Exhibit 1-1
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(a New Jersey corporation)
Debt Securities
UNDERWRITING AGREEMENT
[DATE]
[Name and Address of Underwriters]
Ladies and Gentlemen:
Public Service Enterprise Group Incorporated, a New Jersey corporation
("PSEG"), proposes to issue and sell up to $1,500,000,000 aggregate initial
public offering price of its senior or subordinated debt securities (the "Debt
Securities"), from time to time, in or pursuant to one or more offerings on
terms to be determined at the time of sale.
The Debt Securities will be issued in one or more series as senior
indebtedness (the "Senior Debt Securities") under an indenture, dated as of
November 1, 1998 (the "Senior Indenture"), between PSEG and Wachovia Bank,
National Association (as successor to First Union National Bank), as trustee
(the "Senior Trustee"), or as subordinated indebtedness (the "Subordinated Debt
Securities") under an indenture, to be entered into as of the date of execution
(the "Subordinated Indenture", and collectively with the Senior Indenture, the
"Indentures", and each, an "Indenture"), between PSEG and Wachovia Bank,
National Association (as successor to First Union National Bank), as trustee
(the "Subordinated Trustee", and collectively with the Senior Trustee, the
"Trustees", and each, a "Trustee"). Each series of Debt Securities may vary, as
applicable, as to title, aggregate principal amount, rank, interest rate or
formula and timing of payments thereof, stated maturity date, redemption and/or
repayment provisions, sinking fund requirements, conversion provisions and any
other variable terms established by or pursuant to the applicable Indenture.
As used herein, "Securities" shall mean the Senior Debt Securities and the
Subordinated Debt Securities initially issuable by PSEG.
Whenever PSEG determines to make an offering of Securities through
________________ (the "Representative"), or through an underwriting syndicate
managed by the Representative, PSEG will enter into an agreement (each, a "Terms
Agreement") providing for the sale of such Securities to, and the purchase and
offering thereof by, the Representative and such other underwriters, if any,
selected by the Representative (the "Underwriters", which term shall include the
Representative, whether acting as sole Underwriter or as a member of an
underwriting syndicate, as well as any Underwriter substituted pursuant to
Section 10 hereof).
The Terms Agreement relating to the offering of Securities shall specify the
aggregate principal amount of Securities to be initially issued (the "Initial
Underwritten Securities"), the name of each Underwriter participating in such
offering (subject to substitution as provided in Section 10 hereof) and the name
of any Underwriter other than the Representative acting as co-manager in
connection with such offering, the aggregate principal amount of Initial
Underwritten Securities which each such Underwriter severally agrees to
purchase, whether such offering is on a fixed or variable price basis and, if on
a fixed price basis, the initial offering price, the price at which the Initial
Underwritten Securities are to be purchased by the Underwriters, the form, time,
date and place of delivery and payment of the Initial Underwritten Securities
and any other material variable terms of the Initial Underwritten Securities. In
addition, if applicable, such Terms Agreement shall specify whether PSEG has
agreed to grant to the Underwriters an option to purchase additional Securities
to cover over-allotments, if any, and the aggregate principal amount of
Securities subject to such option (the "Option Underwritten Securities"). As
used herein, the term "Underwritten Securities" shall include the Initial
Underwritten Securities and all or any portion of any Option Underwritten
Securities. The Terms Agreement, which shall be substantially in the form of
Exhibit A hereto, may take the form of an exchange of any standard form of
written telecommunication between PSEG and the Representative, acting for itself
and, if applicable, as representative of any other Underwriters. Each offering
of Underwritten Securities through the Representative as sole Underwriter or
through an underwriting syndicate managed by the Representative will be governed
by this Underwriting Agreement, as supplemented by the applicable Terms
Agreement.
PSEG has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-_________) for the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement has been declared effective by
the Commission and each Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and PSEG has filed such
post-effective amendments thereto as may be required prior to the execution of
the applicable Terms Agreement and each such post-effective amendment has been
declared effective by the Commission. Such registration statement (as so
amended, if applicable), including the information, if any, deemed to be a part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), together with registration statement on Form S-3 (No. 333-79101),
is referred to herein as the "Registration Statement"; and the final prospectus
and the final prospectus supplement relating to the offering of the Underwritten
Securities, in the form first furnished to the Underwriters by PSEG for use in
connection with the offering of the Underwritten Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall also be deemed to
include all documents incorporated therein by reference pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the
execution of the applicable Terms Agreement; provided, further, that if PSEG
files a registration statement with the Commission pursuant to Rule 462(b) of
the 1933 Act Regulations (the "Rule 462(b) Registration Statement"), then, after
such filing, all references to "Registration Statement" shall also be deemed to
include the Rule 462 Registration Statement; and provided, further, that if PSEG
elects to rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus"
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shall also be deemed to include the final or preliminary prospectus and the
applicable term sheet or abbreviated term sheet (the "Term Sheet"), as the case
may be, in the form first furnished to the Underwriters by PSEG in reliance upon
Rule 434 of the 1933 Act Regulations, and all references in this Underwriting
Agreement to the date of the Prospectus shall mean the date of the Term Sheet. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the Registration Statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness and prior to the execution and delivery of the
applicable Terms Agreement. For purposes of this Underwriting Agreement, all
references to the Registration Statement, Prospectus, Term Sheet or preliminary
prospectus or to any amendment or supplement to any of the foregoing shall be
deemed to include any copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Underwriting Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" (or
other references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be, prior to the execution of the applicable Terms Agreement;
and all references in this Underwriting Agreement to amendments or supplements
to the Registration Statement, Prospectus or preliminary prospectus shall be
deemed to mean and include the filing of any document under the 1934 Act which
is incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be, after the execution of the
applicable Terms Agreement.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by PSEG. PSEG represents and warrants
to the Representative, as of the date hereof, and to each Underwriter named in
the applicable Terms Agreement, as of the date thereof, as of the Closing Time
(as defined below) and, if applicable, as of each Date of Delivery (as defined
below) (in each case, a "Representation Date"), as follows:
(1) Compliance with Registration Requirements. PSEG meets the
requirements for use of Form S-3 under the 1933 Act. The Registration
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement (or such Rule 462(b)
Registration Statement) has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of PSEG, are contemplated by the Commission, and any request
on the part of the Commission for additional information has been complied
with. In addition, each Indenture has been duly qualified under the 1939
Act.
At the respective times the Registration Statement (including any
Rule 462(b) Registration Statement) and any post-effective amendments
thereto (including the filing
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of PSEG's most recent Annual Report on Form 10-K with the Commission (the
"Annual Report on Form 10-K")) became effective and at each Representation
Date, the Registration Statement (including any Rule 462(b) Registration
Statement) and any amendments thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations") and did not 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 not misleading. At the date of the Prospectus, at the
Closing Time and at each Date of Delivery, if any, neither the Prospectus
nor any amendments and supplements thereto included or will include an
untrue statement of a material fact or omitted or will omit 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. If
PSEG elects to rely upon Rule 434 of the 1933 Act Regulations, PSEG will
comply with the requirements of Rule 434. Notwithstanding the foregoing,
the representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to PSEG in writing by any Underwriter through the Representative
expressly for use in the Registration Statement or the Prospectus.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with the offering of Underwritten Securities will,
at the time of such delivery, be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
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 1933 Act and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to PSEG by an Underwriter through the
Representative expressly for use therein;
(2) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations") and,
when read together with the other information in the Prospectus, at the
date of the Prospectus, at the Closing Time and at each Date of Delivery,
if any, did not and will not
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include an untrue statement of a material fact or omit 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.
(3) Independent Accountants. The accountants who certified the
financial statements and any supporting schedules thereto included in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of PSEG included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, as well as those financial statements,
schedules and notes of any other entity included therein, present fairly
the financial position of PSEG and its consolidated subsidiaries, or such
other entity, as the case may be, at the dates indicated and the statement
of operations, stockholders' equity and cash flows of PSEG and its
consolidated subsidiaries, or such other entity, as the case may be, for
the periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement and the
Prospectus present fairly in accordance with GAAP the information required
to be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Registration
Statement and the Prospectus.
(5) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the business, properties, earnings or financial
condition of PSEG and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by PSEG
or any of its subsidiaries, other than those arising in the ordinary
course of business, which are material with respect to PSEG and its
subsidiaries considered as one enterprise and (C) except for regular
dividends on PSEG's common stock or preferred stock, in amounts per share
that are consistent with past practice or the applicable charter document
or supplement thereto, respectively, there has been no dividend or
distribution of any kind declared, paid or made by PSEG on any class of
its capital stock.
(6) Good Standing of PSEG. PSEG has been duly organized 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 to conduct its business as described in the Prospectus and
is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect.
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(7) Good Standing of Subsidiaries. Each "significant subsidiary" of
PSEG (as such term is defined in Rule 1-02 of Regulation S-X promulgated
under the ▇▇▇▇ ▇▇▇) and Public Service Electric and Gas Company, PSEG
Power LLC and PSEG Energy Holdings Inc. (each, a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation or limited liability company in good standing
under the laws of the jurisdiction of its organization, has power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation/ limited liability company to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect. Except as otherwise stated
in the Registration Statement and the Prospectus, all of the issued and
outstanding capital stock of each Subsidiary that is a corporation has
been duly authorized and is validly issued, fully paid and non-assessable
and is owned by PSEG, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding shares of capital stock of any Subsidiary
was issued in violation of preemptive or other similar rights of any
security holder of such Subsidiary.
(8) Capitalization. If the Prospectus contains a "Capitalization"
section, the authorized, issued and outstanding shares of capital stock of
PSEG is as set forth in the column entitled "Actual" under such section
(except for subsequent issuances thereof, if any, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). Such shares of capital stock have
been duly authorized and validly issued by PSEG and are fully paid and
non-assessable, and none of such shares of capital stock was issued in
violation of preemptive or other similar rights of any security holder of
PSEG.
(9) Authorization of this Underwriting Agreement and Terms
Agreement. This Underwriting Agreement has been, and the applicable Terms
Agreement as of the date thereof will have been, duly authorized, executed
and delivered by PSEG.
(10) Authorization of Underwritten Securities. The Underwritten
Securities being sold pursuant to the applicable Terms Agreement, whether
Senior Debt Securities and/or Subordinated Debt Securities, have been, or
as of the date of such Terms Agreement will have been, duly authorized by
PSEG for issuance and sale pursuant to this Underwriting Agreement and
such Terms Agreement. Such Underwritten Securities, when issued and
authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the consideration therefor specified in such
Terms Agreement, will constitute valid and binding obligations of PSEG,
enforceable against PSEG in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and except further as enforcement thereof may be limited by
requirements that a claim with respect to any Debt
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Securities payable in a foreign or composite currency (or a foreign or
composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or by governmental authority to limit, delay or
prohibit the making of payments outside the United States. Such
Underwritten Securities will be in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the applicable
Indenture.
(11) Authorization of the Indentures. Each applicable Indenture has
been, or prior to the issuance of the Debt Securities thereunder will have
been, duly authorized, executed and delivered by PSEG and, upon such
authorization, execution and delivery, will constitute a valid and binding
agreement of PSEG, enforceable against PSEG in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(12) Descriptions of the Underwritten Securities and the Indentures.
The Underwritten Securities being sold pursuant to the applicable Terms
Agreement and each applicable Indenture, as of each Representation Date,
when issued and delivered in accordance with the terms of the related
Underwritten Securities, will conform in all material respects to the
statements relating thereto contained in the Prospectus and will be
substantially in the form filed or incorporated by reference, as the case
may be, as an exhibit to the Registration Statement.
(13) Absence of Defaults and Conflicts. Neither PSEG nor any of its
Subsidiaries is in violation of its Amended and Restated Certificate of
Incorporation, other organization document or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which PSEG or any of its Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the assets, properties or operations
of PSEG or any of its Subsidiaries is subject (collectively, "Agreements
and Instruments"), except for such defaults that would not result in a
Material Adverse Effect. The execution, delivery and performance of this
Underwriting Agreement, the applicable Terms Agreement and each applicable
Indenture and any other agreement or instrument entered into or issued or
to be entered into or issued by PSEG in connection with the transactions
contemplated hereby or thereby or in the Registration Statement and the
Prospectus and the consummation of the transactions contemplated herein
and in the Registration Statement and the Prospectus (including the
issuance and sale of the Underwritten Securities and the use of the
proceeds from the sale of the Underwritten Securities as described under
the caption "Use of Proceeds") and compliance by PSEG with its obligations
hereunder and thereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any assets, properties or operations of PSEG or any of its
subsidiaries pursuant to, any
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Agreements and Instruments, nor will such action result in any violation
of the provisions of the charter or by-laws of PSEG or any of its
subsidiaries or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over PSEG or any of its
subsidiaries or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by PSEG or any of its subsidiaries.
(14) Absence of Labor Dispute. No labor dispute with the employees
of PSEG or any of its Subsidiaries exists or, to the knowledge of PSEG, is
imminent, and PSEG is not aware of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case,
may reasonably be expected to result in a Material Adverse Effect.
(15) Absence of Proceedings. Other than as set forth in or
contemplated by the Prospectus, there is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or to the knowledge of
PSEG threatened, against or affecting PSEG or any of its subsidiaries
which is required to be disclosed in the Registration Statement and the
Prospectus (other than as stated therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the consolidated assets,
properties or operations thereof or the consummation of the transactions
contemplated under the Prospectus, this Underwriting Agreement, the
applicable Terms Agreement or any applicable Indenture, or the performance
by PSEG of its obligations hereunder and thereunder. The aggregate of all
pending legal or governmental proceedings to which PSEG or any of its
subsidiaries is a party or of which any of their respective assets,
properties or operations is the subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(16) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(17) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, is necessary or required for the due authorization,
execution and delivery by PSEG of this Underwriting Agreement or the
applicable Terms Agreement or for the performance by PSEG of the
transactions contemplated under the Prospectus, this Underwriting
Agreement, such Terms Agreement or any applicable Indenture, except the
registration of the Securities under the 1933 Act, the qualification of
the Indentures under the 1939 Act and such consents, approvals,
registrations or qualifications as may be required under state securities
or Blue
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Sky laws in connection with the issuance and sale, as the case may be, of
the securities and except such as have been already made, obtained or
rendered, as applicable.
(18) Possession of Licenses and Permits. PSEG and its Subsidiaries
possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them. PSEG and its
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, result in a Material Adverse Effect. All of
the Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in a
Material Adverse Effect. Neither PSEG nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(19) Title to Property. PSEG and its Subsidiaries have good and
marketable title to all real property owned by PSEG and its Subsidiaries
and good title to all other properties owned by them, in each case, free
and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind, except (A) as otherwise stated
in the Registration Statement and the Prospectus or (B) those which do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by PSEG or any of its Subsidiaries. All of the leases and
subleases material to the business of PSEG and its Subsidiaries considered
as one enterprise, and under which PSEG or any of its Subsidiaries holds
properties described in the Prospectus, are in full force and effect, and
neither PSEG nor any of its Subsidiaries has received any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of PSEG or any of its Subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of PSEG
or such Subsidiary of the continued possession of the leased or subleased
premises under any such lease or sublease.
(20) Insurance. PSEG and its Subsidiaries have in full force and
effect insurance with reputable insurers covering their assets,
properties, operations, personnel and business against such losses,
damage, risks and hazards as are adequate in accordance with customary
industry practice to protect PSEG, its Subsidiaries and their businesses.
(21) Commodity Exchange Act. The Underwritten Securities being sold
pursuant to the applicable Terms Agreement, will be excluded or exempted
under, or beyond the purview of, the Commodity Exchange Act, as amended
(the "Commodity Exchange Act"), and the rules and regulations of the
Commodity Futures Trading Commission under the Commodity Exchange Act (the
"Commodity Exchange Act Regulations").
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(22) Investment Company Act. PSEG is not, and upon the issuance and
sale of the Underwritten Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").
(23) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would not, singly
or in the aggregate, result in a Material Adverse Effect, (A) neither PSEG
nor any of its Subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule
of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) PSEG and its
subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against PSEG or any of its subsidiaries
and (D) there are no events or circumstances that might reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or
agency, against or affecting PSEG or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(b) Officers' Certificates. Any certificate signed by any officer of PSEG
or any of its Subsidiaries and delivered to any Underwriter or to counsel for
the Underwriters in connection with the offering of the Underwritten Securities
shall be deemed a representation and warranty by PSEG to each Underwriter as to
the matters covered thereby on the date of such certificate and, unless
subsequently amended or supplemented, at each Representation Date subsequent
thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Underwritten Securities. The several commitments of the Underwriters
to purchase the Underwritten Securities pursuant to the applicable Terms
Agreement shall be deemed to have been made on the basis of the representations,
warranties and agreements herein contained and shall be subject to the terms and
conditions herein set forth.
(b) Option Underwritten Securities. Subject to the terms and conditions
herein set forth, PSEG may grant, if so provided in the applicable Terms
Agreement, an option to the Underwriters, severally and not jointly, to purchase
up to the aggregate principal amount of the Option Underwritten Securities set
forth therein at a price per Option Underwritten Security
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equal to the price per Initial Underwritten Security. Such option, if granted,
will expire 30 days after the date of such Terms Agreement, and may be exercised
in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Underwritten Securities upon notice by the
Representative to PSEG setting forth the aggregate principal amount of Option
Underwritten Securities as to which the several Underwriters are then exercising
the option and the time, date and place of payment and delivery for such Option
Underwritten Securities. Any such time and date of payment and delivery (each, a
"Date of Delivery") shall be determined by the Representative, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, unless otherwise agreed upon by the
Representative and PSEG. If the option is exercised as to all or any portion of
the Option Underwritten Securities, each of the Underwriters, severally and not
jointly, will purchase that proportion of the total aggregate principal amount
of Option Underwritten Securities then being purchased which the aggregate
principal amount of Initial Underwritten Securities each such Underwriter has
severally agreed to purchase as set forth in such Terms Agreement bears to the
total aggregate principal amount of Initial Underwritten Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the offices of PSEG, ▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon
by the Representative and PSEG, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date of the applicable Terms Agreement (unless postponed
in accordance with the provisions of Section 10 hereof), or such other time not
later than ten business days after such date as shall be agreed upon by the
Representative and PSEG (such time and date of payment and delivery being herein
called "Closing Time"). In addition, in the event that the Underwriters have
exercised their option, if any, to purchase any or all of the Option
Underwritten Securities, payment of the purchase price for, and delivery of such
Option Underwritten Securities, shall be made at the above-mentioned offices of
PSEG, or at such other place as shall be agreed upon by the Representative and
PSEG, on the relevant Date of Delivery as specified in the notice from the
Representative to PSEG.
Payment shall be made to PSEG by wire transfer of immediately available
funds to a bank account designated by PSEG, against delivery to the
Representative for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Underwritten Securities which it has severally agreed to purchase. the
Representative, individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the
Underwritten Securities to be purchased by any Underwriter whose funds have not
been received by the Closing Time or the relevant Date of Delivery, as the case
may be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. The Underwritten Securities shall be in
such denominations and registered in such names as the Representative may
request in writing at least one full business day prior to the Closing Time or
the relevant Date of Delivery, as the case may be. The Underwritten Securities
will be made available for examination and packaging by the
11
Representative in The City of New York not later than 9:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of PSEG. PSEG covenants with the Representative and
with each Underwriter participating in the offering of Underwritten Securities,
as follows:
(a) Compliance with Securities Regulations and Commission Requests. PSEG,
subject to Section 3(b), will comply with the requirements of Rule 430A of the
1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, if and as
applicable, and will notify the Representative(s) promptly, and confirm the
notice in writing, of (i) the effectiveness of any post-effective amendment to
the Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Underwritten Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. PSEG will promptly effect the filings necessary pursuant to Rule
424 and will take such steps as it deems necessary to ascertain promptly whether
the Prospectus transmitted for filing under Rule 424 was received for filing by
the Commission and, in the event that it was not, it will promptly file the
Prospectus. PSEG will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, promptly to use its best
efforts to obtain its withdrawal.
(b) Filing of Amendments. PSEG will give the Representative notice of its
intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations), any Term
Sheet or any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Representative with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not
file or use any such document of which the Representative or counsel for the
Underwriters shall reasonably disapprove.
(c) Delivery of Registration Statements. PSEG has furnished or will
deliver to the Representative and counsel for the Underwriters, in such
quantities as the Representative may reasonably request, without charge, signed
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein)
and signed copies of all consents and certificates of experts, and will also
deliver to the Representative, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. The Registration Statement and
each amendment thereto furnished to the Underwriters will be identical to any
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. PSEG will deliver to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and
12
PSEG hereby consents to the use of such copies for purposes permitted by the
1933 Act. PSEG will furnish to each Underwriter, without charge, during the
period when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. PSEG will comply with the
1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the
Underwritten Securities as contemplated in this Underwriting Agreement and the
applicable Terms Agreement and in the Registration Statement and the Prospectus.
If at any time when the Prospectus is required by the 1933 Act or the 1934 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for PSEG, to amend the Registration
Statement in order that the Registration Statement 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 not misleading or to
amend or supplement the Prospectus in order that the Prospectus will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, PSEG
will promptly prepare and file with the Commission, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and PSEG will furnish to the Underwriters, without charge,
such number of copies of such amendment or supplement as the Underwriters may
reasonably request.
(f) Blue Sky Qualifications. PSEG will use its best efforts, in
cooperation with the Underwriters, to qualify the Underwritten Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representative may designate and to
maintain such qualifications in effect for a period of not less than one year
from the date of the applicable Terms Agreement; provided, however, that PSEG
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Underwritten Securities have been so
qualified, PSEG will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a period
of not less than one year from the date of such Terms Agreement.
(g) Earnings Statement. PSEG will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its security
holders as soon as practicable an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
13
(h) Use of Proceeds. PSEG will use the net proceeds received by it from
the sale of the Underwritten Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(i) Listing. PSEG will use its best efforts to effect the listing of the
Underwritten Securities, prior to the Closing Time, on any national securities
exchange or quotation system if and as specified in the applicable Terms
Agreement.
(j) Restriction on Sale of Securities. Between the date of the applicable
Terms Agreement and the Closing Time or such other date specified in such Terms
Agreement, PSEG will not, without the prior written consent of the
Representative, directly or indirectly, issue, sell, offer or contract to sell,
grant any option for the sale of, or otherwise dispose of, the securities
specified in such Terms Agreement.
(k) Reporting Requirements. PSEG, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. PSEG will pay all expenses
incident to the performance of its obligations under this Underwriting Agreement
or the applicable Terms Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Underwriting
Agreement, any Terms Agreement, any Agreement Among Underwriters, the Indentures
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Underwritten Securities, (iii) the
preparation, issuance and delivery of the Underwritten Securities to the
Underwriters, including any transfer taxes and any stamp or other duties payable
upon the sale, issuance or delivery of the Underwritten Securities to the
Underwriters, (iv) the fees and disbursements of PSEG's counsel, accountants and
other advisors or agents (including transfer agents and registrars), as well as
the fees and disbursements of the Trustees and their respective counsel, (v) the
qualification of the Underwritten Securities under state securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation, printing and
delivery of the Blue Sky Survey, and any amendment thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheet, and the Prospectus and any amendments or supplements thereto, (vii)
the fees charged by nationally recognized statistical rating organizations for
the rating of the Underwritten Securities, (viii) the fees and expenses incurred
with respect to the listing of the Underwritten Securities, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review, if any, by the National Association
of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Underwritten Securities, (x) all other costs and expenses incident to the
performance of obligations hereunder which are not otherwise specifically
provided for in this Section and (xi) the fees and expenses of any Underwriter
acting in the capacity of a "qualified independent underwriter" (as defined in
Rule 2720(b)(15) of the Conduct Rules of the NASD), if applicable.
14
(b) Termination of Agreement. If the applicable Terms Agreement is
terminated by the Representative in accordance with the provisions of Section 5
hereof, PSEG shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Underwritten Securities pursuant to the
applicable Terms Agreement are subject to the accuracy of the representations
and warranties of PSEG contained in Section 1 hereof or in certificates of any
officer of PSEG or any of its subsidiaries delivered pursuant to the provisions
hereof, to the performance by PSEG of its covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective under the
1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or be pending or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel for the Underwriters. A prospectus containing information relating to
the description of the Underwritten Securities, the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any
required post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A),
or, if PSEG has elected to rely upon Rule 434 of the 1933 Act Regulations, a
Term Sheet including the Rule 434 Information shall have been filed with the
Commission in accordance with Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, the Representative
shall have received the favorable opinion, dated as of Closing Time, of either
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire, Associate General Counsel or R. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire,
Vice President and General Counsel of PSEG, in form and substance satisfactory
to counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters, to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters, with respect to the matters set forth in (6) to (9), (10) (solely
as to the information in the Prospectus under "Description of Debt Securities",
or any caption purporting to describe any such Securities), (16), (17), (20) and
the penultimate paragraph of Exhibit B hereto. In giving such opinion, such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York, the federal law of the United States and
the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Representative. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of PSEG and its
subsidiaries and certificates of public officials.
15
(d) Officer's Certificate. At Closing Time, there shall not have been,
since the date of the applicable Terms Agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of PSEG and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
Representative shall have received a certificate of the Chairman, the President
or any Vice President of PSEG, dated as of Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) are true and correct with the same force and effect
as though expressly made at and as of the Closing Time, (iii) PSEG has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted, are pending or, to the best of such
officer's knowledge, are threatened by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of the
applicable Terms Agreement, the Representative shall be furnished with a letter
from Deloitte & Touche LLP dated such date and addressed to the Board of
Directors of PSEG and to the Representative (on its own behalf and as
representative of the Underwriters) with copies thereof for each of the
Underwriters, to the effect that (i) they are independent public accountants
with respect to PSEG and its subsidiaries within the meaning of the 1933 Act and
the 1933 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
PSEG's most recent Annual Report on Form 10-K filed with the Commission under
Section 13 of the 1934 Act (the "Form 10-K") comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 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 PSEG and its subsidiaries incorporated
by reference in the Registration Statement and the Prospectus and included in
PSEG's Form 10-Q Quarterly Reports filed with the Commission under Section 13 of
the 1934 Act (the "Forms 10-Q") subsequent to the most recent Form 10-K, (2) a
reading of the latest available unaudited financial statements of PSEG (3) a
reading of the minutes of Meetings of the Shareholders and of the Board of
Directors of PSEG 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 PSEG 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 Underwriters),
nothing has come to their attention which caused them to believe that (A) any
material modifications should be made to the unaudited financial statements
included in the Forms 10-Q for them to be in conformity with generally accepted
accounting principles; (B) the unaudited financial statements included in the
Forms 10-Q do not comply as to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act Regulations or (C) at
the date of the latest available financial statements and at a specified date
16
not more than three days prior to the date of such letter, there was any change
in the common stock or preferred stock or increase in long-term debt (except for
such stock and long-term debt acquired for sinking fund purposes or redeemed
pursuant to optional redemption or sinking fund provisions, or changes in
capital lease obligations incurred in the ordinary course of PSEG's business) of
PSEG or any decrease in the consolidated net assets of PSEG (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 PSEG 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 days prior to the date of such letter, there were any decreases, as
compared with the corresponding period in the preceding year, in consolidated
revenues or net income of PSEG, 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
Underwriters and PSEG; (iv) in addition to the audit referred to in their report
included or incorporated by reference in the Registration Statement and the
Prospectus, and the limited procedures referred to in clause (iii) above, they
have carried out certain other specified procedures, not constituting an audit,
with respect to certain amounts, percentages and financial information which are
included or incorporated by reference in the Registration Statement and the
Prospectus and which are specified by the Underwriters, and have found such
amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of PSEG and its subsidiaries
identified in such letter, provided, that said letter may vary from requirements
specified above in such manner as the Representative may deem not to be material
or as may be acceptable to the Representative with the consent of Underwriters
who, together with the Representative, have agreed to purchase in the aggregate
50% or more of the Underwritten Securities.
(f) Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from Deloitte & Touche LLP a letter, dated as of Closing Time, in
form and substance satisfactory to the Representative, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (e) of this Section 5, except that the specified date referred to
shall be a date not more than three business days prior to the Closing Time.
(g) Ratings. At Closing Time and at any relevant Date of Delivery, the
Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical rating organization", as defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations, as specified in the
applicable Terms Agreement, and PSEG shall have delivered to the Representative
a letter, dated as of such date, from each such rating organization, or other
evidence satisfactory to the Representative, confirming that the Underwritten
Securities have such ratings. Since the time of execution of such Terms
Agreement, there shall not have occurred a downgrading in, or withdrawal of, the
rating assigned to the Underwritten Securities or any of PSEG's other securities
by any such rating organization, and no such rating organization shall have
publicly announced that it has under surveillance or review its rating of the
Underwritten Securities or any of PSEG's other securities.
(h) Approval of Listing. At Closing Time, the Underwritten Securities
shall have been approved for listing, subject only to official notice of
issuance, if and as specified in the applicable Terms Agreement.
17
(i) No Objection. If the Registration Statement or an offering of
Underwritten Securities has been filed with the NASD for review, the NASD shall
not have raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(j) Lock-up Agreements. On the date of the applicable Terms Agreement, the
Representative shall have received, in form and substance satisfactory to it,
each lock-up agreement, if any, specified in such Terms Agreement as being
required to be delivered by the persons listed therein.
(k) Over-Allotment Option. In the event that the Underwriters are granted
an over-allotment option by PSEG in the applicable Terms Agreement and the
Underwriters exercise their option to purchase all or any portion of the Option
Underwritten Securities, the representations and warranties of PSEG contained
herein and the statements in any certificates furnished by PSEG or any of its
subsidiaries hereunder shall be true and correct as of each Date of Delivery,
and, at the relevant Date of Delivery, the Representative shall have received:
(1) A certificate, dated such Date of Delivery, of the Chairman, the
President or any Vice President of PSEG, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains true
and correct as of such Date of Delivery.
(2) The favorable opinion of either ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire,
Associate General Counsel or R. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire, Vice President and
General Counsel for PSEG, each in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Underwritten Securities and otherwise to the same effect as the
opinion required by Section 5(b) hereof.
(3) The favorable opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel
for the Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(4) A letter from Deloitte & Touche LLP, in form and substance
satisfactory to the Representative and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to
the Representative pursuant to Section 5(f) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph shall
be a date not more than three business days prior to such Date of
Delivery.
(5) Since the time of execution of such Terms Agreement, there shall
not have occurred a downgrading in, or withdrawal of, the rating assigned
to the Underwritten Securities or any of PSEG's other securities by any
such rating organization, and no such rating organization shall have
publicly announced that it has under surveillance or review its rating of
the Underwritten Securities or any of PSEG's other securities.
(l) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Underwritten Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all
18
proceedings taken by PSEG in connection with the issuance and sale of the
Underwritten Securities as herein contemplated shall be satisfactory in form and
substance to the Representative and counsel for the Underwriters.
(m) Termination of Terms Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
the applicable Terms Agreement (or, with respect to the Underwriters' exercise
of any applicable over-allotment option for the purchase of Option Underwritten
Securities on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase the Option Underwritten Securities on such Date of
Delivery) may be terminated by the Representative by notice to PSEG at any time
at or prior to the Closing Time (or such Date of Delivery, as applicable), and
such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. PSEG agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information deemed to be a part thereof, if applicable,
or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, 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 PSEG; 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;
provided, however, that this indemnity agreement shall not apply (i) to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information
19
furnished to PSEG by any Underwriter through the Representative expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or (ii) to any Underwriter in connection with any
preliminary prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results solely from the fact that such Underwriter
sold Underwritten 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 1933 Act, if PSEG has previously
furnished to the Representative on behalf of the Underwriters, including such
Underwriter, the copies thereof theretofore requested by the Representative, and
the loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in a preliminary prospectus
that was corrected in the Prospectus.
(b) In no case shall PSEG be liable under the indemnity agreement set
forth in Section 6(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. PSEG shall be
entitled to participate at its own expense in the defense, or, if it so elects,
within a reasonable time after receipt of such notice, to assume the defense of
any suit brought to enforce any such claim, but if it so elects to assume the
defense, such defense shall be conducted by counsel chosen by it and approved by
the Underwriter or Underwriters or controlling person or persons, defendant or
defendants in any suit so brought, which approval shall not be unreasonably
withheld. In the event that PSEG elects to assume the defense of any such suit
and retains such counsel, the Underwriter or Underwriters or controlling person
or persons, defendant or defendants in the suit shall bear the fees and expenses
of any additional counsel thereafter retained by them. In the event that the
parties to any such action (including impleaded parties) include PSEG and one or
more Underwriters and any such Underwriter shall have been advised by counsel
chosen by it and satisfactory to PSEG, 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 PSEG, PSEG shall not have the right to assume the defense of
such action on behalf of such Underwriter and PSEG 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 PSEG shall not, 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 Representative in
writing. PSEG agrees to notify the Representative promptly after the assertion
of any claim against it, any of its directors, any of its officers who signed
the Registration Statement, or any person who controls it within the meaning of
Section 15 of the 1933 Act, in connection with the issuance and sale, as the
case may be, of the Securities.
(c) Indemnification of PSEG, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless PSEG, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls PSEG within the meaning of
20
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to PSEG by such Underwriter through the Representative expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto). In case
any action shall be brought against PSEG 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 PSEG, and PSEG and each person so indemnified shall have the
rights and duties given to the Underwriters by the provisions of Section 6(b)
hereof.
(d) The indemnity agreements contained in this Section 6 shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of PSEG, or any Underwriter or any controlling person, and shall
survive the delivery of the Securities to the Underwriters.
(e) Settlement. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, PSEG and the Underwriters
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreements incurred by
PSEG 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 in the Terms Agreement or appearing on the cover page
of the Prospectus relating to the Securities bears to the initial public
offering price appearing thereon and PSEG, is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) 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 1933 Act shall have the same rights to
contribution as such Underwriter, and each director of PSEG, each officer of
PSEG who signed the Registration Statement, and each person, if any, who
controls PSEG
21
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as PSEG. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the aggregate principal
amount of Initial Underwritten Securities set forth opposite their respective
names in the applicable Terms Agreement and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Underwriting
Agreement or the applicable Terms Agreement or in certificates of officers of
PSEG or any of its subsidiaries submitted pursuant hereto or thereto shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or controlling person, or by or on
behalf of PSEG, and shall survive delivery of and payment for the Underwritten
Securities.
If this Agreement shall be terminated pursuant to Section 9 hereof, PSEG
shall not be under any liability to any Underwriter except as provided in
Sections 4, 6 and 7 hereof; but if, for any other reason the transactions
contemplated herein are not consummated, PSEG will reimburse the Underwriters
for all out-of-pocket expenses, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Securities, but PSEG shall then be under no further
liability to the Underwriters in respect of the Securities not so delivered
except as provided in Sections 4, 6 and 7 hereof. Except as provided above, PSEG
shall not 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, notice or agreement on behalf of any Underwriter
made or given by the representatives jointly or by the Representative on behalf
of the representatives.
SECTION 9. Termination.
(a) Underwriting Agreement. This Underwriting Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by PSEG
or by the Representative upon the giving of 30 days' prior written notice of
such termination to the other party hereto.
(b) Terms Agreement. The Representative may terminate the applicable Terms
Agreement, by notice to PSEG, at any time at or prior to the Closing Time or any
relevant Date 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, (y) trading in any of PSEG's securities on the New
York Stock Exchange or (z) commercial banking or securities settlement or
clearance services in the United States, 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 Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering of the
Securities or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus, or (b) the rating
22
accorded the Securities or any of PSEG's debt securities or preferred stock by
any Rating Agency shall have been lowered since the time this Underwriting
Agreement was executed or if any Rating Agency shall have publicly announced
since the time this Underwriting Agreement was executed that it has placed its
rating of the Securities or any of PSEG's debt securities or preferred stock
under surveillance or review, with possible negative implications.
(c) Liabilities. If this Underwriting Agreement or the applicable Terms
Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Underwritten Securities which it
or they are obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), then the Representative shall have the right, within 36
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 36-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of Underwritten
Securities to be purchased on such date pursuant to such Terms
Agreement, the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in
the proportions that their respective underwriting obligations under
such Terms Agreement bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities exceeds
10% of the aggregate principal amount of Underwritten Securities to
be purchased on such date pursuant to such Terms Agreement, such
Terms Agreement (or, with respect to the Underwriters' exercise of
any applicable over-allotment option for the purchase of Option
Underwritten Securities on a Date of Delivery after the Closing
Time, the obligations of the Underwriters to purchase, and PSEG to
sell, such Option Underwritten Securities on such Date of Delivery)
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and PSEG with respect to the related Option Underwritten
Securities, as the case may be, either the Representative or PSEG shall have the
right to postpone the Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
23
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at
____________________________ attention of ______________; and notices to PSEG
shall be directed to it at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇ Esq., Associate General Counsel.
SECTION 12. Parties. This Underwriting Agreement and the applicable Terms
Agreement shall each inure to the benefit of and be binding upon PSEG, the
Representative and, upon execution of such Terms Agreement, any other
Underwriters and their respective successors. Nothing expressed or mentioned in
this Underwriting Agreement or such Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and PSEG and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Underwriting Agreement or such Terms Agreement or any provision
herein or therein contained. This Underwriting Agreement and such Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Underwritten Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND ANY
APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
24
SECTION 14. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
Very truly yours,
PUBLIC SERVICE ENTERPRISE
GROUP INCORPORATED
By:
---------------------------------------
Title
Confirmed and accepted as of the
date first above written:
[Representative]
By:
-----------------------------------
Title:
25
Exhibit A
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(a New Jersey corporation)
Debt Securities
TERMS AGREEMENT
[Date]
To: Public Service Enterprise Group Incorporated
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We understand that Public Service Enterprise Group Incorporated, a New
Jersey corporation ("PSEG"), proposes to issue and sell $_______________
aggregate principal amount of its [senior] [subordinated] debt securities (the
"Debt Securities") (such securities also being hereinafter referred to as the
"Underwritten Securities"). Subject to the terms and conditions set forth or
incorporated by reference herein, the underwriters named below (the
"Underwriters") offer to purchase, severally and not jointly, the principal
amount of Underwritten Securities opposite their names set forth below at the
purchase price set forth below.
Underwriter Principal Amount
----------- ----------------
___________________................................ $____________
___________________................................ ____________
Total.............................................. $____________
The Underwritten Securities shall have the following terms:
Title:
Rank:
Ratings: ▇▇▇▇▇'▇ Investors Service, Inc.: ________
Standard & Poor's Rating Services: ________
Aggregate principal amount: $______________
A-1
Aggregate principal amount of Option Underwritten Securities: __________
Denominations: $1,000 and integral multiples thereof.
Currency of payment: U.S. dollars.
Interest rate or formula:
Interest payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Sinking fund requirements: None.
Listing requirements: None.
Black-out provisions: Three business days from the date of this Agreement.
Fixed or Variable Price Offering: [Fixed Price Offering]
Initial public offering price per security:
____% of the principal amount, plus
accrued interest, if any,
from __________, 200_.
Purchase price per security:
____% of principal amount, plus accrued
interest, if any, from _____________,
200_.
Form: Global Note through the facilities of The Depository Trust Company.
Other terms and conditions:
A-2
Closing date and location: ______________, 200_, 9:00 A.M.
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
All of the provisions contained in the document attached as Annex I hereto
entitled "PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED -- Debt Securities --
Underwriting Agreement" are hereby incorporated by reference in their entirety
herein and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.
A-3
Please accept this offer no later than 7:00 o'clock P.M. (New York City
time) on _______________, 200_ by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
[Underwriters]
By: [Representative]
----------------------------------
Authorized Signatory
On behalf of itself and the other
Underwriters named above.
Accepted:
PUBLIC SERVICE ENTERPRISE
GROUP INCORPORATED
By:
--------------------------------
Name:
Title:
A-4
Exhibit B
FORM OF OPINION OF PSEG'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) PSEG has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Jersey.
(2) PSEG has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under, or as contemplated under, the
Underwriting Agreement and the applicable Terms Agreement.
(3) PSEG is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect.
(4) Each Subsidiary has been duly organized and is validly existing as a
corporation or limited liability company in good standing under the laws of the
jurisdiction of its organization, has power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation/ limited liability
company to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing would not result in a Material Adverse Effect.
Except as otherwise stated in the Registration Statement and the Prospectus, all
of the issued and outstanding capital stock of each Subsidiary has been duly
authorized and is validly issued, fully paid and non-assessable and, to the best
of my knowledge, is owned by PSEG, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding shares of capital stock of any Subsidiary was
issued in violation of preemptive or other similar rights of any security holder
of such Subsidiary.
(5) The authorized, issued and outstanding shares of capital stock of PSEG
is as set forth in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances thereof, if any, pursuant to
reservations, agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options referred to in
the Prospectus). Such shares of capital stock have been duly authorized and
validly issued by PSEG and are fully paid and non-assessable, and none of such
shares of capital stock was issued in violation of preemptive or other similar
rights of any security holder of PSEG.
(6) The Underwriting Agreement and the applicable Terms Agreement have
been duly authorized, executed and delivered by PSEG.
Annex I-1
(7) The Underwritten Securities have been duly authorized by PSEG for
issuance and sale pursuant to the Underwriting Agreement and the applicable
Terms Agreement. The Underwritten Securities, when issued and authenticated in
the manner provided for in the applicable Indenture and delivered against
payment of the consideration therefor specified in such Terms Agreement, will
constitute valid and binding obligations of PSEG, enforceable against PSEG in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law), and except further as enforcement thereof may be limited by
requirements that a claim with respect to any debt securities payable in a
foreign or composite currency (or a foreign or composite currency judgment in
respect of such claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or by governmental
authority to limit, delay or prohibit the making of payments outside the United
States. The Underwritten Securities are in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the applicable
Indenture.
(8) The applicable Indenture has been duly authorized, executed and
delivered by PSEG and (assuming due authorization, execution and delivery
thereof by the applicable Trustee) constitutes a valid and binding agreement of
PSEG, enforceable against PSEG in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(9) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and the Indenture conform, when issued and delivered in
accordance with the terms of the related Underwritten Securities, will conform,
in all material respects to the statements relating thereto contained in the
Prospectus and are in substantially the form filed or incorporated by reference,
as the case may be, as an exhibit to the Registration Statement.
(10) The information in the Prospectus under "Description of Debt
Securities" or any caption purporting to describe any such Securities, in the
Annual Report on Form 10-K under "Regulatory Issues" and "Environmental Matters"
in Item 1 - Business and under Item 3 - Legal Proceedings, to the extent that it
constitutes matters of law, summaries of legal matters or PSEG's charter, bylaws
or legal proceedings, or legal conclusions, has been reviewed by me and is
correct in all material respects.
(11) To the best of my knowledge, neither PSEG nor any of its Subsidiaries
is in violation of its charter or by-laws and no default by PSEG or any of its
Subsidiaries exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
Annex I-2
(12) The execution, delivery and performance of the Underwriting
Agreement, the applicable Terms Agreement and the applicable Indenture and any
other agreement or instrument entered into or issued or to be entered into or
issued by PSEG in connection with the transactions contemplated in the
Registration Statement and the Prospectus and the consummation of the
transactions contemplated in the Underwriting Agreement and such Terms Agreement
and in the Registration Statement and the Prospectus (including the issuance and
sale of the Underwritten Securities and the use of the proceeds from the sale of
the Underwritten Securities as described under the caption "Use of Proceeds")
and compliance by PSEG with its obligations thereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
assets, properties or operations of PSEG or any of its subsidiaries pursuant to,
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to me, to which PSEG or
any of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the assets, properties or operations of PSEG or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the charter or by-laws of PSEG or any of its subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to me, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over PSEG or any of its subsidiaries or any of
their assets, properties or operations.
(13) To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation to which PSEG or any of its
subsidiaries thereof is a party or to which the assets, properties or operations
of PSEG or any of its subsidiaries thereof is subject, before or by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect or which might reasonably be
expected to materially and adversely affect the assets, properties or operations
thereof or the consummation of the transactions contemplated under the
Underwriting Agreement, the applicable Terms Agreement or the Indenture or the
performance by PSEG of its obligations thereunder.
(14) All descriptions in the Prospectus of contracts and other documents
to which PSEG or its subsidiaries are a party are accurate in all material
respects. To the best of my knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all material respects.
(15) To the best of my knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(16) The Registration Statement (including any Rule 462(b) Registration
Statement) has been declared effective under the 1933 Act. Any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b). To the best of my knowledge, no stop
order suspending the effectiveness of the Registration Statement (or such Rule
462(b) Registration Statement) has been issued under the 1933 Act and
Annex I-3
no proceedings for that purpose have been initiated or are pending or threatened
by the Commission.
(17) The Registration Statement (including any Rule 462(b) Registration
Statement) and the Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement
(including any Rule 462(b) Registration Statement) and Prospectus, excluding the
documents incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or omitted therefrom and each Trustee's Statement of
Eligibility on Form T-1 (the "Form T-1s"), as to which I express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(18) The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules therein or omitted therefrom,
as to which I express no opinion), when they became effective or were filed with
the Commission, as the case may be, complied as to form in all material respects
with the requirements of the 1933 Act or the 1934 Act, as applicable, and the
rules and regulations of the Commission thereunder.
(19) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the due authorization,
execution or delivery by PSEG of the Underwriting Agreement or the applicable
Terms Agreement or for the performance by PSEG of the transactions contemplated
under the Prospectus, the Underwriting Agreement, such Terms Agreement or the
Indenture, other than under the 1933 Act, the 1933 Act Regulations, the 1939 Act
and the 1939 Act Regulations, which have already been made, obtained or
rendered, as applicable.
(20) The applicable Indenture has been duly qualified under the 1939 Act.
(21) The Underwritten Securities, upon issuance, will be excluded or
exempted under, or beyond the purview of, the Commodity Exchange Act, as amended
(the "Commodity Exchange Act"), and the rules and regulations of the Commodity
Futures Trading Commission under the Commodity Exchange Act (the "Commodity
Exchange Act Regulations").
(22) PSEG is not, and upon the issuance and sale of the Underwritten
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the "1940
Act").
Nothing has come to my attention that would lead me to believe that the
Registration Statement (including any Rule 462(b) Registration Statement) or any
post-effective amendment thereto (except for financial statements and supporting
schedules and other financial data included therein or omitted therefrom and for
the Form T-1s, as to which I make no statement), at the time the Registration
Statement (including any Rule 462(b) Registration Statement) or any
post-effective amendment thereto (including the filing of PSEG's Annual Report
on Form 10-K with the Commission) became effective or at the date of the
applicable Terms Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be
Annex I-4
stated therein or necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto (except for financial
statements and supporting schedules and other financial data included therein or
omitted therefrom, as to which I make no statement), at the time the Prospectus
was issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent he deems proper, on
certificates of responsible officers of PSEG and public officials. Such opinion
shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
Annex I-5
