Exhibit 4.5
Preferred Trust Securities Guarantee Agreement
between
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(as Guarantor)
and
WACHOVIA BANK, NATIONAL ASSOCIATION
(as Guarantee Trustee)
Dated as of
September 10, 2002
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ---------
310(a).................................................... 4.01(a)
310(b).................................................... 4.01(c), 2.08
310(c).................................................... Inapplicable
311(a).................................................... 2.02(b)
311(b).................................................... 2.02(b)
311(c).................................................... Inapplicable
312(a).................................................... 2.02(a)
312(b).................................................... 2.02(b)
313....................................................... 2.03
314(a).................................................... 2.04
314(b).................................................... Inapplicable
314(c).................................................... 2.05
314(d).................................................... Inapplicable
314(e).................................................... 1.01, 2.05, 3.02
314(f).................................................... 2.01, 3.02
315(a).................................................... 3.01(d)
315(b).................................................... 2.07
315(c).................................................... 3.01
315(d).................................................... 3.01(d)
316(a).................................................... 1.01, 2.06, 5.04
316(b).................................................... 5.03
316(c).................................................... 8.02
317(a).................................................... Inapplicable
317(b).................................................... Inapplicable
318(a).................................................... 2.01(b)
318(b).................................................... 2.01
318(c).................................................... 2.01(a)
-------------
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
(i)
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.....................................................2
ARTICLE II
TRUST INDENTURE ACT
Section 2.01. Trust Indenture Act; Application................................4
Section 2.02. Reports by the Guarantee Trustee................................4
Section 2.03. Periodic Reports to Guarantee Trustee...........................4
Section 2.04. Evidence of Compliance with Conditions Precedent................4
Section 2.05. Events of Default; Waiver.......................................5
Section 2.06. Event of Default; Notice........................................5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.01. Powers and Duties of the Guarantee Trustee......................5
Section 3.02. Certain Rights of Guarantee Trustee.............................7
Section 3.03. Indemnity.......................................................8
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.01. Guarantee Trustee; Eligibility..................................8
Section 4.02. Appointment, Removal and Resignation of the
Guarantee Trustee...............................................9
ARTICLE V
GUARANTEE
Section 5.01. Guarantee......................................................10
Section 5.02. Waiver of Notice and Demand....................................10
Section 5.03. Obligations Not Affected.......................................10
Section 5.04. Rights of Holders..............................................11
Section 5.05. Guarantee of Payment...........................................11
Section 5.06. Subrogation....................................................11
Section 5.07. Independent Obligations........................................11
(ii)
ARTICLE VI
COVENANTS
Section 6.01. Ranking........................................................12
Section 6.02. Limitation of Transactions.....................................12
ARTICLE VII
TERMINATION
Section 7.01. Termination....................................................13
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Successors and Assigns.........................................13
Section 8.02. Amendments.....................................................13
Section 8.03. Notices........................................................13
Section 8.04. Benefit........................................................14
Section 8.05. Interpretation.................................................14
Section 8.06. Governing Law..................................................15
(iii)
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of September 10, 2002, is executed and
delivered by Public Service Enterprise Group Incorporated, a New Jersey
corporation (the "Guarantor"), to Wachovia Bank, National Association, a
national banking association duly organized and existing under the laws of the
United States of America, as trustee (the "Guarantee Trustee"), for the benefit
of the Holders (as defined herein) from time to time of the Preferred Trust
Securities (as defined herein) of PSEG Funding Trust I, a Delaware statutory
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Declaration"), dated as of September 10, 2002, among the trustees of the Issuer
named therein, the Guarantor, as depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer will
issue $460,000,000 aggregate liquidation amount of its 6.25% Preferred Trust
Securities (liquidation amount of $50 per preferred trust security) (the
"Preferred Trust Securities") representing undivided beneficial interests in the
assets of the Issuer and having the terms set forth in the Declaration;
WHEREAS, the Preferred Trust Securities will be issued by the Issuer and
the proceeds thereof, together with the proceeds from the sale by the Issuer of
its Common Securities (as defined herein) will be used to purchase the Senior
Deferrable Notes (as defined herein) of the Guarantor which will be deposited
with Wachovia Bank, National Association (formerly known as First Union National
Bank), as Property Trustee under the Declaration, as Trust Property (as defined
in the Declaration);
WHEREAS, as incentive for the Holders to purchase Preferred Trust
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Trust
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee Agreement") in substantially
identical terms to this Guarantee Agreement for the benefit of the holders of
the Common Securities, except that if an event of default (as defined in the
Declaration), has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders to receive Guarantee
Payments under this Guarantee Agreement.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Trust Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Trust Securities.
1
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Guarantee Agreement, each of
the terms set forth below shall, unless the context otherwise requires, have the
following meaning. Each capitalized or otherwise defined term used but not
otherwise defined herein shall have the meaning assigned to such terms in the
Declaration as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing undivided beneficial
interests in the assets of the Issuer and having the rights provided therefor in
the Declaration.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, that except with
respect to a default resulting from a failure to pay any Guarantee Payment, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or Distributions (as
defined in the Declaration), without duplication, with respect to the Preferred
Trust Securities, to the extent not paid or made by or on behalf of the Issuer:
(i) any accumulated and unpaid Distributions required to be paid on the
Preferred Trust Securities, to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price") with respect to
Preferred Trust Securities in respect of which the related Senior Deferrable
Notes have been redeemed by the Company upon the occurrence of a Tax Event
Redemption, to the extent the Issuer has funds available therefor, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Senior Deferrable
Notes to the Holders in exchange for Preferred Trust Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation amount and
all accumulated and unpaid Distributions on the Preferred Trust Securities to
the date of payment, to the extent the Issuer shall have funds available
therefor, and (b) the amount of assets of the Issuer remaining legally available
for distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution"). If an event of default under the Indenture has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders to receive Guarantee Payments.
"Guarantee Trustee" means Wachovia Bank, National Association, until a
Successor Guarantee Trustee (as defined below) has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Guarantee Trustee.
2
"Holder" means a Person in whose name a Preferred Trust Security is
registered in the Securities Register; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Trust Securities
have given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indenture" means the Indenture dated as of November 1, 1998, between
Public Service Enterprise Group Incorporated and Wachovia Bank, National
Association, as trustee thereunder, as amended and supplemented by the First
Supplemental Indenture, dated as of September 10, 2002, between Public Service
Enterprise Group Incorporated and Wachovia Bank, National Association.
"List of Holders" has the meaning specified in Section 2.01(c).
"Majority in liquidation amount of the Preferred Trust Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holders, of more
than 50% of the aggregate liquidation amount of all then outstanding Preferred
Trust Securities issued by the Issuer.
"Officers' Certificate" means a certificate signed by the Chairman, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Guarantor.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Vice President, any Assistant Vice President, any Trust Officer or Assistant
Trust Officer or any other officer of the Corporate Trust Department of the
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Senior Deferrable Notes" means the series of debt securities of the
Guarantor designated the o % Senior Deferrable Notes due 2007 held by the
Property Trustee (as defined in the Declaration).
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Tax Event Redemption" has the same meaning as defined in the Declaration.
3
ARTICLE II
TRUST INDENTURE ACT
Section 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(c) List of Holders. The Guarantor shall furnish or cause to be
furnished to the Guarantee Trustee (i) semiannually, on or before January
15 and July 15 of each year, a list, in such form as the Guarantee Trustee
may reasonably require, of the names and addresses of the Holders ("List
of Holders") as of a date not more than 15 days prior to the delivery
thereof, and (ii) at such other times as the Guarantee Trustee may request
in writing, within 30 days after the receipt by the Guarantor of any such
request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished, in each case to the extent such information
is in the possession or control of the Guarantor and is not identical to a
previously supplied List of Holders or has not otherwise been received by
the Guarantee Trustee in its capacity as such. The Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new
List of Holders.
(d) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
Section 2.02. Reports by the Guarantee Trustee. Within 60 days after May
31 of each year, the Guarantee Trustee shall provide to the Holders such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
Section 2.03. Periodic Reports to Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form and manner and at the times
required by Section 314 of the Trust Indenture Act.
Section 2.04. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Each Officers' Certificate and Opinion of Counsel delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
4
(a) a statement that each officer signing the Officers' Certificate
or Opinion of Counsel has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate or Opinion of Counsel and upon which the statements contained
therein are based;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
Section 2.05. Events of Default; Waiver. The Holders of a Majority in
liquidation amount of the Preferred Trust Securities may, by vote, on behalf of
the Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
Section 2.06. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to
the Holders, notices of all Events of Default known to the Guarantee
Trustee, unless such defaults have been cured before the giving of such
notice, provided, that, except in the case of a default in the payment of
a Guarantee Payment, the Guarantee Trustee shall be protected in
withholding such notice if and so long as the Board of Directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received
written notice, or a Responsible Officer charged with the administration
of the Declaration shall have obtained written notice, of such Event of
Default.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE
Section 3.01. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any
5
Person except a Holder exercising his or her rights pursuant to Section
5.04(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee
shall automatically vest in any Successor Guarantee Trustee upon
acceptance by such Successor Guarantee Trustee of its appointment
hereunder and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit
of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and no implied
covenants or obligations shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred
and is continuing (and has not been cured or waived pursuant to Section
2.06), the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or
use in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action,
its own negligent failure to act, its bad faith or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
6
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a Majority in liquidation amount of the
Preferred Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of this
Guarantee Agreement or reasonable indemnity against such risk or liability
is not reasonably assured to it.
Section 3.02. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.01:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
written advice or Opinion of Counsel with respect to legal matters shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by it hereunder in good faith and
in accordance with such advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such
7
reasonable indemnity as would satisfy a reasonable person in the position
of the Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it
in complying with such request or direction.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
Section 3.03. Indemnity. The Guarantor agrees to indemnify the Guarantee
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence, bad faith or willful misconduct on the part of the
Guarantee Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payments as a result
of any amount due to it under this Guarantee Agreement. The provisions of this
Section shall survive the resignation and removal of the Guarantee Trustee and
the termination of this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.01. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
8
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and shall be a
corporation meeting the requirements of Section 310(a) of the Trust
Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this
Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.01(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act. In determining
whether the Guarantee Trustee has a "conflicting interest" within the
meaning of Section 310(b)(1) of the Trust Indenture Act, the provisions
contained in the proviso to Section 310(b)(1) of the Trust Indenture Act
and the Guarantee Trustee's Statement of Eligibility on Form T-1 shall be
deemed incorporated herein.
Section 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until new, eligible
guarantee trustee has been appointed (a "Successor Guarantee Trustee") and
has accepted such appointment and assumed the applicable obligations
hereunder by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing
executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court
of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any,
as it may deem proper, appoint a Successor Guarantee Trustee.
9
ARTICLE V
GUARANTEE
Section 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders of the outstanding Preferred Trust
Securities the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer pursuant to the Declaration or by the
Guarantor pursuant to the Indenture), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or to the
Guarantee Trustee for remittance to the Holders or by causing the Issuer to pay
such amounts to the Holders.
Section 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
Section 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Trust
Securities to be performed or observed by the Issuer;
(b) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Trust Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(c) the voluntary or involuntary liquidation, termination, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(d) any invalidity of, or defect or deficiency in, the Preferred
Trust Securities;
(e) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(f) to the extent permitted by law, any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge
or defense of a guarantor, it being the intent of this Section 5.03 that
the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
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There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the
Holders of a Majority in liquidation amount of the Preferred Trust Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of this Guarantee
Agreement or exercise or direct the exercise of any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and (iv) if the
Guarantee Trustee has failed to enforce this Guarantee Agreement as above
provided, any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer or any
other Person. Notwithstanding the foregoing, if the Guarantor has failed to make
a Guarantee Payment, a Holder may directly institute a proceeding against the
Guarantor for enforcement of this Guarantee Agreement for such payment. The
Guarantor waives any right or remedy to require that any action on this
Guarantee Agreement be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
Section 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Senior Deferrable Notes to Holders as provided in the Declaration.
Section 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by the Issuer pursuant to Section 5.01; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
Section 5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Trust Securities and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
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ARTICLE VI
COVENANTS
Section 6.01. Ranking. This Guarantee Agreement will constitute a senior
unsecured obligation of the Guarantor and will rank (i) pari passu with the
senior unsecured liabilities of the Guarantor and with any unsecured senior
guarantee now or hereafter entered into by the Guarantor relating to the
Guarantor's unsecured senior liabilities, except those made subordinate by their
terms, and (ii) senior to the Guarantor's equity.
Section 6.02. Limitation of Transactions. So long as any Preferred Trust
Securities remain outstanding, if (i) there shall have occurred an Event of
Default, (ii) there shall have occurred an event of default under the Indenture
or (iii) the Guarantor has exercised its option to defer interest payments on
the Senior Deferrable Notes by extending the interest payment period as provided
therein, and such period or extension thereof shall be continuing, then (a) the
Guarantor shall not declare or pay any dividend on, make any distribution or
other payment with respect to, or redeem, purchase, acquire or make any
liquidation payment with respect to any of its capital stock (other than (1)
purchases or other acquisitions of shares of the Guarantor's capital stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee or director compensation or benefit plans, under the Guarantor's direct
stock purchase and dividend reinvestment plan, or pursuant to any contract or
security outstanding on the first day of any such event requiring the Guarantor
to purchase its capital stock, (2) as a result of a reclassification of the
Guarantor's capital stock or as a result of an exchange or conversion of one
class or series of the Guarantor's capital stock for another class or series of
the Guarantor's capital stock, (3) redemptions or repurchases of any rights
pursuant to a rights agreement, or (4) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged),
(b) the Guarantor shall not make any distribution on any security of a grantor
trust which ranks pari passu with the Preferred Trust Securities or pay interest
on its senior debt with similar deferral provisions to the Senior Deferrable
Notes, (c) the Guarantor shall not make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Guarantor that rank subordinate in right of payment to the Senior Deferrable
Notes and (d) the Guarantor shall not make any guarantee payments with respect
to the foregoing or with respect to any guarantee by the Guarantor of the debt
of any subsidiary of the Guarantor if such guarantee ranks subordinate in right
of payment to the Senior Deferrable Notes (other than pursuant to this Guarantee
Agreement or the Common Securities Guarantee Agreement).
In addition, so long as any Preferred Trust Securities remain outstanding,
the Guarantor (i) will remain the sole direct or indirect owner of all the
outstanding Common Securities; provided that any permitted successor of the
Guarantor under the Indenture may succeed to the Guarantor's ownership of the
Common Securities, (ii) will permit the Common Securities to be transferred only
as permitted by the Declaration, and (iii) will use its best efforts to cause
the Issuer to continue to be treated as a grantor trust for United States
federal income tax purposes, except in connection with a distribution of the
Senior Deferrable Notes, the redemption of all of the Trust Securities or
mergers, consolidations or amalgamations, each as provided in the Declaration,
in which case the Issuer would be dissolved.
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ARTICLE VII
TERMINATION
Section 7.01. Termination. This Guarantee Agreement shall terminate and be
of no further force and effect upon (i) full payment by the Issuer or the
Guarantor, as the case may be, of the Redemption Price for all Preferred Trust
Securities, (ii) the distribution of the Senior Deferrable Notes to the Holders
in accordance with Article VIII of the Declaration upon the dissolution of the
Issuer or (iii) full payment by the Issuer or the Guarantor, as the case may be,
of the amounts payable in accordance with the Declaration upon the dissolution
of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid with respect to Preferred
Trust Securities or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Trust Securities then outstanding. The
Guarantor may not consolidate with or merge with or into, or sell, convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety (either in one transaction or a series of transactions) to, any
Person unless permitted under Article Eight of the Indenture. In connection with
a consolidation, merger or sale involving the Guarantor that is permitted under
Article Eight of the Indenture the Person formed by or surviving such
consolidation or merger or to which such sale, conveyance, transfer or lease
shall have been made, if other than the Guarantor, shall expressly assume all of
the obligations of the Guarantor hereunder and under the Declaration.
Section 8.02. Amendments. Except with respect to any changes which do not
adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Guarantee Agreement may
only be amended with the prior approval of the Holders of a Majority in
liquidation amount of the Preferred Trust Securities (excluding any Preferred
Trust Securities held by the Guarantor or an affiliate thereof). The provisions
of Article VI of the Declaration concerning meetings of the Holders shall apply
to the giving of such approval.
Section 8.03. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing and delivered, telecopied
or mailed by first class mail, postage prepaid, as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders:
Public Service Enterprise Group Incorporated
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Treasurer
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
PSEG Funding Trust I
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Treasurer
with a copy to:
Wachovia Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
(c) if given to any Holder, at the address set forth in the
Securities Register.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 8.04. Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and is not separately transferable from the Preferred Trust
Securities.
Section 8.05. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(b) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(c) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
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(d) a reference to the singular includes the plural and vice versa;
and
(e) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
Section 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED,
as Guarantor
By:
------------------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Guarantee Trustee
By:
------------------------------------------
Name:
Title:
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