related prospectus supplement, in the form first filed
with respect to the Preferred Securities pursuant to Rule 424(b) under the
Act, is referred to herein collectively as the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include PSE&G's most recent annual report on Form 10-K filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement (the "Form 10-K"));
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which
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they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Trust or PSE&G by an Underwriter through the
Representatives expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust or PSE&G by an Underwriter
through the Representatives expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "TIA"), and
the rules and regulations of the Commission thereunder and do not and will
not, (i) as of the applicable effective date as to the Registration
Statement and any amendment thereto and (ii) as of the applicable filing
date as to the Prospectus and any amendment or supplement thereto, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Trust or PSE&G
by an Underwriter through the Representatives expressly for use therein;
(e) Deloitte & Touche LLP are independent public accountants with
respect to PSE&G as required by the Act and the rules and regulations of
the Commission thereunder;
(f) Neither the Trust nor PSE&G has sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus any material loss from fire, explosion, flood, accident
or other calamity not fully covered by insurance, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any material increase in long-term debt of
PSE&G and its subsidiaries, considered as a whole, or any material adverse
change in or affecting the
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general affairs, financial position, stockholders' equity or results of
operations of PSE&G and its subsidiaries, considered as a whole, or any
material transaction (other than one entered into in the ordinary course
of business) entered into by the Trust or PSE&G, in each case otherwise
than as set forth in or contemplated by the Prospectus;
(g) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of
the State of Delaware (the "Delaware Business 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:
(h) PSE&G has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Jersey,
with due corporate authority to own and operate its properties and conduct
its business as described in the Prospectus;
(i) The issuance and sale of the Preferred Securities and the Common
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement, the purchase of the Subordinated Debentures
by the Trust from PSE&G, the distribution of the Subordinated Debentures
upon the liquidation of the Trust in the circumstances contemplated by the
Trust Agreement and described in the Prospectus, and the consummation by
the Trust of the transactions contemplated herein and in the Trust
Agreement, will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
agreement or instrument to which the Trust is a party or by which the
Trust is bound or to which any of the property or assets of the Trust is
subject, nor will such action result in any violation of the provisions of
the Trust Agreement or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Trust or
any of its properties;
(j) The issuance and sale of the Preferred Securities and the Common
Securities by the Trust, the issuance by PSE&G of the Subordinated
Debentures and the Guarantee, the compliance by PSE&G and the Trust with
all of the provisions of this Agreement, the execution, delivery and
performance by PSE&G of the Trust Agreement, the Guarantee, the Indenture
and the Subordinated Debentures (collectively, the "PSE&G Agreements"),
the distribution of the Subordinated Debentures upon the liquidation of
the Trust in the circumstances contemplated by the Trust Agreement and
described in the Prospectus, and the consummation of the transactions
herein and therein contemplated, will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which PSE&G is a party or by which PSE&G
is bound or to which any of the property or assets of PSE&G is subject,
nor will such action result in any violation of the provisions of the
charter or by-laws of PSE&G or any statute
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or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over PSE&G or any of its properties;
(k) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Trust or PSE&G or any of their properties is
required for the issuance and sale of the Preferred Securities and Common
Securities by the Trust, the issuance by PSE&G of the Subordinated
Debentures and the Guarantee, the purchase of the Subordinated Debentures
by the Trust from PSE&G, the distribution of the Subordinated Debentures
upon the liquidation of the Trust in the circumstances contemplated by the
Trust Agreement and described in the Prospectus, the execution, delivery
and performance by PSE&G of the PSE&G Agreements, or the consummation of
the transactions contemplated herein or therein, except the approval,
consent and order of the Board of Public Utilities of the State of New
Jersey with respect to the issuance by PSE&G of the Subordinated
Debentures and the Guarantee, registration of the Registered Securities
under the Act, registration of the Preferred Securities under the Exchange
Act, the qualification of the Trust Agreement, the Indenture and the
Guarantee under the TIA and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the issuance and sale, as the case may
be, of the Registered Securities; and
(l) Other than as set forth in or contemplated by the Prospectus,
there are no legal or governmental proceedings pending to which PSE&G is a
party or of which any property of PSE&G is the subject which is reasonably
likely to have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of PSE&G and its
subsidiaries; and, to the best of PSE&G's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened
by others.
2. Subject to the terms and conditions herein set forth, the Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase, at a purchase price per share of
$25.00 per Preferred Security, the number of Preferred Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
As compensation to the Underwriters for their commitments hereunder, and
in view of the fact that the proceeds of the sale of the Preferred Securities
will be used by the Trust. to purchase the Subordinated Debentures of PSE&G,
PSE&G hereby agrees to pay at the Time of Delivery to [_______________], for the
accounts of the several Underwriters, an amount equal to $______ per share for
the Preferred Securities, except that such commission will be $____ per
Preferred Security sold to certain institutions.
3. Upon the authorization by the Representatives of the release of the
Preferred Securities, the several Underwriters propose to offer the Preferred
Securities for sale upon the terms and conditions set forth in the Prospectus.
4. The Preferred Securities to be purchased by each Underwriter hereunder
will be represented by a global certificate or certificates in book-entry form
which will be deposited by
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of on behalf of the Trust with The Depository Trust Company ("DTC") or its
designated custodian and registered in the name of Cede & Co., as nominee of
DTC. The Trust will deliver the Preferred Securities to [__________________],
for the account of each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of immediately
available funds to the Trust, by causing DTC to credit the Preferred Securities
to the account of [________________] at DTC. The time, date and location of such
delivery and payment (the "Time of Delivery") shall be 10:00 a.m., New Jersey
time, on __________, 200_, or at such other time and date as the
Representatives, the Trust and PSE&G May agree upon in writing at the office of
the Trust, 00 Xxxx Xxxxx, Xxxxxx, Xxx Xxxxxx.
At the Time of Delivery, PSE&G will pay, or cause to be paid, the
compensation payable to the Underwriters under Section 2 hereof by wire transfer
of immediately available funds to [_________________], on behalf of the
Underwriters.
5. Each of the Trust and PSE&G, jointly and severally, agrees with each of
the Underwriters:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act within the time prescribed under Rule 424(b) or Rule 430A(a)(3),
as the case may be, under the Act; to make no further amendment or any
supplement to the Registration Statement or the Prospectus prior to the
Time of Delivery which shall be reasonably disapproved by the
Representatives promptly after reasonable notice thereof; to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Representatives with copies thereof; in
the case of PSE&G, prior to the termination of the offering of the
Preferred Securities, to file promptly all reports and any definitive
proxy or information statements required to be filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act; to
advise the Representatives, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
Prospectus, of the suspension of the qualification of the Registered
Securities for offering or sale in any jurisdiction of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event
of the issuance of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Registered Securities or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) ______ To use its best efforts to qualify the Registered
Securities for offering and sale under the securities laws of such
jurisdictions of the United States as the Representatives may designate
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Preferred Securities, provided that in
connection therewith neither the Trust nor PSE&G shall be required to
qualify as a foreign corporation or to file a general consent to service
of process in any jurisdiction;
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(c) To furnish the Underwriters with copies of the Prospectus in
such quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required in connection with the offering or
sale of the Preferred Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would contain an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such Period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon the request of the
Representatives to file such document and to prepare and furnish without
charge to each underwriter and to any dealer in securities as many copies
as the Representatives may reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or
omission or effect such compliance,
(d) In the case of PSE&G, to make generally available to its
security holders as soon as practicable, but no later than 60 days after
the close of the period covered thereby, an earnings statement in form
complying with the provisions of Rule 158 under the Act) covering the
l2-month period beginning not later than the first day of PSE&G's fiscal
quarter next following the effective date (as defined in Rule 158) of the
Registration Statement;
(e) During the period beginning from the date hereof and continuing
to and including the earlier of (i) the date, after the Time of Delivery,
on which the distribution of the Preferred Securities ceases, as
determined by the Representatives or (ii) 30 days after the Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of any
Preferred Securities, any other preferred beneficial interests in the
Trust or any securities of PSE&G which are substantially similar to the
Subordinated Debentures, the Guarantee or the Preferred Securities, or any
securities convertible into or exchangeable for or representing the right
to receive any of the aforementioned securities, without the prior written
consent of the Representatives (other than the Preferred Securities or
securities issued pursuant to PSE&G's stock option or other benefit or
incentive plans maintained for its officers, directors, or employees);
(f) In the case of PSE&G, to issue the Guarantee and the
Subordinated Debentures concurrently with the issuance and sale of the
Preferred Securities as contemplated herein; and
(g) To use its best efforts to list, subject to notice of issuance,
(i) the Preferred Securities and (ii) the Subordinated Debentures, upon
any distribution upon the liquidation of the Trust to holders of the
Preferred Securities, in each case on the New York Stock Exchange.
6. The Trust and PSE&G, jointly and severally, covenant and agree with the
several Underwriters that they will pay the following: (i) the fees,
disbursements and expenses of the Trust's and PSE&G's counsel and accountants in
connection with the registration of the
7
Registered Securities under the Act and all other expenses in connection with
the preparation, printing and filing of the registration Statement, any
Preliminary Prospectus and the Prospectus and any amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement Among
Underwriters, this Agreement, the Blue Sky Memoranda and any other documents in
connection with the offering, purchase, sale and delivery of the Registered
Securities: (iii) all expenses in connection with the qualification of the
Registered Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the 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, Xxxxx'x Investors Service, Inc.
or Duff & Xxxxxx 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 PSE&G herein are, at and as of the Time of
Delivery, true and correct, the condition that the Trust and PSE&G shall have
performed all of their obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) and Rule 430A(a)(3), if applicable, within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 5(a) hereof; and
no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission;
(b) Xxxxxx Xxxxxx Xxxxx & Xxxx 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
(iii), (iv), (v), (vii), (x), (xi) and (xv) of Section 7(c) hereof (it
being understood that such counsel may rely as to all matters of New
Jersey law and legal conclusions based thereon upon the opinion of counsel
for PSE&G referred to in Section 7(c) hereof and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
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(c) X. Xxxxx Xxxxxxx, Esq., Senior Vice President and General
Counsel, or Xxxxx X. Xxxxx, Esq., General Corporate Counsel, of PSE&G,
shall have furnished to the Representatives his written opinion, dated the
Time of Delivery, to the effect that:
(i) PSE&G has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of New
Jersey, with due corporate authority to own and operate its
properties and conduct its business as described in the Prospectus;
(ii) PSE&G is a subsidiary of Public Service Enterprise Group
Incorporated, which is a public utility holding company exempt from
the provisions of the Public Utility Holding Company Act of 1935
(except Section 9(a)(2) thereof);
(iii) The PSE&G Agreements each have been duly authorized,
executed and delivered by PSE&G and constitute valid instruments or
obligations, as the case may be, legally binding upon and
enforceable against PSE&G (except as limited by bankruptcy,
insolvency or other laws or equitable principles affecting
creditors' rights generally); and the Subordinated Debentures are
entitled to the benefits provided by the Indenture;
(iv) The Trust Agreement, the Indenture and the Guarantee have
been duly qualified under the TIA;
(v) This Agreement has been duly authorized, executed and
delivered by each of the Trust and PSE&G;
(vi) The franchises of PSE&G are sufficient authority for it
to carry on its business as described in the Prospectus;
(vii) All approvals, consents and orders of the Board of
Public Utilities of the State of New Jersey legally required for the
issuance by PSE&G of the Guarantee and the Subordinated Debentures
have been obtained and are in full force and effect; any approval,
consent or order of any other commission or other governmental
authority legally required for the issuance and sale, as the case
may be, of the Registered Securities has been obtained (except that
such issuance and sale may be subject to the provisions of the
securities laws of certain states); and such issuance and sale is in
accordance with the approvals, consents and orders obtained;
(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 PSE&G, the distribution of
the Subordinated Debentures upon the liquidation of the Trust in the
circumstances contemplated by the Trust Agreement and described in
the Prospectus, and the consummation of the transactions
contemplated herein and in the Trust Agreement, will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default
9
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 PSE&G of the
Guarantee and the Subordinated Debentures, the compliance by PSE&G
and the Trust with all of the provisions of this Agreement, the
execution, delivery and performance by PSE&G of the PSE&G
Agreements, the distribution of the Subordinated Debentures upon the
liquidation of the Trust in the circumstances contemplated by the
Trust Agreement and described in the Prospectus and the consummation
of the transactions herein and therein contemplated, will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any agreement or
instrument known to such counsel to which PSE&G is a party or by
which PSE&G is bound or to which any of the property or assets of
PSE&G is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of PSE&G or any statute or
any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over PSE&G or any of
its properties;
(x) The Registered Securities conform as to legal matters to
the statements concerning them in the Prospectus; and the summaries
of the PSE&G Agreements contained in the Prospectus constitute
correct summaries thereof for use therein;
(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 PSE&G's Form 10-K under "Rate
Matters" and "Environmental Matters" in Item 1"--Business" and under
Item 3 "--Legal Proceedings" 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) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by
the Trust or PSE&G prior to
10
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 PSE&G but without independent
check or verification, such counsel has no reason to believe that
any of such documents, when such documents were so filed, contained
an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and
(xv) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Trust or
PSE&G prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Act and the TIA and the rules and
regulations thereunder; and on the basis of a general review and
discussion with certain officers and employees of PSE&G 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 PSE&G 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 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 PSE&G 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) Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx LLP, special counsel for the
Trust and PSE&G, shall have furnished to the Representatives their written
opinion, dated the Time of Delivery, in form and substance satisfactory to
the Representatives, to the effect that:
(i) Neither the Trust nor PSE&G 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; and
11
(ii) 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) Xxxxxxxx, Xxxxxx & Finger P.A., special Delaware counsel for the
Trust and PSE&G, shall have furnished to the Representatives their written
opinion, dated the Time of Delivery, in form and substance satisfactory to
the Representatives, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business 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 business trust have been made;
(ii) Under the Delaware Business 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 Business 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 Business Trust Act and the Trust
Agreement, the execution and delivery by the Trust of this
Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary trust action
on the part of the Trust;
(v) The Trust Agreement constitutes a valid and binding
obligation of PSE&G and the Trustees, enforceable against PSE&G and
the Trustees, in accordance with its terms, subject, as to
enforcement, to the effect upon the Trust Agreement of (a)
bankruptcy, insolvency, moratorium, receivership, liquidation,
fraudulent conveyance, reorganization and other similar laws
relating to or affecting the remedies and rights of creditors, (b)
principles of equity, including applicable law relating to fiduciary
duties (regardless of whether considered or applied in a proceeding
in equity or at law) and (c) the effect of applicable public policy
on the enforceability of provisions relating to indemnification or
contribution;
(vi) The Preferred Securities have been duly authorized by the
Trust Agreement and are 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 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; and provided that
12
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; and under the Delaware
Business Trust Act and the Trust Agreement, the issuance of the
Preferred Securities is not subject to preemptive or other similar
rights;
(vii) 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 Business Trust Act and the Trust Agreement, the
issuance of the Common Securities is not subject to preemptive or
other similar rights;
(viii) 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;
(ix) 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 Business 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
(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 Business 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 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
13
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
PSE&G and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder (the "Act
Regulations");
(ii) in their opinion, the audited consolidated financial
statements and financial statement schedule(s) incorporated by
reference in the Registration Statement and the Prospectus and
included in the Form 10-K comply as to form in all material respects
with the applicable accounting requirements of the Act, the Act
Regulations, the Exchange Act and the applicable published rules and
regulations thereunder (the "Exchange Act Regulations");
(iii) on the basis of (1) the performance of the procedures
specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in
Statement on Auditing Standards No. 71, 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 PSE&G
and its subsidiaries included in PSE&G'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 PSE&G, (3) a
reading of the latest Consent of the Sole Shareholder in Lieu of
Annual Meeting, the minutes of Meetings of the Board of Directors of
PSE&G as set forth in the minute books for the current year and
certain draft resolutions for subsequent meetings and (4) inquiries
of the officers of PSE&G who have responsibility for financial and
accounting matters (it being understood that the foregoing
procedures do not constitute an audit made in accordance with
generally accepted auditing standards and would not necessarily
reveal matters of significance with respect to the comments made in
such letter, and accordingly that Deloitte & Touche LLP makes no
representation as to the sufficiency of such procedures for the
purposes of the several Underwriters), nothing has come to their
attention which caused them to believe that (A) any material
modifications should be made to the unaudited consolidated financial
statements included in the 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 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
14
preferred stock or increase in long-term debt (except for such stock
and long-term debt acquired for sinking fund purposes or redeemed
pursuant to optional redemption or sinking fund provisions, or
changes in capital lease obligations incurred in the ordinary course
of PSE&G's business) of PSE&G or any decrease in the consolidated
net assets of PSE&G (except as occasioned by the declaration of
dividends), in each case as compared with the amounts shown on the
most recent consolidated balance sheet of PSE&G incorporated by
reference in the Registration Statement and the Prospectus or,
during the period from the date of such balance sheet to a specified
date not more than three business days prior to the date of such
letter, upon inquiries of the appropriate officers of PSE&G, there
were any decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues or net income of PSE&G,
except in each such case as set forth in or contemplated by the
Registration Statement and the Prospectus or except for such
exceptions enumerated in such letter as shall have been agreed to by
the Representatives and PSE&G; and
(iv) in addition to the audit referred to in their report
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 PSE&G and its
subsidiaries identified in such letter, provided that said letter
may vary from the requirements specified above in such manner as you
may deem not to be material or as may be acceptable to the
Representatives with the consent of Underwriters who have agreed to
purchase in the aggregate 50% or more of the Preferred Securities.
(g) The Trust Agreement, the Guarantee and the Indenture shall have
been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives:
(h) Neither the Trust nor PSE&G shall have sustained since the date
of the latest audited financial statements included or incorporated by
reference in the Prospectus any 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 (ii) since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, there shall not have been any increase in long-term debt
of PSE&G and its subsidiaries considered as a whole, or any change in or
affecting the general affairs, financial position, or equity or results of
operations of the Trust or PSE&G and its subsidiaries considered as a
whole, or any transaction (other than one entered into in the ordinary
course of business) entered into by the Trust or PSE&G, in each case
otherwise than as set forth or contemplated in the Prospectus, the effect
of which, in any such case described in clause (i) or (ii), is in the
reasonable judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public
15
offering of the Preferred Securities or the delivery of the Preferred
Securities on the terms and in the manner contemplated in the Prospectus;
(i) The Preferred Securities shall have been duly listed, subject to
official notice of issuance, on the New York Stock Exchange; and
(j) At the Time of Delivery, the Representatives shall have received
certificates of duly authorized officers of the Trust and PSE&G, dated the
Time of Delivery, to the effect that:
(i) the Prospectus has been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with the provisions of this Agreement; and no stop order suspending
the effectiveness of the Registration Statement or any part thereof
has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission;
(ii) the representations and warranties of the Trust and PSE&G
contained herein are true and correct as if made at and as of the
Time of Delivery;
(iii) the Trust and PSE&G have performed all agreements
contained herein to be performed by them at or prior to the Time of
Delivery; and
(iv) Neither the Trust nor PSE&G has sustained since the date
of the latest audited financial statements included or incorporated
by reference in the Prospectus any material loss from fire,
explosion, flood, accident or other calamity not fully covered by
insurance, otherwise than as set forth or contemplated in the
Prospectus, and since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there
shall not have been any material increase in long-term debt of PSE&G
and its subsidiaries, considered as a whole, or any material adverse
change in or affecting the general affairs, financial position,
equity or results of operations of the Trust or PSE&G and its
subsidiaries, considered as a whole, or any transaction (other than
one entered into in the ordinary course of business) entered into by
the Trust or PSE&G, in each case otherwise than as set forth or
contemplated in the Prospectus.
8. (a) The Trust and PSE&G, jointly and severally, agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged statement of a material fact contained in the
Registration Statement (or any amendment thereto), 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
16
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, unless such untrue statement or omission or such alleged
untrue statement or omission was made in reliance upon and in
conformity with written information furnished to the Trust or PSE&G
by an Underwriter through the Representatives expressly for use in
the Registration Statement, such Preliminary Prospectus or the
Prospectus, or any amendment or supplement thereto;
(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, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission or any alleged untrue statement or omission,
if such settlement is effected with the written consent of the Trust
and PSE&G; and
(iii) against any and all expense whatsoever, as incurred,
reasonably incurred in investigating, preparing or defending against
any litigation, 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.
The Trust and PSE&G shall not be liable for indemnity under this Section
8(a) With respect to any Preliminary Prospectus to the extent that any such
loss, claim, damage or liability of such Underwriter results solely from the
fact that such Underwriter sold Preferred Securities to a person to whom it is
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) in any case where such delivery is required by the
Act, if the Trust and PSE&G has previously furnished to the Representatives on
behalf of the Underwriters, including such Underwriter, the copies thereof
theretofore requested by the Representatives, and the loss, claim, damage or
liability of such Underwriter results from an untrue statement or omission of a
material fact contained in the Preliminary Prospectus that was corrected in the
Prospectus.
(b) In no case shall the Trust or PSE&G be liable under the
indemnity agreement set forth in Section 8(a) hereof with respect to any
claim made against any Underwriter or any such controlling person unless
such party shall be notified in writing of the nature of the claim
promptly after the assertion thereof, but failure to so notify such party
shall not relieve it from any liability which it may have otherwise than
on account of said indemnity agreement. The Trust or PSE&G, as the case
may be, shall be entitled to participate at its own expense in the
defense, or, if it so elects, within a reasonable time after receipt of
such notice, to assume the defense of any suit brought to enforce any such
claim, but if it so elects to assume the defense shall be conducted by
counsel chosen by it and approved by the Underwriter or Underwriters or
controlling person or persons, defendant or defendants in any suit so
brought, which approval shall not be unreasonably withheld. In the event
that the Trust or PSE&G, as the case may be, elects to assume the defense
of any such suit and retains such counsel, the Underwriter or Underwriters
or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and
17
expenses of any additional counsel thereafter retained by them. In the
event that the parties to any such action (including impleaded parties)
include both the Trust or PSE&G, as the case may be, and one or more
Underwriters and any such Underwriter shall have been advised by counsel
chosen by it and satisfactory to the Trust or PSE&G, as the case may be,
that there may be one or more legal defenses available to it which are
different from or additional to those available to the Trust or PSE&G, as
the case may be, neither the Trust nor PSE&G shall have the right to
assume the defense of such action on behalf of such Underwriter and the
Trust or PSE&G, as the case may be, will reimburse such Underwriter and
any person controlling such Underwriter as aforesaid for the reasonable
fees and expenses of any counsel retained by them, it being understood
that neither the Trust nor PSE&G shall, in connection with any one action
or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys for all such Underwriters and controlling persons, which firm
shall be designated by the Representatives in writing. The Trust and PSE&G
agree to notify the Representatives promptly after the assertion of any
claim against them, any of their directors, any of their officers who
signed the Registration Statement, or any person who controls them within
the meaning of Section 15 of the 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 it will indemnify and
hold harmless the Trust and PSE&G, their directors, and each of their
officers who signed the Registration Statement and each person, if any,
who controls them within the meaning of Section 15 of the Act to the same
extent as the indemnity agreement set forth in Section 8(a) hereof, but
only with respect to statements or omissions made in the Registration
Statement, any Preliminary Prospectus or the Prospectus, or any amendment
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Trust or PSE&G by such Underwriter expressly
for use in the Registration Statement, such Preliminary Prospectus, or the
Prospectus, or any amendment or supplement thereto. In case any action
shall be brought against the Trust or any person so indemnified based on
the Registration Statement, such Preliminary Prospectus or the Prospectus,
or any amendment or supplement thereto and in respect of which indemnity
may be sought against any Underwriter, such Underwriter shall have the
rights and duties given to the Trust and PSE&G, and the Trust and PSE&G
and each person so indemnified shall have the rights and duties given to
the Underwriters by the provisions of Section 8(a) and (b) hereof.
(d) The indemnity agreements contained in Section 8 shall remain
operative and in full force and effect, regardless of any investigation
made by or on behalf of the Trust or PSE&G, or any Underwriter or any
controlling person, and shall survive the delivery and settlement of the
Preferred Securities to the Underwriters.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in Section 8
is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Trust, PSE&G and the
Underwriters shall contribute to the aggregate losses,
18
liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreements incurred by the Trust, PSE&G and one or more of
the Underwriters, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus
relating to the Preferred Securities bears to the initial public offering
price appearing thereon and the Trust and PSE&G, jointly and severally, is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section
15 of the Act shall have the same rights to contribution as such
Underwriter, and each trustee of the Trust or director of PSE&G, each
officer of the Trust or PSE&G who signed the Registration Statement, and
each person, if any, who controls the Trust or PSE&G within the meaning of
Section 15 of the Act shall have the same rights to contribution as the
Trust and PSE&G.
9. (a) If any Underwriter shall default in its obligation to purchase the
Preferred Securities which it has agreed to purchase hereunder at the Time of
Delivery, the Representatives may in their discretion arrange for the
Underwriters or another party or other parties to purchase such Preferred
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Preferred Securities, then the Trust and PSE&G shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Preferred
Securities on such terms. In the event that, within the respective prescribed
periods, the Representatives notify the Trust and PSE&G that they have so
arranged for the purchase of such Preferred Securities, or the Trust or PSE&G
notifies the Representatives that it has so arranged for the purchase of such
Preferred Securities, the Representatives or the Trust and PSE&G shall have the
right to postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Trust and PSE&G agree to file promptly any amendments to
the Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter," as used
in this Agreement, shall include any person substituted under this Section with
like effect as if such person had originally been a Party to this Agreement with
respect to such Preferred Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Preferred Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and PSE&G as provided in Section 9(a) hereof, the
aggregate number of such Preferred Securities which remains unpurchased does not
exceed one-tenth of the aggregate number of all the Preferred Securities to be
purchased at the Time of Delivery, then the Trust and PSE&G shall have the right
to require each non-defaulting Underwriter to purchase the number of Preferred
Securities which such Underwriter agreed to purchase hereunder at the Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Preferred Securities which
such Underwriter agreed to purchase hereunder) of the Preferred Securities of
such defaulting Underwriter or Underwriters for which such arrangements
19
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Preferred Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and PSE&G as provided in Section 9(a) hereof, the
aggregate number of such Preferred Securities which remains unpurchased exceeds
one-tenth of the aggregate number of all the Preferred Securities to be
purchased at the Time of Delivery, or if the Trust and PSE&G shall not exercise
be right described in Section 9(b) hereof to require non-defaulting Underwriters
to purchase Preferred Securities of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter, the Trust or PSE&G, except for the expenses to
be borne by the Trust, PSE&G and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. This Agreement may be terminated by notice to the Trust and PSE&G by
the Representatives at any time prior to the Time of Delivery if (a) (i) a
general banking moratorium shall have been declared by either Federal or New
York authorities, or (ii) there shall have occurred any new outbreak or
unforeseen escalation of hostilities or other national or international calamity
or crisis, or (iii) there shall have occurred a suspension or material
limitation in (x) trading in securities generally on the New York Stock Exchange
or (y) trading in any of PSE&G's securities on the New York Stock Exchange, and
the effect of the occurrence of any event referred to in clause (i), (ii) or
(iii) above is, in the reasonable judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering of the Preferred Securities or the delivery of the Preferred
Securities on the terms and in the manner contemplated in the Prospectus, or (b)
the rating accorded the Preferred Securities or any of PSE&G's debt securities
or preferred stock by any Rating Agency shall have been lowered since the time
this Agreement was executed or if any Rating Agency shall have publicly
announced since the time this Agreement was executed that it has placed its
rating of the Preferred Securities or any of PSE&G's debt securities or
preferred stock under a surveillance or review, with possible negative
implications.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, PSE&G and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Trust,
PSE&G or any officer or director or controlling person of the Trust or PSE&G,
and shall survive delivery of and payment for the Preferred Securities.
12. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Trust nor PSE&G shall be under any liability to any Underwriter
except as provided in Section 6 and Section 8 hereof; but if, for any other
reason the transactions contemplated herein are not consummated, the Trust and
PSE&G will reimburse the Underwriter for all out-of-pocket expenses, including
fees and disbursements of counsel, reasonably incurred by the Underwriter in
making preparations for the purchase, sale and delivery of the Preferred
Securities, but the Trust and PSE&G shall then be under no further liability to
the Underwriter in respect of the
20
Preferred Securities not so delivered except as provided in Section 6 and
Section 8 hereof. Except as provided above, neither the Trust nor PSE&G shall be
liable to the Underwriters for damages on account of any other consequential
damages or loss of anticipated profits.
In all dealings hereunder, the Representatives shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, voice or agreement on behalf of any Underwriter
made or given by the Representatives jointly or by [________________] on behalf
of the Representatives.
13. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Representatives in care of
[___________________________________________________]; and if to the Trust or
PSE&G by mail to it at the address of the Trust or PSE&G at 00 Xxxx Xxxxx, X.X.
Box 570, Newark, New Jersey 07101, Attention: Xxxxx X. Xxxxx, Esq., General
Corporate Counsel. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Trust, PSE&G and, to the extent provided in Sections 8
and 11 hereof, the officers and directors of the Trust or PSE&G and each person
who controls the Trust or PSE&G or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Preferred Securities from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey (without regard to conflict of laws
principles).
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
21
If the foregoing is in accordance with your understanding. please sign and
return to us two counterparts hereof, and upon the acceptance hereof by the
Representatives, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Underwriters, on the one hand, and the Trust and PSE&G, on the other hand. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement Among
Underwriters, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
PSE&G Capital Trust III
By: Public Service Electric and Gas Company,
as Depositor
By:
-----------------------------------
Name:
Title:
Public Service Electric and Gas Company
By:
-----------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name of Representatives]
By: Name of Lead Manager
By:__________________________
Name:
Title:
On behalf of themselves and as Representatives
for each of the Underwriters named in Schedule I hereto
22
SCHEDULE I
Total Number
of Securities
Underwriters to be Purchased
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