As filed with the Securities and Exchange Commission on April 23, 1996
Registration No. 33-_____
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
Public Service Electric and Gas PSE&G Capital Trust I
Company PSE&G Capital Trust II
(Exact name of registrant as specified PSE&G Capital Trust III
in charter) (Exact name of registrants as
specified in Trust Agreements)
Delaware
New Jersey
(State or other jurisdiction of incorporation or organization)
22-1212800 (to be applied for)
(I.R.S. Employer Identification No.)
80 Park Plaza
P.O. Box 570
Newark, New Jersey 07101
(201) 430-7000
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
Robert C. Murray
Senior Vice President
and Chief Financial Officer
80 Park Plaza, T4B
P.O. Box 570
Newark, New Jersey 07101
(201) 430-5630
(Name, address, including zip code, and telephone number, including area
code, of agent for service for each registrant)
with copies to:
James T. Foran, Esquire Howard G. Godwin, Jr., Esquire
General Corporate Counsel Brown & Wood
80 Park Plaza, T5B One World Trade Center
P.O. Box 570 New York, New York 10048
Newark, New Jersey 07101
Approximate date of commencement of proposed sale to the public: After
the Registration Statement becomes effective, as determined by market
conditions and other factors.
___________________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box.
___________________
<PAGE>
<TABLE><CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Class of Amount To Be Maximum Maximum Amount of
Securities To Be Registered Registered(1) Offering Price Aggregate Registration
Per Unit(2)(3) Offering Fee
Price(2)(3)
<S> <C> <C> <C> <C>
PSE&G Capital Trust I, II and III
Cumulative Quarterly Income
Preferred Securities . . . . . .
Public Service Electric and Gas
Company Guarantees with respect to
Preferred Securities(4) . . . .
Public Service Electric and Gas
Company Deferrable Interest
Subordinated Debentures . . . .
Total . . . . . . . . . . . . . . . $350,000,000 100% $350,000,000 $120,689.66
</TABLE>
(1) There are being registered hereunder a presently indeterminate
number of Cumulative Quarterly Income Preferred Securities of PSE&G
Capital Trust I, II and III with an aggregate initial offering
price not to exceed $350,000,000 and related Guarantees and
Deferrable Interest Subordinated Debentures of Public Service
Electric and Gas Company for which no separate consideration will
be received.
(2) Estimated solely for the purpose of determining the registration
fee.
(3) Pursuant to Rule 457(n) and (o), the registration fee is calculated
on the basis of the proposed maximum offering price of the
Cumulative Quarterly Income Preferred Securities.
(4) This registration is deemed to include the rights of holders of the
Cumulative Quarterly Income Preferred Securities under the
Guarantees and certain backup undertakings as described in the
Registration Statement.
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
===========================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 23, 1996
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED _______________, 1996
__________ Preferred Securities
PSE&G Capital Trust I
_____% Cumulative Quarterly Income Preferred Securities (QUIPS(SM)),* Series A
(liquidation amount $25 per Preferred Security)
guaranteed to the extent PSE&G Capital Trust I
has funds as set forth herein by
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
_________________________________
The _____% Cumulative Quarterly Income Preferred Securities, Series A
(the "Series A Preferred Securities") offered hereby represent undivided
beneficial interests in the assets of PSE&G Capital Trust I, a statutory
business trust created under the laws of the State of Delaware (the "Series
A Issuer"). Public Service Electric and Gas Company ("PSE&G") will be the
owner of the beneficial interests represented by the common
(continued on next page)
See "Risk Factors" commencing on page S-3 for certain information
relevant to an investment in the Series A Preferred Securities, including
the period during which and circumstances under which payments of
Distributions on the Series A Preferred Securities may be deferred and the
related Federal income tax consequences.
Application will be made to list the Series A Preferred Securities on
the New York Stock Exchange. If approved for listing, trading of the
Series A Preferred Securities is expected to commence within a 30-day
period after the initial delivery thereof.
_________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_________________________________
Proceeds to
Initial Public Underwriting the Series
Offering Price Commission(1)
A Issuer(2)(3)
-------------- ------------- --------------
Per Series A Preferred $25.00 (2) $25.00
Security . . . . . . . . .
Total . . . . . . . . . . . $___________ (2) $___________
_______________________
(1) PSE&G and the Series A Issuer have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Series A
Preferred Securities will be used to purchase the Series A Debentures,
the Underwriting Agreement provides that PSE&G will pay to the
Underwriters, as compensation for their arranging the investment
therein of such proceeds, $__________ per Series A Preferred Security
(or $__________ in the aggregate). See "Underwriting."
(3) Expenses of the offering, which are payable by PSE&G, are estimated to
be $______________.
_________________________________
The Series A Preferred Securities offered hereby are offered severally
by the Underwriters, as specified herein, subject to receipt and acceptance
by them and subject to their right to reject any order in whole or in part.
It is expected that delivery of the Series A Preferred Securities will be
made in book-entry-only form through the facilities of DTC on or about June
____, 1996.
_______________________
*QUIPS is a service mark of Goldman, Sachs & Co.
Goldman, Sachs & Co.
_____________________
The date of this Prospectus Supplement is __________, 1996.
<PAGE>
(continued from previous page)
securities of the Series A Issuer (the "Common Securities"). First Union
National Bank is the Property Trustee of the Series A Issuer (the "Property
Trustee"). The Series A Issuer exists for the sole purpose of issuing
beneficial interests in the assets of the Series A Issuer and investing the
proceeds thereof in _____% Deferrable Interest Subordinated Debentures, Series A
to be issued by PSE&G (the "Series A Debentures"). The Series A Preferred
Securities will have a preference over the Common Securities under certain
circumstances with respect to cash distributions and amounts payable on
liquidation or redemption. See "Description of the Preferred Securities -
Subordination of Common Securities" in the accompanying Prospectus.
Holders of the Series A Preferred Securities will be entitled to receive
cumulative cash distributions ("Distributions") at an annual rate of _____% of
the liquidation amount of $25 per Series A Preferred Security, accumulating from
the date of original issuance and payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year, commencing June 30, 1996.
So long as a Debenture Event of Default has not occurred and is continuing,
PSE&G has the right to defer payments of interest on the Series A Debentures by
extending the interest payment period in respect thereof for up to 20
consecutive quarters (each, an "Extension Period"). See "Certain Terms of the
Series A Preferred Securities---Distributions" herein and "Description of the
Debentures--Option to Extend Interest Payment Period" in the accompanying
Prospectus. If and for so long as interest payments are so deferred,
Distributions on the Series A Preferred Securities will also be deferred.
During an Extension Period, Distributions will continue to accumulate, and
owners of Series A Preferred Securities will be required to accrue interest
income for Federal income tax purposes. See "United States Taxation--Potential
Extension of Interest Payment Period and Original Issue Discount."
PSE&G has, through the Series A Guarantee, the Trust Agreement, the
Indenture and the Series A Debentures, taken together, fully, irrevocably and
unconditionally guaranteed all of the Series A Issuer's obligations under the
Series A Preferred Securities. Under the Series A Guarantee, PSE&G guarantees
the payment of Distributions and payments on redemption or liquidation with
respect to the Series A Preferred Securities, in each case out of funds
available therefor held by the Series A Issuer, to the extent described herein.
See "Description of the Guarantee" in the accompanying Prospectus. If PSE&G
fails to make payments on the Series A Debentures, the Series A Issuer will not
have sufficient funds to make the related payments, including Distributions, on
the Series A Preferred Securities. The Series A Guarantee does not cover such
payments when the Series A Issuer does not have sufficient funds available
therefor. In such event, the remedy of a holder of Series A Preferred
Securities is to enforce the rights of the Series A Issuer under the Series A
Debentures. See "Description of the Guarantee - Guarantee Events of Default" in
the accompanying Prospectus.
The obligations of PSE&G under the Series A Guarantee are subordinate and
junior in right of payment to all general liabilities of PSE&G, and the
obligations of PSE&G under the Series A Debentures are subordinate and junior in
right of payment to all present and future Senior Indebtedness of PSE&G. At
March 31, 1996, the Senior Indebtedness of PSE&G aggregated approximately $5.315
billion.
The Series A Preferred Securities are subject to mandatory redemption upon
repayment of the Series A Debentures at maturity on _________, ____, or upon
earlier redemption. See "Certain Terms of the Series A Preferred Securities-
- -Redemption." PSE&G will have the option at any time on or after June
___, 2001 to redeem, in whole or in part, the Series A Debentures. In
addition, the Series A Debentures will be subject to redemption, in whole but
not in part, at the option of PSE&G upon the occurrence of certain special
events described under "Certain Terms of the Series A Preferred Securities-
- -Special Event Redemption."
PSE&G has the right, at any time, subject to certain conditions, to
terminate the Series A Issuer and cause the Series A Debentures to be
distributed to the holders of the Series A Preferred Securities and the Common
Securities. See "Certain Terms of the Series A Preferred Securities-
- -Distribution of Series A Debentures." If the Series A Debentures
are so distributed, PSE&G will use its best efforts to list them on the
New York Stock Exchange.
In the event of liquidation of the Series A Issuer, holders of Series A
Preferred Securities will be entitled to receive a liquidation amount of $25 per
Series A Preferred Security plus accumulated and unpaid Distributions to the
date of payment, unless, in connection with such liquidation, the Series A
Debentures are distributed to the holders of the Series A Preferred Securities
and the Common Securities. See "Description of the Preferred
Securities--Liquidation Distribution Upon Termination" in the accompanying
Prospectus.
The Series A Preferred Securities will be represented by global
securities registered in the name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Series A Preferred Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by participants in DTC. Except as described in the accompanying
Prospectus, Series A Preferred Securities in certificated form will not be
issued in exchange for the global securities. See "Description of the
Preferred Securities -- Book-Entry-Only Issuance -- The Depository Trust
Company" in the accompanying Prospectus.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A
PREFERRED SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE,
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
S-2
<PAGE>
The following information supplements and should be read in conjunction
with the information contained in the accompanying Prospectus. Each of the
capitalized terms used in this Prospectus Supplement and not defined herein
has the meaning set forth in the accompanying Prospectus.
RISK FACTORS
Prospective purchasers of Series A Preferred Securities should
carefully review the information contained elsewhere in this Prospectus
Supplement and in the accompanying Prospectus and should particularly
consider the following matters:
Ranking of Subordinated Obligations under the Series A Guarantee and the
Series A Debentures
The obligations of Public Service Electric and Gas Company ("PSE&G")
under the Guarantee issued by PSE&G (the "Series A Guarantee") for the
benefit of the holders of the _____% Cumulative Quarterly Income Preferred
Securities, Series A (the "Series A Preferred Securities") issued by PSE&G
Capital Trust I (the "Series A Issuer") are unsecured and subordinate and
junior in right of payment to all general liabilities of PSE&G. The
obligations of PSE&G under its _____% Deferrable Interest Subordinated
Debentures, Series A (the "Series A Debentures") issued pursuant to the
Indenture dated as of June 1, 1996 (as amended and supplemented from time
to time, the "Indenture") between PSE&G and First Union National Bank, as
trustee (the "Debenture Trustee"), are unsecured and subordinate and junior
in right of payment to all Senior Indebtedness of PSE&G. At March 31,
1996, the Senior Indebtedness of PSE&G aggregated approximately $5.315
billion. No terms of the Series A Preferred Securities, the Series A
Debentures or the Series A Guarantee limit PSE&G's ability to incur
additional indebtedness, including indebtedness that ranks senior to the
Series A Debentures and the Series A Guarantee. See "Description of the
Guarantee--Status of the Guarantee" and "Description of the
Debentures--Subordination" in the accompanying Prospectus.
The ability of the Series A Issuer to pay quarterly cash distributions
("Distributions") on the Series A Preferred Securities and the redemption
price or liquidation amount of the Series A Preferred Securities is solely
dependent upon PSE&G making payments on the Series A Debentures when due.
Option to Extend Interest Payment Period; Tax Consequences
So long as an event of default with respect to the Series A Debentures
(a "Debenture Event of Default") under the Indenture has not occurred and
is continuing, PSE&G has the right at any time and from time to time to
defer payments of interest on the Series A Debentures by extending the
interest payment periods on the Series A Debentures for up to 20
consecutive quarters with respect to each deferral period (each, an
"Extension Period"), but not beyond the maturity or any redemption date of
the Series A Debentures. As a consequence, Distributions on the Series A
Preferred Securities would be deferred by the Series A Issuer during such
Extension Period (but the amount of Distributions to which holders of the
Series A Preferred Securities would be entitled would continue to
accumulate at the rate of _____% per annum, compounded quarterly). During
an Extension Period, PSE&G may not declare or pay any dividend on, or
redeem, purchase, acquire or make a liquidation payment with respect to,
any shares of PSE&G's capital stock. Prior to the termination of any
Extension Period, PSE&G may shorten or further extend the interest payment
period, provided that such Extension Period, together with all such
previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the maturity or any redemption date of the
Series A Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, PSE&G may elect to begin a new Extension
Period, subject to the above requirements. See "Certain Terms of the
Series A Preferred
S-3
<PAGE>
Securities--Distributions" herein and "Description of the Debentures--Option
to Extend Interest Payment Period" in the accompanying Prospectus.
Should an Extension Period occur, an owner of Series A Preferred
Securities will continue to accrue interest income in respect of its
pro rata share of the Series A Debentures held by the Series A Issuer for
Federal income tax purposes. As a result, an owner of Series A Preferred
Securities will include such interest in gross income for Federal income
tax purposes in advance of the receipt of cash and will not receive the
cash related to such income from the Series A Issuer if such owner disposes
of the Series A Preferred Securities prior to the record date for the
payment of Distributions following such Extension Period. See "United
States Taxation--Potential Extension of Interest Payment Period and Original
Issue Discount."
PSE&G has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Series A Debentures. However, should PSE&G exercise such right in the
future, the market price of the Series A Preferred Securities is likely to
be affected. An owner who disposes of Series A Preferred Securities during
an Extension Period might not receive the same return on investment as an
owner who continues to hold Series A Preferred Securities. In addition, as
a result of the existence of PSE&G's right to defer interest payments on
the Series A Debentures, the market price of the Series A Preferred
Securities (which represent undivided beneficial interests in the Series A
Debentures) may be more volatile than other securities on which original
issue discount accrues that are not subject to such deferrals.
Special Event Redemption
Upon the occurrence and continuation of a Tax Event or an Investment
Company Event (as defined in "Certain Terms of the Series A Preferred
Securities--Special Event Redemption"), PSE&G has the right to redeem the
Series A Debentures, in whole but not in part, and therefore cause a
mandatory redemption of the Series A Preferred Securities and common
securities of the Series A Issuer (the "Common Securities" and, together
with the Series A Preferred Securities, the "Trust Securities"), at a
redemption price equal to the liquidation amount plus accumulated and
unpaid Distributions, within 90 days following the occurrence of such Tax
Event or Investment Company Event.
On December 7, 1995, President Clinton proposed certain tax law
changes that would, among other things, generally deny interest deductions
to corporate issuers if the debt instrument has a term exceeding 20 years
and is not reflected as indebtedness on such issuer's consolidated balance
sheet. Because the term of the Series A Debentures exceeds 20 years, this
proposal, were it to become effective, would prevent PSE&G from deducting
interest on the Series A Debentures. However, on March 29, 1996, the
Chairmen of the Senate Finance Committee and the House Ways and Means
Committee issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals,
if adopted, will be no earlier than the date of appropriate Congressional
action. PSE&G believes that, under current law, interest on the Series A
Debentures is deductible. There can be no assurance, however, that such
proposals, subsequent proposals or final legislation will not affect the
ability of PSE&G to deduct interest on the Series A Debentures which in
turn could give rise to a Tax Event and, accordingly, PSE&G's optional
right to redeem the Series A Debentures, as described under "Certain Terms
of the Series A Preferred Securities--Special Event Redemption."
S-4
<PAGE>
Distribution of Series A Debentures; Possible Adverse Effect on Market
Price
At any time, PSE&G may, in its sole discretion, terminate the Series A
Issuer and cause the Series A Debentures to be distributed to the holders
of the Trust Securities, provided that PSE&G shall have delivered to the
Issuer Trustees (as defined herein) an opinion of nationally recognized tax
counsel (which may be regular tax counsel to PSE&G or an affiliate but not
an employee thereof and which must be acceptable to First Union National
Bank, as the Property Trustee for the Series A Issuer (the "Property
Trustee")) that any such distribution will not be a taxable event to the
owners of the Trust Securities. Although PSE&G has agreed to use its best
efforts to list the Series A Debentures so distributed on the New York
Stock Exchange, there can be no assurance that the Series A Debentures will
be approved for listing on the New York Stock Exchange or that a trading
market will exist for the Series A Debentures.
There can be no assurance as to the market prices for the Series A
Debentures that may be distributed in exchange for the Series A Preferred
Securities if a termination of the Series A Issuer were to occur.
Accordingly, the Series A Preferred Securities that an investor may hold
after termination of the Series A Issuer and prior to any exchange or the
Series A Debentures that a holder of Series A Preferred Securities may
receive on liquidation of the Series A Issuer may trade at a discount to
the price that the investor paid to purchase such Series A Preferred
Securities. Because holders of Series A Preferred Securities may receive
Series A Debentures, prospective purchasers of Series A Preferred
Securities are also making an investment decision with regard to the Series
A Debentures and should carefully review all the information regarding the
Series A Debentures contained herein. See "Certain Terms of the Series A
Preferred Securities --Distribution of Series A Debentures" herein and
"Description of the Debentures" in the accompanying Prospectus.
Rights Under the Series A Guarantee
The Series A Guarantee will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). First
Union National Bank will act as the indenture trustee under the Series A
Guarantee (the "Guarantee Trustee") for the purposes of compliance with the
Trust Indenture Act and will hold the Series A Guarantee for the benefit of
the holders of the Series A Preferred Securities. Under the Series A
Guarantee, PSE&G guarantees to the holders of the Series A Preferred
Securities the following payments, to the extent not paid by the Series A
Issuer: (i) any accumulated and unpaid Distributions on the Series A
Preferred Securities to the extent that the Series A Issuer has funds
available therefor, (ii) the redemption price of any Series A Preferred
Securities called for redemption to the extent that the Series A Issuer has
funds available therefor, and (iii) upon a voluntary or involuntary
termination, winding-up or liquidation of the Series A Issuer (unless the
Series A Debentures are distributed to holders of the Preferred
Securities), the lesser of (a) the liquidation amount of $25 per Series A
Preferred Security plus accumulated and unpaid Distributions to the date of
payment, and (b) the amount of assets of the Series A Issuer available for
distribution to holders of Series A Preferred Securities in liquidation of
the Series A Issuer. See "Description of the Guarantee--General" in the
accompanying Prospectus. The holders of at least a majority in aggregate
liquidation amount of the Series A Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of the Series A
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee under the Series A Guarantee. Any holder of the Series A
Preferred Securities may, after such holder's written request to the
Guarantee Trustee to enforce the Series A Guarantee, institute a legal
proceeding directly against PSE&G to enforce its rights under the Series A
Guarantee without first instituting a legal proceeding against the Series A
Issuer, the Guarantee Trustee or any other person or entity. If PSE&G were
to default on its obligation to pay amounts payable on the Series A
Debentures, the Series A Issuer would lack funds for the payment of
Distributions or amounts payable on redemption of the Series A Preferred
S-5
<PAGE>
Securities or upon liquidation of the Series A Issuer, and, in each such
event, holders of the Series A Preferred Securities would not be able to
rely upon the Series A Guarantee for payment of such amounts. Instead, the
Property Trustee, or holders of the Series A Preferred Securities, would be
entitled to enforce the rights of the Series A Issuer under the Series A
Debentures against PSE&G pursuant to the terms of the Series A Debentures.
The Amended and Restated Trust Agreement of the Series A Issuer (the "Trust
Agreement") provides that each holder of Series A Preferred Securities, by
acceptance thereof, agrees to the provisions of the Trust Agreement, the
Series A Guarantee and the Indenture.
Limited Voting Rights
Holders of Series A Preferred Securities have limited voting rights
under the Trust Agreement. Holders of Series A Preferred Securities will
not be entitled to vote to appoint, remove or replace the Issuer Trustees,
which voting rights are vested exclusively in PSE&G, as the holder of the
Common Securities, except that upon the occurrence of an event of default
under the Trust Agreement, the holders of at least a majority in
liquidation amount of the Series A Preferred Securities may replace the
Property Trustee and the Delaware Trustee (as defined herein). See
"Description of the Preferred Securities--Voting Rights; Amendment of Trust
Agreement" and "--The Issuer Trustees" in the accompanying Prospectus.
Trading Characteristics of the Series A Preferred Securities
The Series A Preferred Securities may trade at a price that does not
fully reflect the value of accrued but unpaid interest with respect to the
Series A Debentures. An owner of Series A Preferred Securities who
disposes of Series A Preferred Securities between record dates for payments
of Distributions will nevertheless be required to include accrued but
unpaid interest on the Series A Debentures through the date of disposition
in income as ordinary income and to add such amount to its adjusted tax
basis of the Series A Preferred Securities so disposed. Such owner will
recognize a capital loss to the extent the selling price (which may not
fully reflect the value of accrued but unpaid interest) is less than its
adjusted tax basis (which will include accrued but unpaid interest).
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for Federal income tax purposes. See "United States
Taxation."
PSE&G CAPITAL TRUST I
PSE&G Capital Trust I is a statutory business trust created under the
laws of the State of Delaware pursuant to the Trust Agreement. The
exclusive business of the Series A Issuer is to issue and sell the Series A
Preferred Securities and the Common Securities representing undivided
beneficial interests in the assets of the Series A Issuer and to use the
proceeds therefrom to purchase the Series A Debentures, to maintain the
status of the Series A Issuer as a grantor trust for Federal income tax
purposes and to engage in only those activities that are necessary,
convenient or incidental thereto. Accordingly, the Series A Debentures
will be the sole assets of the Series A Issuer, and payments on the
Series A Debentures will be the sole revenues of the Series A Issuer.
Pursuant to the Trust Agreement, PSE&G will be obligated to pay all
expenses and liabilities of the Series A Issuer. The Series A Issuer has a
term of 54 years, but may terminate earlier as provided in the Trust
Agreement. See "Description of the Preferred Securities--Liquidation
Distribution Upon Termination" in the accompanying Prospectus.
The business and affairs of the Series A Issuer are conducted by three
trustees: (i) First Union National Bank, as Property Trustee; (ii) an
affiliate of the Property Trustee with its principal place of business in
the State of Delaware as "Delaware Trustee;" and (iii) one individual who
is an employee and
S-6
<PAGE>
officer of or affiliated with PSE&G as "Administrative Trustee." The
Property Trustee, the Delaware Trustee and the Administrative Trustee are
collectively referred to herein as the "Issuer Trustees." The Trust
Agreement is qualified under the Trust Indenture Act and the Property
Trustee will act as the indenture trustee thereunder for the purposes of
compliance with the Trust Indenture Act.
Concurrently with the issuance of the Series A Preferred Securities,
PSE&G will acquire Common Securities of the Series A Issuer with a
liquidation amount equal to 3% of the aggregate liquidation amount of all
of the Trust Securities of the Series A Issuer. The Common Securities will
rank pari passu, and payments will be made thereon pro rata, with the
Series A Preferred Securities, except that upon the occurrence and
continuance of a Debenture Event of Default, the rights of PSE&G, as holder
of the Common Securities, to payment of Distributions and payments upon
liquidation and redemption will be subordinated to the rights of the
holders of the Series A Preferred Securities.
The principal place of business of the Series A Issuer is 80 Park
Plaza, P.O. Box 570, Newark, New Jersey 07101 and its telephone number is
(201) 430-7000.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
General
PSE&G is an operating public utility company engaged principally in
the generation, transmission, distribution and sale of electric energy
service and in the transmission, distribution and sale of gas service in
New Jersey. PSE&G supplies electric and gas service in areas of New Jersey
in which approximately 5,500,000 persons, approximately 70% of the State's
population, reside. PSE&G is the principal subsidiary of Public Service
Enterprise Group Incorporated which owns all of PSE&G's common stock.
PSE&G's service area is a corridor of approximately 2,600 square miles
running diagonally across the State of New Jersey from Bergen County in the
northeast to an area below the City of Camden in the southwest. This
heavily populated, commercialized and industrialized territory encompasses
most of New Jersey's largest municipalities, including the six largest
cities, in addition to approximately 300 suburban and rural communities.
Ratio of Earnings to Fixed Charges
PSE&G's ratio of earnings to fixed charges for each of the periods
indicated is as follows:
12 Months Ended
Years Ended December 31, March 31, 1996
------------------------------------------------ --------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
3.20 2.70 3.30 3.35 3.25
The ratio of earnings to fixed charges represents, on a pre-tax basis,
the number of times earnings cover fixed charges. Earnings consist of net
income, to which has been added fixed charges and taxes based on income of
PSE&G and its subsidiaries. Fixed charges consist of interest charges and
an interest factor in rentals.
S-7
<PAGE>
Ratio of Earnings to Fixed Charges Plus Preferred Securities Dividend
Requirements
PSE&G's ratio of earnings to fixed charges plus preferred securities
dividend requirements for each of the periods indicated is as follows:
12 Months Ended
Years Ended December 31, March 31, 1996
------------------------------------------------ --------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
2.86 2.43 2.89 2.92 2.77
The ratio of earnings to fixed charges plus preferred securities
dividend requirements represents, on a pre-tax basis, the number of times
earnings cover fixed charges plus preferred securities dividend
requirements. Earnings consist of net income, to which has been added
fixed charges and taxes based on income of PSE&G and its subsidiaries.
Fixed charges consist of interest charges and an interest factor in
rentals. Preferred securities dividend requirements represent the pre-tax
earnings necessary to pay dividends on outstanding preferred stock,
computed at the effective tax rates for the applicable periods.
USE OF PROCEEDS
The net proceeds from the sale of the Series A Preferred Securities
and the Common Securities will be used by the Series A Issuer to purchase
the Series A Debentures from PSE&G. The net proceeds from the sale of the
Series A Debentures will be used by PSE&G to _____________________________.
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
The following summary of certain terms and provisions of the Series A
Preferred Securities supplements the description of the terms and
provisions of the Preferred Securities set forth in the accompanying
Prospectus under the heading "Description of the Preferred Securities," to
which description reference is hereby made.
Distributions
The Series A Preferred Securities represent undivided beneficial
interests in the assets of the Series A Issuer, the sole assets of which
will be the Series A Debentures. Distributions on the Series A Preferred
Securities will be cumulative and will accumulate from the date of original
issuance at the annual rate of ____% of the liquidation amount of $25 per
Series A Preferred Security. Distributions will be payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
commencing June 30, 1996. Distributions in arrears after the quarterly
payment date therefor will accumulate additional Distributions (to the
extent permitted by law) compounded quarterly at the annual rate of _____%
thereof. The term "Distributions," as used herein, shall include any such
additional Distributions. The amount of Distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months.
So long as a Debenture Event of Default has not occurred and is
continuing, PSE&G has the right at any time and from time to time to defer
the payment of interest by extending the interest payment period on the
Series A Debentures for up to 20 consecutive quarters, provided that any
such Extension
S-8
<PAGE>
Period shall not extend beyond the maturity or any redemption date of the
Series A Debentures. As a consequence, quarterly Distributions on the
Series A Preferred Securities would be deferred by the Series A Issuer
during any Extension Period, but the amount of Distributions to which
holders of the Series A Preferred Securities would be entitled would
continue to accumulate at the rate set forth above, compounded quarterly.
During any Extension Period, PSE&G may not declare or pay any dividend on,
or redeem, purchase, acquire, or make a liquidation payment with respect
to, any shares of PSE&G's capital stock. Prior to the termination of any
Extension Period, PSE&G may shorten or further extend the interest payment
period, provided that such Extension Period, together with all such
previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the maturity or any redemption date of the Series
A Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, PSE&G may elect to begin a new Extension Period,
subject to the above requirements. See "United States Taxation--Potential
Extension of Interest Payment Period and Original Issue Discount" herein
and "Description of the Debentures--Option to Extend Interest Payment
Period" in the accompanying Prospectus. PSE&G has no current intention of
exercising its right to defer payments of interest by extending the
interest payment period on the Series A Debentures.
The Series A Preferred Securities will be issued in the form of one or
more global securities and The Depository Trust Company ("DTC"), or any
successor depositary will act as depositary for the Series A Preferred
Securities. See "Description of the Preferred Securities -- Book-Entry-Only
Issuance -- The Depository Trust Company" in the accompanying Prospectus.
Payments on the Series A Preferred Securities represented by a global
security will be made to DTC, as the depositary for the Series A Preferred
Securities. In the event that the Series A Preferred Securities are issued
in certificated form, the payment of Distributions and payments on
redemption or liquidation will be payable, the transfer of the Series A
Preferred Securities will be registerable and Series A Preferred Securities
will be exchangeable at the corporate office of the Property Trustee in
Newark, New Jersey, or at the offices of any paying agent or transfer agent
appointed by the Administrative Trustee, provided, however, that the
payment of Distributions may be made at the option of the Property Trustee
by check mailed to the address of the persons entitled thereto. In
addition, if the Series Preferred Securities are issued in certificated
form, the record dates for the payment of Distributions will be the 15th
day of the last month of each quarter, whether or not a Business Day.
Redemption
Upon the payment of the Series A Debentures, whether at maturity or
upon redemption as provided in the Indenture, the proceeds from such
payment will be applied by the Property Trustee to redeem a Like Amount of
the Trust Securities, upon not less than 30 nor more than 60 days' notice,
at a redemption price equal to the aggregate liquidation amount plus
accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price"). See "Certain Terms of the Series A
Debentures--Redemption."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having an aggregate liquidation amount equal
to the principal amount of Series A Debentures to be contemporaneously
redeemed or paid at maturity in accordance with the Indenture and the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities and (ii) with respect to a distribution of Series A Debentures
to holders of Trust Securities in connection with a termination and
liquidation of the Series A Issuer, Series A Debentures having a principal
amount equal to the aggregate liquidation amount of the Trust Securities in
exchange for which such Series A Debentures are distributed.
S-9
<PAGE>
Special Event Redemption
If a Tax Event or an Investment Company Event (each, a "Special
Event") has occurred and is continuing, PSE&G has the right to redeem the
Series A Debentures, in whole but not in part, and therefore cause a
mandatory redemption of the Trust Securities, in whole but not in part, at
the Redemption Price within 90 days following the occurrence of such
Special Event.
"Tax Event" means that PSE&G shall have received an opinion of counsel
(which may be counsel to PSE&G or an affiliate but not an employee thereof
and which must be acceptable to the Property Trustee) experienced in such
matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein affecting taxation, or as a result
of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or
after the date of original issuance of the Series A Preferred Securities,
there is more than an insubstantial risk that (i) the Series A Issuer is,
or will be, subject to Federal income tax with respect to interest on the
Series A Debentures, (ii) interest payable by PSE&G on the Series A
Debentures is not, or will not be, deductible by PSE&G for Federal income
tax purposes or (iii) the Series A Issuer is, or will be, subject to more
than a de minimis amount of other taxes, duties, assessments or other
governmental charges.
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law") to the effect that the
Series A Issuer is or will be considered an "investment company" that is
required to be registered under the Investment Company Act of 1940, as
amended, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Series A Preferred Securities.
Distribution of Series A Debentures
At any time, PSE&G may, in its sole discretion, terminate the Series A
Issuer and cause a Like Amount of Series A Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Series A Issuer
upon 30 days' prior notice to the holders of the Trust Securities, provided
that PSE&G shall have delivered to the Issuer Trustees an opinion of
nationally recognized tax counsel (which may be regular tax counsel to
PSE&G or an affiliate but not an employee thereof and which must be
acceptable to the Property Trustee) that any such distribution will not be
a taxable event to the owners of the Trust Securities for Federal income
tax purposes. In addition, the Series A Debentures may be distributed to
holders of Trust Securities in certain other circumstances as described
under "Certain Terms of the Preferred Securities--Liquidation Distribution
Upon Termination" in the accompanying Prospectus.
Liquidation Amount
The amount payable on the Series A Preferred Securities in the event
of any liquidation of the Series A Issuer is $25 per Series A Preferred
Security plus accumulated and unpaid Distributions, unless, in connection
with such liquidation, the Series A Debentures are distributed to the
holders of the Trust Securities.
S-10
<PAGE>
CERTAIN TERMS OF THE SERIES A DEBENTURES
The following summary of certain terms and provisions of the Series A
Debentures supplements the description of the terms and provisions of the
Debentures set forth in the accompanying Prospectus under the heading
"Description of the Debentures," to which description reference is hereby
made.
The Series A Debentures will be unsecured and subordinate and junior
in right of payment to all Senior Indebtedness of PSE&G.
Interest Rate; Maturity
Concurrently with the issuance of the Series A Preferred Securities,
the Series A Issuer will invest the proceeds thereof, together with the
consideration paid by PSE&G for the Common Securities, in the Series A
Debentures. The Series A Debentures will be issued as a series of
Debentures under the Indenture. The Series A Debentures will mature on
June ___, ____. The Series A Debentures will bear interest at the annual
rate of _____% of the principal amount thereof, payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
commencing June 30, 1996. Interest which is accrued and unpaid after the
quarterly payment date therefor will bear additional interest on the amount
thereof (to the extent permitted by law) at the annual rate of _____%
thereof, compounded quarterly. The term "interest," as used herein, shall
include quarterly interest payments and interest on quarterly interest
payments in arrears, as applicable. The interest payment provisions for
the Series A Debentures correspond to the Distribution provisions of the
Series A Preferred Securities.
Redemption
The Series A Debentures are redeemable prior to maturity at the option
of PSE&G at a redemption price equal to 100% of the principal amount
thereof plus accrued and unpaid interest to the redemption date (i) at any
time on or after June ___, 2001, in whole or in part, or (ii) if a Special
Event occurs and is continuing, in whole but not in part.
Distribution of Series A Debentures
If Series A Debentures are distributed to the holders of the Trust
Securities upon the termination and liquidation of the Series A Issuer, the
Series A Debentures will be in denominations of $25 and integral multiples
thereof. It is anticipated that the Series A Debentures would be
distributed in the form of one or more global securities and DTC, or any
successor depositary for the Series A Preferred Securities, would act as
depositary for the Series A Debentures. The depositary arrangements for
the Series A Debentures would be substantially identical to those in effect
for the Series A Preferred Securities. Neither PSE&G, the Debenture
Trustee, any paying agent nor any other agent of PSE&G or the Debenture
Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a global security for such Series A Debentures or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. For a description of DTC and the terms of
the depositary arrangements relating to payments, transfers, voting rights,
redemption and other notices and other matters, see "Description of the
Preferred Securities--Book-Entry-Only Issuance--The Depository Trust Company"
in the accompanying Prospectus.
Payments on the Series A Debentures represented by a global security
will be made to DTC, as the depositary for the Series A Debentures. In the
event that the Series A Debentures are issued in certificated form,
principal and interest will be payable, the transfer of the Series A
Debentures will be registrable and Series A Debentures will be exchangeable
for Series A Debentures of other denominations
S-11
<PAGE>
of a like aggregate principal amount, at the corporate office of the
Debenture Trustee in Newark, New Jersey, or at the offices of any paying
agent or transfer agent appointed by PSE&G; provided, however, that payment
of interest may be made at the option of PSE&G by check mailed to the
address of the persons entitled thereto or by wire transfer. In addition,
if the Series A Debentures are issued in certificated form, the record
dates for payment of interest will be the 15th day of the last month of
each quarter, whether or not a Business Day.
If the Series A Debentures are distributed to the holders of the Trust
Securities upon the termination and liquidation of the Series A Issuer,
PSE&G will use its best efforts to list the Series A Debentures on the New
York Stock Exchange.
UNITED STATES TAXATION
General
This section is a summary of certain Federal income tax considerations
that may be relevant to prospective purchasers of Series A Preferred
Securities and represents the opinion of Ballard Spahr Andrews & Ingersoll,
special tax counsel to PSE&G and the Series A Issuer, insofar as it relates
to matters of law and legal conclusions. This section is based upon current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
existing regulations thereunder and current administrative rulings and
court decisions, all of which are subject to change. Subsequent changes may
cause tax consequences to vary substantially from the consequences
described below. Unless otherwise stated, this summary deals only with
Series A Preferred Securities held as capital assets and does not deal with
special classes of holders, such as dealers in securities or currencies,
life insurance companies, persons holding Series A Preferred Securities as
a hedge against or which are hedged against currency risks or as a part of
a straddle, or persons whose functional currency is not the United States
dollar.
POTENTIAL INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO
THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE OF SERIES
A PREFERRED SECURITIES PURSUANT TO THE OFFERING MADE HEREBY AND OF THE
OWNERSHIP AND DISPOSITION OF SERIES A PREFERRED SECURITIES IN LIGHT OF
THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL
OR OTHER LAWS.
While PSE&G believes, based upon the advice of its counsel, that the
Series A Debentures will be treated as indebtedness for Federal income tax
purposes, holders of Series A Preferred Securities should note that the
Internal Revenue Service (the "IRS") may attempt to treat the Series A
Debentures as equity rather than indebtedness for tax purposes. If the IRS
were successful in such attempt, the Series A Debentures would be subject
to redemption at the option of PSE&G as described under "Certain Terms of
the Series A Debentures--Redemption" and "Certain Terms of the Series A
Preferred Securities--Special Event Redemption."
Income from Series A Preferred Securities
In connection with the issuance of the Series A Debentures, Ballard
Spahr Andrews & Ingersoll will render its opinion to the effect that, under
then current law and assuming full compliance with the terms of the Trust
Agreement, the Series A Issuer will be classified as a grantor trust and
not as an association taxable as a corporation or partnership for Federal
income tax purposes.
S-12
<PAGE>
As a consequence, each owner of Series A Preferred Securities will be
considered the owner of a pro rata portion of the Series A Debentures held
by the Series A Issuer. As a further consequence, each owner of Series A
Preferred Securities will be required to include in gross income his or her
pro rata share of the income accrued on the Series A Debentures held by the
Series A Issuer. Such income should not exceed Distributions received by
the owners of Series A Preferred Securities on the Series A Preferred
Securities except in limited circumstances described under "--Potential
Extension of Interest Payment Period and Original Issue Discount." No
portion of such income will be eligible for the dividends-received
deduction.
Potential Extension of Interest Payment Period and Original Issue Discount
Under the Indenture, PSE&G has the right at any time from time to time
to extend the interest payment periods on the Series A Debentures for up to
20 consecutive quarters but not beyond the maturity or any redemption date
of the Series A Debentures. PSE&G's right to defer payments of interest by
extending the interest payment periods will cause the Series A Debentures
to be treated as issued with "original issue discount" for Federal income
tax purposes. Accordingly, an owner of Series A Preferred Securities will
accrue interest income (i.e., original issue discount) under a constant
yield basis over the term of the Series A Debentures (including any
Extension Period), regardless of the receipt of cash with respect to the
period to which such income is attributable.
As a result, owners of Series A Preferred Securities during an
Extension Period will include interest in gross income in advance of the
receipt of cash, and any owners of Series A Preferred Securities who
dispose of Series A Preferred Securities prior to the record date for the
payment of Distributions following such Extension Period will include
interest in gross income, but will not receive any cash related thereto.
The tax basis of a Series A Preferred Security will be increased by the
amount of any original issue discount that is included in income without a
receipt of cash and will be decreased when and if such cash is subsequently
received by the owner of the Series A Preferred Security.
Disposition of the Series A Preferred Securities
Gain or loss will be recognized on a sale, including a redemption for
cash, of Series A Preferred Securities in an amount equal to the difference
between the amount realized and the tax basis of an owner of Series A
Preferred Securities in his or her pro rata share of Series A Debentures
represented by such Series A Preferred Securities. Gain or loss recognized
by an owner of Series A Preferred Securities on the sale or exchange of
Series A Preferred Securities held for more than one year generally will be
taxable as long-term capital gain or loss.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
holder or beneficial owner who or which is (i) a nonresident alien
individual or (ii) a foreign corporation, partnership, estate or trust, in
either case not subject to Federal income tax on a net income basis in
respect of a Series A Preferred Security.
Under present Federal income tax law, subject to the discussion below
with respect to backup withholding:
(i) payments by the Series A Issuer or any of its paying agents to any
United States Alien Holder will not be subject to Federal withholding tax,
provided that (a) the owner of the Series A Preferred Security does not
actually or constructively own 10% or more of the total combined voting
power of all
S-13
<PAGE>
classes of stock of PSE&G, (b) the owner of the Series A Preferred
Securities is not a controlled foreign corporation that is related to PSE&G
through stock ownership, and (c) either (1) the owner of the Series A
Preferred Securities certifies to the Series A Issuer or its agent, under
penalties of perjury, that it is a United States Alien Holder and provides
its name and address or (2) the holder of the Series A Preferred Securities
is a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or
business (a "financial institution"), and such holder certifies to the
Series A Issuer or its agent, under penalties of perjury, that such
statement has been received from the owner by it or by a financial
institution between it and the owner and furnishes the payor with a copy
thereof; and
(ii) a United States Alien Holder of a Series A Preferred Security
will not be subject to Federal income or withholding tax on any gain
realized on the sale or exchange of a Series A Preferred Security unless
such person is present in the United States for 183 days or more in the
taxable year of sale and such person has a "tax home" in the United States
or certain other requirements are met.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to payments
to noncorporate United States holders of the proceeds of the sale of the
Series A Preferred Securities within the United States and "backup
withholding" at a rate of 31% will apply to such payments if the seller
fails to provide a correct taxpayer identification number.
Payments of the proceeds from the sale by a United States Alien Holder
of Series A Preferred Securities made to or through a foreign office of a
broker will not be subject to information reporting or backup withholding,
except that, if the broker is a United States person, a controlled foreign
corporation for United States tax purposes or a foreign person 50% or more
of whose gross income is effectively connected with a United States trade
or business for a specified three-year period, information reporting may
apply to such payment. Payments of the proceeds from the sale of Series A
Preferred Securities to or through the United States office of a broker is
subject to information reporting and backup withholding unless the holder
or beneficial owner certifies as to its non-United States status or
otherwise establishes an exemption from information reporting and backup
withholding.
Receipt of Series A Debentures Upon Liquidation of the Series A Issuer
PSE&G may cause the Series A Issuer to be terminated and cause the
Series A Debentures to be distributed to the holders of Series A Preferred
Securities in liquidation of such holders' interests in the Series A
Issuer, provided that PSE&G has delivered to the Issuer Trustees an opinion
of nationally recognized tax counsel (which may be regular tax counsel to
PSE&G or an affiliate but not an employee thereof and which must be
acceptable to the Property Trustee) that any such distribution will not be
a taxable event to the owners of the Series A Preferred Securities for
Federal income tax purposes. Under current Federal income tax law and
interpretation and assuming the Series A Issuer is treated as a grantor
trust, such a distribution should not be treated as a taxable event to
owners of the Series A Preferred Securities. Such a tax-free transaction
would result in the owner of Series A Preferred Securities receiving an
aggregate tax basis in the Series A Debentures equal to such owner's
aggregate tax basis in the owner's Series A Preferred Securities. A
owner's holding period for such Series A Debentures would include the
period during which such owner had a beneficial interest in the Series A
Preferred Securities.
S-14
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Series A Issuer has agreed to sell to each of the Underwriters named below,
for whom Goldman, Sachs & Co. and ________________ are acting as
Representatives (the "Representatives"), and each of the Underwriters has
severally agreed to purchase from the Series A Issuer, the respective
number of Series A Preferred Securities set forth opposite its name below:
Number of Series A
Underwriter Preferred Securities
----------- --------------------
Goldman, Sachs & Co. . . . . . .
Total . . . . . . . . . . .
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Series A
Preferred Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series A Preferred Securities in
part directly to the public at the initial public offering price set forth
on the cover page of this Prospectus Supplement, and in part to certain
securities dealers at such price less a concession of $__________ per
Series A Preferred Security. The Underwriters may allow, and such dealers
may reallow, a concession not in excess of $__________ per Series A
Preferred Security to certain brokers and dealers. After the Series A
Preferred Securities are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Representatives.
In view of the fact that the proceeds from the sale of the Series A
Preferred Securities will be loaned to PSE&G, under the Underwriting
Agreement PSE&G has agreed to pay to the Underwriters an underwriting
commission of $______ per Series A Preferred Security.
Prior to this offering, there has been no public market for the
Series A Preferred Securities. Application has been made to list the
Series A Preferred Securities on the New York Stock Exchange. If approved
for listing, trading on the Series A Preferred Securities is expected to
commence within a 30-day period after the initial delivery thereof. In
order to meet one of the requirements for listing the Series A Preferred
Securities on the New York Stock Exchange, the Underwriters have undertaken
to sell the Series A Preferred Securities to a minimum of 400 beneficial
owners.
PSE&G and the Series A Issuer have agreed, during the period beginning
from the date of the Underwriting Agreement and continuing to and including
the earlier of (i) the date on which the distribution of the Series A
Preferred Securities ceases, as determined by the Underwriters, or
(ii) 30 days after the closing date, not to offer, sell, contract to sell
or otherwise dispose of any Preferred Securities or any preferred stock or
any other securities of PSE&G which are substantially similar to the Series
A Preferred Securities, including any guarantee of such securities, or any
securities convertible into or exchangeable for or represent the right to
receive any of the foregoing securities, without the prior written consent
of the Representatives.
S-15
<PAGE>
PSE&G and the Series A Issuer have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act.
S-16
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION DATED APRIL 23, 1996
PSE&G Capital Trust I
PSE&G Capital Trust II
PSE&G Capital Trust III
Cumulative Quarterly Income Preferred Securities (QUIPS(SM))*
guaranteed to the extent the Issuer thereof has funds as set forth herein
by
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
_________________
PSE&G Capital Trust I, PSE&G Capital Trust II and PSE&G Capital Trust
III, each a statutory business trust created under the laws of the State of
Delaware (each, an "Issuer," and collectively, the "Issuers") may severally
offer, from time to time, their respective cumulative quarterly income
preferred securities (the "Preferred Securities") representing undivided
beneficial interests in the assets of such Issuer. Public Service Electric
and Gas Company, a New Jersey corporation ("PSE&G"), will be the owner of
beneficial interests represented by the common securities (the "Common
Securities") of each Issuer. First Union National Bank is the Property
Trustee of each Issuer. The payment of quarterly cash distributions
("Distributions") with respect to the Preferred Securities of each Issuer
and payments on liquidation or redemption with respect to such Preferred
Securities, in each case out of funds available therefor held by such
Issuer, are each guaranteed by PSE&G to the extent described herein (each,
a "Guarantee"). The obligations of PSE&G under each Guarantee will be
subordinate and junior in right of payment to all general liabilities of
PSE&G. Concurrently with the issuance by each Issuer of its Preferred
Securities, such Issuer will invest the proceeds thereof in a corresponding
series of PSE&G's deferrable interest subordinated debentures (the
"Debentures"). The Debentures will be subordinate and junior in right of
payment to all Senior Indebtedness (as defined herein) of PSE&G. The
Debentures will be the sole assets of each Issuer and payments in respect
of the Debentures will be the only revenues of each Issuer.
The Preferred Securities may be offered in amounts, at prices and on
terms to be determined at the time of offering; provided, however, that the
aggregate initial public offering price of all Preferred Securities issued
pursuant to the Registration Statement of which this Prospectus forms a
part shall not exceed $350,000,000. Certain specific terms of an Issuer's
Preferred Securities will be set forth in an accompanying Prospectus
Supplement, including where applicable and to the extent not set forth
herein, the identity of such Issuer, the specific title, the aggregate
number, the Distribution rate (or the method for determining such rate),
the liquidation amount, redemption provisions, the right, if any, of PSE&G
to terminate such Issuer and cause the corresponding series of Debentures
to be distributed to the holders of such Issuer's Preferred Securities, the
period during which interest on the corresponding series of Debentures may
be deferred, the initial public offering price, and any other special
terms, as well as any planned listing on a securities exchange, of such
Preferred Securities.
The Preferred Securities may be sold in a public offering to or
through underwriters or dealers designated from time to time. See "Plan of
Distribution." The names of any such underwriters or dealers involved in
the sale of the Preferred Securities of a particular Issuer, the number of
Preferred Securities to be purchased by any such underwriters or dealers
and any applicable commissions or discounts will be set forth in the
accompanying Prospectus Supplement. The net proceeds to each Issuer will
also be set forth in the accompanying Prospectus Supplement.
The accompanying Prospectus Supplement will also contain information
concerning Federal income tax considerations applicable to the Preferred
Securities offered thereby.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
____________________
* QUIPS is a service mark of Goldman, Sachs & Co.
The date of this Prospectus is ___________, 1996.
<PAGE>
Information contained herein is subject to completion of amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offer to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
<PAGE>
STATEMENT OF AVAILABLE INFORMATION
Public Service Electric and Gas Company, a New Jersey corporation
("PSE&G"), is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and
Exchange Commission ("SEC"). Such reports and other information can be
inspected and copied at the public reference facilities maintained by the
SEC at 450 Fifth Street, N.W., Washington, D.C. and at its regional offices
at 500 West Madison Street, Chicago, Illinois and 7 World Trade Center, New
York, New York. Copies of such reports and other information may also be
obtained from the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549-1004 at prescribed rates. Such reports and
other information can also be inspected at the New York Stock Exchange,
Inc. (the "New York Stock Exchange") where certain of PSE&G's securities
are listed.
No separate financial statements of PSE&G Capital Trust I, PSE&G
Capital Trust II or PSE&G Capital Trust III, each a statutory business
trust created under the laws of the State of Delaware (each, an "Issuer,"
and collectively, the "Issuers") have been included herein. PSE&G and the
Issuers do not consider that such financial statements would be material to
holders of any Issuer's cumulative quarterly income preferred securities
(the "Preferred Securities") because each Issuer is a newly formed special
purpose entity, has no operating history or independent operations and is
not engaged in and does not propose to engage in any activity other than
its holding as trust assets the corresponding series of deferrable interest
subordinated debentures (the "Debentures") of PSE&G and its issuance of its
Preferred Securities and common securities (the "Common Securities," and
together with the Preferred Securities, the "Trust Securities"). See "The
Issuers," "Description of the Preferred Securities" and "Description of
Debentures."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by PSE&G with the SEC pursuant to the
Exchange Act are incorporated herein by reference:
1. PSE&G's Annual Report on Form 10-K for the year ended December
31, 1995; and
2. PSE&G's Current Reports on Form 8-K dated January 19, 1996 and
March 14, 1996.
Each document filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of the offering of the related Preferred Securities shall be
deemed to be incorporated by reference in this Prospectus and the
accompanying Prospectus Supplement and shall be a part hereof and thereof
from the date of filing of such document. Any statement contained herein
or therein or in a document all or a portion of which is incorporated or
deemed to be incorporated by reference herein and therein shall be deemed
to be modified or superseded for purposes of this Prospectus and the
accompanying Prospectus Supplement to the extent that a statement contained
herein or therein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein and therein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus or the accompanying Prospectus Supplement.
PSE&G undertakes to provide without charge to each person, including
any beneficial owner, to whom this Prospectus and the accompanying
Prospectus Supplement are delivered, upon written or oral request of such
person, a copy of any or all documents described above under "Incorporation
of Certain
2
<PAGE>
Documents by Reference," other than exhibits to such documents not
specifically incorporated by reference therein. Such requests should be
directed to the Director - Investor Relations, Public Service Electric and
Gas Company, 80 Park Plaza, T6B, P.O. Box 570, Newark, New Jersey 07101,
telephone (201) 430-6503.
THE ISSUERS
Each of PSE&G Capital Trust I, PSE&G Capital Trust II and PSE&G
Capital Trust III is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement executed by PSE&G, as sponsor for each
Issuer, and the Issuer Trustees (as defined herein) and (ii) the filing of
a certificate of trust with the Delaware Secretary of State. Each trust
agreement will be amended and restated in its entirety (each, as so amended
and restated, a "Trust Agreement") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a
part. Each Trust Agreement will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
Each Issuer exists for the exclusive purposes of issuing and selling
its Trust Securities, using the proceeds from the sale of its Trust
Securities to acquire a corresponding series of Debentures, maintaining the
status of the Issuer as a grantor trust for Federal income tax purposes and
engaging in those activities necessary, convenient or incidental thereto.
All of the Common Securities of each Issuer will be owned by PSE&G. The
Common Securities of an Issuer will rank pari passu, and payments will be
made thereon pro rata, with the Preferred Securities of that Issuer, except
that upon the occurrence and continuance of an event of default on the
corresponding series of Debentures (a "Debenture Event of Default") under
the Indenture dated as of June 1, 1996 (as amended or supplemented from
time to time, the "Indenture") between PSE&G and First Union National Bank,
as trustee (the "Debenture Trustee"), the rights of the holders of the
Common Securities to payment of quarterly cash distributions
("Distributions") and payments upon liquidation or redemption on Common
Securities will be subordinated to the rights of the holders of the
Preferred Securities.
Each Issuer's business and affairs are conducted by three trustees,
each appointed by PSE&G as holder of the Common Securities: (i) First
Union National Bank (the "Property Trustee"); (ii) an affiliate of the
Property Trustee that has its principal place of business in the State of
Delaware (the "Delaware Trustee"); and (iii) one individual trustee who is
an employee or officer of or affiliated with PSE&G (the "Administrative
Trustee," and collectively with the Property Trustee and the Delaware
Trustee, the "Issuer Trustees"). The holder of the Common Securities, or
the holders of at least a majority in liquidation amount of an Issuer's
Preferred Securities if an event of default under the Trust Agreement (a
"Trust Agreement Event of Default") has occurred and is continuing, will be
entitled to remove and replace the Property Trustee and the Delaware
Trustee. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustee,
which voting rights are vested exclusively in the holder of the Common
Securities. The duties and obligations of each of the Issuer Trustees are
governed by the applicable Trust Agreement.
Pursuant to the Trust Agreement of each Issuer, PSE&G will pay all
fees and expenses related to that Issuer and the offering of the Preferred
Securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of that Issuer.
The principal place of business of each Issuer is 80 Park Plaza,
Newark, New Jersey 07101, and its telephone number is (201) 430-7000.
3
<PAGE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
PSE&G is an operating public utility company engaged principally in
the generation, transmission, distribution and sale of electric energy
service and in the transmission, distribution and sale of gas service in
New Jersey. PSE&G supplies electric and gas service in areas of New Jersey
in which approximately 5,500,000 persons, approximately 70% of the State's
population, reside. PSE&G is the principal subsidiary of Public Service
Enterprise Group Incorporated, which owns all of PSE&G's common stock.
PSE&G's service area is a corridor of approximately 2,600 square miles
running diagonally across the State of New Jersey from Bergen County in the
northeast to an area below the City of Camden in the southwest. This
heavily populated, commercialized and industrialized territory encompasses
most of New Jersey's largest municipalities, including its six largest
cities, in addition to approximately 300 suburban and rural communities.
PSE&G's executive offices are located at 80 Park Plaza, Newark, New
Jersey 07101, and its telephone number is (201) 430-7000.
USE OF PROCEEDS
Unless otherwise specified in the accompanying Prospectus Supplement,
the proceeds to be received by the Issuers from the sale of the Preferred
Securities offered hereby will be used by the Issuers to purchase
Debentures from PSE&G. The proceeds from the sale of the Debentures will
be used by PSE&G to refund certain outstanding preferred stock of PSE&G
identified in the accompanying Prospectus Supplement.
DESCRIPTION OF THE PREFERRED SECURITIES
Pursuant to the terms of each Trust Agreement, the Issuers will issue
the Preferred Securities and the Common Securities. The Preferred
Securities of a particular Issuer will represent undivided beneficial
interests in the assets of such Issuer and the holders thereof will be
entitled to a preference in certain circumstances with respect to the
payment of Distributions and amounts payable on redemption or liquidation
over the Common Securities of such Issuer, as well as other benefits as
described in the applicable Trust Agreement. The form of the Trust
Agreement has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part and each Trust Agreement has been
qualified as an indenture under the Trust Indenture Act. Each of the
Issuers is a legally separate entity and the assets of one are not
available to satisfy the obligations of the other.
General
The Preferred Securities of each Issuer will rank pari passu, and
payments will be made thereon pro rata, with the Common Securities of that
Issuer except as described under "-- Subordination of Common Securities."
The proceeds from the sale of the Preferred Securities and the Common
Securities will be used by the related Issuer to purchase a corresponding
series of Debentures. The Debentures will be held in trust by the Property
Trustee for the benefit of the holders of the related Trust Securities.
Each Guarantee Agreement executed by PSE&G for the benefit of the holders
of each Issuer's Preferred Securities (each, a "Guarantee") ranks junior
and subordinate in right of payment to all general liabilities of PSE&G and
only guarantees payment of Distributions or amounts payable on redemption
or liquidation
4
<PAGE>
of such Preferred Securities when the related Issuer has funds available to
make such payments. See "Description of the Guarantee."
It is anticipated that the revenues of each Issuer available for
distribution to its holders of Preferred Securities will be limited to
payments from PSE&G under the corresponding series of Debentures in which
such Issuer will invest the proceeds from the issuance and sale of such
Preferred Securities and its Common Securities. See "Description of the
Debentures." If PSE&G does not make payments on such Debentures, the
Property Trustee will not have funds available to make related payments,
including Distributions, on the corresponding Preferred Securities.
Distributions
Distributions on the Preferred Securities of each Issuer will be
payable at a rate specified in the accompanying Prospectus Supplement for
such Preferred Securities. The amount of Distributions payable for any
period will be computed on the basis of a 360-day year of twelve 30-day
months.
Distributions on the Preferred Securities will be cumulative and will
accumulate from the date of original issuance and will be payable quarterly
in arrears on the dates specified in the accompanying Prospectus Supplement
except as otherwise described below. In the event that any date on which
Distributions are otherwise payable on the Preferred Securities is not a
Business Day, payment of such Distributions will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect to any such delay), except that if such Business Day is
in the next succeeding calendar year, payment of such Distributions shall
be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date"). A "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in The City of New York or the State
of New Jersey are required by law or executive order to remain closed.
Distributions on the Preferred Securities will be payable to the
holders thereof as they appear on the Securities Register of the related
Issuer on the relevant record date, which, as long as the Preferred
Securities remain in book-entry-only form, will be one Business Day prior
to the relevant Distribution Date. Subject to any applicable laws and
regulations and the provisions of the applicable Trust Agreement, each such
payment will be made as described under "--Book-Entry-Only Issuance--The
Depository Trust Company." In the event any Preferred Securities are not in
book-entry-only form, the relevant record date for such Preferred
Securities will be the 15th day of the last month of each quarter, whether
or not a Business Day.
So long as a Debenture Event of Default has not occurred and is
continuing with respect to a series of Debentures, PSE&G will have the
right at any time and from time to time to defer payments of interest by
extending the interest payment period on any series of Debentures for up to
the maximum period specified in the accompanying Prospectus Supplement for
such series of Debentures (each, an "Extension Period"), provided that any
such Extension Period shall not extend beyond the maturity or any
redemption date of the Debentures of such series. As a consequence of any
such extension, quarterly Distributions on the corresponding Preferred
Securities would be deferred by the Issuer thereof during such Extension
Period, but the amount of Distributions to which holders of the Series A
Preferred Securities would be entitled will continue to accumulate at the
annual rate applicable to the quarterly Distribution thereon, compounded
quarterly. During any Extension Period, PSE&G may not declare or pay any
dividend on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any shares of PSE&G's capital stock. Prior to the
termination of any Extension Period, PSE&G may shorten or further extend
the interest payment period, provided that such Extension Period, together
with all such
5
<PAGE>
previous and further extensions thereof, may not exceed the maximum
Extension Period or extend beyond the maturity or any redemption date of
such Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, PSE&G may elect to begin a new Extension
Period, subject to the above requirements. See "Description of the
Debentures--Option to Extend Interest Payment Period."
Redemption
Upon the repayment of any series of Debentures, whether at maturity or
upon redemption, the proceeds from such repayment will be applied by the
Property Trustee to redeem a like amount of the corresponding Trust
Securities at a redemption price (the "Redemption Price") equal to the
liquidation amount of such Trust Securities plus all accumulated and unpaid
Distributions to the redemption date (the "Redemption Date"). The
redemption terms of a particular series of Debentures and the corresponding
Trust Securities will be set forth in the accompanying Prospectus
Supplement.
Redemption Procedures
Notice of any redemption of Trust Securities will be given by the
Property Trustee to the holders of such Trust Securities to be redeemed
not less than 30 nor more than 60 days prior to the Redemption Date. If a
notice of redemption is given with respect to any Trust Securities, then,
to the extent funds are available therefor the Issuer thereof will
irrevocably deposit with the paying agent for such Trust Securities funds
sufficient to pay the applicable Redemption Price for the Trust Securities
being redeemed on the Redemption Date and will give such paying agent
irrevocable instructions and authority to pay the Redemption Price to the
holders upon their surrender of such Trust Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the holders of
such Trust Securities on the relevant record dates for the related
Distribution Dates.
If notice of redemption shall have been given and funds irrevocably
deposited as required, then upon the date of such deposit, all rights of
the holders of such Trust Securities so called for redemption will cease,
except the right of the holders of such Trust Securities to receive the
Redemption Price, but without interest thereon, and such Trust Securities
will cease to be outstanding. In the event that any Redemption Date for
Trust Securities is not a Business Day, then the Redemption Price will be
payable on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that if
such Business Day falls in the next calendar year, the Redemption Price
will be payable on the immediately preceding Business Day. In the event
that payment of the Redemption Price in respect of any Trust Securities
called for redemption is improperly withheld or refused and not paid either
by such Issuer or by PSE&G pursuant to the Guarantee as described under
"Description of the Guarantee," Distributions on such Trust Securities will
continue to accumulate at the then applicable rate, from the original
Redemption Date to the date of payment, in which case the actual payment
date will be considered the Redemption Date for purposes of calculating the
Redemption Price.
Subject to applicable law, PSE&G or its subsidiaries may at any time
and from time to time purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.
If less than all the Trust Securities issued by an Issuer are to be
redeemed on a Redemption Date, then the aggregate amount of such Trust
Securities to be redeemed shall be allocated by the Property Trustee to the
Preferred Securities and the Common Securities of such Issuer pro rata
based on the respective aggregate liquidation amounts of such Issuer's
Preferred Securities and Common Securities.
6
<PAGE>
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, each
Issuer's Trust Securities, as applicable, shall be made pro rata based on
the liquidation amount of such Trust Securities; provided, however, that if
on any Distribution Date or Redemption Date a Debenture Event of Default
shall have occurred and is continuing, no payment of any Distribution on,
or Redemption Price of, any of the Issuer's Common Securities, and no other
payment on account of the liquidation of such Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid
Distributions on all of such Issuer's outstanding Preferred Securities for
all Distribution periods terminating on or prior thereto, or in the case of
a redemption, the full amount of such Redemption Price on all of such
Issuer's outstanding Preferred Securities shall have been made or provided
for, and all funds available to the Property Trustee shall first be applied
to the payment in full in cash of all Distributions on, or Redemption Price
of, such Issuer's Preferred Securities then due and payable.
If a Debenture Event of Default shall have occurred and is continuing,
the holder of the related Issuer's Common Securities will be deemed to have
waived any right to act with respect to such Debenture Event of Default or
Trust Agreement Event of Default until the effect of such Debenture Event
of Default and Trust Agreement Event of Default has been cured, waived or
otherwise eliminated. Until any such Debenture Event of Default or Trust
Agreement Event of Default has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders
of the corresponding Preferred Securities and not on behalf of PSE&G, as
holder of such Issuer's Common Securities, and only the holders of such
Preferred Securities will have the right to direct the Property Trustee to
act on their behalf.
Liquidation Distribution Upon Termination
Pursuant to a Trust Agreement, each Issuer shall be terminated on the
first to occur of: (i) the expiration of the term of such Issuer; (ii) the
bankruptcy, dissolution or liquidation of PSE&G or an acceleration of the
maturity of the corresponding series of Debentures held by such Issuer;
(iii) if provided for in the accompanying Prospectus Supplement, upon the
election of PSE&G to terminate such Issuer and cause the distribution of
the corresponding series of Debentures to the holders of such Issuer's
Trust Securities; (iv) the redemption of all of such Issuer's Trust
Securities; and (v) an order for the termination of such Issuer shall have
been entered by a court of competent jurisdiction. The election of PSE&G
pursuant to (iii) shall be made by PSE&G giving written notice to the
Issuer Trustees not less than 30 days prior to the date of distribution of
the corresponding series of Debentures and shall be accompanied by an
opinion of counsel that such event will not be a taxable event to the
holders of the Trust Securities for Federal income tax purposes.
If an early termination event occurs as described in clause (i), (ii)
or (v) above with respect to any Issuer, such Issuer shall be liquidated by
the Issuer Trustees as expeditiously as the Issuer Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of
such Issuer as provided by applicable law, to the holders of its Trust
Securities a like amount of the corresponding series of Debentures, unless
such distribution is determined by the Property Trustee not to be
practical, in which event such holders will be entitled to receive out of
the assets of such Issuer available for distribution to holders, after
satisfaction of liabilities to creditors of such Issuer as provided by
applicable law, an amount equal to, in the case of holders of Preferred
Securities, the aggregate liquidation amount of $25 per Preferred Security
plus accumulated and unpaid Distributions thereon to the date of payment
(such amount, the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because such Issuer has insufficient
assets available to pay in full the aggregate Liquidation Distribution,
then the amounts payable by such Issuer on its Preferred Securities shall
be paid on a pro rata basis. The holders
7
<PAGE>
of such Issuer's Common Securities will be entitled to receive the
Liquidation Distribution upon any such liquidation pro rata with the
holders of its Preferred Securities, except that if a Debenture Event of
Default has occurred and is continuing the Preferred Securities shall have
a priority over the Common Securities.
Trust Agreement Event of Default; Notice
A Debenture Event of Default shall constitute an event of default with
respect to the Preferred Securities issued under each Trust Agreement (a
"Trust Agreement Event of Default").
Within 90 days after the occurrence of any Trust Agreement Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Trust Agreement Event of Default to the holders of
such Issuer's Trust Securities, the Administrative Trustee and PSE&G, as
Depositor, unless such default shall have been cured or waived. PSE&G, as
Depositor, and the Administrative Trustee are required to file annually
with the Property Trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to them under
each Trust Agreement.
Under each Trust Agreement, if the Property Trustee fails to enforce
its rights under the Trust Agreement or the Indenture, to the fullest
extent permitted by law and subject to the terms of the Trust Agreement and
the Indenture, any holder of the related Preferred Securities may, after
such holder's written request to the Property Trustee to enforce such
rights, institute a legal proceeding directly against any person to enforce
the Property Trustee's rights under the Trust Agreement or the Indenture
without first instituting a legal proceeding against the Property Trustee
or any other person. In addition, to the extent that any action under the
Indenture is entitled to be taken by the holders of at least a specified
percentage of the principal amount of a series of Debentures, holders of
the corresponding Preferred Securities may take such action if such action
is not taken by the Property Trustee after a demand therefor. To the
fullest extent permitted by law, the foregoing is in addition to and not in
limitation of any direct rights provided to the holders of the Preferred
Securities under the terms of the Indenture, including the right, without
any notice or other demand on the Property Trustee, to institute suit for
the enforcement of any payment of the principal of and premium, if any, and
interest on the corresponding series of Debentures, all as provided in the
Indenture.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities
with respect to the payment of Distributions and amounts payable on
redemption and liquidation as described above. See "--Liquidation
Distribution Upon Termination" and "--Subordination of Common Securities."
Removal of Issuer Trustees
Unless a Trust Agreement Event of Default shall have occurred and is
continuing, any Issuer Trustee may be removed and replaced at any time by
the holder of the Common Securities. If a Trust Agreement Event of Default
has occurred and is continuing, the Property Trustee and the Delaware
Trustee may be removed and replaced at such time only by the holders of at
least a majority in liquidation amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have
the right to vote to appoint, remove or replace the Administrative Trustee,
which voting rights are vested exclusively in the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance
of appointment by the successor trustee in accordance with the provisions
of the applicable Trust Agreement.
8
<PAGE>
Co-Trustees and Separate Property Trustee
Unless a Trust Agreement Event of Default shall have occurred and is
continuing, at any time and from time to time, for the purpose of meeting
the legal requirements of the Trust Indenture Act or of any jurisdiction in
which any part of the Trust Property (as defined in each Trust Agreement)
may at such time be located, the holder of the Common Securities and the
Administrative Trustee shall have the power (i) to appoint one or more
persons approved by the Property Trustee either to act as co-trustee,
jointly with the Property Trustee, of all or any part of such Trust
Property, or to act as separate trustee of any such Trust Property, in
either case with such powers as may be provided in the instrument of
appointment, and (ii) to vest in such person or persons in such capacity,
any property, title, right or power deemed necessary or desirable, subject
to the provisions of each Trust Agreement. If a Trust Agreement Event of
Default has occurred and is continuing, the Property Trustee alone shall
have power to make such appointment.
Merger or Consolidation of Issuer Trustees
Any corporation or other entity into which any of the Issuer Trustees
may be merged or converted or with which it may be consolidated, or any
corporation or other entity resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any corporation or
other entity succeeding to all or substantially all the corporate trust
business of such Trustee, shall be the successor of such Trustee under the
Trust Agreements, provided such corporation or other entity shall be
otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Issuers
An Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except as described below. An Issuer may, at the request of PSE&G, with
the consent of the Administrative Trustee and without the consent of the
holders of its Preferred Securities, merge with or into, consolidate,
amalgamate, or be replaced by a trust organized as such under the laws of
any State, provided that (i) such successor entity either (a) expressly
assumes all of the obligations of such Issuer with respect to such
Preferred Securities or (b) substitutes for its Preferred Securities other
securities substantially similar to the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same
as such Preferred Securities rank with respect to the payment of
Distributions and payments upon redemption and liquidation, (ii) PSE&G
expressly appoints a trustee of such successor entity possessing the same
powers and duties as the Property Trustee as the holder of the
corresponding series of Debentures, (iii) the Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on
which the corresponding Preferred Securities are then listed, if any,
(iv) such merger, consolidation, amalgamation or replacement does not cause
the corresponding Preferred Securities (including any Successor Securities)
to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
holders of the corresponding Preferred Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of such Issuer, (vii) prior to such
merger, consolidation, amalgamation or replacement, PSE&G has received an
opinion of counsel to such Issuer to the effect that (a) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the holders of the corresponding
Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation or
replacement, neither such Issuer nor such successor entity will be required
to register as an investment company under
9
<PAGE>
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and (viii) PSE&G or any permitted successor assignee owns all of the
common securities of such successor entity and guarantees the obligations
of such successor entity under the Successor Securities at least to the
extent provided by the related Guarantee and Trust Agreement.
Notwithstanding the foregoing, an Issuer shall not, except with the consent
of all holders of the corresponding Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity, to
permit any other entity or to consolidate, amalgamate, merge with or into,
or replace it if such consolidation, amalgamation, merger or replacement
would cause such Issuer or the successor entity to be classified as other
than a grantor trust for Federal income tax purposes.
Voting Rights; Amendment of Trust Agreement
Except as provided below and under "--Mergers, Consolidations,
Amalgamations or Replacements of the Issuers" and "Description of the
Guarantee--Amendments and Assignment" and as otherwise required by law and
each Trust Agreement, the holders of the Preferred Securities will have no
voting rights.
A Trust Agreement may be amended from time to time by PSE&G, as
Depositor, and the Issuer Trustees, without the consent of the holders of
the corresponding Preferred Securities, (i) to cure any ambiguity, defect
or inconsistency or (ii) to make any other change that does not adversely
affect in any material respect the interests of any holder of such
Preferred Securities. A Trust Agreement may be amended by PSE&G, as
Depositor, and the Issuer Trustees in any other respect, with the consent
of the holders of at least a majority in liquidation amount of such
Preferred Securities, except to (i) change the amount, timing, currency or
method of payment of any Distribution or Liquidation Distribution, (ii)
restrict the right of a holder of a Preferred Security to institute suit
for enforcement of any Distribution, Redemption Price or Liquidation
Distribution, (iii) change the purpose of the Issuer, (iv) authorize the
issuance of any additional beneficial interests in the Issuer, (v) change
the redemption provisions, (vi) change the conditions precedent for PSE&G
to elect to terminate the related Issuer and distribute the corresponding
series of Debentures to the holders of such Issuer's Preferred Securities
or (vii) affect the limited liability of any holder of Preferred
Securities, which actions will require the consent of each holder of the
related Preferred Securities affected thereby. Notwithstanding the
foregoing, no amendment may be made without receipt by the Issuer of an
opinion of counsel to the effect that such amendment will not affect such
Issuer's status as a grantor trust for Federal income tax purposes or its
exemption from regulation as an investment company under the Investment
Company Act.
The Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture Trustee
with respect to such Debentures, (ii) waive any past default pursuant to
Section 6.04 of the Indenture, (iii) exercise any right to rescind or annul
an acceleration of the principal of the corresponding series of Debentures
or (iv) consent to any amendment or modification of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of at least a majority in
aggregate liquidation amount of all outstanding Preferred Securities of the
corresponding series; provided, however, that where a consent or approval
under the Indenture would require the consent or approval of each holder of
Debentures affected thereby, no such consent or approval shall be given by
the Property Trustee without the prior consent of each holder of the
related Preferred Securities. The Issuer Trustees shall not revoke any
action previously authorized or approved by a vote of the holders of such
Preferred Securities except by subsequent vote of the holders thereof. The
Property Trustee shall notify all holders of the Preferred Securities of
any notice received from the Debenture Trustee as a result of the Issuer
being the holder of the Debentures. In addition to obtaining the foregoing
approvals of the holders of the Preferred Securities, prior to taking any
of the
10
<PAGE>
foregoing actions, the Issuer Trustees shall obtain an opinion of counsel
to the effect that the Issuer will not be classified as an association
taxable as a corporation or a partnership for Federal income tax purposes
on account of such action and will continue to be classified as a grantor
trust for Federal income tax purposes.
Any required approval of holders of Preferred Securities may be given
at a meeting of holders of such Preferred Securities convened for such
purpose or pursuant to written consent. The Property Trustee will cause a
notice of any meeting at which holders of Preferred Securities are entitled
to vote, or of any matter upon which action by written consent of such
holders is to be taken, to be given to each holder of record of such
Preferred Securities in the manner set forth in each Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under certain circumstances, any Preferred Securities that
are owned by PSE&G, the Issuer Trustees or any affiliate of PSE&G or any
Issuer Trustee shall, for purposes of such vote or consent, be treated as
if they were not outstanding.
Book-Entry-Only Issuance--The Depository Trust Company
The Depository Trust Company ("DTC") will act as securities depositary
for all of the Preferred Securities. The Preferred Securities will be
issued only as fully-registered securities registered in the name of Cede &
Co. (DTC's nominee) as the holder thereof. One or more fully-registered
global securities will be issued for the Preferred Securities of each
Issuer, representing in the aggregate the total number of such Issuer's
Preferred Securities, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement
among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct participants include
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC
is owned by a number of its Direct Participants and by the New York Stock
Exchange, the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to
others such as securities brokers and dealers, banks and trust companies
that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and its Participants are on file with the SEC.
Purchases of Preferred Securities within the DTC system must be made
by or through Direct Participants, which will receive a credit for the
Preferred Securities on DTC's records. The ownership interest of each
actual purchaser of each Preferred Security ("Beneficial Owner") is in turn
to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchases,
but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of
their holdings, from the Direct or Indirect Participants through which the
Beneficial Owners purchased Preferred Securities. Transfers of ownership
interests in the Preferred Securities are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their
ownership interests in Preferred Securities, except in the event that use
of the book-entry system for the Preferred Securities of such Issuer is
discontinued.
11
<PAGE>
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Preferred Securities are credited,
which may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered
holder of the Preferred Securities. If less than all of an Issuer's
Preferred Securities are being redeemed, DTC's practice is to determine by
lot the amount of the interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities is limited to
the holders of record of the Preferred Securities, in those instances in
which a vote is required, neither DTC nor Cede & Co. will itself consent or
vote with respect to the Preferred Securities. Under its usual procedures,
DTC would mail an omnibus proxy (the "Omnibus Proxy") to the Property
Trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts such Preferred Securities are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made by the
Property Trustee on behalf of the related Issuer to DTC. DTC's practice is
to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the
responsibility of such Participant and not of DTC, the Property Trustee,
the Issuer of the relevant Preferred Securities or PSE&G, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of Distributions to DTC is the responsibility of the Property
Trustee on behalf of the related Issuer, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursements of such
payments to the Beneficial Owners is the responsibility of the Direct and
Indirect Participants.
DTC may discontinue providing its services as securities depositary
with respect to any series of Preferred Securities at any time by giving
reasonable notice to the Property Trustee and PSE&G. In the event that a
successor securities depositary is not obtained, definitive Preferred
Security certificates representing such Preferred Securities are required
to be printed and delivered. PSE&G, as Depositor, at its option, may
decide to discontinue use of the system of book-entry transfers through DTC
(or a successor depositary), in which case definitive certificates for the
related Preferred Securities will be issued. After a Trust Agreement Event
of Default, the related Issuer will issue definitive certificates for such
Issuer's Preferred Securities. Upon distribution of such Preferred
Securities certificates, owners of such Preferred Securities will become
the registered holders of such series of Preferred Securities.
_______________________
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Issuers and PSE&G believe to
be accurate, but the Issuers and PSE&G assume no responsibility for the
accuracy thereof. Neither the Issuers nor PSE&G has any responsibility for
the
12
<PAGE>
performance by DTC or its Participants of their respective obligations as
described herein or under the rules and procedures governing their
respective operations.
In the event that the book-entry-only system is discontinued, the
payment of any Distribution, Redemption Price and Liquidation Distribution
in respect of a series of Preferred Securities will be payable in the
manner described in the accompanying Prospectus Supplement, and the
following provisions would apply. The Property Trustee shall keep the
registration books for such Preferred Securities at its corporate trust
office. Such Preferred Securities may be transferred or exchanged for one
or more Preferred Securities upon surrender thereof at the corporate trust
office of the Property Trustee by the holders or their duly authorized
attorneys or legal representatives. Upon surrender of any Preferred
Securities to be transferred or exchanged, the Property Trustee shall
record the registration of transfer or exchange in the registration books
and shall deliver new Preferred Securities appropriately registered. The
Property Trustee shall not be required to register the transfer of any
Preferred Securities that have been called for redemption or on or after
the Liquidation Date. The Issuers and the Property Trustee shall be
entitled to treat the holders of the related Preferred Securities, as their
names appear in the registration books, as the owners of those Preferred
Securities for all purposes under the applicable Trust Agreement.
Information Concerning the Property Trustee
The Property Trustee is the sole Trustee under each Trust Agreement
for purposes of the Trust Indenture Act and shall have and be subject to
all of the duties and responsibilities specified with respect to an
indenture trustee under the Trust Indenture Act. The Property Trustee,
other than during the occurrence and continuance of a Trust Agreement Event
of Default, undertakes to perform only such duties as are specifically set
forth in each Trust Agreement and, upon a Trust Agreement Event of Default,
must use the same degree of care and skill in the exercise thereof as a
prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Property Trustee is under no
obligation to exercise any of the powers vested in it by each Trust
Agreement at the request of any holder of Preferred Securities unless such
holder is offered reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no Trust
Agreement Event of Default has occurred and is continuing, and the Property
Trustee is required to decide between alternative courses of action,
construe ambiguous provisions in a Trust Agreement or is unsure of the
application of any provision of a Trust Agreement, and the matter is not
one on which holders of Preferred Securities are entitled under such Trust
Agreement to vote, then the Property Trustee shall take such action as is
directed by PSE&G, as Depositor, and, if not so directed, may take such
action as it deems advisable and in the best interests of the holders of
the corresponding Trust Securities and will have no liability except for
its own negligent action, negligent failure to act or willful misconduct.
Miscellaneous
The Administrative Trustee is authorized and directed to conduct the
affairs of and to operate the Issuers in such a way that (i) no Issuer will
be deemed to be an "investment company" required to be registered under the
Investment Company Act or to be taxed as a corporation or partnership for
Federal income tax purposes, (ii) the Issuers will qualify as grantor
trusts for Federal income tax purposes and (iii) the Debentures held by
such Issuers will be treated as indebtedness of PSE&G for Federal income
tax purposes. In this connection, PSE&G and the Administrative Trustee are
authorized to take any action, not inconsistent with applicable law, the
applicable certificate of trust of such Issuer or the applicable Trust
Agreement, that PSE&G and the Administrative Trustee determine in their
discretion to be necessary or desirable for such purposes, even if such
action adversely affects the interests of the holders of the corresponding
Preferred Securities.
13
<PAGE>
Holders of the Preferred Securities have no preemptive or similar
rights.
No Issuer may borrow money or issue debt or mortgages or pledge any of
its assets.
Except as otherwise provided in the Trust Agreements, any action
requiring the consent or vote of the Issuer Trustees shall be approved by
the Administrative Trustee.
Governing Law
The Trust Agreements will be governed by and construed in accordance
with the laws of the State of Delaware.
DESCRIPTION OF THE GUARANTEE
Each Guarantee will be executed and delivered by PSE&G concurrently
with the issuance by each Issuer of its Preferred Securities for the
benefit of the holders from time to time of such Preferred Securities.
Each Guarantee complies with the requirements of the Trust Indenture Act
and First Union National Bank will act as indenture trustee ("Guarantee
Trustee") under each Guarantee for the purposes of compliance with the
Trust Indenture Act. Reference herein to Preferred Securities means the
Preferred Securities to which a Guarantee relates. The Guarantee Trustee
will hold each Guarantee for the benefit of the holders of the related
Issuer's Preferred Securities.
General
PSE&G will irrevocably and unconditionally agree, to the extent set
forth in each Guarantee, to pay in full, to the holders of the related
Issuer's Preferred Securities, the Guarantee Payments (as defined below)
(except to the extent paid by or on behalf of such Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim which such
Issuer may have or assert. The following payments, to the extent not paid
by an Issuer (the "Guarantee Payments"), will be subject to the applicable
Guarantee (without duplication): (i) any accumulated and unpaid
Distributions required to be paid on such Preferred Securities, to the
extent that such Issuer has funds available therefor, (ii) the Redemption
Price to the extent that such Issuer has funds available therefor, and
(iii) upon a voluntary or involuntary termination, winding-up or
liquidation of such Issuer (unless the corresponding series of Debentures
are distributed to holders of such Preferred Securities), the lesser of (a)
the aggregate of the liquidation amount of $25 per Preferred Security plus
all accumulated and unpaid Distributions on the Preferred Securities to the
date of payment, to the extent the Issuer has funds available therefor and
(b) the amount of assets of such Issuer remaining available for
distribution to holders of Preferred Securities in liquidation of such
Issuer. PSE&G's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by PSE&G to the holders of the
corresponding Preferred Securities or by causing such Issuer to pay such
amounts to such holders. While the assets of PSE&G will not be available
pursuant to the Guarantee for the payment of any Distribution, Liquidation
Distribution or Redemption Price on any Preferred Securities if the Issuer
does not have funds available therefor as described above, PSE&G has agreed
under the Trust Agreement to pay the expenses of each Issuer. Accordingly,
each Guarantee, together with the backup undertakings, consisting of
related covenants contained in each Trust Agreement and PSE&G's obligations
under the Indenture and the Debentures, provide for PSE&G's full,
irrevocable and unconditional guarantee of the Preferred Securities.
No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is
only the combined operation of the Debentures, the Indenture,
14
<PAGE>
the Trust Agreement and the Guarantee that has the effect of providing a
full, irrevocable and unconditional guarantee of the Issuer's obligations
under the Preferred Securities. See "Relationship Among the Preferred
Securities, the Debentures and the Guarantee."
Status of the Guarantee
Each Guarantee will constitute an unsecured obligation of PSE&G and
will rank subordinate and junior in right of payment to all general
liabilities of PSE&G. The Trust Agreements provide that each holder of
Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the related Guarantee. Each Guarantee will
rank pari passu with all other such Guarantees issued by PSE&G. Each
Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly
against PSE&G to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held by the Guarantee Trustee for the benefit of the
holders of the corresponding Preferred Securities. Each Guarantee will not
be discharged except by payment of the Guarantee Payments in full to the
extent not paid by the Issuer or upon distribution to the holders of the
Preferred Securities of the corresponding series of Debentures pursuant to
the Trust Agreement.
Amendments and Assignment
Except with respect to any changes which do not materially adversely
affect the rights of holders of the corresponding Preferred Securities (in
which case no consent of the holders will be required), no Guarantee may be
amended without the prior approval of the holders of at least a majority in
aggregate liquidation amount of such Preferred Securities (excluding any
Preferred Securities held by PSE&G or an affiliate thereof). The manner of
obtaining any such approval will be as set forth under "Description of the
Preferred Securities--Voting Rights; Amendment of Trust Agreement." All
guarantees and agreements contained in each Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of PSE&G and
shall inure to the benefit of the holders of the corresponding Preferred
Securities.
Guarantee Events of Default
An event of default under each Guarantee (a "Guarantee Event of
Default") will occur upon the failure of PSE&G to perform any of its
payment or other obligations thereunder; provided, however, that except
with respect to a Guarantee Event of Default resulting from a failure to
make any of the Guarantee Payments, PSE&G shall have received notice of
such Guarantee Event of Default from the Guarantee Trustee and shall not
have cured such Guarantee Event of Default within 60 days after receipt of
such notice. The holders of at least a majority in aggregate liquidation
amount of the corresponding Preferred Securities (excluding any Preferred
Securities held by PSE&G or an affiliate thereof) have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of such Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee
Trustee under such Guarantee.
If the Guarantee Trustee fails to enforce the Guarantee, any holder of
the corresponding Preferred Securities may, after such holder's written
request to the Guarantee Trustee to enforce such Guarantee, institute a
legal proceeding directly against PSE&G to enforce such holder's rights
under the Guarantee without first instituting a legal proceeding against
the related Issuer, the Guarantee Trustee or any other person or entity.
15
<PAGE>
PSE&G, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not PSE&G is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and
continuance of a Guarantee Event of Default, undertakes to perform only
such duties as are specifically set forth in each Guarantee and, upon a
Guarantee Event of Default, must exercise such of the rights and powers
vested in it by the Guarantee and to use the same degree of care and skill
in the exercise thereof as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it
by any Guarantee at the request of any holder of any Preferred Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
Termination of the Guarantee
Each Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price or Liquidation Distribution for
the corresponding Preferred Securities, or upon distribution of the
corresponding series of Debentures to the holders of the corresponding
Preferred Securities. Each Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of the
corresponding Preferred Securities must restore payment of any sums paid
under such Preferred Securities or such Guarantee.
Governing Law
Each Guarantee will be governed by and construed in accordance with
the laws of the State of New Jersey.
DESCRIPTION OF DEBENTURES
General
The Debentures are to be issued in one or more series under the
Indenture. Each series of Debentures will rank pari passu with all other
series of Debentures and the $158,639,176 aggregate principal amount of
PSE&G's 9-3/8% Deferrable Interest Subordinated Debentures, Series A and
the $61,855,670 aggregate principal amount of PSE&G's 8% Deferrable
Interest Subordinated Debentures, Series B (together, the "MIPs
Debentures"). Each series of Debentures will be unsecured and subordinate
and junior in right of payment, to the extent and in the manner set forth
in the Indenture, to all Senior Indebtedness (as defined below) of PSE&G.
See "--Subordination." Except as otherwise provided in the accompanying
Prospectus Supplement, the Indenture does not limit the incurrence or
issuance of Senior Indebtedness.
The accompanying Prospectus Supplement will describe the following
terms of any series of Debentures: (i) the title of such series of
Debentures; (ii) the aggregate principal amount of such series of
Debentures; (iii) the date or dates on which the principal of such series
of Debentures is payable or the method of determination thereof; (iv) the
rate or rates, if any, at which such series of Debentures shall bear
interest, the interest payment dates on which any such interest shall be
payable or the method by which any of the foregoing shall be determined;
(v) any terms regarding redemption; (vi) the maximum
16
<PAGE>
Extension Period for such series of Debentures; and (vii) any other terms
of such series of Debentures not inconsistent with the provisions of the
Indenture.
Certain Federal income tax consequences and special considerations
applicable to any series of Debentures will be described in the
accompanying Prospectus Supplement.
Option to Extend Interest Payment Period
Under the Indenture, PSE&G shall have the right at any time and from
time to time, so long as a Debenture Event of Default has not occurred and
is continuing with respect to a series of Debentures, to defer payments of
interest by extending the interest payment period for such series of
Debentures for up to the maximum Extension Period provided for such series
of Debentures, provided that no Extension Period shall extend beyond the
maturity or any redemption date of such series of Debentures. At the end
of the Extension Period, PSE&G is obligated to pay all interest then
accrued and unpaid (together with interest thereon to the extent permitted
by applicable law). During any Extension Period, PSE&G may not declare or
pay any dividend on, or redeem, purchase, acquire, or make a liquidation
payment with respect to, any of its capital stock. Prior to the
termination of any Extension Period, PSE&G may shorten or further extend
the interest payment period, provided that such Extension Period, together
with all such previous and further extensions thereof, may not exceed the
maximum Extension Period for such series of Debentures or extend beyond the
maturity or any redemption date of such series of Debentures. Upon the
termination of any Extension Period and the payment of all amounts then
due, PSE&G may elect to begin a new Extension Period, subject to the above
requirements. PSE&G is required to give notice to the Debenture Trustee
and cause the Debenture Trustee to give notice to the holders of the
applicable series of Debentures of its selection of an Extension Period or
any shortening or extension thereof, one Business Day prior to the date the
notice of the record or payment date of the related Distribution on the
corresponding series of Preferred Securities or payment of interest on the
Debentures is required to be given to any national securities exchange on
which such series of Debentures or the corresponding Preferred Securities
are then listed or other applicable self-regulatory organization but in any
event not less than two Business Days prior to such record date.
If during any Extension Period PSE&G fails to pay dividends on any
shares of PSE&G's preferred stock for four consecutive quarterly periods,
pursuant to PSE&G's Restated Certificate of Incorporation, as amended, the
holders of PSE&G's preferred stock, voting separately as a single class,
are entitled to elect a majority of PSE&G's Board of Directors. Such
voting rights of the holders of preferred stock to elect directors shall
continue until all accumulated and unpaid dividends thereon have been paid.
Subordination
The Indenture provides that all payments by PSE&G in respect of the
Debentures shall be subordinated to the prior payment in full of all
amounts payable on Senior Indebtedness. The term "Senior Indebtedness"
means (i) the principal of and premium, if any, in respect of (a)
indebtedness of PSE&G for money borrowed and (b) indebtedness evidenced by
securities, debentures, bonds or other similar instruments issued by PSE&G;
(ii) all capital lease obligations of PSE&G; (iii) all obligations of PSE&G
issued or assumed as the deferred purchase price of property, all
conditional sale obligations of PSE&G and all obligations of PSE&G under
any title retention agreement (but excluding trade accounts payable arising
in the ordinary course of business); (iv) certain obligations of PSE&G for
the reimbursement of any obligation, any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction
entered into in the ordinary course of business of PSE&G; (v) all
obligations of the type referred to in clauses (i) through (iv) of other
persons and all dividends of other persons (other
17
<PAGE>
than the Preferred Securities or similar securities) for the payment of
which, in either case, PSE&G is responsible or liable as obligor, guarantor
or otherwise (other than the Guarantee and obligations ranking equal to the
Guarantee); and (vi) certain obligations of the type referred to in clauses
(i) through (v) of other persons secured by any lien on any property or
asset of PSE&G (whether or not such obligation is assumed by PSE&G), except
for any such indebtedness that is by its terms subordinated to or pari
passu with the Debentures and for indebtedness between or among PSE&G and
its affiliates.
Upon any payment or distribution of assets or securities of PSE&G,
upon any dissolution or winding-up or total or partial liquidation or
reorganization of PSE&G, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all amounts
payable on Senior Indebtedness (including any interest accruing on such
Senior Indebtedness subsequent to the commencement of a bankruptcy,
insolvency or similar proceeding) shall be paid in full before the holders
of the Debentures or the Debenture Trustee on behalf of the holders shall
be entitled to receive from PSE&G any payment of principal of, premium, if
any, or interest on the Debentures or distributions of any assets or
securities.
No direct or indirect payment by or on behalf of PSE&G of principal
of, premium, if any, or interest on the Debentures, whether pursuant to the
terms of the Debentures or upon acceleration or otherwise, shall be made
if, at the time of such payment, there exists (i) a default in the payment
of all or any portion of any Senior Indebtedness or (ii) any other default
pursuant to which the maturity of Senior Indebtedness has been accelerated
and, in either case, requisite notice has been given to the Debenture
Trustee and such default shall not have been cured or waived by or on
behalf of the holders of such Senior Indebtedness.
If the Debenture Trustee or any holder of the Debentures shall have
received any payment on account of the principal of, premium, if any, or
interest on the Debentures when such payment is prohibited and before all
amounts payable on Senior Indebtedness are paid in full, then such payment
shall be received and held in trust for the holders of Senior Indebtedness
and shall be paid to the holders of the Senior Indebtedness remaining
unpaid to the extent necessary to pay such Senior Indebtedness in full.
Nothing in the Indenture shall limit the right of the Debenture
Trustee or the holders of the Debentures to take any action to accelerate
the maturity of the Debentures or to pursue any rights or remedies against
PSE&G, provided that all Senior Indebtedness shall be paid before holders
of the Debentures are entitled to receive any payment from PSE&G of
principal of or premium, if any, or interest on the Debentures.
Upon the payment in full of all Senior Indebtedness, the holders of
the Debentures shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of assets of PSE&G
made on such Senior Indebtedness until the Debentures shall be paid in
full.
Certain Covenants of PSE&G
PSE&G will covenant that it may not declare or pay any dividend on, or
redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (i) during an Extension Period, (ii) if there
shall have occurred and is continuing any event that, with the giving of
notice or the lapse of time or both, would constitute a Debenture Event of
Default or (iii) if PSE&G is in default with respect to its payment or
other obligations under any Guarantee. See "--Debenture Events of Default"
and "Description of the Guarantee--Guarantee Events of Default."
18
<PAGE>
Any waiver of any Debenture Event of Default will require the approval
of at least a majority of the aggregate principal amount of the Debentures
of that series or, if a series of Debentures are held by an Issuer, the
approval of at least a majority in aggregate liquidation amount of the
Preferred Securities of such Issuer, provided, however, that a Debenture
Event of Default resulting from the failure to pay the principal of,
premium, if any, or interest on the Debentures may not be waived.
Modification of the Indenture
From time to time, PSE&G and the Debenture Trustee, without notice to
or the consent of any holders of Debentures may amend or supplement the
Indenture or the Debentures for any of the following purposes: (i) to cure
any ambiguity, defect or inconsistency; (ii) to comply with the provisions
of the Indenture regarding consolidation, merger or sale, conveyance,
transfer or lease of the properties as an entirety or substantially as an
entirety of PSE&G; (iii) to provide for uncertificated Debentures in
addition to or in place of certificated Debentures; (iv) to make any other
change that does not in the reasonable judgment of PSE&G adversely affect
the rights of any holder of the Debentures; (v) to comply with any
requirement of the SEC in connection with the qualification of the
Indenture under the Trust Indenture Act; or (vi) to set forth the terms and
conditions, which shall not be inconsistent with the Indenture, of each
additional series of Debentures and the form of Debentures of such series.
The Indenture contains provisions permitting PSE&G and the Debenture
Trustee to modify the Indenture or any supplemental indenture or to waive
future compliance by PSE&G with the provisions of the Indenture, with the
consent of the holders of at least a majority of the aggregate principal
amount of the Debentures of each series affected thereby, provided that no
such modification, without the consent of each holder of the Debentures may
(i) reduce the principal of such Debentures, (ii) reduce the principal
amount of outstanding Debentures of any series the holders of which must
consent to an amendment of the Indenture or a waiver, (iii) change the
stated maturity of the principal of, premium, if any, or interest on or the
rate of interest of the Debentures, (iv) change the redemption provisions
applicable to the Debentures adversely to the holders thereof, (v) impair
the right to institute suit for the enforcement of any payment with respect
to the Debentures, (vi) change the currency in which payments with respect
to the Debentures are to be made, or (vii) change the subordination
provisions applicable to the Debentures adversely to the holders thereof,
provided that if a series of Debentures are held by an Issuer, no amendment
shall be made that adversely affects the holders of the Preferred
Securities of such Issuer, and no waiver of any Debenture Event of Default
with respect to the corresponding series of Debentures or compliance with
any covenant under the Indenture shall be effective, without the prior
consent of the holders of at least a majority of the aggregate liquidation
amount of the Preferred Securities of such Issuer.
Debenture Events of Default
The following are "Debenture Events of Default" with respect to the
Debentures of any series: (i) default for 30 days in payment of any
interest on any Debenture of that series (other than the payment of
interest during an Extension Period); (ii) default in payment of principal
of or premium, if any, on any Debenture of that series when the same
becomes due and payable; (iii) default for 60 days after receipt by PSE&G
of a "Notice of Default" in the performance of or failure to comply with
any other covenant or agreements for such series of Debentures or in the
Indenture or any supplemental indenture under which such series of
Debentures may have been issued or (iv) certain events of bankruptcy,
insolvency or reorganization of PSE&G. In case a Debenture Event of
Default shall occur and is continuing, other than one relating to
bankruptcy, insolvency or reorganization of PSE&G, in which case the
principal of premium, if any, and any interest on all of the Debentures
shall become immediately due and payable, the Debenture Trustee or the
holders at least 25% in aggregate principal amount of the Debentures of
that
19
<PAGE>
series may declare the principal, together with interest accrued thereon,
of all the Debentures of that series to be due and payable; provided,
however, that if a series of Debentures are then held by an Issuer, if upon
a Debenture Event of Default with respect to such series of Debentures the
Debenture Trustee or the holders of at least 25% in aggregate principal
amount of such series of Debentures fail to declare the principal of such
series of Debentures to be immediately due and payable, then the holders of
at least 25% in aggregate liquidation amount of the corresponding Preferred
Securities shall have such right by written notice to PSE&G and the
Debenture Trustee. The holders of at least a majority in aggregate
principal amount of such series of Debentures, by notice to the Debenture
Trustee, may rescind an acceleration, provided that if the principal of a
series of Debentures has been declared due and payable by the holders of
the corresponding Preferred Securities, no rescission of such acceleration
will be effective unless consented to by the holders of at least a majority
in aggregate liquidation amount of such series of Preferred Securities.
PSE&G is required to furnish to the Debenture Trustee annually a
statement as to the compliance by PSE&G with all conditions and covenants
under the Indenture and the Debentures and as to any Debenture Event of
Default.
Consolidation, Merger, Sale or Conveyance
The Indenture provides that PSE&G may not consolidate with or merge
with or into any other person or sell, convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
person, unless (i) the successor person shall be organized and existing
under the laws of the United States or any state thereof or the District of
Columbia, and shall expressly assume by a supplemental indenture all of the
obligations of PSE&G under the Debentures and the Indenture; (ii)
immediately after giving effect to such transaction, no Debenture Event of
Default, and no event which, after notice or lapse of time or both, would
become a Debenture Event of Default, shall have occurred and be continuing;
and (iii) certain other conditions prescribed in the Indenture are met.
Defeasance and Discharge
Under the terms of the Indenture, PSE&G will be discharged from any
and all obligations in respect of the Debentures of any series if PSE&G
deposits with the Debenture Trustee, in trust, (i) cash and/or (ii) United
States Government Obligations (as defined in the Indenture), which through
the payment of interest thereon and principal thereof in accordance with
their terms will provide cash in an amount sufficient to pay all the
principal of, premium, if any, and interest on, the Debentures of such
series on the dates such payments are due in accordance with the terms of
such Debentures.
Information Concerning the Debenture Trustee
Subject to the provisions of the Indenture relating to its duties, the
Debenture Trustee will be under no obligation to exercise any of its rights
or powers under the Indenture at the request, order or direction of the
holders of any series of Debentures or the holders of the related Preferred
Securities, unless such holders shall have offered to the Debenture Trustee
reasonable security and indemnity. Subject to such provision for
indemnification, the holders of at least a majority in aggregate principal
amount of any series of Debentures affected or the holders of at least a
majority in aggregate liquidation amount of the related Preferred
Securities (with each such series voting as a class) will have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee with respect to such series of
Debentures or exercising any trust or power conferred on the Debenture
Trustee.
20
<PAGE>
The Indenture contains limitations on the right of the Debenture
Trustee, as a creditor of PSE&G, to obtain payment of claims in certain
cases, or to realize on certain property received in respect of any such
claim as security or otherwise. In addition, the Debenture Trustee may be
deemed to have a conflicting interest and may be required to resign as
Debenture Trustee if at the time of a Debenture Event of Default (i) it is
a creditor of PSE&G or (ii) if there is a default under the Indenture
referred to below.
First Union National Bank is the Trustee under PSE&G's Indenture dated
August 1, 1924, with respect to PSE&G's First and Refunding Mortgage Bonds
and PSE&G's Indenture dated as of November 1, 1994, as supplemented, with
respect to the MIPs Debentures. PSE&G also maintains other normal banking
relationships with First Union National Bank.
Governing Law
The Indenture will be governed by and construed in accordance with the
laws of the State of New Jersey.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE DEBENTURES AND THE GUARANTEE
As long as payments of interest and other payments are made when due
on a series of Debentures, such payments will be sufficient to cover the
payment of Distributions and redemption and liquidation payments due on the
corresponding Preferred Securities, primarily because (i) the aggregate
principal amount of each series of Debentures will be equal to the sum of
the aggregate liquidation amount of the corresponding Preferred Securities
and Common Securities; (ii) the interest rate and interest and other
payment dates on each series of Debentures will match the Distribution rate
and Distribution and other payment dates for the corresponding Preferred
Securities; (iii) each Trust Agreement provides that PSE&G shall pay for
all and any costs, expenses and liabilities of each Issuer except such
Issuer's obligations to holders of its Preferred Securities under such
Preferred Securities; and (iv) each Trust Agreement further provides that
each Issuer will not engage in any activity that is not consistent with the
limited purposes of such Issuer.
Payments of Distributions and redemption and liquidation payments due
on the Preferred Securities (to the extent the Issuer thereof has funds
available for such payments) are guaranteed by PSE&G as and to the extent
set forth under "Description of the Guarantee." If and to the extent that
PSE&G does not make payments on any series of Debentures, such Issuer will
not pay Distributions or other amounts due on the related Preferred
Securities.
If the Guarantee Trustee fails to enforce any Guarantee, a holder of
any corresponding Preferred Security may, after such holder's written
request to the Guarantee Trustee to enforce such Guarantee, institute a
legal proceeding directly against PSE&G to enforce its rights under such
Guarantee without first instituting a legal proceeding against the
Guarantee Trustee, the related Issuer or any other person or entity.
Each Issuer's Preferred Securities evidence the rights of the holders
thereof to undivided beneficial interests in the assets of such Issuer, and
each Issuer exists for the sole purpose of issuing its Trust Securities and
investing the proceeds thereof in a corresponding series of Debentures. A
principal difference between the rights of a holder of a Preferred Security
and a holder of a Debenture is that a holder of a Debenture will accrue,
and (subject to the permissible extension of the interest payment
21
<PAGE>
period) is entitled to receive, interest on the principal amount of
Debentures held, while a holder of Preferred Securities is entitled to
receive Distributions only if and to the extent the Issuer has funds
available for the payment of such Distributions.
Upon any voluntary or involuntary termination, winding-up or
liquidation of any Issuer not involving a distribution of any series of
Debentures, the holders of the corresponding Preferred Securities will be
entitled to receive, out of assets held by such Issuer, the Liquidation
Distribution in cash. See "Description of the Preferred
Securities--Liquidation Distribution Upon Termination." Upon any voluntary
liquidation or bankruptcy of PSE&G, the Property Trustee, as holder of the
Debentures, would be a creditor of PSE&G, subordinated in right of payment
to all Senior Indebtedness, but entitled to receive payment in full of
principal, premium, if any, and interest, before any stockholders of PSE&G
receive payments or distributions. Since PSE&G is the guarantor under each
Guarantee and has agreed to pay for all costs, expenses and liabilities of
each Issuer (other than the Issuer's obligations to the holders of its
Preferred Securities), the positions of a holder of such Preferred
Securities and a holder of such Debentures relative to other creditors and
to stockholders of PSE&G in the event of liquidation or bankruptcy of PSE&G
would be substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a Debenture Event of Default. However, in the event of payment
defaults under, or acceleration of, Senior Indebtedness, the subordination
provisions of the Debentures provide that no payments may be made in
respect of the Debentures until such Senior Indebtedness has been paid in
full or any payment default thereunder has been cured or waived. Failure
to make required payments on any series of Debentures would constitute a
Debenture Event of Default.
PLAN OF DISTRIBUTION
The Issuers may offer or sell Preferred Securities offered hereby to
one or more underwriters for public offering and sale by them. The Issuers
may sell Preferred Securities as soon as practicable after effectiveness of
the Registration Statement. Any such underwriter involved in the offer and
sale of the Preferred Securities will be named in an accompanying
Prospectus Supplement.
Underwriters may offer and sell the Preferred Securities at a fixed
price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices relating to such
prevailing market prices or at negotiated prices. In connection with the
sale of Preferred Securities, underwriters may be deemed to have received
compensation from PSE&G in the form of underwriting discounts or
commissions and may also receive commissions. Underwriters may sell
Preferred Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters.
Any underwriting compensation paid by PSE&G on behalf of the Issuers
to underwriters in connection with the offering of Preferred Securities,
and any discounts, concessions or commissions allowed by underwriters to
participating dealers, will be set forth in an accompanying Prospectus
Supplement. Underwriters and dealers participating in the distribution of
the Preferred Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them
on resale of the Preferred Securities may be deemed to be underwriting
discounts and commissions, under the Securities Act of 1933, as amended
(the "Securities Act"). Underwriters and dealers may be entitled, under
agreement with PSE&G and the Issuers, to indemnification against and
contribution toward certain civil liabilities, including liabilities under
the Securities Act, and to reimbursement by the Issuers for certain
expenses.
22
<PAGE>
Underwriters and dealers may engage in transactions with, or perform
services for, PSE&G and/or any of its affiliates in the ordinary course of
business.
Each series of Preferred Securities will be a new issue of securities
and will have no established trading market. Any underwriters to whom
Preferred Securities are sold by the Issuers for public offering and sale
may make a market in such Preferred Securities but such underwriters will
not be obligated to do so and may discontinue any market making at any time
without notice. The Preferred Securities may or may not be listed on a
national securities exchange. No assurance can be given as to the
liquidity of or the existence of trading markets for any Preferred
Securities.
LEGAL MATTERS
Certain legal matters will be passed upon for PSE&G by R. Edwin
Selover, Esquire, Senior Vice President and General Counsel of PSE&G or
James T. Foran, Esquire, General Corporate Counsel of PSE&G and by Ballard
Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, special tax counsel
to PSE&G, for each Issuer by Richards, Layton & Finger, special Delaware
counsel to PSE&G and the Issuers, and for the underwriters by Brown & Wood,
New York, New York, who may rely on the opinion of Mr. Selover or Mr. Foran
as to matters of New Jersey law. R. Edwin Selover, Esquire or James T.
Foran, Esquire and Brown & Wood may rely on the opinion of Ballard Spahr
Andrews & Ingersoll as to matters of Pennsylvania law and on the opinion of
Richards, Layton & Finger as to matters of Delaware law.
EXPERTS
The consolidated financial statements and related financial statement
schedules of PSE&G incorporated by reference in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, for the periods
indicated in their report thereon which is included in the Annual Report on
Form 10-K for the year ended December 31, 1995. The consolidated financial
statements and related financial statement schedules audited by Deloitte &
Touche LLP have been incorporated herein by reference in reliance on their
report given on their authority as experts in accounting and auditing.
23
<PAGE>
======================================== ===================================
__________ Preferred Securities
No person has been authorized to
give any information or to make any PSE&G Capital Trust I
representations other than those
contained in this Prospectus Supplement _____% Cumulative Quarterly
or the Prospectus and, if given or made, Income Preferred
such information or representations must Securities, Series A
not be relied upon as having been
authorized. This Prospectus Supplement guaranteed to the extent
and the Prospectus do not constitute an PSE&G Capital Trust I has funds
offer to sell or the solicitation of any as set forth herein by
offer to buy any securities other than
the securities described in this PUBLIC SERVICE ELECTRIC
Prospectus Supplement and the Prospectus AND GAS COMPANY
or an offer to sell or the solicitation
of an offer to buy such securities in
any circumstances in which such offer or
solicitation is unlawful. Neither the
delivery of this Prospectus Supplement [LOGO] PSE&G
or the Prospectus nor any sale made
hereunder or thereunder shall, under any
circumstances, create any implication
that the information contained herein or
therein is correct as of any time
subsequent to the date of such
information.
________________
TABLE OF CONTENTS ______________________________
Page
---- PROSPECTUS SUPPLEMENT
Prospectus Supplement ______________________________
Risk Factors . . . . . . . . . . . . .
PSE&G Capital Trust I . . . . . . . . .
Public Service Electric and Gas Company
Use of Proceeds . . . . . . . . . . . .
Certain Terms of the Series A
Preferred Securities . . . . . . . .
Certain Terms of the Series A
Debentures . . . . . . . . . . . . . .
United States Taxation . . . . . . . .
Underwriting . . . . . . . . . . . . .
Prospectus
Statement of Available Information . .
Incorporation of Certain Documents
by Reference . . . . . . . . . . . .
The Issuers . . . . . . . . . . . . . .
Public Service Electric and Gas Company
Use of Proceeds . . . . . . . . . . . .
Description of the Preferred Securities
Description of the Guarantee . . . . .
Description of the Debentures . . . . .
Relationship Among the Preferred
Securities,
the Debentures and the Guarantee . .
Plan of Distribution . . . . . . . . .
Legal Matters . . . . . . . . . . . . . Goldman, Sachs & Co.
Experts . . . . . . . . . . . . . . . . Representatives of the Underwriters
======================================== ===================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Filing fees--Securities and Exchange Commission . . . . . $120,690
Printing . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
New York Stock Exchange listing fee . . . . . . . . . . $ 60,820
Legal fees and Blue Sky fees and expenses . . . . . . . $140,000
Accounting fees . . . . . . . . . . . . . . . . . . . . $ 15,000
Fees and expenses of various Trustees . . . . . . . . . $ 20,000
Rating agencies fees and expenses . . . . . . . . . . . $121,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . $ 22,490
--------
Total . . . . . . . . . . . . . . . . . . . . . . $550,000
========
____________________
* Estimated
Item 15. Indemnification of Directors and Officers.
Under Section 14A:3-5 of the New Jersey Business Corporation Act,
PSE&G:
(1) has power to indemnify each director and officer of PSE&G (as well as
its employees and agents) against expenses and liabilities in connection with
any proceeding involving him by reason of his being or having been such director
or officer, other than a proceeding by or in the right of PSE&G, if (a) such
director of officer acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of PSE&G, and (b) with respect to
any criminal proceeding, such director or officer had no reasonable cause to
believe his conduct was unlawful;
(2) has power to indemnify each director and officer of PSE&G against
expenses in connection with any proceeding by or in the right of PSE&G to
procure a judgment in its favor which involves such director or officer by
reason of his being or having been such director or officer, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interest of PSE&G; however, in such proceeding no indemnification may be
provided in respect to any claim, issue or matter as to which such director or
officer shall have been adjudged to be liable to PSE&G, unless and only to the
extent that the court determines that the director or officer is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper;
(3) must indemnify each director and officer against expenses to the
extent that he has been successful on the merits or otherwise in any proceeding
referred to in (1) and (2) above or in defense of any claim, issue or matter
therein; and
(4) has power to purchase and maintain insurance on behalf of a director
or officer against any expenses incurred in any proceeding and any liabilities
asserted against him by reason of his being or having been a director or
officer, whether or not PSE&G would have the power to indemnify him against such
expenses and liabilities under the statute.
As used in the statute, "expenses" means reasonable costs, disbursements
and counsel fees, "liabilities" means amounts paid or incurred in satisfaction
of settlements, judgments, fines and penalties, and "proceedings" means any
pending, threatened or completed civil, criminal, administrative or
<PAGE>
arbitrative action, suit or proceeding, and any appeal therein and any inquiry
or investigation which could lead to such action, suit or proceeding.
Indemnification may be awarded by a court under (1) or (2) as well as under
(3) above, notwithstanding a prior determination by PSE&G that the director or
officer has not met the applicable standard of conduct.
Indemnification under the statute does not exclude any other rights to
which a director or officer may be entitled under a certificate of
incorporation, by-law, or otherwise.
Subdivision 1 of Article VI of PSE&G's Restated Certificate of
Incorporation, as amended, provides as follows:
1. Indemnification of Directors, Officers and Employees:
The corporation shall indemnify to the fullest extent from time to time
permitted by law any person made, or threatened to be made, a party to any
pending, threatened or completed civil, criminal, administrative or arbitrative
action, suit or proceeding and any appeal therein (and any inquiry or
investigation which could lead to such action, suit or proceeding) by reason of
the fact that he is or was a director, officer or employee of the corporation or
serves or served any other enterprise as a director, officer or employee at the
request of the corporation. Such right of indemnification shall inure to the
benefit of the legal representative of any such person.
Subdivision 5 of Article VI of PSE&G's Restated Certificate of
Incorporation, as amended, provides as follows:
5. Limitation of Liability:
To the fullest extent from time to time permitted by law, directors and
officers of the corporation shall not be personally liable to the corporation or
its shareholders for damages for breach of any duty owed to the corporation or
its shareholders. No amendment or repeal of this provision shall adversely
affect any right or protection of a director or officer of the corporation
existing at the time of such amendment or repeal.
The directors and officers of PSE&G are insured under policies of
insurance, within the limits and subject to the limitations of the policies,
against claims made against them for acts in the discharge of their duties, and
PSE&G is insured to the extent that it is required or permitted by law to
indemnify the directors and officers for such loss. The premiums for such
insurance are paid by PSE&G.
PSE&G, as sponsor, has agreed to indemnify the Issuer Trustees for, and to
hold the Issuer Trustees harmless against, any loss, damage, claims, liability,
penalty or expense incurred without negligence or bad faith on the part of any
Issuer Trustee, arising out of or in connection with the acceptance or
administration of the Trust Agreement, including the costs of expenses of any
Issuer Trustee of defending itself against any claim or liability in connection
with the exercise and performance of any of its powers or duties under the Trust
Agreement.
<PAGE>
Item 16. Exhibits
Exhibit
Numbers
- -------
1 Form of Underwriting Agreement.
3-1 Certificate of Trust for PSE&G Capital Trust I.
3-2 Certificate of Trust for PSE&G Capital Trust II.
3-3 Certificate of Trust for PSE&G Capital Trust III.
3-4 Trust Agreement for PSE&G Capital Trust I.
3-5 Trust Agreement for PSE&G Capital Trust II.
3-6 Trust Agreement for PSE&G Capital Trust III.
3-7 Form of Amended and Restated Trust Agreement (Agreements for PSE&G
Capital Trust I, PSE&G Capital Trust II and PSE&G Capital Trust III
will be substantially identical except for names and dates).
4-1 Form of Preferred Security Certificate for PSE&G Capital Trust I,
PSE&G Capital Trust II and PSE&G Capital Trust III (included in
Exhibit 3-7).
4-2 Form of Deferrable Interest Subordinated Debenture (included in
Exhibit 4-3).
4-3 Form of Deferrable Interest Subordinated Debenture Indenture.
4-4 Form of Deferrable Interest Subordinated Debenture Supplemental
Indenture.
4-5 Form of Guarantee Agreement (Agreements will be substantially
identical except for names and dates).
5-1 Opinion of James T. Foran, Esquire relating to the legality of the
Debentures and the Guarantees, including consent.
5-2 Opinion of Richards, Layton & Finger, special Delaware counsel,
relating to the legality of the Preferred Securities of PSE&G Capital
Trust I, including consent.
5-3 Opinion of Richards, Layton & Finger, special Delaware counsel,
relating to the legality of the Preferred Securities of PSE&G Capital
Trust II, including consent.
5-4 Opinion of Richards, Layton & Finger, special Delaware counsel,
relating to the legality of the Preferred Securities of PSE&G Capital
Trust III, including consent.
8 Opinion of Ballard Spahr Andrews & Ingersoll, special tax counsel, as
to tax matters, including consent.
12-1 Computations of Ratios of Earnings to Fixed Charges (incorporated by
reference to PSE&G's Annual Report on Form 10-K for the year ended
December 31, 1995, File No. 1-9120).
12-2 Computations of Ratios of Earnings to Combined Fixed Charges plus
Preferred Securities Dividend Requirements (incorporated by reference
to PSE&G's Annual Report on Form 10-K for the year ended December 31,
1995, File No. 1-9120).
23-1 Consent of Independent Auditors.
23-2 Consent of James T. Foran, Esquire (included in Exhibit 5-1).
23-3 Consent of Richards, Layton & Finger (included in Exhibits 5-2, 5-3
and 5-4).
23-4 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 8).
25-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Indenture Trustee under the Deferrable
Interest Subordinated Debenture Indenture and Deferrable Interest
Subordinated Debenture Supplemental Indenture.
25-2 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Property Trustee under the Amended and
Restated Trust Agreement for PSE&G Capital Trust I.
25-3 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Property Trustee under the Amended and
Restated Trust Agreement for PSE&G Capital Trust II.
<PAGE>
25-4 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Property Trustee under the Amended and
Restated Trust Agreement for PSE&G Capital Trust III.
25-5 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Guarantee Trustee under the Guarantee
Agreement for PSE&G Capital Trust I.
25-6 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Guarantee Trustee under the Guarantee
Agreement for PSE&G Capital Trust II.
25-7 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Guarantee Trustee under the Guarantee
Agreement for PSE&G Capital Trust III.
____________________
Item 17. Undertakings
A. To Update Annually
The Registrants hereby undertake (1) to file, during any period in
which offers or sales are being made, a post-effective amendment to this
registration statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by PSE&G pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement;
(2) that for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. Incorporation by Reference
The Registrants hereby undertake that, for purposes of determining any
liability under the Securities Act of 1933, each filing of PSE&G's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Indemnification
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrants, the Registrants have been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a
<PAGE>
director, officer or controlling person of the Registrants in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
D. Equity Offerings of Nonreporting Registrants
The Registrants hereby undertake to provide to the underwriter at the
closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
E. Pricing Information
The Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrants, PSE&G Capital Trust I, PSE&G Capital Trust II and PSE&G Capital
Trust III each certifies that it has reasonable grounds to believe it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Newark, State of New Jersey, on this 23rd day of
April, 1996.
PSE&G Capital Trust I
By: Public Service Electric and Gas Company,
as Sponsor
By: /s/ E. James Ferland
----------------------------------------
E. James Ferland
Chairman of the Board
and Chief Executive Officer
PSE&G Capital Trust II
By: Public Service Electric and Gas Company,
as Sponsor
By: /s/ E. James Ferland
----------------------------------------
E. James Ferland
Chairman of the Board
and Chief Executive Officer
PSE&G Capital Trust III
By: Public Service Electric and Gas Company,
as Sponsor
By: /s/ E. James Ferland
----------------------------------------
E. James Ferland
Chairman of the Board
and Chief Executive Officer
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, Public Service Electric and Gas Company, certifies that it has
reasonable grounds to believe it meets all of the requirements for filing on
Form S-3 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Newark,
State of New Jersey, on this 23rd day of April, 1996.
Public Service Electric and Gas Company
By: /s/ E. James Ferland
------------------------------------------
E. James Ferland
Chairman of the Board and
Chief Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ E. James Ferland Chairman of the April 23, 1996
- ---------------------------- Board and Chief
E. James Ferland Executive Officer
and Director
(Principal
Executive Officer)
/s/ Robert C. Murray Senior Vice April 23, 1996
- ---------------------------- President and
Robert C. Murray Chief Financial
Officer (Principal
Financial Officer)
/s/ Patricia A. Rado Vice President and April 23, 1996
- ---------------------------- Controller
Patricia A. Rado (Principal
Accounting
Officer)
/s/ Lawrence R. Codey Director April 23, 1996
- ----------------------------
Lawrence R. Codey
/s/ Raymond V. Gilmartin Director April 23, 1996
- ----------------------------
Raymond V. Gilmartin
/s/ Irwin Lerner Director April 23, 1996
- ----------------------------
Irwin Lerner
/s/ James C. Pitney Director April 23, 1996
- ----------------------------
James C. Pitney
/s/ Forest J. Remick Director April 23, 1996
- ----------------------------
Forrest J. Remick
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT
NO. DESCRIPTION
- ------- -----------
1 Form of Underwriting Agreement.
3-1 Certificate of Trust for PSE&G Capital Trust I.
3-2 Certificate of Trust for PSE&G Capital Trust II.
3-3 Certificate of Trust for PSE&G Capital Trust III.
3-4 Trust Agreement for PSE&G Capital Trust I.
3-5 Trust Agreement for PSE&G Capital Trust II.
3-6 Trust Agreement for PSE&G Capital Trust III.
3-7 Form of Amended and Restated Trust Agreement (Agreements for PSE&G
Capital Trust I, PSE&G Capital Trust II and PSE&G Capital Trust III
will be substantially identical except for names and dates).
4-1 Form of Preferred Security Certificate for PSE&G Capital Trust I,
PSE&G Capital Trust II and PSE&G Capital Trust III (included in
Exhibit 3-7).
4-2 Form of Deferrable Interest Subordinated Debenture (included in
Exhibit 4-3).
4-3 Form of Deferrable Interest Subordinated Debenture Indenture.
4-4 Form of Deferrable Interest Subordinated Debenture Supplemental
Indenture.
4-5 Form of Guarantee Agreement (Agreements will be substantially
identical except for names and dates).
5-1 Opinion of James T. Foran, Esquire relating to the legality of the
Debentures and the Guarantees, including consent.
5-2 Opinion of Richards, Layton & Finger, special Delaware counsel,
relating to the legality of the Preferred Securities of PSE&G Capital
Trust I, including consent.
5-3 Opinion of Richards, Layton & Finger, special Delaware counsel,
relating to the legality of the Preferred Securities of PSE&G Capital
Trust II, including consent.
5-4 Opinion of Richards, Layton & Finger, special Delaware counsel,
relating to the legality of the Preferred Securities of PSE&G Capital
Trust III, including consent.
8 Opinion of Ballard Spahr Andrews & Ingersoll, special tax counsel, as
to tax matters, including consent.
12-1 Computations of Ratios of Earnings to Fixed Charges (incorporated by
reference to PSE&G's Annual Report on Form 10-K for the year ended
December 31, 1995, File No. 1-9120).
12-2 Computations of Ratios of Earnings to Combined Fixed Charges plus
Preferred Securities Dividend Requirements (incorporated by reference
to PSE&G's Annual Report on Form 10-K for the year ended December 31,
1995, File No. 1-9120).
23-1 Consent of Independent Auditors.
23-2 Consent of James T. Foran, Esquire (included in Exhibit 5-1).
23-3 Consent of Richards, Layton & Finger (included in Exhibits 5-2, 5-3
and 5-4).
23-4 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 8).
25-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Indenture Trustee under the Deferrable
Interest Subordinated Debenture Indenture and Deferrable Interest
Subordinated Debenture Supplemental Indenture.
25-2 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Property Trustee under the Amended and
Restated Trust Agreement for PSE&G Capital Trust I.
25-3 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Property Trustee under the Amended and
Restated Trust Agreement for PSE&G Capital Trust II.
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT
NO. DESCRIPTION
- ------- -----------
25-4 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Property Trustee under the Amended and
Restated Trust Agreement for PSE&G Capital Trust III.
25-5 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Guarantee Trustee under the Guarantee
Agreement for PSE&G Capital Trust I.
25-6 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Guarantee Trustee under the Guarantee
Agreement for PSE&G Capital Trust II.
25-7 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Union National Bank, as Guarantee Trustee under the Guarantee
Agreement for PSE&G Capital Trust III.
PSE&G Capital Trust [ ]
[ ]% Cumulative Quarterly Income Preferred Securities, Series [ ]
(liquidation amount $25 per preferred security)
guaranteed to the extent the Trust
has sufficient funds by
Public Service Electric and Gas Company
---------------------
Underwriting Agreement
---------------------
[ ], 199_
Goldman, Sachs & Co.,
[ ],
[ ], and
[ ],
As representatives (the "Representatives") of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Dear Sirs:
PSE&G Capital Trust [ ], a Delaware statutory business trust (the
"Trust"), and Public Service Electric and Gas Company, a New Jersey corporation
("PSE&G"), propose, subject to the terms and conditions stated herein, that the
Trust issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") [ ]% Cumulative Quarterly Income Preferred Securities,
Series [ ] (liquidation amount $25 per preferred security), representing
undivided beneficial interests in the assets of the Trust (the "Preferred
Securities"), guaranteed by PSE&G as to the payment of distributions and
payments upon liquidation or redemption, and benefitting from certain additional
undertakings of PSE&G to the extent set forth in the Guarantee Agreement between
PSE&G and First Union National Bank, National Association, as trustee (the
"Guarantee Trustee"), to be dated as of the Time of Delivery (as defined in
Section 4 hereof ) (the "Guarantee").
Concurrently with the issuance of the Preferred Securities and PSE&G's
investment in the common securities of the Trust (the "Common Securities")
representing undivided beneficial interests in the assets of the Trust, the
Trust will loan the proceeds thereof to PSE&G and, to evidence such loan, PSE&G
will issue and deliver to the Trust PSE&G's [ ]% Deferrable Interest
Subordinated Debentures, Series [ ] (the "Subordinated Debentures"). The
Subordinated Debentures will be issued under an Indenture, dated as of
[ ], 1996 (the "Indenture"), between PSE&G and First Union National
Bank, National Association, as trustee (the "Debenture Trustee").
<PAGE>
1. Each of the Trust and PSE&G, jointly and severally, represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-[ ]) in
respect of, among other things, the Preferred Securities, the Guarantee and
the Subordinated Debentures (collectively, the "Registered Securities") has
been filed with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 415 under the Securities Act of 1933, as amended (the
"Act"), and delivered to the Representatives; such registration statement
and any post-effective amendment thereto, each in the form heretofore
delivered to the Representatives, have been declared effective by the
Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission; and
no stop order suspending the effectiveness of such registration statement
has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in such
registration statement or thereafter filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act is
referred to herein as a "Preliminary Prospectus"; the various parts of such
registration statement, including (i) all exhibits thereto, (ii) if
applicable, the information contained in the form of prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be a
part of the registration statement at the time it was declared effective
and (iii) the documents incorporated by reference in the prospectus
contained in the registration statement at the time such part of such
registration statement became effective, each as amended at the time such
part of such registration statement became effective, are referred to
herein collectively as the "Registration Statement"; the final prospectus,
as supplemented by the related prospectus supplement, in the form first
filed pursuant to Rule 424(b) under the Act, is referred to herein
collectively as the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; and any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include PSE&G's most recent annual report on Form 10-K filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Registration Statement that is incorporated by reference in the
Registration Statement (the "Form 10-K"));
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules
2
<PAGE>
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 the Trust or PSE&G by an Underwriter
through the Representatives expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated
by reference in the Prospectus or any further amendment or supplement
thereto, when such documents are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust or PSE&G by an Underwriter
through the Representatives expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "TIA"), and
the rules and regulations of the Commission thereunder and do not and will
not, (i) as of the applicable effective date as to the Registration
Statement and any amendment thereto and (ii) as of the applicable filing
date as to the Prospectus and any amendment or supplement thereto, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Trust or PSE&G by
an Underwriter through the Representatives expressly for use therein;
(e) Deloitte & Touche LLP are independent public accountants with
respect to PSE&G as required by the Act and the rules and regulations of
the Commission thereunder;
3
<PAGE>
(f) Neither the Trust nor PSE&G has sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus any material loss from fire, explosion, flood, accident
or other calamity not fully covered by insurance, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, there has not been any material increase in long-term debt of
PSE&G and its subsidiaries, considered as a whole, or any material adverse
change in or affecting the general affairs, financial position,
stockholders' equity or results of operations of PSE&G and its
subsidiaries, considered as a whole, or any material transaction (other
than one entered into in the ordinary course of business) entered into by
the Trust or PSE&G, in each case otherwise than as set forth in or
contemplated by the Prospectus;
(g) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of
the State of Delaware (the "Delaware Business Trust Act") with the trust
power and authority to own property and conduct its business as described
in the Prospectus, and has conducted and will conduct no business other
than the transactions contemplated by this Agreement and described in the
Prospectus; the Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the trust agreement between PSE&G, as
depositor, and the trustees named therein (the "Trustees") (as amended and
restated from time to time, the "Trust Agreement") and the agreements and
instruments contemplated by the Trust Agreement and described in the
Prospectus; the Trust has no liabilities or obligations other than those
arising out of the transactions contemplated by this Agreement and the
Trust Agreement and described in the Prospectus; and the Trust is not a
party to or subject to any action, suit or proceeding of any nature;
(h) PSE&G has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Jersey,
with due corporate authority to own and operate its properties and conduct
its business as described in the Prospectus;
(i) The issuance and sale of the Preferred Securities and the Common
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement, the purchase of the Subordinated Debentures
by the Trust from PSE&G, the distribution of the Subordinated Debentures
upon the liquidation of the Trust in the circumstances contemplated by the
Trust Agreement and described in the Prospectus, and the consummation by
the Trust of the transactions contemplated herein and in the Trust
Agreement, will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any agreement
or instrument to which the Trust is a party or by which the Trust is bound
or to which any of the property or assets of the Trust is subject, nor will
such action result in any violation of the provisions of the Trust
Agreement or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Trust or any of
its properties;
4
<PAGE>
(j) The issuance and sale of the Preferred Securities and the Common
Securities by the Trust, the issuance by PSE&G of the Subordinated
Debentures and the Guarantee, the compliance by PSE&G and the Trust with
all of the provisions of this Agreement, the execution, delivery and
performance by PSE&G of the Trust Agreement, the Guarantee, the Indenture
and the Subordinated Debentures (collectively, the "PSE&G Agreements"), the
distribution of the Subordinated Debentures upon the liquidation of the
Trust in the circumstances contemplated by the Trust Agreement and
described in the Prospectus, and the consummation of the transactions
herein and therein contemplated, will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which PSE&G is a party or by which PSE&G
is bound or to which any of the property or assets of PSE&G is subject, nor
will such action result in any violation of the provisions of the charter
or by-laws of PSE&G or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over PSE&G or any
of its properties;
(k) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Trust or PSE&G or any of their properties is required
for the issuance and sale of the Preferred Securities and Common Securities
by the Trust, the issuance by PSE&G of the Subordinated Debentures and the
Guarantee, the purchase of the Subordinated Debentures by the Trust from
PSE&G, the distribution of the Subordinated Debentures upon the liquidation
of the Trust in the circumstances contemplated by the Trust Agreement and
described in the Prospectus, the execution, delivery and performance by
PSE&G of the PSE&G Agreements, or the consummation of the transactions
contemplated herein or therein, except the approval, consent and order of
the Board of Public Utilities of the State of New Jersey with respect to
the issuance by PSE&G of the Subordinated Debentures and the Guarantee,
registration of the Registered Securities under the Act, registration of
the Preferred Securities under the Exchange Act, the qualification of the
Trust Agreement, the Indenture and the Guarantee under the TIA and such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
issuance and sale, as the case may be, of the Registered Securities;
(l) Other than as set forth in or contemplated by the Prospectus,
there are no legal or governmental proceedings pending to which PSE&G is a
party or of which any property of PSE&G is the subject which is reasonably
likely to have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of PSE&G and its
subsidiaries; and, to the best of PSE&G's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others; and
(m) None of the Trust, PSE&G or any of PSE&G's affiliates does
business with the Government of Cuba or with any person or affiliate
located in Cuba.
5
<PAGE>
2. Subject to the terms and conditions herein set forth, the Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase, at a purchase price per share of
$25.00 per Preferred Security, the number of Preferred Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Preferred Securities will
be used by the Trust to purchase the Subordinated Debentures of PSE&G, PSE&G
hereby agrees to pay at the Time of Delivery to Goldman, Sachs & Co., for the
accounts of the several Underwriters, an amount equal to
$[ ] per share for the Preferred Securities.
3. Upon the authorization by the Representatives of the release of the
Preferred Securities, the several Underwriters propose to offer the Preferred
Securities for sale upon the terms and conditions set forth in the Prospectus.
4. The Preferred Securities to be purchased by each Underwriter hereunder
will be represented by a global certificate or certificates in book-entry form
which will be deposited by or on behalf of the Trust with The Depository Trust
Company ("DTC") or its designated custodian and registered in the name of Cede &
Co., as nominee of DTC. The Trust will deliver the Preferred Securities to
Goldman, Sachs & Co., for the account of each Underwriter, against payment by or
on behalf of such Underwriter of the purchase price therefor by wire transfer of
immediately available funds to the Trust, by causing DTC to credit the Preferred
Securities to the account of Goldman, Sachs & Co. at DTC. The time, date and
location of such delivery and payment (the "Time of Delivery") shall be 10:00
a.m., New Jersey time, on [ ], 199_, or at such other time and date as
the Representatives, the Trust and PSE&G may agree upon in writing at the office
of the Trust, 80 Park Plaza, Newark, New Jersey.
At the Time of Delivery, PSE&G will pay, or cause to be paid, the
compensation payable to the Underwriters under Section 2 hereof by wire transfer
of immediately available funds to Goldman, Sachs & Co., on behalf of the
Underwriters.
5. Each of the Trust and PSE&G, jointly and severally, agrees with each
of the Underwriters:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act within the time prescribed under Rule 424(b) or Rule 430A(a)(3), as
the case may be, under the Act; to make no further amendment or any
supplement to the Registration Statement or the Prospectus prior to the
Time of Delivery which shall be reasonably disapproved by the
Representatives promptly after reasonable notice thereof; to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed and to furnish the Representatives with copies thereof; in the
case of PSE&G, prior to the termination of the offering of the
6
<PAGE>
Preferred Securities, to file promptly all reports and any definitive proxy
or information statements required to be filed with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act; to advise the
Representatives, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus, of the
suspension of the qualification of the Registered Securities for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or Prospectus
or for additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of any
prospectus relating to the Registered Securities or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To use its best efforts to qualify the Registered Securities for
offering and sale under the securities laws of such jurisdictions of the
United States as the Representatives may designate and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Preferred Securities, provided that in connection therewith neither
the Trust nor PSE&G shall be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required in connection with the offering or
sale of the Preferred Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would contain an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or the Exchange
Act, to notify the Representatives and upon the request of the
Representatives to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as the Representatives may reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission
or effect such compliance;
(d) In the case of PSE&G, to make generally available to its security
holders as soon as practicable, but no later than 60 days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Act) covering the 12-month period
beginning not later than the first day of PSE&G's fiscal quarter next
following the effective date (as defined in Rule 158) of the Registration
Statement;
7
<PAGE>
(e) During the period beginning from the date hereof and continuing
to and including the earlier of (i) the date, after the Time of Delivery,
on which the distribution of the Preferred Securities ceases, as determined
by the Representatives or (ii) 30 days after the Time of Delivery, not to
offer, sell, contract to sell or otherwise dispose of any Preferred
Securities, any other beneficial interests in the Trust, any shares of
capital stock or securities of PSE&G or the Trust which are substantially
similar to the Subordinated Debentures, the Guarantee or the Preferred
Securities, or any securities convertible into or exchangeable for the
Preferred Securities, beneficial interests in the Trust or such capital
stock or securities, without the prior written consent of the
Representatives (other than the Preferred Securities or securities issued
pursuant to PSE&G's stock option or other benefit or incentive plans
maintained for its officers, directors, or employees);
(f) In the case of PSE&G, to issue the Guarantee and the Subordinated
Debentures concurrently with the issuance and sale of the Preferred
Securities as contemplated herein; and
(g) To use its best efforts to list, subject to notice of issuance,
(i) the Preferred Securities and (ii) the Subordinated Debentures, upon any
distribution upon the liquidation of the Trust to holders of the Preferred
Securities, in each case on the New York Stock Exchange.
6. The Trust and PSE&G, jointly and severally, covenant and agree with
the several Underwriters that they will pay the following: (i) the fees,
disbursements and expenses of the Trust's and PSE&G's counsel and accountants in
connection with the registration of the Registered Securities under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement Among Underwriters, this Agreement, the Blue Sky and Legal
Investment Memoranda and any other documents in connection with the offering,
purchase, sale and delivery of the Registered Securities; (iii) all expenses in
connection with the qualification of the Registered Securities for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the fees and disbursements of counsel for the Underwriters (not to exceed
$7,500) in connection with such qualification and in connection with the Blue
Sky and Legal Investment Memoranda; (iv) any fees charged by Standard & Poor's
Ratings Group, Moody's Investors Service, Inc. or Duff & Phelps Credit Rating
Co. (each, a "Rating Agency") for rating the Preferred Securities; (v) the
reasonable costs and charges of the transfer agent or registrar; (vi) the costs
of any depositary arrangements for the Preferred Securities with DTC or any
successor depositary; (vii) all fees and reasonable expenses of the Trustees,
the Debenture Trustee and the Guarantee Trustee and any agent thereof and the
fees and disbursements of their counsel; (viii) all fees and expenses in
connection with the listing of the Preferred Securities and, if applicable, the
Subordinated Debentures on the New York Stock Exchange and the cost of
registering the Preferred Securities under Section 12 of the Exchange Act; (ix)
the printing of the Preferred Securities and the Subordinated Debentures in
certificated form, if required; and (x) all other costs and expenses
8
<PAGE>
incident to the performance of obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, Section 8 and Section 12 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Preferred Securities
by them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Trust and PSE&G herein are, at and as of the Time of
Delivery, true and correct, the condition that the Trust and PSE&G shall have
performed all of their obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) and Rule 430A(a)(3), if applicable, within the applicable
time period prescribed for such filing by the rules and regulations under
the Act and in accordance with Section 5(a) hereof; and no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission:
(b) Brown & Wood, counsel for the Underwriters, shall have furnished
to the Representatives their written opinion, dated the Time of Delivery,
with respect to the matters referred to in clauses (iii), (iv), (v), (x),
(xi) and (xv) of Section 7(c) hereof (it being understood that such counsel
may rely as to all matters of New Jersey law and legal conclusions based
thereon upon the opinion of counsel for PSE&G referred to in Section 7(c)
hereof, as to all matters of Pennsylvania law and legal conclusions based
thereon upon the opinion of counsel referred to in Section 7(d) hereof and
as to all matters of Delaware law and legal conclusions based thereon upon
the opinion of counsel referred to in Section 7(e) hereof); and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) R. Edwin Selover, Esq., Senior Vice President and General
Counsel, or James T. Foran, Esq., General Corporate Counsel, of PSE&G,
shall have furnished to the Representatives his written opinion, dated the
Time of Delivery, to the effect that:
(i) PSE&G has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of New
Jersey, with due corporate authority to own and operate its properties
and conduct its business as described in the Prospectus;
(ii) PSE&G is a subsidiary of Public Service Enterprise Group
Incorporated, which is a public utility holding company exempt from
the provisions of the Public Utility Holding Company Act of 1935
(except Section 9(a)(2) thereof);
9
<PAGE>
(iii) The PSE&G Agreements have each been duly authorized,
executed and delivered by PSE&G and constitute valid instruments or
obligations, as the case may be, legally binding upon and enforceable
against PSE&G (except as limited by bankruptcy, insolvency or other
laws or equitable principles affecting creditors' rights generally);
and the Subordinated Debentures are entitled to the benefits provided
by the Indenture;
(iv) The Trust Agreement, the Indenture and the Guarantee have
been duly qualified under the TIA;
(v) This Agreement has been duly authorized, executed and
delivered by each of the Trust and PSE&G;
(vi) The franchises of PSE&G are sufficient authority for it to
carry on its business as described in the Prospectus;
(vii) All approvals, consents and orders of the Board of
Public Utilities of the State of New Jersey legally required for the
issuance by PSE&G of the Guarantee and the Subordinated Debentures
have been obtained and are in full force and effect; any approval,
consent or order of any other commission or other governmental
authority legally required for the issuance and sale, as the case may
be, of the Registered Securities has been obtained (except that such
issuance and sale may be subject to the provisions of the securities
laws of certain states); and such issuance and sale is in accordance
with the approvals, consents and orders obtained;
(viii) The issuance and sale of the Preferred Securities and
the Common Securities by the Trust, the compliance by the Trust with
all of the provisions of this Agreement, the purchase of the
Subordinated Debentures by the Trust from PSE&G, the distribution of
the Subordinated Debentures upon the liquidation of the Trust in the
circumstances contemplated by the Trust Agreement and described in the
Prospectus, and the consummation of the transactions contemplated
herein and in the Trust Agreement, will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any agreement or instrument known to such
counsel to which the Trust is a party or by which the Trust is bound
or to which any of the property or assets of the Trust is subject, nor
will such action result in any violation of the provisions of the
Trust Agreement or any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body having
jurisdiction over the Trust or any of its properties;
(ix) The issuance and sale of the Preferred Securities and the
Common Securities by the Trust, the issuance by PSE&G of the Guarantee
and the Subordinated Debentures, the compliance by PSE&G and the Trust
with all of the
10
<PAGE>
provisions of this Agreement, the execution, delivery and performance
by PSE&G of the PSE&G Agreements, the distribution of the Subordinated
Debentures upon the liquidation of the Trust in the circumstances
contemplated by the Trust Agreement and described in the Prospectus
and the consummation of the transactions herein and therein
contemplated, will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any agreement or instrument known to such counsel to
which PSE&G is a party or by which PSE&G is bound or to which any of
the property or assets of PSE&G is subject, nor will such action
result in any violation of the provisions of the charter or by-laws of
PSE&G or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over PSE&G or any of its properties;
(x) The Registered Securities conform as to legal matters to the
statements concerning them in the Prospectus; and the summaries of the
PSE&G Agreements contained in the Prospectus constitute correct
summaries thereof for use therein;
(xi) The statements set forth in the Prospectus under the
captions "Description of the Preferred Securities," "Certain Terms of
the Series A Preferred Securities," "Description of the Guarantee,"
"Description of the Debentures," and "Certain Terms of the Series A
Debentures," insofar as they constitute summaries or matters of law or
legal conclusions, fairly present the information set forth therein;
(xii) The statements made in PSE&G's Form 10-K under
"PSEG--Rate Matters" and "--Environmental Controls" in Item 1--
Business and under Item 3 --Legal Proceedings fairly present the
information set forth therein;
(xiii) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Trust is a party or of
which any property of the Trust is the subject; and, to such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities;
(xiv) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by the
Trust or PSE&G prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements of
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and, on the basis of a general review and
discussion with certain officers and employees of PSE&G but without
independent check or verification, such counsel has no reason to
believe that any of such documents, when such documents were so filed,
contained an untrue statement of a material
11
<PAGE>
fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; and
(xv) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Trust or PSE&G
prior to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the TIA and the rules and regulations
thereunder; and on the basis of a general review and discussion with
certain officers and employees of PSE&G but without independent check
or verification except as indicated in Subsections (x) and (xi) of
this Section 7(c), such counsel has no reason to believe that, as of
its effective date, the Registration Statement or any further
amendment thereto made by the Trust or PSE&G prior to the Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date or as of the Time of
Delivery, the Prospectus or any further amendment or supplement
thereto made by the Trust or PSE&G prior to the Time of Delivery
(other than the financial statements and related schedules therein and
other financial data therein, as to which such counsel need express no
opinion) contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
Such counsel may rely as to all matters of Pennsylvania law and legal
conclusions based thereon upon the opinion of such counsel referred to in
Section 7(d) hereof and as to all matters of Delaware law and legal
conclusions based thereon upon the opinion of such counsel referred to in
Section 7(e) hereof.
(d) Ballard Spahr Andrews & Ingersoll, special counsel for the Trust
and PSE&G, shall have furnished to the Representatives their written
opinion, dated the Time of Delivery, in form and substance satisfactory to
the Representatives, to the effect that:
(i) Neither the Trust nor PSE&G is an "investment company" or an
entity "controlled" by an "investment company" required to be
registered under the Investment Company Act of 1940, as amended;
(ii) The statements made in the Prospectus under the caption
"United States Taxation," to the extent they constitute matters of law
or legal conclusions, have been reviewed by such counsel and are
accurate, complete and correct and fairly present the information set
forth therein.
12
<PAGE>
(e) Richards, Layton & Finger, special Delaware counsel for the Trust
and PSE&G, shall have furnished to the Representatives their written
opinion, dated the Time of Delivery, in form and substance satisfactory to
the Representatives, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust
Act, and all filings required under the laws of the State of Delaware
with respect to the creation and valid existence of the Trust as a
business trust have been made;
(ii) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority to own property
and conduct its business as described in the Prospectus;
(iii) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority (a) to execute
and deliver, and to perform its obligations under, this Agreement and
(b) to issue and perform its obligations under the Preferred
Securities and the Common Securities;
(iv) Under the Delaware Business Trust Act and the Trust
Agreement, the execution and delivery by the Trust of this Agreement,
and the performance by the Trust of its obligations hereunder, have
been duly authorized by all necessary trust action on the part of the
Trust;
(v) The Trust Agreement constitutes a valid and binding
obligation of PSE&G and the Trustees, enforceable against PSE&G and
the Trustees, in accordance with its terms, subject, as to
enforcement, to the effect upon the Trust Agreement of (a) bankruptcy,
insolvency, moratorium, receivership, liquidation, fraudulent
conveyance, reorganization and other similar laws relating to or
affecting the remedies and rights of creditors, (b) principles of
equity (regardless of whether considered or applied in a proceeding in
equity or at law) and (c) the effect of applicable public policy on
the enforceability of provisions relating to indemnification or
contribution;
(vi) The Preferred Securities have been duly authorized pursuant
to the Trust Agreement and are duly and validly issued and, subject to
the qualifications set forth herein, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust; the holders
of the Preferred Securities, as beneficial owners of the Trust (the
"Securityholders"), are entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware;
and provided that such counsel may note that the Securityholders may
be obligated, pursuant to the Trust Agreement, to (a) provide
indemnity and/or security in connection with and pay a sum sufficient
to cover any taxes or governmental charges arising from transfers or
exchanges of Preferred Securities certificates and the issuance of
replacement
13
<PAGE>
Preferred Securities certificates and (b) provide security and/or
indemnity in connection with requests of or directions to the Property
Trustee (as defined in the Trust Agreement) to exercise its rights and
powers under the Trust Agreement; and under the Delaware Business
Trust Act and the Trust Agreement, the issuance of the Preferred
Securities is not subject to preemptive or other similar rights;
(vii) The Common Securities have been duly authorized
pursuant to the Trust Agreement and are duly and validly issued and
fully paid undivided beneficial interests in the assets of the Trust;
and under the Delaware Business Trust Act and the Trust Agreement, the
issuance of the Common Securities is not subject to preemptive or
other similar rights;
(viii) The issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the execution, delivery and
performance by the Trust of this Agreement, the consummation by the
Trust of the transactions contemplated herein and the compliance by
the Trust with its obligations hereunder do not violate (a) any of the
provisions of the Certificate of Trust of the Trust or the Trust
Agreement or (b) any applicable Delaware law or Delaware
administrative regulation;
(ix) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Business Trust Act and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the State
of Delaware, no authorization, approval, consent or order of any
Delaware court or Delaware governmental authority or Delaware agency
is required to be obtained by the Trust solely as a result of the
issuance and sale of the Preferred Securities, the consummation by the
Trust of the transactions contemplated herein or the compliance by the
Trust of its obligations hereunder; and
(x) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Business Trust Act and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the State
of Delaware, and assuming that the Trust is treated as a grantor trust
for federal income tax purposes, the Securityholders (other than those
holders of the Preferred Securities who reside or are domiciled in the
State of Delaware) will have no liability for income taxes imposed by
the State of Delaware solely as a result of their participation in the
Trust, and the Trust will not be liable for any income tax imposed by
the State of Delaware (in rendering the opinion expressed in this
paragraph (x), such counsel need express no opinion concerning the
securities laws of the State of Delaware).
14
<PAGE>
(f) On the date of this Agreement and also at the Time of Delivery,
Deloitte & Touche LLP shall have furnished to the Representatives a letter,
dated the respective date of delivery thereof, in form and substance
satisfactory to the Representatives, to the effect that:
(i) they are independent public accountants with respect to
PSE&G and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder (the "Act
Regulations");
(ii) in their opinion, the audited consolidated financial
statements and financial statement schedule(s) incorporated by
reference in the Registration Statement and the Prospectus and
included in the Form 10-K comply as to form in all material respects
with the applicable accounting requirements of the Act, the Act
Regulations, the Exchange Act and the applicable published rules and
regulations thereunder (the "Exchange Act Regulations");
(iii) on the basis of (1) the performance of the procedures
specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in
Statement on Auditing Standards No. 71, Interim Financial Information,
on the unaudited consolidated balance sheets, the unaudited
consolidated statements of income and retained earnings, and the
unaudited consolidated statements of cash flows, of PSE&G and its
subsidiaries included in PSE&G's quarterly reports on Form 10-Q filed
with the Commission under Section 13 of the Exchange Act (the "Form
10-Q's") subsequent to the Form 10-K, (2) a reading of the latest
available unaudited financial statements of PSE&G, (3) a reading of
the latest Consent of the Sole Shareholder in Lieu of Annual Meeting,
the minutes of Meetings of the Board of Directors of PSE&G as set
forth in the minute books for the current year and certain draft
resolutions for subsequent meetings and (4) inquiries of the officers
of PSE&G who have responsibility for financial and accounting matters
(it being understood that the foregoing procedures do not constitute
an audit made in accordance with generally accepted auditing standards
and would not necessarily reveal matters of significance with respect
to the comments made in such letter, and accordingly that Deloitte &
Touche LLP makes no representation as to the sufficiency of such
procedures for the purposes of the several Underwriters), nothing has
come to their attention which caused them to believe that (A) any
material modifications should be made to the unaudited consolidated
financial statements included in the Form 10-Q's for them to be in
conformity with generally accepted accounting principles; (B) the
unaudited consolidated financial statements included in the Form
10-Q's do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as they apply
to Form 10-Q and Exchange Act Regulations or (C) at the date of the
latest available consolidated financial statements and at a specified
date not more than three business days prior to the date of such
letter, there was any change in the common stock or preferred stock
15
<PAGE>
or increase in long-term debt (except for such stock and long-term
debt acquired for sinking fund purposes or redeemed pursuant to
optional redemption or sinking fund provisions, or changes in capital
lease obligations incurred in the ordinary course of PSE&G's business)
of PSE&G or any decrease in the consolidated net assets of PSE&G
(except as occasioned by the declaration of dividends), in each case
as compared with the amounts shown on the most recent consolidated
balance sheet of PSE&G incorporated by reference in the Registration
Statement and the Prospectus or, during the period from the date of
such balance sheet to a specified date not more than three business
days prior to the date of such letter, upon inquiries of the
appropriate officers of PSE&G, there were any decreases, as compared
with the corresponding period in the preceding year, in consolidated
revenues or net income of PSE&G, except in each such case as set forth
in or contemplated by the Registration Statement and the Prospectus or
except for such exceptions enumerated in such letter as shall have
been agreed to by the Representatives and PSE&G; and
(iv) in addition to the audit referred to in their report
appearing in the Form 10-K incorporated by reference in the
Registration Statement and the Prospectus, and the limited procedures
referred to in clause (iii) above, they have carried out certain other
specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are
included or incorporated by reference in the Registration Statement
and the Prospectus and which are specified by the Representatives, and
have found such amounts, percentages and financial information to be
in agreement with the relevant accounting, financial and other records
of PSE&G and its subsidiaries identified in such letter, provided that
said letter may vary from the requirements specified above in such
manner as you may deem not to be material or as may be acceptable to
the Representatives with the consent of Underwriters who have agreed
to purchase in the aggregate 50% or more of the Preferred Securities.
(g) The Trust Agreement, the Guarantee and the Indenture shall have
been executed and delivered, in each case in a form reasonably satisfactory
to the Representatives;
(h) Neither the Trust nor PSE&G shall have sustained since the date
of the latest audited financial statements included or incorporated by
reference in the Prospectus any loss from fire, explosion, flood, accident
or other calamity not fully covered by insurance, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, there shall not have been any increase in long-term debt of
PSE&G and its subsidiaries, considered as a whole, or any change in or
affecting the general affairs, financial position, or equity or results of
operations of the Trust or PSE&G and its subsidiaries, considered as a
whole, or any transaction (other than one entered into in the ordinary
course of business) entered into by the Trust or PSE&G, in each case
otherwise
16
<PAGE>
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is in the reasonable
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering of the
Preferred Securities or the delivery of the Preferred Securities on the
terms and in the manner contemplated in the Prospectus;
(i) The Preferred Securities shall have been duly listed, subject to
official notice of issuance, on the New York Stock Exchange; and
(j) At the Time of Delivery, the Representatives shall have received
certificates of duly authorized officers of the Trust and PSE&G, dated the
Time of Delivery, to the effect that:
(i) the Prospectus has been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with the provisions of this Agreement; and no stop order suspending
the effectiveness of the Registration Statement or any part thereof
has been issued and no proceeding for that purpose has been initiated
or threatened by the Commission;
(ii) the representations and warranties of the Trust and PSE&G
contained herein are true and correct as if made at and as of the Time
of Delivery;
(iii) the Trust and PSE&G have performed all agreements
contained herein to be performed by them at or prior to the Time of
Delivery; and
(iv) Neither the Trust nor PSE&G has sustained since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss from fire, explosion,
flood, accident or other calamity not fully covered by insurance,
otherwise than as set forth or contemplated in the Prospectus, and
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been
any material increase in long-term debt of PSE&G and its subsidiaries,
considered as a whole, or any material adverse change in or affecting
the general affairs, financial position, equity or results of
operations of the Trust or PSE&G and its subsidiaries, considered as a
whole, or any transaction (other than one entered into in the ordinary
course of business) entered into by the Trust or PSE&G, in each case
otherwise than as set forth or contemplated in the Prospectus.
8. (a) The Trust and PSE&G, jointly and severally, agree to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, as follows:
17
<PAGE>
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, unless such untrue statement or omission or such
alleged untrue statement or omission was made in reliance upon and in
conformity with written information furnished to the Trust or PSE&G by
an Underwriter through the Representatives expressly for use in the
Registration Statement, such Preliminary Prospectus or the Prospectus,
or any amendment or supplement thereto;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission
or any alleged untrue statement or omission, if such settlement is
effected with the written consent of the Trust and PSE&G; and
(iii) against any and all expense whatsoever, as incurred,
reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above.
The Trust and PSE&G shall not be liable for indemnity under this
Section 8(a) with respect to any Preliminary Prospectus to the extent that
any such loss, claim, damage or liability of such Underwriter results
solely from the fact that such Underwriter sold Preferred Securities to a
person to whom it is established that there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus
(excluding documents incorporated by reference) in any case where such
delivery is required by the Act, if the Trust and PSE&G has previously
furnished to the Representatives on behalf of the Underwriters, including
such Underwriter, the copies thereof theretofore requested by the
Representatives, and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in the Preliminary Prospectus that was corrected in the
Prospectus.
(b) In no case shall the Trust or PSE&G be liable under the indemnity
agreement set forth in Section 8(a) hereof with respect to any claim made
against any Underwriter or any such controlling person unless such party
shall be notified in writing
18
<PAGE>
of the nature of the claim promptly after the assertion thereof, but
failure to so notify such party shall not relieve it from any liability
which it may have otherwise than on account of said indemnity agreement.
The Trust or PSE&G, as the case may be, shall be entitled to participate at
its own expense in the defense, or, if it so elects, within a reasonable
time after receipt of such notice, to assume the defense of any suit
brought to enforce any such claim, but if it so elects to assume the
defense shall be conducted by counsel chosen by it and approved by the
Underwriter or Underwriters or controlling person or persons, defendant or
defendants in any suit so brought, which approval shall not be unreasonably
withheld. In the event that the Trust or PSE&G, as the case may be, elects
to assume the defense of any such suit and retains such counsel, the
Underwriter or Underwriters or controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel thereafter retained by them. In the event that the parties to any
such action (including impleaded parties) include both the Trust or PSE&G,
as the case may be, and one or more Underwriters and any such Underwriter
shall have been advised by counsel chosen by it and satisfactory to the
Trust or PSE&G, as the case may be, that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Trust or PSE&G, as the case may be, neither the Trust nor
PSE&G shall have the right to assume the defense of such action on behalf
of such Underwriter and the Trust or PSE&G, as the case may be, will
reimburse such Underwriter and any person controlling such Underwriter as
aforesaid for the reasonable fees and expenses of any counsel retained by
them, it being understood that neither the Trust nor PSE&G shall, in
connection with any one action or separate but similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys for all such Underwriters and controlling
persons, which firm shall be designated by the Representatives in writing.
The Trust and PSE&G agree to notify the Representatives promptly after the
assertion of any claim against them, any of their directors, any of their
officers who signed the Registration Statement, or any person who controls
them within the meaning of Section 15 of the Act, in connection with the
issuance and sale, as the case may be, of the Preferred Securities, the
Guarantee and the Subordinated Debentures.
(c) Each Underwriter severally agrees that it will indemnify and hold
harmless the Trust and PSE&G, their directors, and each of their officers
who signed the Registration Statement and each person, if any, who controls
them within the meaning of Section 15 of the Act to the same extent as the
indemnity agreement set forth in Section 8(a) hereof, but only with respect
to statements or omissions made in the Registration Statement, any
Preliminary Prospectus or the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information
furnished to the Trust or PSE&G by such Underwriter expressly for use in
the Registration Statement, such Preliminary Prospectus, or the Prospectus,
or any amendment or supplement thereto. In case any action shall be
brought against the Trust or any person so indemnified based on the
Registration Statement, such Preliminary Prospectus or the Prospectus, or
any amendment or supplement thereto and in respect of which indemnity
19
<PAGE>
may be sought against any Underwriter, such Underwriter shall have the
rights and duties given to the Trust and PSE&G, and the Trust and PSE&G and
each person so indemnified shall have the rights and duties given to the
Underwriters by the provisions of Section 8(a) and (b) hereof.
(d) The indemnity agreements contained in Section 8 shall remain
operative and in full force and effect, regardless of any investigation
made by or on behalf of the Trust or PSE&G, or any Underwriter or any
controlling person, and shall survive the delivery of the Preferred
Securities to the Underwriters.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in Section 8
is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Trust, PSE&G and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity
agreements incurred by the Trust, PSE&G and one or more of the
Underwriters, in such proportions that the Underwriters are responsible for
that portion represented by the percentage that the underwriting discount
appearing on the cover page of the Prospectus relating to the Preferred
Securities bears to the initial public offering price appearing thereon and
the Trust and PSE&G, jointly and severally, is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act shall
have the same rights to contribution as such Underwriter, and each trustee
of the Trust or director of PSE&G, each officer of the Trust or PSE&G who
signed the Registration Statement, and each person, if any, who controls
the Trust or PSE&G within the meaning of Section 15 of the Act shall have
the same rights to contribution as the Trust and PSE&G.
9. (a) If any Underwriter shall default in its obligation to purchase
the Preferred Securities which it has agreed to purchase hereunder at the Time
of Delivery, the Representatives may in their discretion arrange for the
Underwriters or another party or other parties to purchase such Preferred
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Preferred Securities, then the Trust and PSE&G shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Preferred
Securities on such terms. In the event that, within the respective prescribed
periods, the Representatives notify the Trust and PSE&G that they have so
arranged for the purchase of such Preferred Securities, or the Trust or PSE&G
notifies the Representatives that it has so arranged for the purchase of such
Preferred Securities, the Representatives or the Trust and PSE&G shall have the
right to postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the
20
<PAGE>
Trust and PSE&G agree to file promptly any amendments to the Registration
Statement or the Prospectus which in the opinion of the Representatives may
thereby be made necessary. The term "Underwriter," as used in this Agreement,
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Preferred Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Preferred Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and PSE&G as provided in Section 9(a) hereof, the
aggregate number of such Preferred Securities which remains unpurchased does not
exceed one-tenth of the aggregate number of all the Preferred Securities to be
purchased at the Time of Delivery, then the Trust and PSE&G shall have the right
to require each non-defaulting Underwriter to purchase the number of Preferred
Securities which such Underwriter agreed to purchase hereunder at the Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Preferred Securities which
such Underwriter agreed to purchase hereunder) of the Preferred Securities of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Preferred Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and PSE&G as provided in Section 9(a) hereof, the
aggregate number of such Preferred Securities which remains unpurchased exceeds
one-tenth of the aggregate number of all the Preferred Securities to be
purchased at the Time of Delivery, or if the Trust and PSE&G shall not exercise
the right described in Section 9(b) hereof to require non-defaulting
Underwriters to purchase Preferred Securities of a defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter, the Trust or PSE&G, except for
the expenses to be borne by the Trust, PSE&G and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
10. This Agreement may be terminated by notice to the Trust and PSE&G by
the Representatives at any time prior to the Time of Delivery if (a) (i) a
general banking moratorium shall have been declared by either Federal or New
York authorities, or (ii) there shall have occurred any new outbreak or
unforeseen escalation of hostilities or other national or international calamity
or crisis, or (iii) there shall have occurred a suspension or material
limitation in (x) trading in securities generally on the New York Stock Exchange
or (y) trading in any of PSE&G's securities on the New York Stock Exchange, and
the effect of the occurrence of any event referred to in clause (i), (ii) or
(iii) above is, in the reasonable judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering of the Preferred Securities or the delivery of the Preferred
Securities on the terms and in the manner contemplated in the Prospectus, or (b)
the rating accorded the Preferred Securities or any of PSE&G's debt securities
or preferred stock by any Rating Agency
21
<PAGE>
shall have been lowered since the time this Agreement was executed or if any
Rating Agency shall have publicly announced since the time this Agreement was
executed that it has placed its rating of the Preferred Securities or any of
PSE&G's debt securities or preferred stock under surveillance or review, with
possible negative implications.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, PSE&G and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Trust,
PSE&G or any officer or director or controlling person of the Trust or PSE&G,
and shall survive delivery of and payment for the Preferred Securities.
12. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Trust nor PSE&G shall be under any liability to any Underwriter
except as provided in Section 6 and Section 8 hereof; but if, for any other
reason the transactions contemplated herein are not consummated, the Trust and
PSE&G will reimburse the Underwriter for all out-of-pocket expenses, including
fees and disbursements of counsel, reasonably incurred by the Underwriter in
making preparations for the purchase, sale and delivery of the Preferred
Securities, but the Trust and PSE&G shall then be under no further liability to
the Underwriter in respect of the Preferred Securities not so delivered except
as provided in Section 6 and Section 8 hereof. Except as provided above,
neither the Trust nor PSE&G shall be liable to the Underwriters for damages on
account of any other consequential damages or loss of anticipated profits.
In all dealings hereunder, the Representatives shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by the Representatives jointly or by Goldman, Sachs & Co. on
behalf of the Representatives.
13. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Representatives in care of Goldman, Sachs & Co.,
85 Broad Street, New York, New York 10004, Attention: Registration Department;
and if to the Trust or PSE&G by mail to it at the address of the Trust or PSE&G
at 80 Park Plaza, P.O. Box 570, Newark, New Jersey 07101, Attention: Mr. F.J.
Riepl. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Trust, PSE&G and, to the extent provided in Sections 8
and 11 hereof, the officers and directors of the Trust or PSE&G and each person
who controls the Trust or PSE&G or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Preferred Securities from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
22
<PAGE>
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey (without regard to conflict of laws
principles).
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
23
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof, and upon the acceptance hereof by the
Representatives, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Underwriters, on the one hand, and the Trust and PSE&G, on the other hand. It
is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement Among
Underwriters, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
PSE&G Capital Trust [ ]
By: Public Service Electric and Gas Company,
as Depositor
By:
----------------------------------------------
Name:
Title:
Public Service Electric and Gas Company
By:
----------------------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[ ]
[ ]
[ ]
By: Goldman, Sachs & Co.
By:
----------------------
(Goldman, Sachs & Co.)
On behalf of themselves and as Representatives
for each of the Underwriters named in Schedule I hereto
24
<PAGE>
SCHEDULE I
Underwriter Total Number of
Preferred
Securities
to Be Purchased
- ------------------------------------------------- --------------------
Goldman, Sachs & Co.
--------------------
Total
====================
Exhibit 3.1
CERTIFICATE OF TRUST
OF
PSE&G CAPITAL TRUST I
THIS CERTIFICATE OF TRUST of PSE&G Capital Trust I (the "Trust"),
dated as of April 19, 1996, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Sec. 3801, et seq.).
- ------- -- ----
(i) Name. The name of the business trust being formed hereby
----
is PSE&G Capital Trust I.
(ii) Delaware Trustee. The name and business address of the
----------------
trustee of the Trust in the State of Delaware are First Union Bank of Delaware,
1225 King Street, Wilmington DE 19801; attn: Corporate Trust Department.
(iii) Counterparts. This Certificate of Trust may be
------------
executed in one or more counterparts, all of which together shall constitute one
and the same instrument.
(iv) Effective Date. This Certificate of Trust shall be
--------------
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
FIRST UNION NATIONAL BANK, as
Trustee
By: /s/ Melissa Matthews
----------------------
Name: Melissa Matthews
Title:Vice President
FIRST UNION BANK OF DELAWARE, as
Trustee
By: /s/ Melissa Matthews
----------------------
Name: Melissa Matthews
Title:Vice President
/s/ Fred F. Saunders
----------------------
as Trustee
Name: Fred F. Saunders
Exhibit 3.2
CERTIFICATE OF TRUST
OF
PSE&G CAPITAL TRUST II
THIS CERTIFICATE OF TRUST of PSE&G Capital Trust II (the "Trust"),
dated as of April 19, 1996, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Sec. 3801, et seq.).
- ------- -- ----
(i) Name. The name of the business trust being formed hereby
----
is PSE&G Capital Trust II.
(ii) Delaware Trustee. The name and business address of the
----------------
trustee of the Trust in the State of Delaware are First Union Bank of Delaware,
1225 King Street, Wilmington DE 19801; attn: Corporate Trust Department.
(iii) Counterparts. This Certificate of Trust may be
------------
executed in one or more counterparts, all of which together shall constitute one
and the same instrument.
(iv) Effective Date. This Certificate of Trust shall be
--------------
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
FIRST UNION NATIONAL BANK, as
Trustee
By: /s/ Melissa Matthews
----------------------
Name:Melissa Matthews
Title:Vice President
FIRST UNION BANK OF DELAWARE, as
Trustee
By: /s/ Melissa Matthews
----------------------
Name:Melissa Matthews
Title:Vice President
/s/ Fred F. Saunders
----------------------
as Trustee
Name: Fred F. Saunders
Exhibit 3.3
CERTIFICATE OF TRUST
OF
PSE&G CAPITAL TRUST III
THIS CERTIFICATE OF TRUST of PSE&G Capital Trust III (the "Trust"),
dated as of April 19, 1996, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Sec. 3801, et seq.).
- ------- -- ----
(i) Name. The name of the business trust being formed hereby
----
is PSE&G Capital Trust III.
(ii) Delaware Trustee. The name and business address of the
----------------
trustee of the Trust in the State of Delaware are First Union Bank of Delaware,
1225 King Street, Wilmington DE 19801; attn: Corporate Trust Department.
(iii) Counterparts. This Certificate of Trust may be
------------
executed in one or more counterparts, all of which together shall constitute one
and the same instrument.
(iv) Effective Date. This Certificate of Trust shall be
--------------
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
FIRST UNION NATIONAL BANK, as
Trustee
By: /s/ Melissa Matthews
----------------------
Name:Melissa Matthews
Title:Vice President
FIRST UNION BANK OF DELAWARE, as
Trustee
By: /s/ Melissa Matthews
----------------------
Name:Melissa Matthews
Title:Vice President
/s/ Fred F. Saunders
----------------------
as Trustee
Name: Fred F. Saunders
Exhibit 3.4
TRUST AGREEMENT
---------------
This TRUST AGREEMENT, dated as of April 19, 1996 (this "Trust Agreement"),
among Public Service Electric and Gas Company, a New Jersey corporation, as
"Depositor," First Union National Bank, a banking association organized under
the laws of the United States, First Union Bank of Delaware, and Fred F.
Saunders, not in their individual capacities but solely as Trustees. The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "PSE&G Capital Trust
I," in which name the Trustees, or the Depositor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Depositor hereby assigns, transfers conveys and sets over to
the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. Sec. 3801, et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in accordance with the provisions of
the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery of any licenses, consents or approvals required by applicable law or
otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement (including the prospectus,
prospectus supplements and the exhibits contained therein), relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and possibly certain other securities and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust under Section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended; (ii) to file with the
New York Stock Exchange or any other national stock exchange or The Nasdaq
National Market (each, an "Exchange") and execute on behalf of the Trust one or
more listing applications and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Preferred
<PAGE>
Securities to be listed on any of the Exchanges; (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or "Blue Sky" laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable and (iv) to
execute on behalf of the Trust that certain Underwriting Agreement relating to
the Preferred Securities, among the Trust, the Depositor and the several
Underwriters named therein, substantially in the form included as an exhibit to
the 1933 Act Registration Statement. In the event that any filing referred to
in clauses (i), (ii) and (iii) above is required by the rules and regulations of
the Commission, an Exchange or state securities or blue sky laws, to be executed
on behalf of the Trust by any of the Trustees, Fred F. Saunders, in his capacity
as a Trustee of the Trust, is hereby authorized and directed to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing. In
connection with all of the foregoing, the Depositor hereby constitutes and
appoints E. James Ferland, Robert C. Murray, Fred F. Saunders and Francis J.
Riepl, and each of them, as its true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for the Depositor or in the
Depositor's name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as the Depositor might or could to in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
respective substitute or substitutes, shall do or cause to be done by virtue
hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural person
who is a resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. The Trustees may resign upon thirty (30) days' prior
notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
PUBLIC SERVICE ELECTRIC AND
GAS COMPANY, as Depositor
By: /s/ Fred F. Saunders
--------------------------
Name: Fred F. Saunders
Title: Assistant Treasurer
FIRST UNION NATIONAL BANK,
not in its individual capacity but
solely as Trustee
By: /s/ Melissa Matthews
--------------------------
Name: Melissa Matthews
Title: Vice President
FIRST UNION BANK OF DELAWARE,
not in its individual capacity but
solely as Trustee
By: /s/ Melissa Matthews
--------------------------
Name: Melissa Matthews
Title: Vice President
/s/ Fred F. Saunders
---------------------------
Fred F. Saunders, not in his individual
capacity but solely as Trustee
3
Exhibit 3.5
TRUST AGREEMENT
---------------
This TRUST AGREEMENT, dated as of April 19, 1996 (this "Trust Agreement"),
among Public Service Electric and Gas Company, a New Jersey corporation, as
"Depositor," First Union National Bank, a banking association organized under
the laws of the United States, First Union Bank of Delaware, and Fred F.
Saunders, not in their individual capacities but solely as Trustees. The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "PSE&G Capital Trust
II," in which name the Trustees, or the Depositor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Depositor hereby assigns, transfers conveys and sets over to
the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. Sec. 3801, et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in accordance with the provisions of
the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery of any licenses, consents or approvals required by applicable law or
otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement (including the prospectus,
prospectus supplements and the exhibits contained therein), relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and possibly certain other securities and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust under Section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended; (ii) to file with the
New York Stock Exchange or any other national stock exchange or The Nasdaq
National Market (each, an "Exchange") and execute on behalf of the Trust one or
more listing applications and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Preferred
<PAGE>
Securities to be listed on any of the Exchanges; (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or "Blue Sky" laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable and (iv) to
execute on behalf of the Trust that certain Underwriting Agreement relating to
the Preferred Securities, among the Trust, the Depositor and the several
Underwriters named therein, substantially in the form included as an exhibit to
the 1933 Act Registration Statement. In the event that any filing referred to
in clauses (i), (ii) and (iii) above is required by the rules and regulations of
the Commission, an Exchange or state securities or blue sky laws, to be executed
on behalf of the Trust by any of the Trustees, Fred F. Saunders, in his capacity
as a Trustee of the Trust, is hereby authorized and directed to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing. In
connection with all of the foregoing, the Depositor hereby constitutes and
appoints E. James Ferland, Robert C. Murray, Fred F. Saunders and Francis J.
Riepl, and each of them, as its true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for the Depositor or in the
Depositor's name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as the Depositor might or could to in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
respective substitute or substitutes, shall do or cause to be done by virtue
hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural person
who is a resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. The Trustees may resign upon thirty (30) days' prior
notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
PUBLIC SERVICE ELECTRIC AND
GAS COMPANY, as Depositor
By: /s/ Fred F. Saunders
---------------------------
Name: Fred F. Saunders
Title: Assistant Treasurer
FIRST UNION NATIONAL BANK,
not in its individual capacity but
solely as Trustee
By: /s/ Melissa Matthews
---------------------------
Name: Melissa Matthews
Title: Vice President
FIRST UNION BANK OF DELAWARE,
not in its individual capacity but
solely as Trustee
By: /s/ Melissa Matthews
---------------------------
Name: Melissa Matthews
Title: Vice President
/s/ Fred F. Saunders
----------------------------
Fred F. Saunders, not in his individual
capacity but solely as Trustee
3
Exhibit 3.6
TRUST AGREEMENT
---------------
This TRUST AGREEMENT, dated as of April 19, 1996 (this "Trust Agreement"),
among Public Service Electric and Gas Company, a New Jersey corporation, as
"Depositor," First Union National Bank, a banking association organized under
the laws of the United States, First Union Bank of Delaware, and Fred F.
Saunders, not in their individual capacities but solely as Trustees. The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "PSE&G Capital Trust
III," in which name the Trustees, or the Depositor to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.
2. The Depositor hereby assigns, transfers conveys and sets over to
the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. Sec. 3801, et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in accordance with the provisions of
the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery of any licenses, consents or approvals required by applicable law or
otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement (including the prospectus,
prospectus supplements and the exhibits contained therein), relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and possibly certain other securities and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust under Section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended; (ii) to file with the
New York Stock Exchange or any other national stock exchange or The Nasdaq
National Market (each, an "Exchange") and execute on behalf of the Trust one or
more listing applications and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Preferred
<PAGE>
Securities to be listed on any of the Exchanges; (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or "Blue Sky" laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable and (iv) to
execute on behalf of the Trust that certain Underwriting Agreement relating to
the Preferred Securities, among the Trust, the Depositor and the several
Underwriters named therein, substantially in the form included as an exhibit to
the 1933 Act Registration Statement. In the event that any filing referred to
in clauses (i), (ii) and (iii) above is required by the rules and regulations of
the Commission, an Exchange or state securities or blue sky laws, to be executed
on behalf of the Trust by any of the Trustees, Fred F. Saunders, in his capacity
as a Trustee of the Trust, is hereby authorized and directed to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing. In
connection with all of the foregoing, the Depositor hereby constitutes and
appoints E. James Ferland, Robert C. Murray, Fred F. Saunders and Francis J.
Riepl, and each of them, as its true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for the Depositor or in the
Depositor's name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as the Depositor might or could to in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
respective substitute or substitutes, shall do or cause to be done by virtue
hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural person
who is a resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. The Trustees may resign upon thirty (30) days' prior
notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
PUBLIC SERVICE ELECTRIC AND
GAS COMPANY, as Depositor
By: /s/ Fred F. Saunders
-----------------------------
Name: Fred F. Saunders
Title: Assistant Treasurer
FIRST UNION NATIONAL BANK,
not in its individual capacity but
solely as Trustee
By: /s/ Melissa Matthews
--------------------------
Name: Melissa Matthews
Title: Vice President
FIRST UNION BANK OF DELAWARE,
not in its individual capacity but
solely as Trustee
By: /s/ Melissa Matthews
---------------------------
Name: Melissa Matthews
Title: Vice President
/s/ Fred F. Saunders
--------------------------
Fred F. Saunders, not in his individual
capacity but solely as Trustee
3
Exhibit 3.7
Amended and Restated
Trust Agreement for PSE&G Capital Trust
among
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(as Depositor)
FIRST UNION NATIONAL BANK
(as Property Trustee)
FIRST UNION BANK OF DELAWARE
(as Delaware Trustee)
and
THE ADMINISTRATIVE TRUSTEE NAMED HEREIN
Dated as of
______, ____
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Defined Terms
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
Continuation of the Trust
Section 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.02. Office of the Delaware Trustee; Principal Place of
Business . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.03. Initial Contribution of Trust Property; Expenses
of the Trust . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.04. Issuance of the Trust Securities . . . . . . . . . 11
Section 2.05. Purchase of Debentures . . . . . . . . . . . . . . 11
Section 2.06. Declaration of Trust . . . . . . . . . . . . . . . 11
Section 2.07. Authorization to Enter into Certain Transactions . 12
Section 2.08. Assets of Trust . . . . . . . . . . . . . . . . . . 15
Section 2.09. Title to Trust Property . . . . . . . . . . . . . . 15
ARTICLE III
Payment Account
Section 3.01. Payment Account . . . . . . . . . . . . . . . . . . 16
ARTICLE IV
Distributions; Redemption
Section 4.01. Distributions . . . . . . . . . . . . . . . . . . . 16
Section 4.02. Redemption . . . . . . . . . . . . . . . . . . . . 17
Section 4.03. Subordination of Common Securities . . . . . . . . 19
Section 4.04. Payment Procedures . . . . . . . . . . . . . . . . 20
Section 4.05. Tax Returns and Reports . . . . . . . . . . . . . . 20
ARTICLE V
Trust Securities Certificates
Section 5.01. Initial Ownership . . . . . . . . . . . . . . . . . 21
Section 5.02. The Trust Securities Certificates . . . . . . . . . 21
(i)
<PAGE>
Page
----
Section 5.03. Delivery of Trust Securities Certificates . . . . . 21
Section 5.04. Registration of Transfer and Exchange of Preferred
Securities Certificates . . . . . . . . . . . . . . . . . . . 22
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates . . . . . . . . . . . . . . . . . . . 22
Section 5.06. Persons Deemed Securityholders . . . . . . . . . . 23
Section 5.07. Access to List of Securityholders' Names and
Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.08. Maintenance of Office or Agency . . . . . . . . . . 24
Section 5.09. Appointment of Paying Agent . . . . . . . . . . . . 24
Section 5.10. No Transfer of Common Securities by Depositor . . . 25
Section 5.11. Book-Entry Preferred Securities Certificates;
Common Securities Certificate . . . . . . . . . . . . . . . . 25
Section 5.12. Definitive Preferred Securities Certificates . . . 25
Section 5.13. Rights of Securityholders . . . . . . . . . . . . . 26
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights . . . . . . . . . . . 26
Section 6.02. Notice of Meetings . . . . . . . . . . . . . . . . 27
Section 6.03. Meetings of Preferred Securityholders . . . . . . . 27
Section 6.04. Voting Rights . . . . . . . . . . . . . . . . . . . 28
Section 6.05. Proxies, etc. . . . . . . . . . . . . . . . . . . . 28
Section 6.06. Securityholder Action by Written Consent . . . . . 28
Section 6.07. Record Date for Voting and Other Purposes . . . . . 28
Section 6.08. Acts of Securityholders . . . . . . . . . . . . . . 29
Section 6.09. Inspection of Records . . . . . . . . . . . . . . . 30
ARTICLE VII
The Trustees
Section 7.01. Certain Duties and Responsibilities . . . . . . . . 30
Section 7.02. Notice of Defaults; Direct Action by
Securityholders . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.03. Certain Rights of Property Trustee . . . . . . . . 32
Section 7.04. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 7.05. May Hold Securities . . . . . . . . . . . . . . . . 33
Section 7.06. Compensation; Indemnity; Fees . . . . . . . . . . . 33
Section 7.07. Corporate Property Trustee Required; Eligibility
of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . 34
(ii)
<PAGE>
Page
----
Section 7.08. Conflicting Interests . . . . . . . . . . . . . . . 35
Section 7.09. Co-Trustees and Separate Trustee . . . . . . . . . 35
Section 7.10. Resignation and Removal; Appointment of Successor . 37
Section 7.11. Acceptance of Appointment by Successor . . . . . . 38
Section 7.12. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.13. Preferential Collection of Claims Against
Depositor or Trust . . . . . . . . . . . . . . . . . . . . . 39
Section 7.14. Reports by Property Trustee . . . . . . . . . . . . 39
Section 7.15. Reports to the Property Trustee . . . . . . . . . . 40
Section 7.16. Evidence of Compliance with Conditions Precedent . 40
Section 7.17. Statements Required in Officer's Certificate and
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 40
Section 7.18. Number of Trustees . . . . . . . . . . . . . . . . 41
Section 7.19. Delegation of Power . . . . . . . . . . . . . . . . 41
Section 7.20. Voting . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VIII
Termination and Liquidation
Section 8.01. Termination Upon Expiration Date . . . . . . . . . 42
Section 8.02. Early Termination . . . . . . . . . . . . . . . . . 42
Section 8.03. Termination . . . . . . . . . . . . . . . . . . . . 42
Section 8.04. Liquidation . . . . . . . . . . . . . . . . . . . . 42
ARTICLE IX
Mergers, Etc.
Section 9.01. Mergers, Consolidations, Amalgamations or
Replacements of the Trust . . . . . . . . . . . . . . . . . . 44
ARTICLE X
Miscellaneous Provisions
Section 10.01. Limitation of Rights of Securityholders . . . . . 46
Section 10.02. Amendment . . . . . . . . . . . . . . . . . . . . 46
Section 10.03. Severability . . . . . . . . . . . . . . . . . . . 47
Section 10.04. Governing Law . . . . . . . . . . . . . . . . . . 47
Section 10.05. Payments Due on Non-Business Day . . . . . . . . . 47
Section 10.06. Successors and Assigns . . . . . . . . . . . . . . 48
Section 10.07. Headings . . . . . . . . . . . . . . . . . . . . . 48
Section 10.08. Reports, Notices and Demands . . . . . . . . . . . 48
Section 10.09. Agreement Not to Petition . . . . . . . . . . . . 48
(iii)
<PAGE>
Page
----
Section 10.10. Trust Indenture Act; Conflict with Trust
Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee
and Indenture . . . . . . . . . . . . . . . . . . . . . . . . 49
(iv)
<PAGE>
PSE&G Capital Trust
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939
Trust Indenture Trust Agreement
Act Section Section
- --------------- ---------------
Sec. 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.07
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.07
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07(a)(ii)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08
Sec. 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
Sec. 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
Sec. 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14
Sec. 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.15
(b) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.16, 7.17
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.16, 7.17
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.17
Sec. 315(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a), 7.03(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02, 10.08
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01, 7.03
(e) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Sec. 316(a) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Sec. 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09
Sec. 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.10
__________________
Note: This reconciliation and tie sheet shall not, for any
purpose, be deemed to be a part of the Trust Agreement.
(v)
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT of PSE&G Capital Trust __
(the "Trust"), dated as of ____________, among (i) Public Service Electric
and Gas Company, a New Jersey corporation (the "Depositor"), (ii) First
Union National Bank, a national banking association, as trustee (the
"Property Trustee"), (iii) First Union Bank of Delaware, a
_________________, whose address in Delaware is 1225 King Street,
Wilmington, Delaware 19801, as Delaware trustee (the "Delaware Trustee"),
(iv) Fred F. Saunders, an individual whose address is c/o Public Service
Electric and Gas Company, 80 Park Plaza, P.O. Box 570, Newark, New Jersey
07101 (the "Administrative Trustee") (the Property Trustee, the Delaware
Trustee and the Administrative Trustee are referred to collectively as the
"Trustees"), and (v) the several Holders, as hereinafter defined.
WITNESSETH:
WHEREAS, the Depositor, the Property Trustee, the Delaware
Trustee and the Administrative Trustee have heretofore duly declared and
established a business trust pursuant to the Delaware Business Trust Act by
entering into a Trust Agreement, dated as of ______________ (the "Original
Trust Agreement"), and by executing and filing with the Secretary of State
of the State of Delaware a Certificate of Trust on ______________, a form
of which is attached hereto as Exhibit A; and
WHEREAS, the Depositor, the Property Trustee, the Delaware
Trustee and the Administrative Trustee desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide
for, among other things, (i) the issuance of the Common Securities, as
hereinafter defined, by the Trust to the Depositor, (ii) the issuance and
sale of the Preferred Securities, as hereinafter defined, by the Trust
pursuant to the Underwriting Agreement, as hereinafter defined, and (iii)
the acquisition by the Trust from the Depositor of the Debentures, as
hereinafter defined.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration,
the sufficiency of which is hereby acknowledged, each party, for the
benefit of the other party and for the benefit of the Securityholders, as
hereinafter defined, hereby amends and restates the Original Trust
Agreement in its entirety and agrees as follows:
<PAGE>
ARTICLE I
Defined Terms
-------------
Section 1.01. Definitions. For all purposes of this Trust
-----------
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) each term defined in this Article I has the meaning
assigned to it in this Article I and includes the plural as well as
the singular;
(b) each of the other terms used herein that is defined in
the Trust Indenture Act, either directly or by reference therein, has
the meaning assigned to it therein;
(c) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or a Section, as the
case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and
not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
---
"Administrative Trustee" means the individual identified as the
----------------------
"Administrative Trustee" in the preamble to this Trust Agreement, solely in
his/her capacity as Administrative Trustee of the Trust created and
continued hereunder and not in his/her individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person
---------
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Bankruptcy Event" means, with respect to any Person, the
----------------
occurrence of any of the following events:
(a) Such Person, pursuant to or within the meaning of any
Bankruptcy Law:
2
<PAGE>
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief
against it in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian, as
hereinafter defined, of it or for all or
substantially all of its property, and such
Custodian is not discharged within 60 days;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) admits in writing its inability to pay its debts
generally as they become due; or
(b) A court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against such Person in an
involuntary case or proceeding;
(ii) appoints a Custodian of such Person for all or
substantially all of its properties;
(iii) orders the liquidation of such Person;
(iv) and in each case the order or decree remains
unstayed and in effect for 60 days.
"Bankruptcy Laws" means Title 11 of the United States Code, or
---------------
similar federal or state law for the relief of debtors. "Custodian" means
any receiver, trustee, assignee, liquidator, sequestrator, custodian or
similar official under any Bankruptcy Law.
"Board Resolution" means (i) a copy of a resolution certified by
----------------
the Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors or a committee thereof and to
be in full force and effect on the date of such certification or (ii) a
certificate signed by the authorized officer or officers of the Depositor
to whom the Depositor's Board of Directors or a committee thereof has
delegated its authority, and in each case, delivered to the Trustees.
3
<PAGE>
"Book-Entry Preferred Securities Certificates" means certificates
--------------------------------------------
representing Preferred Securities issued in global, fully registered form
with the Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday,
------------
or (b) a day on which banking institutions in The City of New York or the
State of New Jersey are required by law or executive order to remain
closed.
"Certificate Depository Agreement" means the agreement among the
--------------------------------
Trust, the Property Trustee and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, relating to the
Book-Entry Preferred Securities Certificates, substantially in the form
attached hereto as Exhibit B, as the same may be amended and supplemented
from time to time.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder. The
Depository Trust Company will be the initial Clearing Agency.
"Closing Date" means the Time of Delivery as defined in the
------------
Underwriting Agreement, which date is also the date of execution and
delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commission" means the Securities and Exchange Commission, as
----------
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this Trust
Agreement such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"Common Security" means an undivided beneficial interest in the
---------------
assets of the Trust, having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
-----------------------------
ownership of Common Securities, substantially in the form attached hereto
as Exhibit C.
"Corporate Trust Office" means the principal corporate trust
----------------------
office of the Property Trustee located in the State of New
4
<PAGE>
Jersey which at the date hereof is 765 Broad Street, Newark, New Jersey
07107.
"Creditor" has the meaning specified in Section 2.03.
--------
"Debenture Event of Default" means an "Event of Default" as
--------------------------
defined in the Indenture with respect to the Debentures.
"Debenture Redemption Date" means "Redemption Date" as defined in
-------------------------
the Indenture with respect to the Debentures.
"Debenture Trustee" means First Union National Bank, a national
-----------------
banking association, or any successor appointed in accordance with the
terms and provisions of the Indenture.
"Debentures" means the Depositor's _____% Deferrable Interest
----------
Subordinated Debentures, Series _, issued pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means certificates
--------------------------------------------
representing Preferred Securities issued in certificated, fully registered
form as described in Section 5.12.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
---------------------------
Delaware Code, 12 Del. C. Sec. 3801, et seq., as it may be amended from time
to time.
"Delaware Trustee" means the entity identified as the "Delaware
----------------
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust created and continued hereunder and not in
its individual capacity, or its successor in interest in such capacity, or
any successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this
---------
Trust Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
-----------------
"Distributions" means amounts payable in respect of the Trust
-------------
Securities as provided in Section 4.01.
"Event of Default" means the occurrence of a Debenture Event of
----------------
Default (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body).
5
<PAGE>
"Expiration Date" has the meaning specified in Section 8.01.
---------------
"Extension Period" means the period or periods in which pursuant
----------------
to the Indenture, payments of interest on the Debentures are deferred by
extending the interest payment periods thereof.
"Guarantee" means the Guarantee Agreement executed and delivered
---------
by the Depositor to First Union National Bank, a national banking
association, as trustee, contemporaneously with the execution and delivery
of this Trust Agreement, for the benefit of the Holders of the Preferred
Securities, as amended from time to time.
"Indenture" means the Indenture, dated as of June 1, 1996,
---------
between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
----
deed of trust, adverse ownership interest, hypothecation, assignment,
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
-----------
Securities, Trust Securities having an aggregate Liquidation Amount equal
to the principal amount of Debentures to be contemporaneously redeemed or
paid at maturity, in accordance with the Indenture, and the proceeds of
which will be used to pay the Redemption Price of such Trust Securities,
and (b) with respect to a distribution of Debentures to Holders of Trust
Securities in connection with a termination and liquidation of the Trust,
Debentures having a principal amount equal to the aggregate Liquidation
Amount of the Trust Securities in exchange for which such Debentures are
distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
------------------
Security.
"Liquidation Date" means the date on which Debentures are to be
----------------
distributed to Holders of Trust Securities in connection with a termination
and liquidation of the Trust pursuant to Section 8.04(a).
"Liquidation Distribution" has the meaning specified in Section
------------------------
8.04(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
--------
6
<PAGE>
"Officers' Certificate" means a certificate signed by the
---------------------
Chairman, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Depositor.
"Opinion of Counsel" means a written opinion of counsel, who may
------------------
be counsel for the Trust, the Property Trustee or the Depositor or an
Affiliate of the Depositor, but not an employee of any thereof, and who
shall be acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the
------------------------
recitals to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means,
-----------
as of the date of determination, all Trust Securities theretofore executed
and delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the
Administrative Trustee or delivered to the Administrative Trustee for
cancellation;
(b) Trust Securities for whose redemption money in the
necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the Holders of such Trust Securities;
provided that, if such Trust Securities are to be redeemed, notice of
--------
such redemption has been duly given pursuant to this Trust Agreement;
(c) Trust Securities which have been paid or in exchange
for or in lieu of which other Trust Securities have been executed and
delivered pursuant to Section 5.05, other than any such Trust
Securities in respect of which there shall have been presented to the
Property Trustee proof satisfactory to it that such Trust Securities
are held by a bona fide purchaser; and
(d) as provided in Section 8.04(c);
provided, however, that in determining whether the Holders of the requisite
- -------- -------
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Preferred Securities owned by the Depositor, any Trustee or any
Affiliate of the Depositor or any Trustee shall be disregarded and deemed
not to be Outstanding, except that (a) in determining whether any Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Preferred Securities which such
Trustee actually knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the Outstanding Preferred
Securities are owned by the
7
<PAGE>
Depositor, one or more of the Trustees and/or any such Affiliate.
Preferred Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of
the Administrative Trustee the pledgee's right so to act with respect to
such Preferred Securities and that the pledgee is not the Depositor or any
Affiliate of the Depositor.
"Paying Agent" means the Property Trustee and any co-paying agent
------------
appointed pursuant to Section 5.09.
"Payment Account" means a segregated non-interest-bearing
---------------
corporate trust account maintained by the Property Trustee in its trust
department for the benefit of the Securityholders in which all amounts paid
to the Property Trustee in respect of the Debentures or the Guarantee will
be held and from which the Property Trustee or such other Paying Agent
shall make payments to the Securityholders in accordance with Article 4.
"Person" means any individual, corporation, partnership, limited
------
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Security" means a __% Cumulative Quarterly Income
------------------
Preferred Security, Series _ issued by the Trust, and having an undivided
beneficial interest in the assets of the Trust, having a Liquidation Amount
of $25 and having rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation Distribution
as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
--------------------------------
ownership of one or more Preferred Securities, substantially in the form
attached hereto as Exhibit D.
"Property Trustee" means the commercial bank or trust company
----------------
identified as the "Property Trustee" in the preamble to this Trust
Agreement solely in its capacity as Property Trustee of the Trust
heretofore created and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
---------------
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated
--------
maturity of the Debentures shall be a Redemption Date for a Like Amount of
Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
----------------
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions thereon to the Redemption Date.
8
<PAGE>
"Securities Register" and "Securities Registrar" have the
------------------- --------------------
respective meanings specified in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
-------------- ------
Security or Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Successor Securities" has the meaning specified in Section 8.05.
--------------------
"Trust" means the Delaware business trust created and continued
-----
hereby and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust
---------------
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof, including all exhibits
hereto, including, for all purposes of this Trust Agreement and any such
modification, amendment or supplement, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern this Trust
Agreement and any such modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
-------------------
force at the date as of which this Trust Agreement was executed; provided,
--------
however, that in the event the Trust Indenture Act of 1939 is amended after
- -------
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) any cash on
--------------
deposit in, or owing to, the Payment Account and (c) all proceeds and
rights in respect of the foregoing and any other property and assets for
the time being held or deemed to be held by the Property Trustee pursuant
to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
--------------
Preferred Securities.
"Trust Securities Certificate" means any one of the Common
----------------------------
Securities Certificates or the Preferred Securities Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated
----------------------
________________, among the Trust, the Depositor and the Underwriters named
therein.
9
<PAGE>
ARTICLE II
Continuation of the Trust
Section 2.01. Name. The Trust created and continued hereby
----
shall be known as "PSE&G Capital Trust _" as such name may be modified from
time to time by the Administrative Trustee following written notice to the
Holders of Trust Securities and the other Trustees, in which name the
Trustees may conduct the business of the Trust, make and execute contracts
and other instruments on behalf of the Trust and sue and be sued.
Section 2.02. Office of the Delaware Trustee; Principal Place of
--------------------------------------------------
Business. The address of the Delaware Trustee in the State of Delaware is
- --------
1225 King Street, Wilmington, Delaware 19801 or such other address in the
State of Delaware as the Delaware Trustee may designate by written notice
to the Securityholders and the Depositor. The principal place of business
of the Trust is 80 Park Plaza, Newark, New Jersey 07101.
Section 2.03. Initial Contribution of Trust Property; Expenses
------------------------------------------------
of the Trust.
- ------------
(a) The Property Trustee acknowledges receipt in trust from the
Depositor in connection with the Original Trust Agreement of the sum of
$10, which constituted the initial Trust Property.
(b) The Depositor shall be responsible for and shall pay for all
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the Trust (including, but not limited to, costs and
expenses relating to the organization of the Trust, the issuance and sale
of the Preferred Securities, the fees and expenses (including reasonable
counsel fees and expenses) of the Trustees as provided in Section 7.06, the
costs and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and computing or accounting
equipment, Paying Agent(s), Securities Registrar, duplication, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the disposition of Trust assets).
(c) The Depositor will pay any and all taxes (other than United
States withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.
(d) The Depositor's obligations under this Section 2.03 shall be
for the benefit of, and shall be enforceable by, the Property Trustee and
any Person to whom any such obligations, costs, expenses and taxes are owed
(a "Creditor") whether or not such Creditor has received notice hereof.
The Property Trustee and
10
<PAGE>
any such Creditor may enforce the Depositor's obligations under this
Section 2.03 directly against the Depositor and the Depositor irrevocably
waives any right or remedy to require that the Property Trustee or any such
Creditor take any action against the Trust or any other Person before
proceeding against the Depositor. The Depositor agrees to execute such
additional agreements as may be necessary or desirable in order to give
full effect to the provisions of this Section 2.03.
(e) The Depositor shall make no claim upon the Trust Property
for the payment of such expenses.
Section 2.04. Issuance of the Trust Securities. The Depositor,
--------------------------------
on behalf of the Trust and pursuant to the Original Trust Agreement,
executed and delivered the Underwriting Agreement. Contemporaneously with
the execution and delivery of this Trust Agreement, the Administrative
Trustee, on behalf of the Trust, shall execute in accordance with Section
5.02 and deliver to the Underwriters named in the Underwriting Agreement
one or more Book-Entry Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, representing ______
Preferred Securities having an aggregate Liquidation Amount of $__________,
against receipt by the Property Trustee of the aggregate purchase price of
such Preferred Securities of $__________, which amount the Administrative
Trustee shall promptly deliver to the Property Trustee. Contemporaneously
therewith, the Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.02 and deliver to the Depositor a
Common Securities Certificate, registered in the name of the Depositor,
representing _____ Common Securities having an aggregate Liquidation Amount
of $__________, and in satisfaction of the purchase price of such Common
Securities the Depositor shall deliver to the Property Trustee the sum of
$__________.
Section 2.05. Purchase of Debentures. Contemporaneously with
----------------------
the execution and delivery of this Trust Agreement (i) the Administrative
Trustee, on behalf of the Trust, shall purchase $__________ aggregate
principal amount of Debentures from the Depositor, registered in the name
of the Trust and (ii) in satisfaction of the purchase price for such
Debentures, the Property Trustee, on behalf of the Trust, shall deliver to
the Depositor the sum of $__________.
Section 2.06. Declaration of Trust. The exclusive purposes and
--------------------
functions of the Trust are (a) to issue and sell Trust Securities and use
the proceeds from such sale to acquire the Debentures, (b) to maintain the
status of the Trust as a grantor trust for United States Federal income tax
purposes, and (c) except as otherwise limited herein, to engage in only
those activities necessary, convenient or incidental thereto. The
Depositor hereby appoints the Trustees as trustees of the Trust, to have
all the
11
<PAGE>
rights, powers and duties to the extent set forth herein, and the Trustees
hereby accept such appointment. The Property Trustee hereby declares that
it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Securityholders. The
Administrative Trustee shall have all rights, powers and duties set forth
herein. The Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities
of the Property Trustee or the Administrative Trustee set forth herein.
The Delaware Trustee shall be one of the Trustees of the Trust for the sole
and limited purpose of fulfilling the requirements of Section 3807 of the
Delaware Business Trust Act.
Section 2.07. Authorization to Enter into Certain Transactions.
------------------------------------------------
(a) The Trustees shall conduct the affairs of the Trust in
accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in paragraph (b) of this Section, and in accordance
with the following provisions (i) and (ii), the Trustees shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees under this Trust Agreement, and to
perform all acts in furtherance thereof, including without limitation, the
following:
(i) As among the Trustees, the Administrative Trustee
shall have the power and authority to act on behalf of the Trust with
respect to the following matters:
(A) executing and delivering the Trust Securities on
behalf of the Trust;
(B) causing the Trust to enter into, and executing,
delivering and performing on behalf of the Trust, the Certificate
Depository Agreement and such other agreements as may be necessary or
desirable in connection with the purposes and function of the Trust,
including the appointment of a successor depositary;
(C) assisting in registering the Preferred Securities
under the Securities Act of 1933, as amended, and under state securities or
blue sky laws, and qualifying this Trust Agreement as a trust indenture
under the Trust Indenture Act;
(D) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges as the Depositor
shall determine and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and filing
of all periodic and other reports and other documents pursuant to the
foregoing;
12
<PAGE>
(E) to the extent provided in this Trust Agreement,
winding-up the affairs of and liquidating the Trust and preparing,
executing and filing the certificate of cancellation with the Secretary of
State of the State of Delaware;
(F) sending notices or assisting the Property Trustee
in sending notices and other information regarding the Trust Securities and
the Debentures to Securityholders in accordance with this Trust Agreement;
and
(G) taking any action incidental to the foregoing as
the Administrative Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Trust Agreement for the
benefit of the Securityholders (without consideration of the effect of any
such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall
have the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) establishing and maintaining the Payment Account
and appointing Paying Agents (subject to Section 5.09);
(B) receiving payment of the purchase price of the
Trust Securities;
(C) receiving and holding the Debentures;
(D) collecting interest and principal payments on the
Debentures and depositing them in the Payment Account;
(E) making Distributions and other payments to the
Securityholders in respect of the Trust Securities;
(F) exercising all of the rights, powers and
privileges of a holder of the Debentures;
(G) sending notices of defaults, redemptions,
Extension Periods, liquidations and other information regarding the Trust
Securities and the Debentures to the Securityholders in accordance with
this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
winding-up the affairs of and liquidating the Trust, including distributing
the Trust Property in accordance with the terms of this Trust Agreement,
and preparing, executing and filing the certificate of cancellation with
the Secretary of State of the State of Delaware;
13
<PAGE>
(I) after an Event of Default, taking any action
incidental to the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the terms of this
Trust Agreement and protect and conserve the Trust Property for the benefit
of the Securityholders (without consideration of the effect of any such
action on any particular Securityholder); and
(J) registering transfers of the Preferred Securities
in accordance with this Trust Agreement (but only if at such time the
Property Trustee shall be the Securities Registrar).
(b) So long as this Trust Agreement remains in effect, the Trust
(or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees acting on behalf of the
Trust shall not (i) acquire any assets or investments (other than the
Debentures, and payments thereon or proceeds thereof and payments under the
Guarantee, as provided herein), reinvest the proceeds derived from
investments, possess any power or otherwise act in such a way as to vary
the Trust Property or engage in any activities not authorized by this Trust
Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off
or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii)
take any action that would cause the Trust to fail or cease to qualify as a
grantor trust for United States Federal income tax purposes, (iv) incur any
indebtedness for borrowed money or issue any other debt, (v) issue any
securities or other evidences of beneficial ownership of, or beneficial
interests in, the Trust other than the Trust Securities, or (vi) take or
consent to any action that would result in the placement of a Lien on any
of the Trust Property. The Administrative Trustee shall defend all claims
and demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the Securityholders
in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to assist
the Trust with respect to, or effect on behalf of the Trust, the following
(and any actions taken by the Depositor in furtherance of the following
prior to the date of this Trust Agreement are hereby ratified and confirmed
in all respects):
(i) preparing for filing with the Commission and
executing on behalf of the Trust a registration statement on Form S-3 in
relation to the Preferred Securities, including any amendments thereto;
14
<PAGE>
(ii) determining the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and doing any and all such acts, other than actions which must
be taken by or on behalf of the Trust, and advising the Trustees of actions
they must take on behalf of the Trust, and preparing for execution and
filing any documents to be executed and filed by the Trust or on behalf of
the Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such States;
(iii) preparing for filing and executing on behalf of the
Trust an application to the New York Stock Exchange or any other national
stock exchange or The Nasdaq National Market for listing upon notice of
issuance of any Preferred Securities;
(iv) preparing for filing with the Commission and
executing on behalf of the Trust a registration statement on Form 8-A
relating to the registration of the Preferred Securities under Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended,
including any amendments thereto;
(v) negotiating the terms of, and executing and
delivering, the Underwriting Agreement providing for the sale of the
Preferred Securities; and
(vi) taking any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustee is authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that (i) the Trust will not be deemed
to be an "investment company" required to be registered under the 1940 Act,
or taxed as a corporation or a partnership for United States Federal income
tax purposes (ii) the Trust will qualify as a grantor trust for United
States Federal income tax purposes and (iii) the Debentures will be treated
as indebtedness of the Depositor for United States Federal income tax
purposes. In this connection, the Depositor and the Administrative Trustee
are authorized to take any action, not inconsistent with applicable law,
the Certificate of Trust, as amended from time to time, or this Trust
Agreement, that each of the Depositor and the Administrative Trustee
determines in their discretion to be necessary or desirable for such
purposes.
Section 2.08. Assets of Trust. The assets of the Trust shall
---------------
consist of the Trust Property.
Section 2.09. Title to Trust Property. Legal title to all Trust
-----------------------
Property shall be vested at all times in the Property Trustee (in its
capacity as such) and shall be held and
15
<PAGE>
administered by the Property Trustee for the benefit of the Securityholders
in accordance with this Trust Agreement.
ARTICLE III
Payment Account
---------------
Section 3.01. Payment Account.
---------------
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. All monies and other property deposited or
held from time to time in the Payment Account shall be held by the Property
Trustee for the exclusive benefit of the Securityholders. The Property
Trustee shall have exclusive control of the Payment Account for the purpose
of making deposits in and withdrawals from the Payment Account in
accordance with this Trust Agreement; provided that any Paying Agent may
have the right of withdrawal with respect to the Payment Account solely for
the purpose of making the payments contemplated under Article 4.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on the
Debentures and any amounts paid to the Property Trustee pursuant to the
Guarantee. Amounts held in the Payment Account shall not be invested
pending distribution thereof.
ARTICLE IV
Distributions; Redemption
Section 4.01. Distributions.
-------------
(a) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust available
for the payment of Distributions. Distributions shall accumulate from
______________ and, except during an Extension Period for the Debentures
pursuant to the Indenture, shall be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, commencing on
__________, ____. If any date on which Distributions are otherwise payable
on the Trust Securities is not a Business Day, then the payment of such
Distributions shall be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next succeeding calendar
year, payment of such Distributions shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on such date (each date on which Distributions are payable in
accordance with this Section 4.01(a) is referred to as a "Distribution
Date").
16
<PAGE>
Within two Business Days after receipt by the Property Trustee of
notice of an Extension Period pursuant to Section 4.01 of the Indenture,
the Property Trustee shall give notice thereof to the Securityholders by
first class mail, postage prepaid.
(b) The Trust Securities represent undivided beneficial
interests in the Trust Property, and, subject to Sections 4.03 and 4.06
hereof, all Distributions will be made pro rata on each of the Trust
Securities. Distributions on the Trust Securities shall be payable at a
rate of _____% per annum of the Liquidation Amount of the Trust Securities.
The amount of Distributions payable for any full quarterly period shall be
computed on the basis of a 360-day year of twelve 30-day months and, for
any period shorter than a full month, shall be computed on the basis of the
actual number of days elapsed in such period. During an Extension Period
for the Debentures, the rate per annum at which Distributions on the Trust
Securities accumulate shall be increased by an amount such that the
aggregate amount of Distributions that accumulate on all Trust Securities
during any such extended interest payment period is equal to the aggregate
amount of interest (including interest payable on unpaid interest at the
rate per annum set forth above, compounded quarterly) that accrues during
any such extended interest payment period on the Debentures.
(c) Distributions on the Trust Securities shall be made from the
Payment Account by the Paying Agent and shall be payable on each
Distribution Date only to the extent that the Trust has funds then
available in the Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities on each Distribution
Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date,
which shall be one Business Day prior to such Distribution Date; provided,
--------
however, that in the event that the Preferred Securities are not in
- -------
book-entry-only form, the relevant record date shall be the 15th day of the
last month of each quarter, whether or not a Business Day.
Section 4.02. Redemption.
----------
(a) Upon receipt by the Trust of a notice of redemption of
Debentures, the Trust will call for redemption a Like Amount of Trust
Securities at the Redemption Price on the Debenture Redemption Date and
will call for redemption all Outstanding Trust Securities on the stated
maturity date of the Debentures.
(b) Notice of redemption shall be given by the Property Trustee
by first-class mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the Redemption Date to each Holder of Trust Securities to
be redeemed, at such Holder's address
17
<PAGE>
appearing in the Securities Register. All notices of redemption shall
state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) the place or places where Trust Certificates are to
be surrendered for payment of the Redemption Price;
(v) that on the Redemption Date the Redemption Price will
become payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after such date; and
(vi) if less than all of the Outstanding Trust Securities
are to be redeemed, the identification and total Liquidation Amount of the
particular Trust Securities to be redeemed.
(c) The Trust Securities redeemed on each Redemption Date shall
be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption or payment at maturity of Debentures.
Redemptions of the Trust Securities shall be made and the Redemption Price
shall be payable on each Redemption Date only to the extent that the Trust
has funds then available in the Payment Account for the payment of such
Redemption Price.
(d) If the Trust, by action of the Property Trustee, gives a
notice of redemption in respect of any Preferred Securities, then, on the
Redemption Date, subject to Section 4.02(c), the Property Trustee will
irrevocably deposit with the Paying Agent funds sufficient to pay the
Redemption Price for the Preferred Securities being redeemed on such date
and will give the Paying Agent irrevocable instructions and authority to
pay the Redemption Price to the Holders of such Preferred Securities upon
surrender of their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of
such Trust Securities as they appear on the Securities Register for the
Trust Securities on the record dates for the related Distribution Dates.
If notice of redemption shall have been given and funds irrevocably
deposited as required, then upon the date of such deposit, all rights of
Securityholders holding Trust Securities so called for redemption will
cease, except the right of such Securityholders to receive the Redemption
Price, but without interest, and such Trust Securities will cease to be
Outstanding. In the event that any date on which any Redemption Price is
payable is not a Business Day, then payment
18
<PAGE>
of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case, with the same force and
effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption
is improperly withheld or refused, and not paid either by the Trust or by
the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accumulate, at the then applicable rate, from
the Redemption Date originally established by the Trust for such Trust
Securities to the date such Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of
Trust Securities to be redeemed shall be allocated _% to the Common
Securities and __% to the Preferred Securities. The particular Preferred
Securities to be redeemed shall be selected by the Property Trustee from
the Outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate.
The Property Trustee shall promptly notify the Securities Registrar in
writing of the Preferred Securities selected for redemption. If fewer than
all of the Trust Securities represented by a Trust Securities Certificate
are redeemed, the Administrative Trustee shall execute for the Holder a new
Trust Securities Certificate representing the unredeemed Trust Securities.
For all purposes of this Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Preferred Securities
shall relate, in the case of any Preferred Securities redeemed or to be
redeemed only in part, to the portion of the Liquidation Amount of
Preferred Securities which has been or is to be redeemed.
Section 4.03. Subordination of Common Securities.
----------------------------------
(a) Payment of Distributions on, and the Redemption Price of,
the Trust Securities, as applicable, shall be made pro rata based on the
Liquidation Amount of the Trust Securities; provided, however, that if on
-------- -------
any Distribution Date or Redemption Date, a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution on,
or Redemption Price of, any Common Security, and no other payment on
account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated
and unpaid Distributions on all Outstanding Preferred Securities for all
distribution periods terminating on or prior thereto, or in the case of
payment of the Redemption Price, the full amount of such Redemption Price
on all Outstanding Preferred Securities then being
19
<PAGE>
redeemed, shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the payment in
full in cash of all Distributions on, or the Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Debenture Event of
Default, the Holder of Common Securities will be deemed to have waived any
right to act with respect to any related Event of Default under this Trust
Agreement and such Debenture Event of Default until the effect of such
related Event of Default and such Debenture Event of Default has been
cured, waived or otherwise eliminated. Until any such Event of Default
under this Trust Agreement and such Debenture Event of Default has been so
cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the Holders of the Preferred Securities and not the
Holder of the Common Securities, and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee to act on
their behalf.
Section 4.04. Payment Procedures. Payments of Distributions
------------------
pursuant to Section 4.01 in respect of the Preferred Securities shall be
made by check mailed to the address of the Holder thereof as such address
shall appear on the Securities Register or, if the Preferred Securities are
held by a Clearing Agency, such Distributions shall be made to the Clearing
Agency by wire transfer in immediately available funds. Payments of
Distributions pursuant to Section 4.01 in respect of the Common Securities
shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Holder of the Common Securities. Payment of the
Redemption Price on Liquidation Distribution of the Trust Securities shall
be made in immediately available funds upon surrender of the Preferred
Securities Certificate representing such Preferred Securities at the
Corporate Trust Office of the Property Trustee.
Section 4.05. Tax Returns and Reports. The Administrative
-----------------------
Trustee shall prepare (or cause to be prepared), at the Depositor's
expense, and file all Federal, State and local tax and information returns
and reports required to be filed by or in respect of the Trust. In this
regard, the Administrative Trustee shall (a) prepare and file (or cause to
be prepared or filed) the appropriate Internal Revenue Service Form
required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished)
to each Securityholder the related Internal Revenue Service Form 1099 OID,
or any successor form or the information required to be provided on such
form. The Administrative Trustee shall provide the Depositor and the
Property Trustee with a copy of all such returns, reports and schedules
promptly after such filing or furnishing. The Trustees shall comply with
United States Federal withholding and backup withholding tax laws and
information reporting requirements
20
<PAGE>
with respect to any payments to Securityholders under the Trust Securities.
Section 4.06. Payments under Indenture. Any amount payable
------------------------
hereunder to any Holder of Preferred Securities shall be reduced by the
amount of any corresponding payment such Holder has directly received
pursuant to Section 6.07 of the Indenture or pursuant to the Guarantee.
Notwithstanding the provisions hereunder to the contrary, Securityholders
acknowledge that any Holder of Preferred Securities that receives payment
under Section 6.07 of the Indenture may receive amounts greater than the
amount such Holder may be entitled to receive pursuant to the other
provisions of this Trust Agreement.
ARTICLE V
Trust Securities Certificates
Section 5.01. Initial Ownership. Upon the creation of the Trust
-----------------
and the contribution by the Depositor pursuant to Section 2.03 and until
the issuance of the Trust Securities, and at any time during which no Trust
Securities are outstanding, the Depositor shall be the sole beneficial
owner of the Trust.
Section 5.02. The Trust Securities Certificates. The Trust
---------------------------------
Securities Certificates shall be issued representing one or more Preferred
Securities. Preferred Securities Certificates representing fractional
interests shall not be issued. The Trust Securities Certificates shall be
executed on behalf of the Trust by manual signature of the Administrative
Trustee or by a facsimile signature of the Administrative Trustee
countersigned by the Securities Registrar. Trust Securities Certificates
bearing the manual signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefits of this
Trust Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust
Securities Certificates or did not hold such offices at the date of
delivery of such Trust Securities Certificates. A transferee of a Trust
Securities Certificate shall become a Securityholder, and shall be entitled
to the rights and subject to the obligations of a Securityholder hereunder,
upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Section 5.04.
Section 5.03. Delivery of Trust Securities Certificates. On the
-----------------------------------------
Closing Date, the Administrative Trustee shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections
2.04 and 2.05, to be executed on behalf of the Trust as provided in Section
5.02 and delivered to or upon a
21
<PAGE>
written order of the Depositor signed by its Chairman of the Board, its
President, any Vice President or the Treasurer, without further corporate
action by the Depositor, in authorized denominations. The written order of
the Depositor shall be accompanied by an Officer's Certificate and an
Opinion of Counsel.
Section 5.04. Registration of Transfer and Exchange of Preferred
--------------------------------------------------
Securities Certificates. A registrar appointed by the Depositor (the
- -----------------------
"Securities Registrar") shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 5.08, a register (the "Securities
Register") in which, subject to such reasonable regulations as it may
prescribe, the Securities Registrar shall provide for the registration of
Trust Securities Certificates (subject to Section 5.10 in the case of the
Common Securities Certificates) and registration of transfers and exchanges
of Preferred Securities Certificates as herein provided. The Property
Trustee shall be the initial Securities Registrar; any successor Securities
Registrar shall be appointed by the Administrative Trustee.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to
Section 5.08, the Administrative Trustee shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates representing the same number of Preferred
Securities dated the date of execution by the Administrative Trustee. At
the option of a Holder, Preferred Securities Certificates may be exchanged
for other Preferred Securities Certificates upon surrender of the Preferred
Securities Certificates to be exchanged at the office or agency maintained
pursuant to Section 5.08. The Securities Registrar shall not be required
to register the transfer of any Preferred Securities that have been called
for redemption or after the Liquidation Date.
Preferred Securities presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Administrative Trustee and the
Securities Registrar duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Preferred Securities Certificate
surrendered for registration of transfer or exchange shall be cancelled and
subsequently disposed of by the Property Trustee in accordance with its
customary practice.
No service charge shall be made for any registration of transfer
or exchange of Preferred Securities, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of
Preferred Securities.
22
<PAGE>
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust
------------------------------------------
Securities Certificates. If (a) any mutilated Trust Securities Certificate
- -----------------------
shall be surrendered to the Securities Registrar, or if the Securities
Registrar shall receive evidence to its satisfaction of the destruction,
loss or theft of any Trust Securities Certificate, and (b) there shall be
delivered to the Securities Registrar and the Administrative Trustee such
security or indemnity as may be required by them to hold the Securities
Registrar and the Trust harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustee, on behalf of the Trust shall execute
and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new
Trust Securities Certificate of like tenor. In connection with the
issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustee or the Securities Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive
evidence of an undivided beneficial interest in the assets of the Trust, as
if originally issued, whether or not the lost, stolen or destroyed Trust
Securities Certificate shall be found at any time.
Section 5.06. Persons Deemed Securityholders. Prior to due
------------------------------
presentation of a Trust Security Certificate for registration of transfer,
the Administrative Trustee or the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered
in the Securities Register as the owner of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and neither the Trustees nor the Securities Registrar
shall be bound by any notice to the contrary.
Section 5.07. Access to List of Securityholders' Names and
--------------------------------------------
Addresses. In the event that the Property Trustee is no longer the
- ---------
Securities Registrar, the Administrative Trustee or the Depositor shall
furnish or cause to be furnished (a) to the Property Trustee, quarterly not
later than 10 days prior to a Distribution Date, a list, in such form as
the Property Trustee may reasonably require, of the names and addresses of
the Securityholders as of the most recent record date and (b) to the
Property Trustee, promptly after receipt by the Administrative Trustee or
the Depositor of a request therefor from the Property Trustee in order to
enable the Paying Agent to pay Distributions in accordance with Section
4.01 hereof), in each case to the extent such information is in the
possession or control of the Administrative Trustee or the Depositor and is
not identical to a previously supplied list or has not otherwise been
received by the Property Trustee. The rights of Securityholders to
communicate with other Securityholders with respect to their rights under
this
23
<PAGE>
Trust Agreement or under the Trust Securities, and the corresponding rights
of the Property Trustee shall be as provided in the Trust Indenture Act.
Each Holder, by receiving and holding a Trust Securities Certificate, shall
be deemed to have agreed not to hold the Depositor, the Property Trustee,
the Administrative Trustee or the Delaware Trustee accountable by reason of
the disclosure of its name and address, regardless of the source from which
such information was derived.
Section 5.08. Maintenance of Office or Agency. The Property
-------------------------------
Trustee shall maintain in Newark, New Jersey, an office or offices or
agency or agencies where Preferred Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be
served. The Property Trustee shall give prompt written notice to the
Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency, which shall initially be
at the Corporate Trust Office of the Property Trustee.
Section 5.09. Appointment of Paying Agent. The Paying Agent
---------------------------
shall make Distributions to Securityholders from the Payment Account and
shall report the amounts of such Distributions to the Property Trustee and
the Administrative Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Payment Account for the purpose of making
Distributions. The Administrative Trustee may revoke such power and remove
the Paying Agent, provided that such revocation and removal with respect to
the sole Paying Agent shall not become effective until the appointment of a
successor. The Paying Agent shall initially be the Property Trustee, and
any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustee and the Depositor. Any Person acting as Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Administrative Trustee and the Depositor, and, if applicable,
the Property Trustee, provided that such resignation with respect to the
sole Paying Agent shall not become effective until the appointment of a
successor. In the event that the Property Trustee shall no longer be the
Paying Agent or a successor Paying Agent shall resign or its authority to
act be revoked, the Administrative Trustee shall appoint a successor that
is acceptable to the Property Trustee (in the case of any other Paying
Agent) and the Depositor to act as Paying Agent (which shall be a bank or
trust company and have a combined capital and surplus of at least
$50,000,000). The Administrative Trustee shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative
Trustee to execute and deliver to the Trustees an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the
Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in
24
<PAGE>
trust for the benefit of the Securityholders entitled thereto until such
sums shall be paid to such Securityholders. The Paying Agent shall return
all of such sums remaining unclaimed to the Property Trustee and upon
removal of a Paying Agent such Paying Agent shall also return such sums in
its possession to the Property Trustee. The provisions of Sections 7.01,
7.03 and 7.06 shall apply to the Property Trustee also in its role as
Paying Agent, for so long as the Property Trustee shall act as Paying Agent
and, to the extent applicable, to any other Paying Agent appointed
hereunder. Any reference in this Trust Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Section 5.10. No Transfer of Common Securities by Depositor. To
---------------------------------------------
the fullest extent permitted by law, any attempted transfer of the Common
Securities shall be void. The Administrative Trustee shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE". By execution of this Trust
Agreement, the Depositor agrees to the foregoing provisions.
Section 5.11. Book-Entry Preferred Securities Certificates;
---------------------------------------------
Common Securities Certificate.
- -----------------------------
(a) The Preferred Securities, upon original issuance on the
Closing Date, will not be engraved but will be issued in the form of one or
more printed or typewritten Book-Entry Preferred Securities Certificates,
to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Book-Entry Preferred
Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial
Clearing Agency.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a
definitive Common Securities Certificate.
Section 5.12. Definitive Preferred Securities Certificates. If
--------------------------------------------
(a) the Depositor advises the Trustees in writing that the Clearing Agency
is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option
advises the Trustees in writing that it elects to terminate the book-entry
system through the Clearing Agency or (c) an Event of Default occurs and is
continuing, then the Administrative Trustee shall issue Definitive
Preferred Securities Certificates. Upon surrender to the Administrative
Trustee of the Preferred Securities Certificate or Certificates
representing the Book-Entry Preferred Securities Certificates by the
Clearing Agency, accompanied by registration instructions, the
Administrative Trustee shall execute
25
<PAGE>
and deliver the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities
Registrar nor the Trustees shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. The Definitive Preferred Securities
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Administrative
Trustee, as evidenced by the execution thereof by the Administrative
Trustee.
Section 5.13. Rights of Securityholders. The Securityholders
-------------------------
shall not have any right or title to the Trust Property other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described
below. The Trust Securities shall be personal property giving only the
rights specifically set forth therein and in this Trust Agreement. The
Trust Securities shall have no preemptive or similar rights and when issued
and delivered to Securityholders against payment of the purchase price
therefor will be fully paid and nonassessable by the Trust. The Holders of
the Trust Securities, in their capacities as such, shall be entitled to the
same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights.
----------------------------
(a) Except as provided herein and in the Indenture and as
otherwise required by law, no Holder of Trust Securities shall have any
right to vote or in any manner otherwise control the administration,
operation and management of the Trust or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of
the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) The Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture Trustee
with respect to such Debentures, (ii) waive any past default which may be
waived under Section 6.04 of the Indenture, (iii) exercise any right to
rescind or annul an acceleration of the principal of all the Debentures or
(iv) consent to any amendment or modification of the Indenture, where such
26
<PAGE>
consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
Outstanding Preferred Securities; provided, however, that where such
-------- -------
consent or approval under the Indenture would require the consent or
approval of each holder of Debentures affected thereby, no such consent or
approval shall be given by the Property Trustee without the prior written
consent of each Holder of Outstanding Preferred Securities. The Trustees
shall not revoke any action previously authorized or approved by a vote of
the Holders of Preferred Securities, except by a subsequent vote of the
Holders of Preferred Securities. The Property Trustee shall notify all
Holders of the Preferred Securities of any notice received from the
Debenture Trustee as a result of the Trust being the holder of the
Debentures. In addition to obtaining the foregoing approvals of the
Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an
Opinion of Counsel experienced in such matters to the effect that the Trust
will not be classified as an association taxable as a corporation or
partnership for United States Federal income tax purposes on account of
such action and will continue to be classified as a grantor trust for
United States Federal income tax purposes.
(c) Subject to Section 10.02(c) hereof, if any proposed
amendment to the Trust Agreement provides for, or the Trustees otherwise
propose to effect, (i) any action that would adversely affect in any
material respect the powers, preferences or special rights of the Preferred
Securities, whether by way of amendment to this Trust Agreement or
otherwise, or (ii) the winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities will be entitled to vote on such amendment
or proposal and such amendment or proposal shall not be effective except
with the approval of the Holders of at least a majority in Liquidation
Amount of the Outstanding Preferred Securities.
Section 6.02. Notice of Meetings. Notice of all meetings of the
------------------
Preferred Securityholders, stating the time, place and purpose of the
meeting, shall be given by the Property Trustee pursuant to Section 10.08
to each Preferred Securityholder of record, at his/her registered address,
at least 15 days and not more than 90 days before the meeting. At any such
meeting, any business properly before the meeting may be so considered
whether or not stated in the notice of the meeting. Any adjourned meeting
may be held as adjourned without further notice.
Section 6.03. Meetings of Preferred Securityholders. No annual
-------------------------------------
meeting of Securityholders is required to be held. The Administrative
Trustee, however, shall call a meeting of Securityholders to vote on any
matter upon the written request of the Holders of at least 25% of the
aggregate Liquidation Amount of
27
<PAGE>
the Outstanding Preferred Securities and the Administrative Trustee or the
Property Trustee may, at any time in their discretion, call a meeting of
Preferred Securityholders to vote on any matters as to which the Preferred
Securityholders are entitled to vote.
Holders of at least 50% of the aggregate Liquidation Amount of
the Outstanding Preferred Securities, present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote of the
Holders of at least a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Securities present, either in person or by proxy, at
such meeting shall constitute the action of the Securityholders, unless
this Trust Agreement requires a greater number of affirmative votes.
Section 6.04. Voting Rights. A Securityholder shall be entitled
-------------
to one vote for each Trust Security in respect of any matter as to which
such Securityholder is entitled to vote.
Section 6.05. Proxies, etc. At any meeting of Securityholders,
-------------
any Securityholder entitled to vote thereat may vote by proxy, provided
that no proxy shall be voted at any meeting unless it shall have been
placed on file with the Administrative Trustee, or with such other officer
or agent of the Trust as the Administrative Trustee may direct, for
verification prior to the time at which such vote shall be taken. Pursuant
to a resolution of the Property Trustee, proxies may be solicited in the
name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When
Trust Securities are held jointly by several Persons, any one of them may
vote at any meeting in person or by proxy in respect of such Trust
Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in
respect of such Trust Securities. A proxy purporting to be executed by or
on behalf of a Securityholder shall be deemed valid unless challenged at or
prior to its exercise, and the burden of proving invalidity shall rest on
the challenger. No proxy shall be valid more than three years after its
date of execution.
Section 6.06. Securityholder Action by Written Consent. Any
----------------------------------------
action which may be taken by Securityholders at a meeting may be taken
without a meeting if Holders of the proportion of the Outstanding Preferred
Securities required to approve such action shall consent to the action in
writing.
Section 6.07. Record Date for Voting and Other Purposes. For
-----------------------------------------
the purposes of determining the Securityholders who are
28
<PAGE>
entitled to notice of and to vote at any meeting or by written consent, or
for the purpose of any other action, the Administrative Trustee may from
time to time fix a date, not more than 90 days prior to the date of any
meeting of Securityholders as a record date for the determination of the
identity of the Securityholders for such purposes.
Section 6.08. Acts of Securityholders. Any request, demand,
-----------------------
authorization, direction, notice, consent, waiver or other action provided
or permitted by this Trust Agreement to be given, made or taken by
Securityholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Securityholders in person or
by an agent duly appointed in writing; and, except as otherwise expressly
provided herein, such action shall become effective when such instrument or
instruments are delivered to the Administrative Trustee. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Securityholders signing
such instrument or instruments. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 7.02) conclusive,
if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him/her the
execution thereof. Where such execution is by a signer acting in a
capacity other than his/her individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his/her authority. The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other act of the Securityholder of any Trust Security shall bind
every future Securityholder of the same Trust Security and the
Securityholder of every Trust Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustees or the Trust
in reliance thereon, whether or not notation of such action is made upon
such Trust Security.
29
<PAGE>
Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount
of such Trust Security or by one or more duly appointed agents, each of
which may do so pursuant to such appointment with regard to all or any part
of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustee or among such Securityholders or Trustees with
respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such
Securityholder or Trustee under this Article VI, then the determination of
such matter by the Property Trustee shall be conclusive with respect to
such matter.
Section 6.09. Inspection of Records. Upon reasonable notice to
---------------------
the Administrative Trustee and the Property Trustee, the records of the
Trust shall be open to inspection by Securityholders during normal business
hours for any purpose reasonably related to such Securityholder's interest
as a Securityholder.
ARTICLE VII
The Trustees
Section 7.01. Certain Duties and Responsibilities.
-----------------------------------
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee,
also by the Trust Indenture Act. The Property Trustee, other than during
the occurrence and continuance of an Event of Default, undertakes to
perform only such duties as are specifically set forth in this Trust
Agreement and, upon an Event of Default, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of
his/her own affairs. The Trustees shall have all the privileges, rights
and immunities provided by the Delaware Business Trust Act.
Notwithstanding the foregoing, no provision of this Trust Agreement shall
require the Trustees to expend or risk their own funds or otherwise incur
any financial liability in the performance of any of their duties
hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of
this Trust Agreement relating to the conduct or affecting the liability of
or affording protection to the Trustees shall be subject to the provisions
of this Section. Nothing in this Trust Agreement shall be construed to
release the Property Trustee from
30
<PAGE>
liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct. To the extent that, at law or in equity,
the Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders, the
Administrative Trustee shall not be liable to the Trust or to any
Securityholder for the Administrative Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of
the Administrative Trustee otherwise existing at law or in equity, are
agreed by the Depositor and the Securityholders to replace such other
duties and liabilities of the Administrative Trustee.
(b) All payments made by the Property Trustee or any other
Paying Agent in respect of the Trust Securities shall be made only from the
income and proceeds from the Trust Property. Each Securityholder, by its
acceptance of a Trust Security, agrees that (i) it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to it as herein provided and (ii) the Trustees are not
personally liable to it for any amount distributable in respect of any
Trust Security or for any other liability in respect of any Trust Security.
This Section 7.01(b) does not limit the liability of the Trustees expressly
set forth elsewhere in this Trust Agreement or, in the case of the Property
Trustee, in the Trust Indenture Act.
Section 7.02. Notice of Defaults; Direct Action by
------------------------------------
Securityholders. Within 90 days after the occurrence of any Event of
- ---------------
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.08, notice
of such Event of Default to the Securityholders, the Administrative Trustee
and the Depositor, unless such Event of Default shall have been cured or
waived. If the Property Trustee fails to enforce its rights under this
Trust Agreement or the Indenture, to the fullest extent permitted by law
and subject to the terms of this Trust Agreement and the Indenture, any
Securityholder may, after such Securityholder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding
directly against any Person to enforce the Property Trustee's rights under
this Trust Agreement or the Indenture without first instituting a legal
proceeding against the Property Trustee or any other Person. In addition,
to the extent that any action under the Indenture is entitled to be taken
by the holders of at least a specified percentage of the principal amount
of the outstanding Debentures, Holders of at least the same percentage of
the Liquidation Amount of the Outstanding Preferred Securities may also
take such action in the name of the Trust if such action is not taken by
the Property Trustee after written notice from such Holders of a demand for
such action satisfying any requirements of the Indenture or this Trust
Agreement, including the requirements of Section 7.03(d) hereof. To the
fullest extent permitted by law,
31
<PAGE>
the foregoing shall be in addition to and not in limitation of any direct
rights provided to the Holders of the Preferred Securities under the terms
of the Indenture, including the right, without any notice or other demand
on the Property Trustee, to institute suit for the enforcement of any
payment of the principal of and any premium and interest on Debentures as
provided in Section 6.07 of the Indenture.
Section 7.03. Certain Rights of Property Trustee. Subject to
----------------------------------
the provisions of Section 7.01:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution, Opinion
of Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) if, other than during the occurrence and continuance of an
Event of Default, (i) in performing its duties under this Trust Agreement,
the Property Trustee is required to decide between alternative courses of
action or (ii) in construing any of the provisions in this Trust Agreement,
the Property Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein or (iii) the Property Trustee is unsure
of the application of any provision of this Trust Agreement, then, except
as to any matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken. The Property Trustee
shall take such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Depositor; provided, however, that if the Property Trustee does not
-------- -------
receive such instructions of the Depositor within ten Business Days after
it has delivered such notice, or such reasonably shorter period of time set
forth in such notice (which to the extent practicable shall not be less
than two Business Days), it may, but shall be under no duty to, take or
refrain from taking such action not inconsistent with this Trust Agreement
as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no
liability except for its own negligent action, its own negligent failure to
act or its own willful misconduct;
(c) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel or other
experts with respect to legal matters or advice
32
<PAGE>
within the scope of such experts' area of expertise shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(d) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement
at the request or direction of any of the Securityholders pursuant to this
Trust Agreement, unless such Securityholders shall have offered to the
Property Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(e) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit; and
(f) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys and the Property Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
Section 7.04. Not Responsible for Recitals or Issuance of
-------------------------------------------
Securities. The recitals contained herein and in the Trust Securities
- ----------
Certificates shall be taken as the statements of the Trust, and the
Trustees do not assume any responsibility for their correctness. The
Trustees shall not be accountable for the use or application by the
Depositor of the proceeds of the Debentures.
Section 7.05. May Hold Securities. Any Trustee or any other
-------------------
agent of any Trustee or the Trust, in its individual or any other capacity,
may become the owner or pledgee of Trust Securities and, subject to
Sections 7.08 and 7.13 and, except as provided in the definition of the
term Outstanding in Article I, may otherwise deal with the Trust with the
same rights it would have if it were not a Trustee or such other agent.
Section 7.06. Compensation; Indemnity; Fees. The Depositor
-----------------------------
agrees:
(a) to pay to the Trustees from time to time such compensation
as shall have been agreed in writing with the Depositor for all services
rendered by them hereunder (which
33
<PAGE>
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its own
negligent action, its own negligent failure to act or its own wilful
misconduct (or, in the case of the Administrative Trustee, any such
expense, disbursement or advance as may be attributable to his/her gross
negligence); and
(c) to indemnify each of the Trustees or any predecessor Trustee
for, and to hold the Trustees harmless against, any and all loss, damage,
claims, liability, penalty or expense including taxes (other than taxes
based on the income of such Trustee) incurred without its own negligent
action, its own negligent failure to act or its wilful misconduct (or, in
the case of the Administrative Trustees, incurred without gross negligence
or bad faith), arising out of or in connection with the acceptance or
administration of this Trust Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
No Trustee may claim any Lien or charge on any Trust Property as
a result of any amount due pursuant to this Section 7.06.
The provisions of this Section 7.06 shall survive the termination
of this Trust Agreement.
Section 7.07. Corporate Property Trustee Required; Eligibility
------------------------------------------------
of Trustees.
- -----------
(a) There shall at all times be a Property Trustee hereunder.
The Property Trustee shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus
of at least $50,000,000. If any such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect
to the Trust Securities shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
34
<PAGE>
(b) There shall at all times be one or more Administrative
Trustees hereunder. Each Administrative Trustee shall be either a natural
person who is at least 21 years of age or a legal entity that shall act
through one or more persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The
Delaware Trustee shall either be (i) a natural person who is at least 21
years of age and a resident of the State of Delaware or (ii) a legal entity
with its principal place of business in the State of Delaware and that
otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
Section 7.08. Conflicting Interests. If the Property Trustee
---------------------
has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Property Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Trust Agreement.
Section 7.09. Co-Trustees and Separate Trustee. Unless an Event
--------------------------------
of Default shall have occurred and be continuing, at any time or times, for
the purpose of meeting the legal requirements of the Trust Indenture Act or
of any jurisdiction in which any part of the Trust Property may at the time
be located, the Depositor and the Administrative Trustee (and if more than
one Administrative Trustee, by agreed action of the majority of such
Trustees) shall have power (i) to appoint, and upon the written request of
the Administrative Trustee the Depositor shall for such purpose join with
the Administrative Trustee in the execution, delivery, and performance of
all instruments and agreements necessary or proper to appoint one or more
Persons approved by the Property Trustee either to act as co-trustee,
jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate trustee of
any such property, in either case with such powers as may be provided in
the instrument of appointment, and (ii) to vest in such Person or Persons
in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section.
If the Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall
have power to make such appointment. Any co-trustee or separate trustee
appointed pursuant to this Section shall either be (i) a natural person who
is at least 21 years of age and a resident of the United States or (ii) a
legal entity with its principal place of business in the United States that
shall act through one or more persons authorized to bind such entity.
35
<PAGE>
Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming
to such co-trustee or separate trustee such property, title, right, or
power, any and all such instruments shall, on request, be executed,
acknowledged, and delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
(a) The Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustee or separate
trustee.
(b) The rights, powers, duties, and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Property Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties
and obligations shall be exercised and performed by such co-trustee or
separate trustee.
(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case an Event of Default under the
Indenture has occurred and is continuing, the Property Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Depositor. Upon the
written request of the Property Trustee, the Depositor shall join with the
Property Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee,
or any other trustee hereunder.
36
<PAGE>
(e) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
Section 7.10. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
No resignation or removal of any Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 7.11.
Subject to the immediately preceding paragraph, any Trustee may
resign at any time with respect to the Trust Securities by giving written
notice thereof to the Securityholders.
Unless an Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Holder of the Common
Securities. If an Event of Default shall have occurred and be continuing,
the Property Trustee or the Delaware Trustee, or both of them, may be
removed at such time only by Act of the Holders of at least a majority in
Liquidation Amount of the Outstanding Preferred Securities, delivered to
such Trustee (in its individual capacity and on behalf of the Trust). The
Administrative Trustee may only be removed by the Holder of Common
Securities at any time.
If the instrument of acceptance by the successor Trustee required
by Section 7.11 shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation or removal, the Trustee may
petition, at the expense of the Depositor, any court of competent
jurisdiction for the appointment of a successor Trustee.
If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee
for any cause, at a time when no Event of Default shall have occurred and
be continuing, the Holder of Common Securities, by Act of the Holder of
Common Securities delivered to the retiring Trustee, shall promptly appoint
a successor Trustee or Trustees and the Trust, and the retiring Trustee
shall comply with the applicable requirements of Section 7.11. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee or the Delaware
Trustee, as the case may be, at a time when an Event of Default has
occurred and is continuing, the Holders of Preferred Securities, by Act of
the Securityholders of at least a majority in Liquidation Amount of the
Outstanding Preferred Securities delivered to the retiring Trustee, shall
promptly appoint a
37
<PAGE>
successor Trustee or Trustees, and such successor Trustee shall comply with
the applicable requirements of Section 7.11. If any Administrative Trustee
shall resign, be removed or become incapable of acting as Administrative
Trustee at a time when an Event of Default shall have occurred and be
continuing, the Holder of Common Securities shall appoint a successor
Administrative Trustee. If no successor Trustee shall have been so
appointed by the Holder of Common Securities or the Holders of Preferred
Securities and accepted appointment in the manner required by Section 7.11,
any Securityholder who has been a Securityholder of Trust Securities for at
least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment
of a successor Trustee.
The Property Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to
all Securityholders in the manner provided in Section 10.08 and shall give
notice to the Depositor. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office if it is
the Property Trustee.
Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrative Trustee or Delaware
Trustee who is a natural person dies or becomes, in the opinion of the
Depositor, incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (a) the unanimous act of the
remaining Administrative Trustees if there are at least two of them or (b)
otherwise by the Depositor (with the successor in each case being a Person
who satisfies the eligibility requirements for Administrative Trustee or
for the Delaware Trustee, as the case may be, set forth in Section 7.07).
Section 7.11. Acceptance of Appointment by Successor. In case
--------------------------------------
of the appointment hereunder of a successor Trustee, the retiring Trustee
and each successor Trustee shall execute and deliver to the Trust and the
retiring Trustee an amendment hereto wherein each successor Trustee shall
accept such appointment and which (a) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in,
each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee and (b) shall add to or change any of the provisions of
this Trust Agreement as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Trustees co-trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Trustee shall become effective to the extent
38
<PAGE>
provided therein and each such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee and the Trust; but, on request of the
Trust or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all Trust Property, all
proceeds thereof and money held by such retiring Trustee hereunder.
Upon request of any such successor Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
Section 7.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any Person into which any of the Trustees may be merged or
- --------
converted or with which it may be consolidated, or any Person resulting
from any merger, conversion or consolidation to which such Trustee shall be
a party, or any Person succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee
hereunder, provided such Person shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
Section 7.13. Preferential Collection of Claims Against
-----------------------------------------
Depositor or Trust. If and when the Property Trustee or the Delaware
- ------------------
Trustee shall be or become a creditor (whether directly or indirectly,
secured or unsecured) of the Depositor or the Trust (or any other obligor
upon the Debentures or the Trust Securities), including under the terms of
Section 7.05 hereof, the Property Trustee or the Delaware Trustee, as the
case may be, shall be subject to and shall take all actions necessary in
order to comply with the provisions of the Trust Indenture Act regarding
the collection of claims against the Depositor or Trust (or any such other
obligor).
Section 7.14. Reports by Property Trustee. The Property Trustee
---------------------------
shall transmit to Holders such reports concerning the Property Trustee and
its actions under this Trust Agreement as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the
Property Trustee shall, within 60 days after each May 31 following the date
of this Trust Agreement deliver to Holders a brief report, dated as of such
May 31, which complies with the provisions of such Section 313(a).
39
<PAGE>
A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each stock
exchange upon which any Preferred Securities are then listed, with the
Commission and with the Trust. The Trust will promptly notify the Property
Trustee when any Preferred Securities are listed on any stock exchange.
Section 7.15. Reports to the Property Trustee. The Depositor
-------------------------------
and the Administrative Trustee on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by
Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 7.16. Evidence of Compliance with Conditions Precedent.
------------------------------------------------
The Depositor and the Administrative Trustee on behalf of the Trust shall
provide to the Property Trustee evidence of compliance with the conditions
precedent, if any, provided for in this Trust Agreement that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act.
Section 7.17. Statements Required in Officer's Certificate and
------------------------------------------------
Opinion of Counsel.
- ------------------
Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Trust
Agreement shall include:
(1) a statement that each Person making such Officer's
Certificate or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officer's Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to enable
such Person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement that, in the opinion of such Person, such
covenant or condition has been complied with; provided, however, that with
respect to matters of fact not involving any legal conclusion, an Opinion
of Counsel may rely on an Officer's Certificate or certificates of public
officials.
40
<PAGE>
Section 7.18. Number of Trustees.
------------------
(a) The number of Trustees shall be three, provided that the
Holder of all of the Common Securities by written instrument may increase
and, if increased, may decrease the number of Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to Section
7.18(a), or if the number of Trustees is increased pursuant to Section
7.18(a), a vacancy shall occur. The vacancy shall be filled with a Trustee
appointed in accordance with Section 7.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul the Trust. Whenever a vacancy shall occur, until such
vacancy is filled by the appointment of an Administrative Trustee in
accordance with Section 7.10, the Administrative Trustees in office,
regardless of their number (and notwithstanding any other provision of this
Trust Agreement), shall have all the powers granted to the Administrative
Trustee and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
Section 7.19. Delegation of Power.
-------------------
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any natural person over the age
of 21 his/her power for the purpose of executing any documents contemplated
in Section 2.07(a), including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing;
and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number, if there is more than one
Administrative Trustee, or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the
names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as
set forth herein.
Section 7.20. Voting. Except as otherwise provided in this
------
Trust Agreement, the consent or vote of the Trustees shall be approved by
not less than a majority of the Administrative Trustees.
41
<PAGE>
ARTICLE VIII
Termination and Liquidation
Section 8.01. Termination Upon Expiration Date. Unless earlier
--------------------------------
terminated, the Trust shall automatically terminate on __________, (the
"Expiration Date"), following the distribution of the Trust Property in
accordance with Section 8.04.
Section 8.02. Early Termination. The first to occur of any of
-----------------
the following events is an "Early Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of the Depositor or an acceleration of the
maturity of the Debentures pursuant to Section 6.02 of the Indenture;
(b) upon the election of the Depositor to liquidate the Trust
and cause the distribution of a Like Amount of Debentures to the Holders of
the Trust Securities;
(c) the redemption of all of the Trust Securities; and
(d) an order for termination of the Trust shall have been
entered by a court of competent jurisdiction.
The election of the Depositor pursuant to Section 8.02 shall be
made by the Depositor giving written notice to the Trustees not less than
30 days prior to the date of distribution of the Debentures. Such notice
shall specify the date of distribution of the Debentures and shall be
accompanied by an Opinion of Counsel that such event will not be a taxable
event to the Holders of the Trust Securities for Federal income tax
purposes.
Section 8.03. Termination. The respective obligations and
-----------
responsibilities of the Trustees and the Trust created and continued hereby
shall terminate upon the latest to occur of the following: (a) the
distribution by the Property Trustee to Securityholders upon the
liquidation of the Trust pursuant to Section 8.04, or upon the redemption
of all of the Trust Securities pursuant to Section 4.02, of all amounts
required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustee,
including the performance of any tax reporting obligations with respect to
the Trust or the Securityholders.
Section 8.04. Liquidation.
-----------
(a) If an Early Termination Event specified in clause (a) or (d)
of Section 8.02 occurs or upon the Expiration Date, the
42
<PAGE>
Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, to each
Securityholder a Like Amount of Debentures, subject to Section 8.04(d). If
an Early Termination Event specified in clause (b) occurs, the Trust shall
be liquidated by the Trustee on the date of distribution of the Debentures
specified by the Depositor in its notice delivered pursuant to Section
8.02. Notice of liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not later than 30 nor more than
60 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities Certificates for
certificates evidencing Debentures, or, if Section 8.04(d) applies, receive
a Liquidation Distribution, as the Administrative Trustee or the Property
Trustee shall deem appropriate.
(b) In order to effect the liquidation of the Trust and
distribution of the Debentures to Securityholders, the Property Trustee
either itself acting as exchange agent or through the appointment of a
separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.02(c) or 9.04(d) applies, on or after
the Liquidation Date, (i) the Trust Securities will no longer be deemed to
be Outstanding, (ii) certificates representing a Like Amount of Debentures
will be issued to Holders of Trust Securities Certificates, upon surrender
of such certificates to the Administrative Trustee or its agent for
exchange, (iii) the Depositor shall use its best efforts to have the
Debentures listed on the New York Stock Exchange or such other exchange as
the Preferred Securities are then listed and shall take any reasonable
action necessary to effect the distribution of the Debentures, (iv) any
Trust Securities Certificates not so surrendered for exchange will be
deemed to represent a Like Amount of Debentures, accruing interest at the
rate provided for in the Debentures from the last Distribution Date on
which a Distribution was made on such Trust
43
<PAGE>
Certificates until such certificates are so surrendered (and until such
certificates are so surrendered, no payments or interest or principal will
be made to Holders of Trust Securities Certificates with respect to such
Debentures) and (v) all rights of Securityholders holding Trust Securities
will cease, except the right of such Securityholders to receive Debentures
upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of
this Section 8.04, whether because of an order for termination entered by a
court of competent jurisdiction or otherwise, distribution of the
Debentures in the manner provided herein is determined by the Property
Trustee not to be practical, the Trust Property shall be liquidated, and
the Trust shall be wound-up or terminated, by the Property Trustee in such
manner as the Property Trustee determines. In such event, on the date of
the winding-up or other termination of the Trust, Securityholders will be
entitled to receive out of the assets of the Trust available for
distribution to Securityholders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to
the Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such winding-up or termination,
the Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts
payable by the Trust on the Trust Securities shall be paid on a pro rata
basis (based upon Liquidation Amounts). The Holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any
such winding-up or termination pro rata (determined as aforesaid) with
Holders of Preferred Securities, except that, if a Debenture Event of
Default has occurred and is continuing, the Preferred Securities shall have
a priority over the Common Securities, and no Liquidation Distribution will
be paid to the Holders of the Common Securities unless and until receipt by
the Holder of the Preferred Securities of the entire Liquidation
Distribution payable in respect thereof.
ARTICLE IX
Mergers, Etc.
Section 9.01. Mergers, Consolidations, Amalgamations or
-----------------------------------------
Replacements of the Trust. The Trust may not merge with or into,
- -------------------------
consolidate, amalgamate, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation
or other body, except as described below. The Trust may, at the request of
the Depositor, with the consent of the
44
<PAGE>
Administrative Trustee and without the consent of the Holders of the
Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by a trust organized as such under the laws of any State;
provided, that (i) such successor entity either (a) expressly assumes all
of the obligations of the Trust with respect to the Preferred Securities or
(b) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank with respect to Distributions and payments upon
liquidation and redemption, (ii) the Depositor expressly appoints a trustee
of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Debentures, (iii) the Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any,
(iv) such merger, consolidation, amalgamation or replacement does not cause
the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization,
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Preferred Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose substantially
identical to that of the Trust, (vii) prior to such merger, consolidation,
amalgamation or replacement, the Depositor has received an Opinion of
Counsel to the effect that (a) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such
merger, consolidation, amalgamation or replacement, neither the Trust nor
such successor entity will be required to register as an investment company
under the 1940 Act and (viii) the Depositor or any permitted successor
assignee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee and this Trust
Agreement. Notwithstanding the foregoing, the Trust shall not, except with
the consent of all Holders in Liquidation Amount of the Preferred
Securities, merge with or into, consolidate, amalgamate, or be replaced by
any other entity or permit any other entity or to consolidate, amalgamate,
merge with or into, or replace it if such consolidation, amalgamation,
merger or replacement would cause the Trust or the successor entity to be
classified as other than a grantor trust for United States Federal income
tax purposes.
45
<PAGE>
ARTICLE X
Miscellaneous Provisions
Section 10.01. Limitation of Rights of Securityholders. The
---------------------------------------
death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or
any Securityholder for such Person, to claim an accounting, take any action
or bring any proceeding in any court for a partition or winding-up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
Section 10.02. Amendment.
---------
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, to
cure any ambiguity, defect or inconsistency or make any other change which
does not adversely affect in any material respect the interests of any
Holder of Preferred Securities. Any amendments of this Trust Agreement
pursuant to Section 10.02(a) shall become effective when notice thereof is
given to the Securityholders.
(b) Except as provided in Section 10.02(a) and 10.02(c) hereof,
any provision of this Trust Agreement may be amended by the Trustees and
the Depositor with the consent of Holders of at least a majority of the
Liquidation Amount of the Outstanding Preferred Securities.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected Securityholder
(such consent being obtained in accordance with Section 6.03 or 6.06
46
<PAGE>
hereof), this Trust Agreement may not be amended to (i) change the amount,
timing, or currency of any Distribution or Liquidation Distribution on the
Trust Securities or otherwise adversely affect the amount or method of
payment of any Distribution or Liquidation Distribution required to be made
in respect of the Trust Securities as of a specified date; (ii) change the
redemption provisions of the Trust Securities; (iii) restrict the right of
a Securityholder to institute suit for the enforcement of any such payment
contemplated in (i) or (ii) above on or after the related date; (iv) modify
the first sentence of Section 2.06 hereof; (v) authorize or issue any
beneficial interest in the Trust other than as contemplated by this Trust
Agreement as of the date hereof; or (vi) affect the limited liability of
any Holder of Preferred Securities, and, notwithstanding any other
provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.03 or 6.06
hereof), paragraphs (b) and (c) of this Section 10.02 may not be amended.
(d) Notwithstanding any other provisions of this Trust
Agreement, no amendment to this Trust Agreement shall be made without
receipt by the Trust of an Opinion of Counsel experienced in such matters
to the effect that such amendment will not affect the Trust's status as a
grantor trust for United States Federal income tax purposes or its
exemption from regulation as an "investment company" under the 1940 Act.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust Agreement may
not be amended in a manner which imposes any additional obligation on the
Depositor.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrative Trustee shall promptly provide to the Depositor a
copy of such amendment.
(g) In executing any amendment to the Trust Agreement, the
Property Trustee shall be entitled to receive, and (subject to Section
8.01) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by
this Trust Agreement. Except as contemplated by Section 7.11, the Trustee
may, but shall not be obligated to, enter into any amendment to this Trust
Agreement which affects the Trustee's own rights, duties or immunities
under this Trust Agreement or otherwise.
Section 10.03. Severability. In case any provision in this
------------
Trust Agreement or in the Trust Securities Certificates shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 10.04. Governing Law. THIS TRUST AGREEMENT AND THE
-------------
RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE
TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
Section 10.05. Payments Due on Non-Business Day. If the date
--------------------------------
fixed for any payment on any Trust Security shall be a day which is not a
Business Day, then such payment need not be made on such date but may be
made on the next succeeding day which is a Business Day (except as
otherwise provided therein, with the same force and effect as though made
on the date fixed for such payment), and no interest shall accumulate
thereon for the period after such date.
47
<PAGE>
Section 10.06. Successors and Assigns. This Trust Agreement
----------------------
shall be binding upon and shall inure to the benefit of any successor to
the Trust or successor Trustee or both, including any successor by
operation of law. Except in connection with a consolidation, merger or
sale involving the Depositor that is permitted under Article VII of the
Indenture and pursuant to which the assignee agrees in writing to perform
the Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.
Section 10.07. Headings. The Article and Section headings are
--------
for convenience only and shall not affect the construction of this Trust
Agreement.
Section 10.08. Reports, Notices and Demands. Any report,
----------------------------
notice, demand or other communication which by any provision of this Trust
Agreement is required or permitted to be given or served to or upon any
Securityholder or the Depositor may be given or served in writing by
deposit thereof, first-class postage prepaid in the United States mail,
hand delivery or facsimile transmission, in each case, addressed, (a) in
the case of a Holder of a Preferred Security, to such Holder of a Preferred
Security as such Securityholder's name and address may appear on the
Securities Register; and (b) in the case of the Holder of a Common Security
or the Depositor, to Public Service Electric and Gas Company, 80 Park
Plaza, Newark, New Jersey 07101, Attention: Treasurer, facsimile no.:
_____. Such notice, demand or other communication to or upon a
Securityholder shall be deemed to have been sufficiently given or made, for
all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision
of this Trust Agreement is required or permitted to be given or served to
or upon the Trust, the Property Trustee or the Administrative Trustee shall
be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee to First Union
National Bank, ___________ Attention: ________; (b) with respect to the
Delaware Trustee, to 1225 King Street, Wilmington, Delaware 19801
Attention: Corporate Trust Department; and (c) with respect to the
Administrative Trustee, to the address above for notices to the Depositor,
marked "Attention: Administrative Trustee of PSE&G Capital Trust _ c/o
____________." Such notice, demand or other communication to or upon the
Trust or the Property Trustee shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Trust or the
Property Trustee.
Section 10.09. Agreement Not to Petition. Each of the Trustees
-------------------------
and the Depositor agree for the benefit of the Securityholders that, until
at least one year and one day after the Trust has been terminated in
accordance with Article VIII, they
48
<PAGE>
shall not file, or join in the filing of, a petition against the Trust
under any Bankruptcy Laws or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor or any of the Trustees takes action in violation of this Section
10.09, the Property Trustee agrees, for the benefit of Securityholders,
that at the expense of the Depositor, it shall file an answer with the
bankruptcy court or otherwise properly contest the filing of such petition
by the Depositor or any of the Trustees, as applicable, against the Trust
or the commencement of such action and raise the defense that the Depositor
has agreed in writing not to take such action and should be stopped and
precluded therefrom and such other defenses, if any, as counsel for the
Property Trustee or the Trust may assert. The provisions of this Section
10.09 shall survive the termination of this Trust Agreement.
Section 10.10. Trust Indenture Act; Conflict with Trust
----------------------------------------
Indenture Act.
- -------------
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Trust Agreement
and shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such
required provision shall control. If any provision of this Trust Agreement
modifies or excludes any provision of the Trust Indenture Act which may be
so modified or excluded, the latter provision shall be deemed to apply to
this Trust Agreement as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee
-------------------------------------------------
and Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY
- -------------
INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL
OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL
CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL
OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS
AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION
PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL
CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH
49
<PAGE>
OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE
BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY,
as Depositor
By:
-------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK, as Property
Trustee
By:
-------------------------------------
Name:
Title:
FIRST UNION BANK OF DELAWARE, as
Delaware Trustee
By:
-------------------------------------
Name:
Title:
----------------------------------------
as Administrative Trustee
Name:
50
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
PSE&G CAPITAL TRUST _
THIS CERTIFICATE OF TRUST of PSE&G Capital Trust _ (the "Trust"),
dated ______________, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act
(12 Del. C. Sec. 3801 et seq.).
------- -------
(i) Name. The name of the business trust being formed hereby
----
is PSE&G Capital Trust _.
(ii) Delaware Trustee. The name and business address of the
----------------
trustee of the Trust in the State of Delaware are First Union Bank of
Delaware, 1225 King Street, Wilmington DE 19801; attn: Corporate Trust
Department.
(iii) Counterparts. This Certificate of Trust may be executed
------------
in one or more counterparts, all of which together shall constitute one and
the same instrument.
(iv) Effective Date. This Certificate of Trust shall be
--------------
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
FIRST UNION NATIONAL BANK, as Trustee
By:
-------------------------------------
Name:
Title:
FIRST UNION BANK OF DELAWARE,
as Trustee
By:
-------------------------------------
Name:
Title:
_____________________________,
as Trustee
Name: Fred F. Saunders
A-1
<PAGE>
EXHIBIT B
__________, ____
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention:
General Counsel's Office
Re: PSE&G Capital Trust _ Preferred Securities
------------------------------------------
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters
relating to the issuance and deposit with The Depository Trust Company
("DTC") of the PSE&G Capital Trust _ _____% Cumulative Quarterly Income
Preferred Securities, Series _ (the "Preferred Securities"), of PSE&G
Capital Trust I, a Delaware business trust (the "Issuer"), created pursuant
to a Trust Agreement between Public Service Electric and Gas Company
("PSE&G"), First Union National Bank, as Property Trustee, the Delaware
Trustee named therein and the Administrative Trustee named therein. The
payment of distributions on the Preferred Securities and payments due upon
liquidation of the Issuer or redemption of the Preferred Securities are
guaranteed by PSE&G, to the extent the Issuer has funds available for the
payment thereof and to the extent set forth in a Guarantee Agreement dated
__________, ____ by PSE&G and backup undertakings relating thereto with
respect to the Preferred Securities. The Issuer proposes to sell the
Preferred Securities to certain Underwriters (the "Underwriters") pursuant
to an Underwriting Agreement dated ________________ by and among the
Underwriters, the Issuer and PSE&G and the Underwriters wish to take
delivery of the Preferred Securities through DTC. First Union National
Bank is acting as transfer agent and registrar with respect to the
Preferred Securities (the "Transfer Agent and Registrar").
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's Rules with respect to
the Preferred Securities, the Issuer and the Transfer Agent and Registrar
make the following representations to DTC:
<PAGE>
1. Prior to the closing of the sale of the Preferred Securities to
the Underwriters, which is expected to occur on or about _____________,
there shall be deposited with DTC one or more global certificates
(individually and collectively, the "Global Certificate") registered in the
name of DTC's nominee, Cede & Co., representing an aggregate of __________
Preferred Securities and bearing the following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
hereon is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer
provides for the voting by holders of the Preferred Securities under
certain limited circumstances. The Issuer shall establish a record date
for such purposes and shall, to the extent possible, give DTC notice of
such record date not less than 15 calendar days in advance of such record
date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the
cancellation of all or any part of the Preferred Securities outstanding,
the Issuer or the Transfer Agent and Registrar shall send DTC a notice of
such event at least 5 business days prior to the effective date of such
event.
4. In the event of distribution on, or an offering or issuance
of rights with respect to, the Preferred Securities outstanding, the Issuer
or the Transfer Agent and Registrar shall send DTC a notice specifying:
(a) the amount of and conditions, if any, applicable to the payment of any
such distribution or any such offering or issuance of rights; (b) any
applicable expiration or deadline date or any date by which any action on
the part of the holders of Preferred Securities is required; and (c) the
date any required notice is to be mailed by or on behalf of the Issuer to
holders of Preferred Securities or published by or on behalf of the Issuer
(whether by mail or publication, the "Publication Date"). Such notice
shall be sent to DTC by a secure means (e.g., legible telecopy, registered
----
or certified mail, overnight delivery) in a timely manner designed to
assure that such notice is in DTC's possession no later than the close of
business on the business day
2
<PAGE>
before the Publication Date. The Issuer or the Transfer Agent and
Registrar will forward such notice either in a separate secure transmission
for each CUSIP number or in a secure transmission of multiple CUSIP numbers
(if applicable) that includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have
a method to verify subsequently the use of such means and the timeliness of
such notice.) The Publication Date shall be not less than 20 calendar days
nor more than 90 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made
on the Preferred Securities, the Issuer or the Transfer Agent and Registrar
will notify DTC's Dividend Department of such payment 5 business days prior
to payment date. Notices to DTC's Dividend Department by telecopy shall be
sent to (212) 709-1723. Such notices by mail or by any other means shall
be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm
DTC's receipt of such telecopy by telephoning the Dividend Department at
(212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the
Publication Date of such notice shall be sent by the Issuer or the Transfer
Agent and Registrar to DTC not less than 30 calendar days prior to such
event by a secure means in the manner set forth in paragraph 4. Such
redemption notice shall be sent to DTC's Call Notification Department at
(516) 227-4164 or (516) 227-4190, and receipt of such notice shall be
confirmed by telephoning (516) 227-4070. Notice by mail or by any other
means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred
Securities, notice specifying the terms of the tender and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC by a secure means and in a timely manner as described in
paragraph 4. Notices to DTC pursuant
3
<PAGE>
to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes) shall be sent, unless
notification to another department is expressly provided for herein, by
telecopy to DTC's Reorganization Department at (212) 709-1093 or
(212) 709-1094 and receipt of such notice shall be confirmed by telephoning
(212) 709-6884, or by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advances sent to DTC shall contain
the CUSIP number or numbers of the Preferred Securities and the
accompanying designation of the Preferred Securities, which, as of the date
of this letter, is "PSE&G Capital Trust _ _____% Cumulative Quarterly
Income Preferred Securities, Series _".
8. Distribution payments or other cash payments with respect to
the Preferred Securities evidenced by the Global Certificate shall be
received by Cede & Co., as nominee of DTC, or its registered assigns in
same day funds on each payment date (or in accordance with existing
arrangements between the Issuer or the Transfer Agent and Registrar and
DTC). Such payments shall be made payable to the order of Cede & Co., and
shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the
Transfer Agent and Registrar to use any other telecopy number or address of
DTC as the number or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other
similar transaction (e.g., tender made and accepted in response to the
----
Issuer's or the Transfer Agent and Registrar's invitation) necessitating a
reduction in the aggregate number of Preferred Securities outstanding
evidenced by a global certificate, DTC, in its discretion: (a) may request
the Issuer or the Transfer Agent and Registrar to issue and countersign a
new global certificate; or (b) may make an appropriate notation on such
global certificate indicating the date and amount of such reduction.
4
<PAGE>
11. DTC may discontinue its services as a securities depositary
with respect to the Preferred Securities at any time by giving reasonable
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and
Registrar the aggregate number of Preferred Securities deposited with it)
and discharging its responsibilities with respect thereto under applicable
law. Under such circumstances, the Issuer may determine to make
alternative arrangements for book-entry settlement for the Preferred
Securities, make available one or more separate global certificates
evidencing Preferred Securities to any Participant having Preferred
Securities credited to its DTC account, or issue definitive Preferred
Securities to the beneficial owners thereof, and in any such case, DTC
agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar and to return the global certificates duly endorsed for transfer
as directed by the Issuer or the Transfer Agent and Registrar, together
with any other documents of transfer reasonably requested by the Issuer or
the Transfer Agent and Registrar.
12. In the event that the Issuer determines that beneficial
owners of the global certificate(s) evidencing Preferred Securities shall
be able to obtain definitive Preferred Securities, the Issuer or the
Transfer Agent and Registrar shall notify DTC of the availability of such
definitive Preferred Securities. In such event, the Issuer or the Transfer
Agent and Registrar shall issue, transfer and exchange definitive Preferred
Securities in appropriate amounts, as required by DTC and others, and DTC
agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar and to return the global certificate(s), duly endorsed for
transfer as directed by the Issuer or the Transfer Agent and Registrar,
together with any other documents of transfer reasonably requested by the
Issuer or the Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same
instrument.
5
<PAGE>
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of the Issuer.
Very truly yours,
PSE&G CAPITAL TRUST _
(As Issuer)
By:
--------------------
Name: Fred F. Saunders, as
Administrative Trustee
_____________________________
(As Transfer Agent and Registrar)
By:
-------------------------------------
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By:
---------------------------
Authorized Officer
6
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number
C-1
Number of Common Securities
__________
Certificate Evidencing Common Securities
of
PSE&G Capital Trust _
_____% Common Securities
(liquidation amount $25 per Common Security)
PSE&G Capital Trust _, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
Public Service Electric and Gas Company (the "Holder") is the registered
owner of ____________________ (__________) common securities of the Trust
representing undivided beneficial interests in the assets of the Trust and
designated as the _____% Common Securities (liquidation amount $25 per
Common Security) (the "Common Securities"). In accordance with Section
5.10 of the Trust Agreement (as defined below) the Common Securities are
not transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Trust dated as of
________________, as the same may be amended from time to time (the "Trust
Agreement"). The Trust will furnish a copy of the Trust Agreement to the
Holder without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, the Administrative Trustee of the Trust has
executed this certificate this _____ day of __________, ____.
PSE&G CAPITAL TRUST _
By:
-------------------------------------
Name:
Administrative Trustee
2
<PAGE>
EXHIBIT D
Certificate Number
_____
Number of Preferred Securities
CUSIP NO. __________
Certificate Evidencing Preferred Securities
of
PSE&G Capital Trust _
_____% Cumulative Quarterly Income Preferred Securities,
Series _
(liquidation amount $25 per Preferred Security)
PSE&G Capital Trust _, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that Cede
& Co. (the "Holder") is the registered owner of _________,
_________________________ (_________) preferred securities of the Trust
representing an undivided beneficial interest in the assets of the Trust
and designated the PSE&G Capital Trust _ _____% Cumulative Quarterly Income
Preferred Securities, Series _ (liquidation amount $25 per Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer as provided in Section 5.04 of the Trust
Agreement (as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the Trust dated as of __________, ____, as the same may be
amended from time to time (the "Trust Agreement"). The Holder is entitled
to the benefits of the Guarantee Agreement entered into by Public Service
Electric and Gas Company, a New Jersey corporation, and First Union
National Bank as guarantee trustee, dated as of_________, ____ (the
"Guarantee") to the extent provided therein. The Trust will furnish a copy
of the Trust Agreement and the Guarantee to the Holder without charge upon
written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, the Administrative Trustee of the Trust has
executed this certificate this _____ day of __________, ____.
PSE&G CAPITAL TRUST _
By:
-------------------------------------
Name:
Administrative Trustee
[To be included in Book-Entry Preferred Securities Certificate]
This Preferred Security is a Book-Entry Preferred Securities Certificate
within the meaning of the Trust Agreement hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depository")
or a nominee of the Depository. This Preferred Security is exchangeable
for Preferred Securities registered in the name of a person other than the
Depository or its nominee only in the limited circumstances described in
the Trust Agreement and no transfer of this Preferred Security (other than
a transfer of this Preferred Security as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository) may be registered except
in limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of The Depository Trust Company, a New York corporation, (55 Water Street,
New York) to PSE&G Capital Trust _ or its agent for registration of
transfer, exchange or payment, and any Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of The Depository Trust Company, ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
__________ Preferred Securities represented by this Preferred Securities
Certificate and irrevocably appoints
agent to transfer said Preferred Securities on the books of the Trust. The
agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
Exhibit 4.3
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
and
FIRST UNION NATIONAL BANK, as Trustee
INDENTURE
Dated as of _______________________
Providing for the Issuance of
Deferrable Interest Subordinated Debentures in Series
including
_____% Deferrable Interest Subordinated Debentures, Series A
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02 Other Definitions . . . . . . . . . . . . . . . . . . . 7
SECTION 1.03 Incorporation by Reference of Trust Indenture Act . . . 7
SECTION 1.04 Rules of Construction . . . . . . . . . . . . . . . . . 8
SECTION 1.05 Acts of Holders and Holders of Preferred Securities . . 8
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES
SECTION 2.01 Issue of Debentures Generally . . . . . . . . . . . . . 9
SECTION 2.02 Terms and Form of the Series A Debentures . . . . . . . 11
SECTION 2.03 Payment of Principal and Interest . . . . . . . . . . . 12
SECTION 2.04 Execution, Authentication and Delivery . . . . . . . . 14
SECTION 2.05 Registrar and Paying Agent . . . . . . . . . . . . . . 16
SECTION 2.06 Paying Agent to Hold Money in Trust . . . . . . . . . . 16
SECTION 2.07 Debentureholder Lists . . . . . . . . . . . . . . . . . 17
SECTION 2.08 Transfer and Exchange . . . . . . . . . . . . . . . . . 17
SECTION 2.09 Replacement Debentures . . . . . . . . . . . . . . . . 18
SECTION 2.10 Outstanding Debentures; Determinations of Holders' Action 18
18
SECTION 2.11 Temporary Debentures . . . . . . . . . . . . . . . . . 19
SECTION 2.12 Book-Entry System . . . . . . . . . . . . . . . . . . . 20
SECTION 2.13 Cancellation . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 3
REDEMPTION
SECTION 3.01 Redemption: Notice to Trustee . . . . . . . . . . . . . 22
SECTION 3.02 Selection of Debentures to be Redeemed . . . . . . . . 22
SECTION 3.03 Notice of Redemption . . . . . . . . . . . . . . . . . 22
SECTION 3.04 Effect of Notice of Redemption . . . . . . . . . . . . 23
SECTION 3.05 Deposit of Redemption Price . . . . . . . . . . . . . . 23
SECTION 3.06 Debentures Redeemed in Part . . . . . . . . . . . . . . 24
<PAGE>
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Debentures . . . . . . . . . . . . . . . . . 24
SECTION 4.02 Prohibition Against Dividends . . . . . . . . . . . . . 25
SECTION 4.03 SEC Reports . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.04 Compliance Certificates . . . . . . . . . . . . . . . . 25
SECTION 4.05 Further Instruments and Acts . . . . . . . . . . . . . 26
SECTION 4.06 Payments for Consents . . . . . . . . . . . . . . . . . 26
SECTION 4.07 Payment of Expenses of Trust I . . . . . . . . . . . . 26
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When the Company May Merge . . . . . . . . . . . . . . 27
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . 27
SECTION 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . 30
SECTION 6.05 Control by Majority . . . . . . . . . . . . . . . . . . 30
SECTION 6.06 Limitation on Suits . . . . . . . . . . . . . . . . . . 31
SECTION 6.07 Rights of Holders to Receive Payment . . . . . . . . . 32
SECTION 6.08 Collection Suit by the Trustee . . . . . . . . . . . . 32
SECTION 6.09 The Trustee May File Proofs of Claim . . . . . . . . . 32
SECTION 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . 33
SECTION 6.12 Waiver of Stay . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 7
THE TRUSTEE
SECTION 7.01 Duties of the Trustee . . . . . . . . . . . . . . . . . 34
SECTION 7.02 Rights of the Trustee . . . . . . . . . . . . . . . . . 35
SECTION 7.03 Individual Rights of the Trustee . . . . . . . . . . . 36
SECTION 7.04 The Trustee's Disclaimer . . . . . . . . . . . . . . . 36
SECTION 7.05 Notice of Defaults . . . . . . . . . . . . . . . . . . 36
<PAGE>
SECTION 7.06 Reports by Trustee to Holders . . . . . . . . . . . . . 36
SECTION 7.07 Compensation and Indemnity . . . . . . . . . . . . . . 37
SECTION 7.08 Replacement of Trustee . . . . . . . . . . . . . . . . 38
SECTION 7.09 Successor Trustee by Merger . . . . . . . . . . . . . . 38
SECTION 7.10 Eligibility: Disqualification . . . . . . . . . . . . . 39
SECTION 7.11 Preferential Collection of Claims Against the Company . 39
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONEYS
SECTION 8.01 Satisfaction and Discharge of Indenture . . . . . . . . 39
SECTION 8.02 Application by Trustee of Funds Deposited for
Payment of Debentures . . . . . . . . . . . . . . . . 40
SECTION 8.03 Repayment of Moneys Held by Paying Agent . . . . . . . 41
SECTION 8.04 Return of Moneys Held by the Trustee and Paying
Agent Unclaimed for Three Years . . . . . . . . . . . .41
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders . . . . . . . . . . . . . . 41
SECTION 9.02 With Consent of Holders . . . . . . . . . . . . . . . . 42
SECTION 9.03 Compliance with Trust Indenture Act . . . . . . . . . . 43
SECTION 9.04 Revocation and Effect of Consents . . . . . . . . . . . 43
SECTION 9.05 Notation on or Exchange of Debentures . . . . . . . . . 44
SECTION 9.06 Trustee to Execute Supplemental Indentures . . . . . . 44
SECTION 9.07 Effect of Supplemental Indentures . . . . . . . . . . . 44
ARTICLE 10
SUBORDINATION
SECTION 10.01 Debentures Subordinated to Senior Indebtedness . . . . 45
SECTION 10.02 Priority and Payment of Proceeds in Certain Events:
Remedies Standstill . . . . . . . . . . . . . . . . . 45
SECTION 10.03 Payments which May Be Made Prior to Notice . . . . . . 46
SECTION 10.04 Rights of Holders of Senior Indebtedness Not to Be
Impaired . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 10.05 Trustee May Take Action to Effectuate Subordination . . 47
SECTION 10.06 Subrogation . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.07 Obligations of Company Unconditional: Reinstatement . . 48
SECTION 10.08 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice . . . . . . . . . . . . . . . . . . . 48
SECTION 10.09 Right of Trustee to Hold Senior Indebtedness . . . . . 49
<PAGE>
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls . . . . . . . . . . . . . 49
SECTION 11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.03 Communication by Holders with Other Holders . . . . . . 50
SECTION 11.04 Certificate and Opinion as to Conditions Precedent . . 51
SECTION 11.05 Statements Required in Certificate or Opinion . . . . . 51
SECTION 11.06 Severability Clause . . . . . . . . . . . . . . . . . . 51
SECTION 11.07 Rules by Trustee, Paying Agent and Registrar . . . . . 51
SECTION 11.08 Legal Holidays . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.09 Governing Law . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.10 No Recourse Against Others . . . . . . . . . . . . . . 52
SECTION 11.11 Successors . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.12 Multiple Original Copies of this Indenture . . . . . . 52
SECTION 11.13 No Adverse Interpretation of Other Agreements . . . . . 53
SECTION 11.14 Table of Contents: Headings . . . . . . . . . . . . . . 53
SECTION 11.15 Benefits of the Indenture . . . . . . . . . . . . . . . 53
<PAGE>
INDENTURE, dated as of June 1, 1996, by and between Public Service
Electric and Gas Company, a corporation duly organized and existing under the
laws of the State of New Jersey (the "Company"), and First Union National
Bank, a national banking association duly organized and existing under the
laws of the United States of America as trustee (the "Trustee").
WHEREAS, the Company may from time to time create or establish one or
more statutory business trusts for the purpose of issuing undivided
beneficial interests in the assets thereof (the "Trust Securities") and using
the proceeds thereof to acquire the Company's Deferrable Interest
Subordinated Debentures.
WHEREAS, pursuant to an Amended and Restated Trust Agreement dated as
of June 1, 1996 (the "Trust I Agreement") among the Company, as depositor,
First Union National Bank, as Property Trustee (the "Property Trustee I"),
the Delaware Trustee named therein and the Administrative Trustee named
therein, there has been declared and established PSE&G Capital Trust I, a
Delaware business trust ("Trust I").
WHEREAS, Trust I intends to issue its Trust Securities, including its
____% Cumulative Quarterly Income Preferred Securities, Series A,
representing undivided beneficial interests in the assets of Trust I and
having a liquidation amount of $25 per security and having rights provided
therefor in the Trust I Agreement (the "Series A Preferred Securities").
WHEREAS, the Company has authorized the issuance of its ____%
Deferrable Interest Subordinated Debentures, Series A (the "Series A
Debentures") to be purchased by Trust I with the proceeds of its Trust
Securities, and to provide therefor, the Company has duly authorized the
execution and delivery of this Indenture.
WHEREAS, all things necessary to make the Series A Debentures, when
duly issued and executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company, and to make this Indenture a
valid and binding agreement of the Company, enforceable in accordance with
its terms, have been done.
NOW THEREFORE:
Each of the Company and the Trustee, intending to be legally bound
hereby, agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders (as hereinafter defined) of the
securities issued hereunder, including the Series A Debentures:
<PAGE>
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
-----------
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. When used with respect to any
Person, "control" means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or the Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification and delivered to the Trustee or (ii) a certificate signed
by the authorized officer or officers to whom the Board of Directors has
delegated its authority, and in each case, delivered to the Trustee.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banking institutions in The City of New York or the State of New
Jersey are authorized or required by law or executive order to close.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of
a balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participation or other equivalents of or
interests in (however designated) corporate stock.
"Company" means Public Service Electric and Gas Company, a New Jersey
corporation, or any successor thereto.
"Company Order" means a written request or order signed in the name of
the Company by an Officer of the Company and delivered to the Trustee.
"Debentureholder" or "Holder" means a Person in whose name a Debenture
is registered on the Registrar's books.
2
<PAGE>
"Debentures" shall mean any of the securities of any series issued,
authenticated and delivered under this Indenture.
"Default" means any event which is, or after notice or passage of
time, or both, would be, an Event of Default pursuant to Section 6.01 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period" with respect to any series of Debentures, means the
period during which the Company may elect to extend the interest payment
period on such series of the Debentures pursuant to Section 4.01(b) hereof;
provided that no Extension Period shall extend beyond the Stated Maturity
Date or the Redemption Date of any Debenture of such series.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board.
"Indebtedness" means without duplication, (i) the principal of and
premium (if any) in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by securities, debentures, bonds or
other similar instruments issued by the Company; (ii) all Capital Lease
Obligations of the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement of any obligation, any letter of credit, banker's acceptance,
security purchase facility or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other
than obligations described in (i) through (iii) above) entered into in the
ordinary course of business by the Company to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third Business Day following receipt by the
Company of a demand for reimbursement following payment on the letter of
credit); (v) all obligations of the type referred to in clauses (i) through
(iv) of other Persons and all dividends of other Persons (other than the
Preferred Securities or similar securities) for the payment of which, in
either case, the Company is responsible or liable as obligor, guarantor or
otherwise (other than the Series A Guarantee Agreement or obligations ranking
equal to the Series A Guarantee Agreement); and (vi) all obligations of the
type referred to in clauses (i) through (v) of other Persons secured by any
lien on any property or asset of the Company (whether or not such obligation
is assumed by the Company), the amount of such obligation being deemed to be
the lesser of the value of such property or assets or the amount of the
obligation so secured; provided, however, that Indebtedness will not include
endorsements of negotiable instruments for collection in the ordinary course
of business.
3
<PAGE>
"Indenture" means this indenture, as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of the
TIA that are deemed to be a part hereof.
"Interest Payment Date", when used with respect to the Debentures of
any series, means the stated maturity of any installment of interest on the
Debentures of that series.
"Issue Date", with respect to a series of Debentures, means the date
on which the Debentures of such series are originally issued.
"Officer" means, with respect to any corporation, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of such corporation.
"Officer's Certificate" means a written certificate containing the
applicable information specified in Sections 11.04 and 11.05 hereof, signed
in the name of the Company by any one of its Officers, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion containing the applicable
information specified in Sections 11.04 and 11.05 hereof, by legal counsel
who is reasonably acceptable to the Trustee.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, and interest on the Debentures of any
series on behalf of the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Predecessor Debentures" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and for purposes of this definition,
any Debenture authenticated and delivered under Section 2.09 hereof in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Debenture.
"Preferred Securities" means the Cumulative Quarterly Income Preferred
Securities of a Trust, representing undivided beneficial interests in the
assets of such Trust.
"Property Trustee I" means First Union National Bank and its
successors and assigns, as property trustee under the Trust I Agreement.
4
<PAGE>
"Record Date", with respect to any series of the Debentures, means the
Regular Record Date, the Special Record Date or any date set to determine the
Holders of such series entitled to vote, consent, make a request or exercise
any other right associated with such series.
"Redemption Date", with respect to the Debentures of any series to be
redeemed, means the date specified for the redemption thereof in accordance
with the terms thereof and pursuant to Article 3 of this Indenture.
"Redemption Price", with respect to the Debentures of any series to be
redeemed, means the price at which such Debenture is to be redeemed in
accordance with the terms thereof and pursuant to Article 3 of this
Indenture.
"Regular Record Date", with respect to an interest payment on the
Debentures of a series, means the date set forth in this Indenture or the
supplemental indenture creating such series for the determination of Holders
entitled to receive payment of interest on the next succeeding Interest
Payment Date.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, amended.
"Senior Indebtedness" means all Indebtedness, except for Indebtedness
that is by its terms subordinated to or pari passu with the Debentures.
Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include the Company's Deferrable Interest Subordinated
Debentures issued and outstanding from time to time under the Indenture dated
as of November 1, 1994, as amended and supplemented, between the Company and
First Fidelity Bank, National Association, as trustee, with which the
Debentures are intended to be pari passu, or any Indebtedness between or
among the Company and any Affiliate.
"Series A Debentures" means any of the Company's ____% Deferrable
Interest Subordinated Debentures, Series A issued under this Indenture.
"Series A Guarantee Agreement" means the Guarantee Agreement dated as
of June 1, 1996 from the Company, as guarantor, to First Union National Bank,
as guarantee trustee, with respect to the Series A Preferred Securities.
"Series A Preferred Securities" means the undivided beneficial
interests in the assets of Trust I, having a liquidation amount of $25 and
having rights provided therefor in the Trust I Agreement.
5
<PAGE>
"Special Record Date" for the payment of any Defaulted Interest on the
Debentures of any series means the date determined pursuant to Section 2.03
hereof.
"Stated Maturity Date", with respect to any Debenture, means the date
specified for the Debentures as the fixed date on which the principal of the
Debentures is due and payable.
"Subsidiary" means any corporation, association, partnership, trust or
other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership interests)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) the Company, (ii) the Company and
one or more Subsidiaries, or (iii) one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939, as amended and as in
effect on the date of this Indenture; provided, however, that if the TIA is
amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.
"Trust" means any statutory business trust created by the Company to
issue Trust Securities and to use the proceeds thereof to purchase
Debentures.
"Trust I" means PSE&G Capital Trust I, a Delaware statutory business
trust created under the Delaware Business Trust Act, Chapter 38 of Title 12
of the Delaware Code, 12 Del. C. Sec. 3801, et seq.
"Trust I Agreement" means the Amended and Restated Trust Agreement
dated as of June 1, 1996, among the Company, as Depositor, First Union
National Bank, as Property Trustee, the Delaware Trustee named therein and
the Administrative Trustee named therein, as the same may be amended and
modified from time to time.
"Trust Officer", when used with respect to the Trustee, means any
Senior Vice President, any Vice President, any Assistant Vice President, any
Trust Officer, or Assistant Trust Officer or any other officer of the
Corporate Trust Department of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Trust Securities" means the undivided beneficial interests in the
assets of a Trust.
6
<PAGE>
"Trustee" means First Union National Bank, until a successor replaces
it pursuant to the applicable provisions of this Indenture and, thereafter,
shall mean such successor.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer's option.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of
which (other than directors' qualifying shares) is owned by the Company or
another Wholly Owned Subsidiary.
SECTION 1.02 Other Definitions.
-----------------
TERM DEFINED IN SECTION
---- ------------------
"Act" . . . . . . . . . . . . . . . . . . . . . 1.05
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . 6.01
"Custodian" . . . . . . . . . . . . . . . . . . . . 6.01
"Defaulted Interest" . . . . . . . . . . . . . . . . 2.03
"Depositary" . . . . . . . . . . . . . . . . . . . . 2.12
"global Debenture" . . . . . . . . . . . . . . . . . 2.12
"Legal Holiday" . . . . . . . . . . . . . . . . . . 11.08
"Notice of Default" . . . . . . . . . . . . . . . . 6.01
"Register" . . . . . . . . . . . . . . . . . . . . . 2.05
"Registrar" . . . . . . . . . . . . . . . . . . . . 2.05
"Successor" . . . . . . . . . . . . . . . . . . . . 5.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Debentures.
"indenture security holder" means a Debentureholder or Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
7
<PAGE>
"obligor" on the indenture securities means the Company and any other
obligor on the Debentures.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) Each capitalized term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) words in the singular include the plural, and words in the plural
include the singular; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article,
Section or other subdivision.
SECTION 1.05 Acts of Holders and Holders of Preferred Securities.
---------------------------------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders or by holders of Preferred Securities, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders or holders of Preferred Securities in person or by an agent duly
appointed in writing and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of Holders
or holders of Preferred Securities signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
8
<PAGE>
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Debentures shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Debenture shall bind every future
Holder of the same Debenture and the Holder of every Debenture issued upon
the registration transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is
made upon such Debenture.
(e) If the Company solicits from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, by or pursuant to a resolution of its Board of Directors,
fix in advance a Record Date for the determination of Holders entitled to
give such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so. If such a
Record Date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such Record Date,
but only Holders of record at the close of business on such Record Date shall
be deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of outstanding Debentures have authorized or agreed
or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the outstanding Debentures
shall be computed as of such Record Date.
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES
SECTION 2.01 Issue of Debentures Generally.
-----------------------------
The aggregate principal amount of any series of Debentures which may
be authenticated and delivered under this Indenture is limited to the
aggregate liquidation amount of the Trust Securities of the Trust purchasing
such series of Debentures.
The Debentures may be issued in one or more series as from time to
time shall be authorized by the Board of Directors.
The Debentures of each series and the Trustee's Certificate of
Authentication shall be substantially in the forms to be attached as exhibits
to the Indenture or supplemental indenture creating such series, but in the
case of any series of Debentures other than the Series A Debentures, with
such inclusions, omissions and variations as to letters, numbers or other
marks of identification or designation and such legends or endorsements
printed,
9
<PAGE>
lithographed or engraved thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which
such Debentures may be listed, or to conform to usage.
Other series of Debentures may differ from the Series A Debentures,
and as and between series, in respect of any or all of the following matters:
(a) designation;
(b) Stated Maturity Date or Dates, which may be serial and the
Company's option, if any, to change the Stated Maturity Date or
Dates;
(c) interest rate or method of determination of the interest rate;
(d) the basis upon which interest shall be computed if other than a
360-day year composed of twelve 30-day months;
(e) Interest Payment Dates and the Regular Record Dates therefor;
(f) Issue Date or Dates and interest accrual provisions;
(g) authorized denominations;
(h) the place or places for the payment of principal (and premium, if
any) and interest;
(i) the aggregate principal amount of Debentures of such series which
may be issued;
(j) the optional and mandatory redemption provisions, if any;
(k) provisions, if any, for any sinking or analogous fund with
respect to the Debentures of such series;
(l) any other provisions expressing or referring to the terms and
conditions upon which the Debentures of such series are to be
issued under this Indenture which are not in conflict with the
provisions of this Indenture; and
(m) the maximum duration of the Extension Period.
10
<PAGE>
in each case as determined by the Board of Directors and specified in the
supplemental indenture creating such series.
SECTION 2.02 Terms and Form of the Series A Debentures.
-----------------------------------------
(a) The Series A Debentures shall be designated "Public Service
Electric and Gas Company ____% Deferrable Interest Subordinated Debentures,
Series A." The Series A Debentures and the Trustee's Certificate of
Authentication shall be substantially in the form of Exhibit A attached
hereto. The Series A Debentures shall initially be issued as global
Debentures in accordance with the provisions of Section 2.12 of this
Indenture, with The Depository Trust Company as Depositary. The terms and
provisions contained in the Series A Debentures shall constitute, and are
hereby expressly made, a part of this Indenture. The Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.
(b) The aggregate principal amount of Series A Debentures outstanding
at any time may not exceed $___________ except as provided in Section 2.09
hereof. The Series A Debentures shall be authenticated and delivered upon
delivery to the Trustee of items specified in Section 2.04(d) hereof.
(c) The Stated Maturity Date of the Series A Debentures is
_________________.
(d) The interest rate of the Series A Debentures is ____% per annum.
The Interest Payment Dates for the Series A Debentures are March 31, June 30,
September 30 and December 31 of each year, commencing June 30, 1996. In the
event that any date on which interest is payable on the Series A Debentures
is not a Business Day, then payment of interest payable on such date will be
made on the next day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The Regular Record Date for each Interest
Payment Date for the Series A Debentures shall be the 15th day (whether or
not a Business Day) of the last month of each quarter, provided that if Trust
I is the sole Holder of the Series A Debentures or the Series A Debentures
are issued in book-entry-only form, the Regular Record Date shall be the
close of business on the Business Day next preceding such Interest Payment
Date.
Each Series A Debenture shall bear interest from its Issue Date or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for with respect to such Series A Debenture; except that, so
long as there is no existing Defaulted Interest (as defined in Section 2.03
hereof) or Extension Period on the Series A Debentures, any Series A
Debenture authenticated by the Trustee between the Regular Record Date for
11
<PAGE>
any Interest Payment Date and such Interest Payment Date shall bear interest
from such Interest Payment Date.
Overdue principal of and interest on any Series A Debenture and
interest which has been deferred pursuant to Section 4.01(b) hereof shall
bear interest (to the extent that the payment of such interest shall be
legally enforceable) at a rate per annum equal to the interest rate per annum
payable on such Series A Debenture.
(e) The Series A Debentures shall be issuable only in registered form
without coupons and only in denominations of $25 and any integral multiple
thereof.
(f) The maximum Extension Period for the Series A Debentures shall be
20 consecutive quarters.
SECTION 2.03 Payment of Principal and Interest.
---------------------------------
Unless otherwise specified pursuant to Section 2.01(d), interest on
the Debentures shall be computed on the basis of a 360-day year composed of
twelve 30-day months, and for any period shorter than thirty days, interest
will be computed on the basis of the actual number of days elapsed in such
period.
Unless otherwise provided with respect to a series of Debentures,
(i) the principal and Redemption Price of and interest on each
Debenture shall be payable in such coin or currency of the United
States of America as at the time of payment is legal tender for
the payment of public and private debts;
(ii) the principal and Redemption Price of any Debenture and interest
payable on the Stated Maturity Date (if other than an Interest
Payment Date) or Redemption Date shall be payable, upon surrender
of such Debenture at the office or agency of any Paying Agent
therefor; and
(iii) interest on any Debenture shall be paid on each Interest Payment
Date therefor to the Holder thereof at the close of business on
the Record Date therefor, such interest to be payable by check
mailed to the address of the Person entitled thereto as such
address appears on the Register; provided that, at the written
request of the Holder of at least $10,000,000 aggregate principal
amount of Debentures received by the Registrar not later than the
Regular Record Date for such Interest Payment Date, interest
accrued on such Debenture will be payable by wire transfer within
the continental United States in immediately
12
<PAGE>
available funds to the bank account number of such Holder
specified in such request and entered on the Register by the
Registrar.
Except as specified pursuant to Section 2.01 or Section 4.01(b)
hereof, interest on any Debenture which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the Regular Record Date for such
interest. Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) and (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall, not less than 15
Business Days prior to the date of the proposed payment, notify the Trustee
and the Paying Agent in writing of the amount of Defaulted Interest
proposed to be paid on each Debenture and the date of the proposed payment,
and at the same time the Company shall deposit with the Paying Agent an
amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Paying Agent for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this Clause provided.
The Special Record Date for the payment of such Defaulted Interest shall be
the close of business on the tenth calendar day prior to the date of the
proposed payment. The Trustee shall, in the name and at the expense of the
Company, cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be given to the Holder thereof, not
less than 7 calendar days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been given, such Defaulted Interest shall be paid to the
Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee and the Paying Agent of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Paying Agent.
13
<PAGE>
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debenture.
SECTION 2.04 Execution, Authentication and Delivery.
--------------------------------------
(a) The Debentures shall be executed on behalf of the Company by its
Chairman, its President or one of its Vice Presidents, under its corporate
seal imprinted or reproduced thereon and attested by its Secretary or one of
its Assistant Secretaries. The signature of any such Officer on the
Debentures may be manual or facsimile.
(b) Debentures bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Debentures or did not hold such offices at the date of such Debentures.
(c) No Debenture shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Debenture a Certificate of Authentication duly executed by the Trustee
by manual signature of a Trust Officer, and such Certificate of
Authentication upon any Debenture shall be conclusive evidence, and the only
evidence, that such Debenture has been duly authenticated and made available
for delivery hereunder.
(d) The Trustee shall authenticate and deliver Debentures of a
series, for original issue, at one time or from time to time in accordance
with the Company Order referred to below, upon receipt by the Trustee of:
(1) a Board Resolution approving the form or forms and terms of such
series;
(2) a Company Order requesting the authentication and delivery of
such Debentures and stating the identity of the Trust and the aggregate
liquidation amount of the Trust Securities to be issued concurrently with
such Debentures;
(3) unless previously delivered, this Indenture or an indenture
supplement hereto setting forth the form of such Debentures and
establishing the terms thereof;
(4) the Debentures of such series, executed on behalf of the Company
in accordance with Section 2.04(a) hereof;
(5) an Opinion of Counsel to the effect that:
14
<PAGE>
(i) the form or forms of such Debentures have been duly
authorized by the Company and have been established in conformity with
the provisions of this Indenture; and
(ii) such Debentures, when authenticated and delivered by
the Trustee and issued and delivered by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will constitute valid
and legally binding obligations of the Company, entitled to the
benefits provided by this Indenture, and enforceable in accordance
with their terms, subject, as to enforcement to laws relating to or
affecting generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and
(iii) that this Indenture or any supplemental indenture
referred to in clause (3) above has been duly authorized, executed and
delivered by the Company and is a valid instrument legally binding
upon the Company, enforceable in accordance with its terms, subject as
to enforcement to laws relating to or affecting creditors' rights,
including, without limitation, bankruptcy and insolvency laws and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
(iv) that all consents, approvals and orders of any
commission, governmental authority or agency required in connection
with the issuance and delivery of such Debentures have been obtained.
(e) an Officer's Certificate certifying that no Default or Event of
Default has occurred and is continuing.
(f) The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee may appoint an authenticating agent. An
authenticating agent may authenticate Debentures whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. The Trustee shall pay any
authenticating agent appointed by the Trustee reasonable compensation for its
services and the Trustee shall be reimbursed for such payment by the Company
pursuant to Section 7.07 hereof. The provisions set forth in Section 7.02,
Section 7.03, Section 7.04 and Section 7.07 hereof shall be applicable to any
authenticating agent.
15
<PAGE>
SECTION 2.05 Registrar and Paying Agent.
--------------------------
The Company shall maintain or cause to be maintained, within or
outside the State of New Jersey, an office or agency where the Debentures may
be presented for registration of transfer or for exchange ("Registrar"), a
Paying Agent at whose office the Debentures may be presented or surrendered
for payment, and an office or agency where notices and demands to or upon the
Company in respect of the Debentures and this Indenture may be served. The
Registrar shall keep a register (the "Register") of the Debentures and of
their transfer and exchange. The Company may have one or more co-Registrars
and one or more additional Paying Agents. The term Registrar includes any
additional registrar and the term Paying Agent includes any additional paying
agent. The corporate trust office of the Trustee in Newark, New Jersey, shall
initially be the Registrar for the Series A Debentures and agent for service
of notice or demands on the Company, and the Trustee shall initially be the
Paying Agent for the Series A Debentures.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-Registrar (if not the Company or the Trustee or
an affiliate of the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent. The Company shall give prompt
written notice to the Trustee and to the Holders of any change of location of
such office or agency. If at any time the Company shall fail to maintain or
cause to be maintained any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 11.02 hereof. The Company shall notify the Trustee of the
name and address of any such agent. If the Company fails to maintain a
Registrar, Paying Agent or agent for service of notices or demands, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07 hereof. The Company or any Affiliate of the
Company may act Paying Agent, Registrar or co-Registrar or agent for service
of notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice to the Trustee and to the Holders
of any such designation or rescission and of any change in location of any
such other office or agency.
SECTION 2.06 Paying Agent to Hold Money in Trust.
-----------------------------------
Except as otherwise provided herein, prior to or on each due date of
the principal of and premium (if any) and interest on any Debenture, the
Company shall deposit with the Paying Agent a sum of money sufficient to pay
such principal, premium (if any) and interest so becoming due. The Company
shall require each Paying Agent (other than the Trustee or the Company) to
agree in writing that such Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for the payment
of
16
<PAGE>
principal of and premium (if any) and interest on the Debentures and shall
notify the Trustee of any Default by the Company in making any such payment.
At any time during the continuance of any such Default, the Paying Agent
shall, upon the request of the Trustee, forthwith pay to the Trustee all
money so held in trust and account for any money disbursed by it. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee and to account for any money disbursed by it. Upon doing so, the
Paying Agent shall have no further liability for the money so paid over to
the Trustee. If the Company, a Subsidiary or an Affiliate of either of them
acts as Paying Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund.
SECTION 2.07 Debentureholder Lists.
---------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Debentureholders. If the Trustee is not the Registrar, the Company shall
cause to be furnished to the Trustee on or before the Record Date for each
Interest Payment Date and at such other times as the Trustee may request in
writing, within five Business Days of such request, a list, in such form as
the Trustee may reasonably require of the names and addresses of
Debentureholders.
SECTION 2.08 Transfer and Exchange.
---------------------
When Debentures are presented to the Registrar or a co-Registrar with
a request to register the transfer or to exchange them for an equal principal
amount of Debentures of the same series of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested
if its reasonable requirements for such transactions are met. To permit
registrations of transfer and exchanges, the Company shall execute and the
Trustee shall authenticate Debentures, all at the Registrar's request.
Every Debenture presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by the Holder or his attorney
duly authorized in writing.
The Company shall not require payment of a service charge for any
registration of transfer or exchange of Debentures, but the Company may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges that may be imposed in connection with the registration
of the transfer or exchange of Debentures from the Debentureholder requesting
such transfer or exchange (other than any exchange of a temporary Debenture
for a definitive Debenture not involving any change in ownership).
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (a) any Debenture for a period beginning
at the opening of business 15 days before the mailing of a notice of
redemption of Debentures and ending at
17
<PAGE>
the close of business on the day of such mailing or (b) any Debenture
selected, called or being called for redemption, except, in the case of any
Debenture to be redeemed in part, the portion thereof not to be redeemed.
SECTION 2.09 Replacement Debentures.
----------------------
If (a) any mutilated Debenture is surrendered to the Company or the
Trustee, or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debenture, and there is
delivered to the Company and the Trustee such Debenture or indemnity as may
be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Debenture has been acquired by
a bona fide purchaser, the Company shall execute in exchange for any such
mutilated Debenture or in lieu of any such destroyed, lost or stolen
Debenture, a new Debenture of the same series and of like tenor and principal
amount, bearing a number not contemporaneously outstanding, and the Trustee
shall authenticate and make such new Debenture available for delivery.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, or is about to be redeemed by
the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Debenture, pay or purchase such Debenture, as the
case may be.
Upon the issuance of any new Debentures under this Section 2.09, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Debenture issued pursuant to this Section 2.09 in lieu of
any mutilated, destroyed, lost or stolen Debenture shall constitute an
original additional contractual obligation of the Company (whether or not the
mutilated, destroyed, lost or stolen Debenture shall be at any time
enforceable) by anyone, and shall be entitled to all benefits of this
Indenture equally and ratably with any and all other Debentures duly issued
hereunder.
The provisions of this Section 2.09 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 2.10 Outstanding Debentures; Determinations of Holders'
--------------------------------------------------
Action.
------
Debentures outstanding at any time are all the Debentures
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation, those mutilated, destroyed, lost or stolen Debentures
referred to in Section 2.09 hereof, those redeemed by
18
<PAGE>
the Company pursuant to Article 3 hereof, and those described in this
Section 2.10 as not outstanding. A Debenture does not cease to be
outstanding because the Company or a Subsidiary or Affiliate thereof
holds the Debenture; provided, however, that in determining whether the
Holders of the requisite principal amount of Debentures have given or
concurred in any request, demand, authorization, direction, notice,
consent or waiver hereunder, Debentures owned by the Company or a
Subsidiary or Affiliate (other than any Trust so long as any of the
Preferred Securities of such Trust are outstanding) shall be disregarded
and deemed not to be outstanding.
Subject to the foregoing, only Debentures outstanding at the time of
such determination shall be considered in any such determination (including
determinations pursuant to Articles 3, 6 and 9).
If a Debenture is replaced pursuant to Section 2.09 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that
the replaced Debenture is held by a bona fide purchaser.
If the Paying Agent (other than the Company) holds, in accordance with
this Indenture, at the Stated Maturity Date or on a Redemption Date, money
sufficient to pay the Debentures payable on that date, then immediately on
the Stated Maturity Date or such Redemption Date, as the case may be, such
Debentures shall cease to be outstanding, and interest, if any, on such
Debentures shall cease to accrue.
SECTION 2.11 Temporary Debentures.
--------------------
The Company may execute temporary Debentures, and upon the Company's
Order, the Trustee shall authenticate and make such temporary Debentures
available for delivery. Temporary Debentures shall be printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, in the same series and principal amount and of like tenor as
the definitive Debentures in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
Officers of the Company executing such Debentures may determine, as
conclusively evidenced by their execution of such Debentures.
After the preparation of definitive Debentures, the temporary
Debentures shall be exchangeable for definitive Debentures of the same series
upon surrender of the temporary Debentures at the office or agency of the
Company designated for such purpose pursuant to Section 2.05 hereof, without
charge to the Holders thereof. Upon surrender for cancellation of any one or
more temporary Debentures, the Company shall execute a like principal amount
of definitive Debentures of the same series of authorized denominations, and
the Trustee, upon receipt of a Company Order, shall authenticate and make
such Debentures available for delivery in exchange therefor. Until so
exchanged, the temporary Debentures
19
<PAGE>
shall in all respects be entitled to the same benefits under this Indenture
as definitive Debentures.
SECTION 2.12 Book-Entry System.
-----------------
In order to utilize a book-entry-only system for all or any portion of
the Debentures of any series, all or a portion of the Debentures of any
series may be issued in the form of one or more fully registered Debentures
of the same series for the aggregate principal amount of such Debentures of
each Issue Date, interest rate and Stated Maturity Date (a "global
Debenture"), which global Debenture shall be registered in the name of the
depositary (the "Depositary") selected by the Company or in the name of such
Depositary's nominee. Each global Debenture shall be delivered by the Trustee
to the Depositary or pursuant to the Depositary's instruction and shall bear
a legend substantially to the following effect: "Except as otherwise provided
in Section 2.12 of the Indenture, this Debenture may be transferred, in whole
but not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary."
Notwithstanding any other provision of this Section 2.12 or of Section
2.08 hereof, a global Debenture may be transferred in whole but not in part
and in the manner provided in Section 2.08 hereof, only by a nominee of the
Depositary for such series, or by the Depositary or any such nominee of a
successor Depositary for such series selected or approved by the Company or
to a nominee of such successor Depositary.
If (i) at any time the Depositary for global Debentures of any series
of Debentures notifies the Company that it is unwilling or unable to continue
as Depositary for such global Debentures or if at any time the Depositary for
such global Debentures shall no longer be registered or in good standing
under the Exchange Act or other applicable statute or regulation, and a
successor Depositary for such global Debentures is not appointed by the
Company within 90 days after the Company receives such notice or becomes
aware of such condition, as the case may be, (ii) the Company determines in
its sole discretion, that the Debentures of any series shall no longer be
represented by one or more global Debentures and delivers to the Trustee an
Officer's Certificate evidencing such determination or (iii) an Event of
Default occurs and is continuing, then the provisions of this Section 2.12
shall no longer apply to the Debentures of such series. In such event, the
Company will execute and the Trustee, upon receipt of an Officer's
Certificate evidencing such determination by the Company, will authenticate
and deliver Debentures of such series and of like tenor in definitive
registered form, in authorized denominations, and in aggregate principal
amount equal to the principal amount of the global Debentures of such series
in exchange for such global Debentures. Upon the exchange of global
Debentures for such Debentures in definitive registered form without coupons,
in authorized denominations, the global Debentures shall be cancelled by the
Trustee. Such Debentures in definitive registered form issued in exchange for
global Debentures pursuant to this Section 2.12 shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or
20
<PAGE>
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debentures to the Person in whose names such Debentures
are so registered.
Except as provided above, owners solely of beneficial interests in a
global Debenture shall not be entitled to receive physical delivery of
Debentures in definitive form and will not be considered the Holders thereof
for any purpose under this Indenture.
Members of or participants in the Depositary shall have no rights
under this Indenture with respect to any global Debenture held on their
behalf by the Depositary, and such Depositary or its nominee, as the case may
be, may be treated by the Company, the Trustee, and any agent of the Company
or the Trustee as the Holder of such global Debentures for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee, or any agent of the Company or the Trustee, from giving
effect to any written certification proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its members or
participants, the operation of customary practices governing exercise of the
rights of a Holder of any Debenture, including without limitation the
granting of proxies or other authorization of participants to give or take
any request, demand, authorization, direction, notice, consent, waiver or
other action which a Holder is entitled to give or take under this Indenture.
SECTION 2.13 Cancellation.
------------
All Debentures surrendered for payment, redemption by the Company
pursuant to Article 3 hereof or registration of transfer or exchange shall,
if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by the Trustee. The Company may at any
time deliver to the Trustee for cancellation any Debentures previously
authenticated and made available for delivery hereunder which the Company may
have acquired in any manner whatsoever, and all Debentures so delivered shall
be promptly canceled by the Trustee. The Company may not reissue or issue new
Debentures to replace Debentures it has paid or delivered to the Trustee for
cancellation. No Debentures shall be authenticated in lieu of or in exchange
for any Debentures canceled as provided in this Section 2.13, except as
expressly permitted by this Indenture. All canceled Debentures held by the
Trustee shall be destroyed by the Trustee, and the Trustee shall deliver a
certificate of destruction to the Company.
21
<PAGE>
ARTICLE 3
REDEMPTION
SECTION 3.01 Redemption: Notice to Trustee.
-----------------------------
(a) The Series A Debentures are subject to redemption prior to
maturity as provided therein.
(b) The redemption terms for any additional series of Debentures
shall be as specified in the supplemental indenture creating such series of
Debentures.
(c) If any or all of the Debentures are to be redeemed pursuant to
Section 3.01 (a) or (b) hereof, the Company shall deliver to the Trustee at
least 45 days prior to the Redemption Date a Company Order specifying the
series and principal amount of Debentures to be redeemed and the Redemption
Date and Redemption Price for such Debentures. Such Company Order shall be
accompanied by a Board Resolution authorizing such redemption. If the
Debentures of a series are held by a Trust, the Company shall also deliver a
copy of such Company Order to the Property Trustee for such Trust.
SECTION 3.02 Selection of Debentures to be Redeemed.
--------------------------------------
If less than all the outstanding Debentures of a series are to be
redeemed at any time, the Trustee shall select the Debentures of such series
to be redeemed by lot or by any other method the Trustee considers fair and
appropriate. The Trustee shall make the selection at least 30 but not more
than 60 days before the Redemption Date from outstanding Debentures of such
series not previously called for redemption. Provisions of this Indenture
that apply to Debentures called for redemption also apply to portions of
Debentures called for redemption. The Trustee shall notify the Company
promptly of the Debentures or portions of Debentures to be redeemed.
SECTION 3.03 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before the Redemption Date,
the Trustee, in the Company's name and at the Company's expense, shall mail
or cause to be mailed a notice of redemption by first-class mail, postage
prepaid, to each Holder of Debentures to be redeemed at such Holder's last
address as it appears in the Register.
The notice of redemption shall identify the Debentures to be redeemed,
the provision of the Debentures or this Indenture pursuant to which the
Debentures called for redemption are being redeemed and shall state:
(1) the Redemption Date;
22
<PAGE>
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that payment of the Redemption Price of Debentures called for
redemption will be made only upon surrender of such Debentures to the Paying
Agent;
(5) if fewer than all the outstanding Debentures of any series are to
be redeemed, the identification and principal amounts of the particular
Debentures to be redeemed and that, on and after the Redemption Date, upon
surrender of such Debentures, a new Debenture or Debentures of the same
series and of like tenor and in a principal amount equal to the unredeemed
portion thereof will be issued; and
(6) that, unless the Company defaults in paying the Redemption Price
of the Debentures called for Redemption, plus accrued interest thereon to the
Redemption Date, interest will cease to accrue on such Debentures on and
after the Redemption Date.
Any notice of redemption given in the manner provided herein shall be
conclusively presumed to have been given, whether or not such notice is
actually received. Failure to mail any notice or defect in the mailed notice
or the mailing thereof in respect of any Debenture shall not affect the
validity of the redemption of any other Debenture.
SECTION 3.04 Effect of Notice of Redemption.
------------------------------
If notice of redemption is required as set forth in Section 3.03
hereof, and after notice of redemption has been given, Debentures called for
redemption shall become due and payable on the Redemption Date and at the
Redemption Price and from and after the Redemption Date (unless the Company
shall default in the payment of the Redemption Price and accrued interest),
such Debentures shall cease to bear interest. Upon the later of the
Redemption Date and the date such Debentures are surrendered to the Paying
Agent, such Debentures shall be paid at the Redemption Price, plus accrued
interest to the Redemption Date, provided that installments of interest on
Debentures with an Interest Payment Date which is on or prior to the
Redemption Date shall be payable to the Holders of such Debentures, or one or
more Predecessor Debentures, registered as such at the close of business on
the Regular Record Dates therefor according to their terms and provisions.
SECTION 3.05 Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate is the Paying Agent, shall
segregate and hold in trust or cause such Affiliate to segregate and hold in
trust) money sufficient to pay the Redemption Price of, and accrued interest
on, all Debentures to be redeemed on that Redemption Date. The Paying Agent
shall return to the Company any money in excess of
23
<PAGE>
the amount sufficient to pay the Redemption Price of, and accrued interest
on, all Debentures to be redeemed and any interest accrued on the amount
deposited pursuant to this Section 3.05.
SECTION 3.06 Debentures Redeemed in Part.
---------------------------
Upon surrender of a Debenture that is redeemed in part, the Trustee
shall authenticate for the Holder a new Debenture of the same series and in a
principal amount equal to the unredeemed portion of such Debenture.
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Debentures.
---------------------
(a) The Company shall pay the principal of and premium, if any, and
interest (including interest accruing on or after the filing of a petition in
bankruptcy or reorganization relating to the Company, whether or not a claim
for post-filing interest is allowed in such proceeding) on the Debentures on
or prior to the dates and in the manner provided in such Debentures or
pursuant to this Indenture. An installment of principal, premium, if any, or
interest shall be considered paid on the applicable due date if on such date
the Trustee or the Paying Agent holds, in accordance with this Indenture,
money sufficient to pay all of such installment then due. With respect to
any Debenture, the Company shall pay interest on overdue principal and
interest on overdue installments of interest (including interest accruing
during an Extension Period and/or on or after the filing of a petition in
bankruptcy or reorganization relating to the Company, whether or not a claim
for post-filing interest is allowed in such proceeding), to the extent
lawful, at the rate per annum borne by such Debenture, compounded quarterly.
Interest on overdue interest shall accrue from the date such amounts became
overdue.
(b) Notwithstanding the provisions of Section 4.01(a) hereof or any
other provision herein to the contrary, the Company shall have the right in
its sole and absolute discretion at any time and from time to time while the
Debentures of any series are outstanding, so long as an Event of Default with
respect to such series of Debentures has not occurred and is continuing, to
defer payments of interest by extending the interest payment period for such
series of Debentures for the Extension Period, if any, for such series of
Debentures, provided that such extended interest payment period shall not
extend beyond the Stated Maturity Date or Redemption Date of any Debenture of
such series, and provided further that at the end of each Extension Period
the Company shall pay all interest then accrued and unpaid (together with
interest thereon to the extent permitted by applicable law at the rate per
annum borne by the Debentures). Prior to the termination of an Extension
Period, the Company may shorten or may further extend the interest payment
period,
24
<PAGE>
provided that such Extension Period for such series of Debentures together
with all such previous and further extensions may not exceed the maximum
duration of the Extension Period or extend beyond the Stated Maturity Date or
Redemption Date of any Debenture of such series. The Company shall give the
Trustee notice of the Company's election to begin an Extension Period for any
series of Debentures and any shortening or extension thereof at least one
Business Day prior to the date the notice of the record or payment date of
the related distribution on the Preferred Securities issued by the Trust
which is the Holder of the Debentures of such series or payment of interest
on such Debentures is required to be given to any national securities
exchange on which such Preferred Securities or Debentures are then listed or
other applicable self-regulatory organization, but in any event not less than
two Business Days prior to the Record Date fixed by the Company for the
payment of such interest. The Company shall give or cause the Trustee to give
notice (a form of which shall be provided by the Company to the Trustee) of
the Company's selection of such extended interest payment period to the
Holders by first class mail, postage prepaid.
SECTION 4.02 Prohibition Against Dividends. etc.
-----------------------------------
The Company shall not declare or pay any dividend on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
Capital Stock (i) during an Extension Period, (ii) if at such time there
shall have occurred and is continuing any Default or Event of Default, or
(iii) if the Company shall be in default with respect to its payment or other
obligations under any Guarantee Agreement.
SECTION 4.03 SEC Reports.
-----------
The Company shall file with the Trustee, within 15 days after it files
them with the SEC, copies of its annual report and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act. If the Company is not subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Company shall file with the
Trustee such information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which are specified in Sections 13 or 15(d) of the Exchange Act.
The Company shall also comply with the provisions of Section 314(a) of the
TIA.
SECTION 4.04 Compliance Certificates.
-----------------------
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each of the Company's fiscal years, an Officer's Certificate
stating whether or not the signer knows of any Default or Event of Default.
Such certificate shall contain a certification from the principal executive
officer, principal financial officer or principal accounting officer of the
Company as to his or her knowledge of the Company's compliance with all
conditions
25
<PAGE>
and covenants under this Indenture. For purposes of this Section 4.04(a),
such compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If such Officer does
know of such a Default or Event of Default, the Officer's Certificate shall
describe any such Default or Event of Default, and its status. Such Officer's
Certificate need not comply with Sections 11.04 and 11.05 hereof.
(b) The Company shall deliver to the Trustee any information
reasonably requested by the Trustee in connection with the compliance by the
Trustee or the Company with the TIA.
SECTION 4.05 Further Instruments and Acts.
----------------------------
Upon request of the Trustee, the Company shall execute and deliver
such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
SECTION 4.06 Payments for Consents.
---------------------
Neither the Company nor any Subsidiary shall, directly or indirectly,
pay or cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder of any Debentures for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Debentures unless such consideration is offered to be paid
or agreed to be paid to all Holders of the Debentures who so consent, waive
or agree to amend in the time frame set forth in the documents soliciting
such consent, waiver or agreement.
SECTION 4.07 Payment of Expenses of Trust I.
------------------------------
The Company covenants for the benefit of the Holders of the Series A
Debentures to pay all of the costs and expenses of Trust I in accordance with
Section 2.03(b) of the Trust I Agreement and to pay the taxes of Trust I in
accordance with Section 2.03(c) of the Trust I Agreement in order to permit
Trust I to make distributions on and redemptions of the Series A Preferred
Securities in accordance with Article IV of the Trust I Agreement.
26
<PAGE>
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When the Company May Merge, Etc.
-------------------------------
The Company may not consolidate with or merge with or into, or sell,
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety (either in one transaction or a series of
transactions) to, any Person unless:
(1) the Person formed by or surviving such consolidation or merger or
to which such sale, conveyance, transfer or lease shall have been made (the
"Successor") if other than the Company, (a) is organized and existing under
the laws of the United States of America or any State thereof or the District
of Columbia, and (b) shall expressly assume by a supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
all the obligations of the Company under the Debentures and the Indenture;
(2) immediately prior to and after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the Successor
Person or any Subsidiary as a result of such transaction as having been
incurred by such Person or such Subsidiary at the time of such transaction),
no Default or Event of Default shall have occurred and be continuing; and
(3) the Company delivers to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, sale,
conveyance, transfer or lease and such supplemental indenture comply with
this Indenture.
The Successor will be the successor to the Company, and will be
substituted for, and may exercise every right and power and become the
obligor on the Debentures with the same effect as if the Successor had been
named as the Company herein but, in the case of a sale, conveyance, transfer
or lease of all or substantially all of the assets of the Company, the
predecessor Company will not be released from its obligation to pay the
principal of and premium, if any, and interest on the Debentures.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
-----------------
An "Event of Default" occurs with respect to the Debentures of any
series if one of the following shall have occurred and be continuing:
27
<PAGE>
(1) The Company defaults in the payment, when due and payable, of (a)
interest on any Debenture of that series and the default continues for a
period of 30 days; provided, that during an Extension Period for the
Debentures of that series, failure to pay interest on the Debentures of that
series shall not constitute a Default or Event of Default hereunder, or (b)
the principal of or premium, if any, on any Debentures of that series when
the same becomes due and payable on the Stated Maturity Date thereof, upon
acceleration, on any Redemption Date, or otherwise;
(2) The Company defaults in the performance of or fails to comply
with any of its other covenants or agreements in the Debentures of that
series or this Indenture or in any supplemental indenture under which the
Debentures of that series may have been issued and such failure continues for
60 days after receipt by the Company of a "Notice of Default";
(3) The Company, pursuant to or within the meaning of any Bankruptcy
Law:
(a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief against it in
an involuntary case or proceeding;
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property, and such Custodian is
not discharged within 60 days;
(d) makes a general assignment for the benefit of its creditors;
or
(e) admits in writing its inability to pay its debts generally
as they become due; or
(4) A court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Company in an involuntary case or
proceeding;
(b) appoints a Custodian of the Company for all or substantially
all of its properties;
(c) orders the liquidation of the Company;
28
<PAGE>
(d) and in each case the order or decree remains unstayed and in
effect for 60 days.
The foregoing will constitute an Event of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or
is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11 of the United States Code, or
any similar federal or state law for the relief of debtors. "Custodian" means
any receiver, trustee, assignee, liquidator, sequestrator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (2) above is not an Event of Default until (i)
the Trustee provides a "Notice of Default" to the Company or the Holders of
at least 25% in aggregate principal amount of the Debentures of that series
at the time outstanding or, if that series of Debentures is held by a Trust,
the holders of at least 25% in aggregate liquidation amount of the
outstanding Preferred Securities of that Trust provide a "Notice of Default"
to the Company and the Trustee and (ii) the Company does not cure such
Default within the time specified in clause (2) above after receipt of such
notice. Any such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default."
SECTION 6.02 Acceleration.
------------
If any Event of Default with respect to the Debentures of any series
other than an Event of Default under clause (3) or (4) of Section 6.01 hereof
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Debentures of that series then outstanding
may declare the principal of all the Debentures of that series due and
payable, provided that in the case of a series of Debentures then held by a
Trust, if upon an Event of Default with respect to the Debentures of that
series the Trustee or the Holders of at least 25% in aggregate principal
amount of the Debentures of that series fail to declare the principal of the
Debentures of that series to be immediately due and payable, the holders of
at least 25% in aggregate liquidation amount of the outstanding Preferred
Securities of that Trust shall have such right by a notice in writing to the
Company and the Trustee. Upon such a declaration, such principal, together
with all interest accrued thereon, shall be due and payable immediately. The
Holders of at least a majority in aggregate principal amount of the
Debentures of that series at the time outstanding, in each case, by notice to
the Trustee, may rescind such an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default with respect to such series of Debentures have been cured
or waived except nonpayment of principal or interest that has become due
solely because of acceleration; provided that if the principal of a series of
Debentures has been declared due and payable by the holders of the Preferred
Series of a Trust, no rescission of acceleration will be effective unless
consented to by the holders of at least a majority in aggregate liquidation
amount of the Preferred
29
<PAGE>
Securities of that Trust. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
If an Event of Default specified in clause (3) or (4) of Section 6.01
hereof occurs, the principal of and interest on all the Debentures shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Debentureholders.
SECTION 6.03 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may, in
its own name or as trustee of an express trust, institute, pursue and
prosecute any proceeding, including, without limitation, any action at law or
suit in equity or other judicial or administrative proceeding to collect the
payment of principal of or premium, if any, or interest on the Debentures of
the series that is in default, to enforce the performance of any provision of
the Debentures of that series or this Indenture or to obtain any other
available remedy.
The Trustee may maintain a proceeding even if it does not possess any
of the Debentures or does not produce any of the Debentures in the
proceeding. A delay or omission by the Trustee, any Debentureholder or the
holders of Preferred Securities in exercising any right or remedy accruing
upon an Event of Default shall not impair such right or remedy or constitute
a waiver of, or acquiescence in, such Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults.
-----------------------
If a Default or Event of Default with respect to a series of
Debentures has occurred and is continuing, the Holders of at least a majority
in aggregate principal amount of the Debentures of that series at the time
outstanding, or, if that series of Debentures is held by a Trust, the holders
of at least a majority in liquidation amount of
30
<PAGE>
the Preferred Securities of that Trust, in each case by notice to the Trustee
and the Company, may waive an existing Default or Event of Default and its
consequences except a Default or Event of Default in the payment of the
principal or premium, if any, or interest on any Debenture of that series.
When a Default or Event of Default is waived, it is deemed cured and shall
cease to exist, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any consequent right.
SECTION 6.05 Control by Majority.
-------------------
The Holders of at least a majority in aggregate principal amount of
the Debentures of each series affected (with each such series voting as a
class) or, if that series of Debentures is held by a Trust, the holders of at
least a majority in liquidation amount of the Preferred Securities of that
Trust, may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines in good faith is unduly prejudicial to the rights of other
Debentureholders or may involve the Trustee in personal liability. The
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, including withholding notice to the Holders
of the Debentures of continuing default (except in the payment of the
principal (other than any mandatory sinking fund payment) or premium, if any
or interest on any Debentures) if the Trustee considers it in the interest of
the Holders of the Debentures to do so.
SECTION 6.06 Limitation on Suits.
-------------------
Except as provided in Section 6.07 hereof, no Debentureholder of any
series or the holders of Preferred Securities of the Trust which is the
Holder of that series of Debentures may pursue any remedy with respect to
this Indenture or the Debentures unless:
(1) the Holders or the holders of such Preferred Securities give to
the Trustee written notice stating that an Event of Default with respect to
that series is continuing;
(2) the Holders of at least 25% in principal amount of the Debentures
of that series or the holders of at least 25% in aggregate liquidation amount
of such Preferred Securities make a written request to the Trustee to pursue
a remedy;
(3) the Holders or the holders of such Preferred Securities provide
to the Trustee reasonable security and indemnity against any loss, liability
or expense satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security and indemnity;
and
(5) during such 60 day period, the Holders of a majority in principal
amount of the Debentures of that series or the holders of at least a majority
in aggregate liquidation amount of such Preferred Securities do not give the
Trustee a direction inconsistent with the request.
A Holder of Debentures or a holder of Preferred Securities may not use
this Indenture to prejudice the rights of another Debentureholder or a holder
of Preferred Securities or to obtain a preference or priority over another
Debentureholder or holder of Preferred Securities.
31
<PAGE>
SECTION 6.07 Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal and premium (if any) or interest
on the Debentures held by such Holder, on or after the respective due dates
expressed in the Debentures (in the case of interest, as the same may be
extended pursuant to Section 4.01(b) hereof) or any Redemption Date, is
absolute and unconditional and such right and the right to bring suit for the
enforcement of any such payment on or after such respective dates shall not
be impaired or affected adversely without the consent of each such Holder.
If the Debentures of a series are then held by a Trust, any holder of
Preferred Securities of such Trust shall have the right to bring suit for the
enforcement of payment of Debentures of such series having a principal amount
equal to the aggregate liquidation amount of the Preferred Securities of such
holder.
SECTION 6.08 Collection Suit by the Trustee.
------------------------------
If an Event of Default described in Section 6.01(1) hereof occurs and
is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company or any obligor on the
Debentures for the whole amount owing with respect to the Debentures and the
amounts provided for in Section 7.07 hereof.
SECTION 6.09 The Trustee May File Proofs of Claim.
------------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or its properties or assets, the
Trustee shall be entitled and empowered, by intervention in such proceeding
or otherwise:
(1) to file and prove a claim for the whole amount of the principal
of and premium, if any, and interest on the Debentures and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and of the Holders allowed in such judicial proceeding; and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any Custodian
in any such judicial proceeding is hereby authorized by each Holder to make
such payments to the Trustee and, in the event that the Trustee shall consent
to the making of such payments directly to the Holders, to pay the Trustee
any amount due it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts
due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization,
32
<PAGE>
arrangement, adjustment or composition affecting the Debentures or the rights
of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article 6, it
shall, subject to Article 10 hereof, pay out the money in the following
order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: to Holders of Debentures in respect of which or for the benefit
of which such money has been collected for amounts due and unpaid
on such Debentures for the principal amount, Redemption Price or
interest, if any, as the case may be, ratably, without preference
or priority of any kind, according to such amounts due and
payable on such Debentures; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a Record Date and payment date for any payment to
Debentureholders pursuant to this Section 6.10.
SECTION 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any
party litigant (other than the Trustee) in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07
hereof or a suit by Holders of more than 10% in aggregate principal amount of
the Debentures of any series or, if a series of Debentures is held by a
Trust, the holders of no more than 10% in aggregate liquidation amount of the
Preferred Securities of that Trust.
SECTION 6.12 Waiver of Stay; Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter in force,
that would prohibit or forgive the Company from paying all
33
<PAGE>
or any portion of the principal of or premium, if any, or interest on the
Debentures as contemplated herein or affect the covenants or the performance
by the Company of its obligations under this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
THE TRUSTEE
SECTION 7.01 Duties of the Trustee.
---------------------
(a) If an Event of Default occurs and is continuing with respect to
the Debentures of any series, the Trustee shall exercise the rights and
powers vested in it by this Indenture with respect to that series and use the
same degree of care and skill in its exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Debentures of any series, (i) the Trustee need perform only those
duties with respect to that series that are specifically set forth in this
Indenture or the TIA and no others; and (ii) in the absence of bad faith on
its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this Section 7.01(c) does not limit the effect of Section
7.01(b) hereof;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
34
<PAGE>
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to Section 7.01(a), (b), (c) and (e) and Section 7.02
hereof.
(e) The Trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives security and indemnity reasonably satisfactory
to it against any loss, liability or expense (including reasonable counsel
fees).
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. Except as
otherwise provided in Section 3.05 and Section 8.01 hereof, the Trustee shall
not be liable for interest on any money held by it hereunder.
SECTION 7.02 Rights of the Trustee.
---------------------
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officer's Certificate and, if appropriate, an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officer's Certificate and Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or within
its rights or powers.
(e) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security and indemnity against the
costs, expenses and liabilities (including reasonable counsel fees) which
might be incurred by it in compliance with such request or direction.
35
<PAGE>
SECTION 7.03 Individual Rights of the Trustee.
--------------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Debentures and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Paying Agent, Registrar or co-registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04 The Trustee's Disclaimer.
------------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Debentures. The Trustee shall not be accountable for
the Company's use of the proceeds from the Debentures, and the Trustee shall
not be responsible for any statement in this Indenture or the Debentures or
any report or certificate issued by the Company hereunder or any registration
statement relating to the Debentures (other than the Trustee's Certificate of
Authentication and the Trustee's Statement of Eligibility on Form T-1), or
the determination as to which beneficial owners are entitled to receive any
notices hereunder.
SECTION 7.05 Notice of Defaults.
------------------
If a Default occurs and is continuing with respect to the Debentures
of any series and if it is known to the Trustee, the Trustee shall mail to
each Holder of a Debenture of that series notice of the Default within 90
days after it becomes known to the Trustee unless such Default shall have
been cured or waived. Except in the case of a Default described in Section
6.01(1) hereof, the Trustee may withhold such notice if and so long as a
committee of Trust Officers in good faith determines that the withholding of
such notice is in the interests of the Holders of the Debentures of that
series. The Trustee shall not be charged with knowledge of any Default
(except in the case of a Default under Section 6.01(1) hereof) unless a
responsible Trust Officer assigned to the corporate trust administration
department of the Trustee shall have actual knowledge of the Default. The
second sentence of this Section 7.05 shall be in lieu of the proviso to TIA
Section 315(b). Said proviso is hereby expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 7.06 Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 31, beginning with the May 31 next
following the date of this Indenture, the Trustee shall mail to each
Debentureholder, and such other holders that have submitted their names to
the Trustee for such purpose, a brief report dated as of such May 31 in
accordance with and to the extent required under TIA Section 313.
A copy of each report at the time of its mailing to Debentureholders
shall be filed with the Company, the SEC and any securities exchange on which
the Debentures are
36
<PAGE>
listed. The Company agrees to promptly notify the Trustee whenever the
Debentures become listed on any securities exchange and of any listing
thereof.
SECTION 7.07 Compensation and Indemnity.
--------------------------
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(2) to reimburse the Trustee upon its request for reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, and advances of its agents and counsel,
provided that prior to any Event of Default, the Trustee shall only have one
counsel), including all reasonable expenses and advances incurred or made by
the Trustee in connection with any Event of Default or any membership on any
creditors' committee, except any such expense or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors and
shareholders, for, and to hold it harmless against, any and all loss,
liability or expense, incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of its
powers or duties hereunder.
Before, after or during an Event of Default with respect to the
Debentures of a series, the Trustee shall have a claim and lien prior to the
Debentures of that series as to all property and funds held by it hereunder
for any amount owing it for its fees and expenses or any predecessor Trustee
pursuant to this Section 7.07, except with respect to funds held by the
Trustee or any Paying Agent in trust for the payment of principal of,
premium, if any, or interest on particular Debentures pursuant to Section
2.06 or Section 8.01 hereof.
The Company's payment obligations pursuant to this Section 7.07 are
not subject to Article 10 of this Indenture and shall survive the discharge
of this Indenture. When the Trustee renders services or incurs expenses after
the occurrence of a Default specified in Section 6.01 hereof, the
compensation for services and expenses are intended to constitute expenses of
administration under any Bankruptcy Law.
37
<PAGE>
SECTION 7.08 Replacement of Trustee.
----------------------
The Trustee may resign at any time, by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation;
provided, however, no such resignation shall be effective until a successor
Trustee has accepted its appointment pursuant to this Section 7.08. The
Holders of at least a majority in aggregate principal amount of the
Debentures at the time outstanding may remove the Trustee by so notifying the
Trustee in writing and may appoint a successor Trustee, which shall be
subject to the consent of the Company unless an Event of Default has occurred
and is continuing. The Trustee shall resign if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of act .
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor
Trustee. A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Debentureholders. Subject to payment of all amounts owing
to the Trustee under Section 7.07 hereof and subject further to its lien
under Section 7.07, the retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee. If a successor Trustee does
not take office within 30 days after the retiring Trustee resigns or is
removed, the Company or the Holders of at least a majority in aggregate
principal amount of the Debentures at the time outstanding may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Debentureholder may petition any court of competent jurisdiction for its
removal and the appointment of a successor Trustee.
SECTION 7.09 Successor Trustee by Merger.
---------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to
another corporation, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
38
<PAGE>
SECTION 7.10 Eligibility: Disqualification.
-----------------------------
The Trustee shall at all times satisfy the requirements of TIA
Sections 310(a)(1) and 310(a)(2). The Trustee (or any Affiliate thereof which
has unconditionally guaranteed the obligations of the Trustee hereunder)
shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recently published annual report of condition. The Trustee
shall comply with TIA Section 310(b). In determining whether the Trustee has
conflicting interests as defined in TIA Section 310(b)(1), the provisions
contained in the proviso to TIA Section 310(b)(1) and the Trustee's Statement
of Eligibility on Form
T-1 shall be deemed incorporated herein.
SECTION 7.11 Preferential Collection of Claims Against the Company.
-----------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company,
the Trustee shall be subject to the provisions of the TIA regarding the
collection of claims against the Company.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONEYS
SECTION 8.01 Satisfaction and Discharge of Indenture.
---------------------------------------
The Company shall be deemed to have paid and discharged the entire
indebtedness on any series of the Debentures outstanding on the date the
Company has irrevocably deposited or caused to be irrevocably deposited with
the Trustee or any Paying Agent as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Debentures of such series (1) cash (which may be held in an interest bearing
account insured by the Federal Deposit Insurance Corporation) in an amount,
or (2) U.S. Government Obligations, maturing as to principal and interest at
such times and in such amounts as will ensure the availability of cash, or
(3) a combination thereof, sufficient to pay the principal of and premium, if
any, and interest on all Debentures of such series then outstanding, provided
that in the case of redemption, notice of redemption shall have been given or
the Company shall have irrevocably instructed the Trustee to give such
notice; and further provided that the following conditions shall have been
met:
(A) no Default or Event of Default with respect to the Debentures
of such series has occurred and is continuing on the date of such deposit
or occurs as a result of such deposit;
39
<PAGE>
(B) the Company has delivered to the Trustee an Officer's
Certificate certifying that there does not exist (i) a default in the
payment of all or any portion of any Senior Indebtedness or (ii) any other
default affecting Senior Indebtedness permitting its acceleration as the
result of which the maturity of Senior Indebtedness has been accelerated;
(C) the Company has delivered to the Trustee (i) either a private
Internal Revenue Service ruling or an Opinion of Counsel to the effect that
the Holders of the Debentures of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to federal income tax on the
same amount and in the manner and at the same times as would have been the
case if such deposit, defeasance and discharge had not occurred, and an
Opinion of Counsel to the effect that (A) the deposit shall not result in
the Company, the Trustee or the trust being deemed to be an "investment
company" under the Investment Company Act of 1940, as amended, and (B) such
deposit creates a valid trust in which the Holders of the Debentures of
such series have the sole beneficial interest or that the Holders of the
Debentures of such series have a nonavoidable first priority security
interest in such trust; and
(D) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the defeasance contemplated by this provision have
been complied with.
Upon such deposit, provisions of this Indenture with respect to such series
of Debentures shall no longer be in effect (except as to (1) the rights of
registration of transfer and exchange of Debentures of such series, (2) the
replacement of apparently mutilated, defaced, destroyed, lost or stolen
Debentures of such series, (3) the rights of the Holders of the Debentures of
such series to receive payments of the principal thereof and premium, if any,
and interest thereon, (4) the rights of the Holders of the Debentures of such
series as beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them, (5) the obligation of the Company
to maintain an office or agency for payments on and registration of transfer
of the Debentures of such series, (6) the rights, obligations and immunities
of the Trustee hereunder, and (7) the obligations of the Company to the
Trustee for compensation and indemnity under Section 7.07 hereof; and the
Trustee shall, at the request and expense of the Company, execute proper
instruments acknowledging the same.
SECTION 8.02 Application by Trustee of Funds Deposited for Payment
-----------------------------------------------------
of Debentures.
-------------
Subject to Section 8.04 hereof, all moneys deposited with the Trustee
pursuant to Section 8.01 hereof shall be held in trust and applied by it to
the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent), to the
40
<PAGE>
Holders of the Debentures of the series for the payment or redemption of
which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 8.03 Repayment of Moneys Held by Paying Agent.
----------------------------------------
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under this Indenture shall, upon
demand of the Company, be repaid to it or paid to the Trustee, and thereupon
such Paying Agent shall be released from all further liability with respect
to such moneys.
SECTION 8.04 Return of Moneys Held by the Trustee and Paying Agent
-----------------------------------------------------
Unclaimed for Three Years.
-------------------------
Any moneys deposited with or paid to the Trustee or any Paying Agent
for the payment of the principal of and premium, if any, or interest on the
Debentures of any series and not applied but remaining unclaimed for three
years after the date when such principal, premium, if any, or interest shall
have become due and payable shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Company by the Trustee or such Paying Agent, and the Holders of
such Debentures shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look
only to the Company for any payment which such Holder may be entitled to
collect, and all liability of the Trustee or any Paying Agent with respect to
such moneys shall thereupon cease.
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders.
--------------------------
From time to time, when authorized by a resolution of the Board of
Directors, the Company and the Trustee, without notice to or the consent of
any Holders of the Debentures, may amend or supplement this Indenture:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article 5 hereof;
(3) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures;
41
<PAGE>
(4) to make any other change that does not in the reasonable judgment
of the Company adversely affect the rights of any Debentureholder;
(5) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA; or
(6) to set forth the terms and conditions, which shall not be
inconsistent with this Indenture, of the series of Debentures (other than the
Series A Debentures) that are to be issued hereunder and the form of
Debentures of such series.
SECTION 9.02 With Consent of Holders.
-----------------------
The Company and the Trustee may amend this Indenture in any manner not
permitted by Section 9.01 or may waive future compliance by the Company with
any provisions of this Indenture with the consent of the Holders of at least
a majority in aggregate principal amount of the Debentures of each series
affected thereby. Such an amendment or waiver may not, without the consent
of each Holder of the Debentures affected thereby:
(1) reduce the principal amount of such Debentures;
(2) reduce the principal amount of such Debentures the Holders of
which must consent to an amendment of the Indenture or a waiver;
(3) change the stated maturity of the principal of or the interest on
or rate of interest of such Debentures;
(4) change adversely to the Holders the redemption provisions of
Article 3 hereof;
(5) change the currency in respect of which the payments on such
Debentures are to be made;
(6) make any change in Article 10 hereof that adversely affects the
rights of the Holders of the Debentures or any change to any other Section
hereof that adversely affects their rights under Article 10 hereof; or
(7) change Section 6.07 hereof;
provided that, in the case of the outstanding Debentures of a series then
held by a Trust, no such amendment shall be made that adversely affects the
holders of the Preferred Securities of that Trust, and no waiver of any Event
of Default with respect to the Debentures of that series or compliance with
any covenant under this Indenture shall be effective, without the
42
<PAGE>
prior consent of the holders of at least a majority of the aggregate
liquidation amount of the outstanding Preferred Securities of that Trust.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Debentures, or which modifies
the rights of the Holders of Debentures of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debentures of any other series.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
If certain Holders agree to defer or waive certain obligations of the
Company hereunder with respect to Debentures held by them, such deferral or
waiver shall not affect the rights of any other Holder to receive the payment
or performance required hereunder in a timely manner.
After an amendment or waiver under this Section 9.02 becomes
effective, the Company shall mail to each Holder a notice briefly describing
the amendment or waiver. Any failure of the Company to mail such notices, or
any defect therein, shall not, however, in any way impair or affect the
validity of such amendment or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article 9 shall
comply with the TIA.
SECTION 9.04 Revocation and Effect of Consents. Waivers and Actions.
------------------------------------------------------
Until an amendment, waiver or other action by Holders becomes
effective, a consent to it or any other action by a Holder of a Debenture
hereunder is a continuing consent by the Holder and every subsequent Holder
of that Debenture or portion of the Debenture that evidences the same
obligation as the consenting Holder's Debenture, even if notation of the
consent, waiver or action is not made on such Debenture. However, any such
Holder or subsequent Holder may revoke the consent, waiver or action as to
such Holder's Debenture or portion of the Debenture if the Trustee receives
the notice of revocation before the consent of the requisite aggregate
principal amount of such Debentures then outstanding has been obtained and
not revoked. After an amendment, waiver or action becomes effective, it
shall bind every Holder of the Debentures of the related series, except as
provided in Section 9.02 hereof.
43
<PAGE>
The Company may, but shall not be obligated to, fix a Record Date for
the purpose of determining the Holders entitled to consent to any amendment
or waiver. If a Record Date is fixed, then, notwithstanding the first two
sentences of the immediately preceding paragraph, those Persons who were
Holders at such Record Date or their duly designated proxies, and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver
or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such Record Date. No such consent shall be valid
or effective for more than 90 days after such Record Date.
SECTION 9.05 Notation on or Exchange of Debentures.
-------------------------------------
Debentures of the related series authenticated and made available for
delivery after the execution of any supplemental indenture pursuant to this
Article 9 may, and shall, if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Debentures so modified as
to conform, in the opinion of the Trustee and the Board of Directors, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and made available for delivery by the Trustee in exchange for
outstanding Debentures.
SECTION 9.06 Trustee to Execute Supplemental Indentures.
------------------------------------------
The Trustee shall execute any supplemental indenture authorized
pursuant to this Article 9 if the supplemental indenture does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may, but need not, execute it. In executing such
supplemental indenture the Trustee shall be entitled to receive, and shall be
fully protected in relying upon, an Officer's Certificate and Opinion of
Counsel stating that such supplemental indenture is authorized or permitted
by this Indenture.
SECTION 9.07 Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes
and every Holder of Debentures of the related series theretofore or
thereafter authenticated and made available for delivery hereunder shall be
bound thereby.
44
<PAGE>
ARTICLE 10
SUBORDINATION
SECTION 10.01 Debentures Subordinated to Senior Indebtedness.
----------------------------------------------
Notwithstanding the provisions of Section 6.10 hereof or any other
provision herein or in any Debenture, the Company and the Trustee or Holder
by his acceptance thereof (a) covenants and agrees, that all payments by the
Company of the principal of and premium, if any, and interest on the
Debentures (other than Debentures which have been discharged pursuant to
Article 8) shall be subordinated in accordance with the provisions of this
Article 10 to the prior payment in full, in cash or cash equivalents, of all
amounts payable on, under or in connection with Senior Indebtedness, and (b)
acknowledges that holders of Senior Indebtedness are or shall be relying on
this Article 10.
SECTION 10.02 Priority and Payment of Proceeds in Certain Events:
---------------------------------------------------
Remedies Standstill.
-------------------
(a) Upon any payment or distribution of assets or securities of the
Company, as the case may be, of any kind or character, whether in cash,
property or securities, upon any dissolution or winding up or total or
partial liquidation or reorganization of the Company, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all amounts payable on, under or in connection with Senior Indebtedness
(including any interest accruing on such Senior Indebtedness subsequent to
the commencement of a bankruptcy, insolvency or similar proceeding) shall
first be paid in full in cash, or payment provided for in cash or cash
equivalents, before the Holders or the Trustee on behalf of the Holders or
the holders of Preferred Securities shall be entitled to receive from the
Company any payment of principal of or premium, if any, or interest on the
Debentures or distribution of any assets or securities.
(b) No direct or indirect payment by or on behalf of the Company of
principal of or premium, if any, or interest on the Debentures (other than
Debentures which have been discharged pursuant to Article 8) whether pursuant
to the terms of the Debentures or upon acceleration or otherwise shall be
made if, any the time of such payment, there exists (i) a default in the
payment of all or any portion of any Senior Indebtedness and the Trustee has
received written notice thereof from the Company, or from holders of Senior
Indebtedness or from any trustee, representative or agent therefor, or (ii)
any other default affecting Senior Indebtedness permitting its acceleration,
as a result of which the maturity of Senior Indebtedness has been accelerated
and the Trustee has received written notice from a trustee, representative or
agent for the holders of the Senior Indebtedness or the holders of at least a
majority in principal amount of the Senior Indebtedness then outstanding of
such default and acceleration, and such default shall not have been cured or
waived by or on behalf of the holders of such Senior Indebtedness.
45
<PAGE>
(c) If, notwithstanding the foregoing provisions prohibiting such
payment or distribution, the Trustee or any Holder shall have received any
payment on account of the principal of or premium, if any, or interest on the
Debentures (other than as permitted by subsections (a) and (b) of this
Section 10.02) when such payment is prohibited by this Section 10.02 and
before all amounts payable on, under or in connection with Senior
Indebtedness are paid in full in cash or cash equivalents then and in such
event (subject to the provisions of Section 10.08 hereof) such payment or
distribution shall be received and held in trust for the holders of Senior
Indebtedness and, at the written direction of the trustee, representative or
agent for the holders of the Senior Indebtedness, shall be paid to the
holders of the Senior Indebtedness remaining unpaid to the extent necessary
to pay such Senior Indebtedness in full in cash or cash equivalents.
Upon any payment or distribution of assets or securities referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely
upon any order or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are
pending, and upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making any such payment or
distribution, delivered to the Trustee for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 10.
SECTION 10.03 Payments which May Be Made Prior to Notice.
------------------------------------------
Nothing in this Article 10 or elsewhere in this Indenture shall
prevent (i) the Company, except under the conditions described in Section
10.02 hereof, from making payments of principal of or premium, if any, or
interest on the Debentures or from depositing with the Trustee any monies for
such payments, or (ii) the application by the Trustee of any monies deposited
with it for the purpose of making such payments of principal of or premium,
if any, or interest on the Debentures, to the Holders entitled thereto,
unless at least one Business Day prior to the date when such payment would
otherwise (except for the prohibitions contained in Section 10.02 hereof)
become due and payable the Trustee shall have received the written notice
provided for in Section 10.02(b)(i) or (ii) hereof.
SECTION 10.04 Rights of Holders of Senior Indebtedness Not to Be
--------------------------------------------------
Impaired.
--------
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time or in any way be
prejudiced or impaired by any act or failure to act in good faith by any such
holder, or by any noncompliance by the Company with the terms and provisions
and covenants herein regardless of any knowledge thereof any such holder may
have or otherwise be charged with.
46
<PAGE>
The provisions of this Article 10 are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior Indebtedness.
Notwithstanding anything to the contrary in this Article 10, to the extent
any Holders or the Trustee have paid over or delivered to any holder of
Senior Indebtedness any payment or distribution received on account of the
principal of or premium (if any) or interest on the Debentures to which any
other holder of Senior Indebtedness shall be entitled to share in accordance
with Section 10.02 hereof, no holder of Senior Indebtedness shall have a
claim or right against any Holders or the Trustee with respect to any such
payment or distribution or as a result of the failure to make payments or
distributions to such other holder of Senior Indebtedness.
SECTION 10.05 Trustee May Take Action to Effectuate Subordination.
---------------------------------------------------
Each Holder of a Debenture, by his acceptance thereof, authorizes and
directs the Trustee on his behalf to take such action as may be required by
the trustee, representative or agent for holders of Senior Indebtedness or by
the Company to effectuate, as between the holders of Senior Indebtedness and
the Holders, the subordination as provided in this Article 10 and appoints
the Trustee his attorney-in-fact for any and all such purposes.
SECTION 10.06 Subrogation.
-----------
Upon the payment in full, in cash or cash equivalents, of all Senior
Indebtedness, any Holder shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of assets of
the Company made on such Senior Indebtedness until the Debentures shall be
paid in full; and for the purposes of such subrogation, no payments or
distributions to holders of such Senior Indebtedness of any cash property or
securities to which such Holders of the Debentures would be entitled except
for this Article 10, and no payment pursuant to this Article 10 to holders of
such Senior Indebtedness by such Holders of the Debentures, shall, as between
the Company, its creditors other than holders of such Senior Indebtedness and
such Holders of the Debentures, be deemed to be a payment by the Company to
or on account of such Senior Indebtedness, it being understood that the
provisions of this Article 10 are solely for the purpose of defining the
relative rights of the holders of such Senior Indebtedness, on the one hand,
and such Holders of the Debentures, on the other hand.
If any payment or distribution to which Holders of Debentures would
otherwise have been entitled but for the provisions of this Article 10 shall
have been applied, pursuant to this Article 10, to the payment of all Senior
Indebtedness then and in such case such Holders of the Debentures shall be
entitled to receive from the holders of such Senior Indebtedness at the time
outstanding any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount sufficient to pay, in cash or cash
equivalents, all such Senior Indebtedness in full.
47
<PAGE>
SECTION 10.07 Obligations of Company Unconditional: Reinstatement.
---------------------------------------------------
Nothing in this Article 10 or elsewhere in this Indenture or in any
Debenture is intended to or shall impair, as between the Company and Holders
of the Debentures, the obligations of the Company, which are absolute and
unconditional, to pay to such Holders the principal of and premium, if any,
and interest on the Debentures as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of such Holders of the Debentures and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee, any Holder from exercising all
remedies otherwise permitted by applicable law under this Indenture, subject
to the rights, if any, under this Article 10 of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
The failure to make a scheduled payment of principal of or premium, if
any, or interest on the Debentures by reason of Section 10.02 shall not
be construed as preventing the occurrence of an Event of Default under
Section 6.01 hereof; provided, however, that if (i) the conditions preventing
the making of such payment no longer exist, and (ii) such Holders of the
Debentures are made whole with respect to such omitted payments, the Event of
Default relating thereto (including any failure to pay any accelerated
amounts) shall be automatically waived, and the provisions of the Indenture
shall be reinstated as if no such Event of Default had occurred.
SECTION 10.08 Trustee Entitled to Assume Payments Not Prohibited in
-----------------------------------------------------
Absence of Notice.
-----------------
The Trustee or Paying Agent shall not be charged with the knowledge of
the existence of any default in the payment of all or a portion of any Senior
Indebtedness or any other default affecting Senior Indebtedness permitting
its acceleration, as a result of which the maturity of the Senior
Indebtedness has been accelerated, unless and until the Trustee or Paying
Agent shall have received written notice thereof from the Company or one or
more holders of Senior Indebtedness or from any trustee or agent therefor or
unless the Trustee or Paying Agent otherwise had actual knowledge thereof;
and, prior to the receipt of any such written notice or actual knowledge of a
responsible Trust Officer in the corporate trust administration department of
the Trustee or Paying Agent, the Trustee or Paying Agent may conclusively
assume that no such facts exist.
Unless at least one Business Day prior to the date when by the terms
of this Indenture any monies are to be deposited by the Company with the
Trustee or any Paying Agent for any purpose (including, without limitation,
the payment of the principal of or premium, if any, or interest on any
Debenture), the Trustee or Paying Agent shall have received with respect to
such monies the notice provided for in Section 10.02 or a
48
<PAGE>
responsible Trust Officer in the corporate trust administration department of
the Trustee or Paying Agent shall have actual knowledge of default in the
payment of all or a portion of any Senior Indebtedness or any other default
affecting Senior Indebtedness permitting its acceleration, as the result of
which the maturity of the Senior Indebtedness has been accelerated, the
Trustee or Paying Agent shall have full power and authority to receive and
apply such monies to the purpose for which they were received. Neither of
them shall be affected by any notice to the contrary, which may be received
by either on or after such date. The foregoing shall not apply to the Paying
Agent if the Company is acting as Paying Agent. Nothing in this Section 10.08
shall limit the right of the holders of Senior Indebtedness to recover
payments as contemplated by Section 10.02 hereof. The Trustee or Paying Agent
shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself or itself to be a holder of such Senior
Indebtedness (or a trustee or agent on behalf of, or other representative of,
such holder) to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of any such
holder. The Trustee shall not be deemed to have any duty to the holders (and
shall be fully protected in relying upon such notice) of Senior Indebtedness.
SECTION 10.09 Right of Trustee to Hold Senior Indebtedness.
--------------------------------------------
The Trustee and any Paying Agent shall be entitled to all of the
rights set forth in this Article 10 in respect of any Senior Indebtedness at
any time held by them to the same extent as any other holder of such Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee or any Paying Agent of any of its rights as such holder.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by operation of subsection (c) of Section 318 of the TIA,
the imposed duties shall control. The provisions of Sections 310 to 317,
inclusive, of the TIA that impose duties on any Person (including provisions
automatically deemed included in an indenture unless the indenture provides
that such provisions are excluded) are a part of and govern this Indenture,
except as, and to the extent, they are expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 11.02 Notices.
-------
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing and delivered, telecopied or mailed by
first-class mail, postage prepaid, addressed as follows:
49
<PAGE>
if to the Company:
Public Service Electric and Gas Company
80 Park Plaza, T6B
P.O. Box 570
Newark, New Jersey 07101
Facsimile No.
Attention: Treasurer
if to the Trustee:
First Union National Bank
765 Broad Street
Newark, New Jersey 07101
Facsimile No.
Attention: Corporate Trust Department
The Company or the Trustee, by giving notice to the other, may
designate additional or different addresses for subsequent notices of
communications. The Company shall notify the holder, if any, of Senior
Indebtedness of any such additional or different addresses of which the
Company receives notice from the Trustee.
Any notice or communication given to a Debentureholder shall be mailed
or delivered to the Debentureholder at the Debentureholder's address as it
appears on the Register of the Registrar and shall be sufficiently given if
mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the
Debentureholders, it shall mail a copy to the Trustee and each Registrar,
Paying Agent or co-Registrar.
SECTION 11.03 Communication by Holders with Other Holders.
-------------------------------------------
Debentureholders may communicate, pursuant to TIA Section 312(b), with
other Debentureholders with respect to their rights under this Indenture or
the Debentures. The Company, the Trustee, the Registrar, the Paying Agent and
anyone else shall have the protection of TIA Section 312(c).
50
<PAGE>
SECTION 11.04 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officer's Certificate (complying with Section 11.05 hereof)
stating that, in the opinion of such Officer, all conditions precedent to the
taking of such action have been complied with; and
(2) if appropriate, an Opinion of Counsel (complying with Section
11.05 hereof) stating that, in the opinion of such counsel' all such
conditions precedent to the taking of such action have been complied with.
SECTION 11.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(1) a statement that each Person making such Officer's Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officer's Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such Person, such Person
has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement that, in the opinion of such Person, such covenant or
condition has been complied with; provided, however, that with respect to
matters of fact not involving any legal conclusion, an Opinion of Counsel may
rely on an Officer's Certificate or certificates of public officials.
SECTION 11.06 Severability Clause.
-------------------
If any provision in this Indenture or in the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
51
<PAGE>
SECTION 11.07 Rules by Trustee, Paying Agent and Registrar.
--------------------------------------------
The Trustee may make reasonable rules for action by or a meeting of
Debentureholders. The Registrar and Paying Agent may make reasonable rules
for their functions.
SECTION 11.08 Legal Holidays.
--------------
A "Legal Holiday" is any day other than a Business Day. If any
specified date (including a date for giving notice) is a Legal Holiday, the
action to be taken on such date shall be taken on the next succeeding day
that is not a Legal Holiday, and if such action is a payment in respect of
the Debentures, unless otherwise specified pursuant to Section 2.01 hereof no
principal, premium (if any) or interest installment shall accrue for the
intervening period; except that if any interest payment is due on a Legal
Holiday and the next succeeding day is in the next succeeding calendar year,
such payment shall be made on the Business Day immediately preceding such
Legal Holiday.
SECTION 11.09 Governing Law.
-------------
This Indenture and the Debentures shall be governed by and construed
in accordance with the laws of the State of New Jersey as applied to
contracts made and performed within the State of New Jersey, without regard
to its principles of conflicts of laws.
SECTION 11.10 No Recourse Against Others.
--------------------------
No director, officer, employee or stockholder, as such, of the Company
shall have any liability for any obligations of the Company under the
Debentures or this Indenture or for any claim based on, in respect of or by
reason of such obligations their creation. By accepting a Debenture, each
Debentureholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Debentures.
SECTION 11.11 Successors.
----------
All agreements of the Company in this Indenture and Debentures shall
bind its successors and assigns. All agreements of the Trustee in this
Indenture shall bind its successors and assigns.
SECTION 11.12 Multiple Original Copies of this Indenture.
------------------------------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. Any signed copy shall be sufficient proof of this Indenture.
52
<PAGE>
SECTION 11.13 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 11.14 Table of Contents: Headings. Etc.
--------------------------------
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 11.15 Benefits of the Indenture.
-------------------------
Except as expressly provided in Article 10 hereof with respect to
holders of Senior Indebtedness and in Articles 6 and 9 with respect to
holders of Preferred Securities, nothing in this Indenture or in the
Debentures, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder and the Holders of the
Debentures, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
53
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
PUBLIC SERVICE ELECTRIC AND
GAS COMPANY
By:
------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
FIRST UNION NATIONAL BANK,
as Trustee
By:
------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
54
<PAGE>
Exhibit A
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
_% Deferrable Interest Subordinated Debenture,
Series A
No. __
Public Service Electric and Gas Company, a New Jersey corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
____________________ or registered assigns, the principal sum of __________
Dollars on __________, ____, and to pay interest on said principal sum from
__________, ____ or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, quarterly in
arrears on March 31, June 30, September 30 and December 31, commencing June
30, 1996 (each, an "Interest Payment Date") at the rate of ___% per annum
until the principal hereof shall have become due and payable, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at
the same rate per annum. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months, and for any period shorter than thirty days, interest will be
computed on the basis of the actual number of days elapsed in such period.
In the event that any Interest Payment Date is not a Business Day, then
interest will be payable on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Debenture is registered at the close of business on
the Regular Record Date for such interest installment, which shall be the
15th day (whether or not a Business Day) of the last month of each quarter,
provided that if all of the Series A Debentures (as defined below) are then
held by PSE&G Capital Trust I (the "Trust") or the Series A Debentures are
held in book-entry-only form, the Regular Record Date shall be the close of
business on the Business Day next preceding such Interest Payment Date. Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and
may be paid to the Person in whose name this Debenture is registered at the
close of business on a Special Record Date to be fixed by the Trustee (as
defined below) for the payment of such defaulted interest, notice whereof
shall be given to the Holders of the Series A Debentures not less than 7 days
prior to such Special Record Date, as more fully provided in the Indenture.
A-1
<PAGE>
Payment of the principal of and interest on this Debenture will be
made in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. Payments
of interest on an Interest Payment Date will be made by check mailed to the
Holder hereof at the address shown in the Register or, at the option of the
Holder hereof, to such other place in the United States of America as the
Holder hereof shall designate to the Trustee in writing. At the request of a
Holder of at least $10,000,000 aggregate principal amount of Series A
Debentures, interest on such Debentures will be payable by wire transfer
within the continental United States in immediately available funds to the
bank account number specified in writing by such Holder to the Registrar
prior to the Regular Record Date.
The principal amount hereof and any interest due on the Stated
Maturity Date or a Redemption Date (other than an Interest Payment Date) will
be paid only upon surrender of this Debenture at the principal corporate
trust office of First Union National Bank, Paying Agent, in Newark, New
Jersey, or at such other office or agency of the Paying Agent as the Company
shall designate by written notice to the Holder of this Debenture.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is
issued subject to the provisions of the Indenture with respect thereto. The
Holder of this Debenture, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. The Holder of this Debenture,
by his acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Series A Debentures"),
specified in the Indenture, limited in aggregate principal amount to $______
, issued under and pursuant to an Indenture dated as June 1, 1996 (the
"Indenture") executed and delivered between the Company and First Union
National Bank, as trustee (the "Trustee"). The Series A Debentures are
initially being issued to the Trust, to be held on behalf of the Trust by its
property trustee (the "Property Trustee"). Concurrently with the issuance of
the Series A Debentures, the Trust is issuing its trust securities,
representing undivided beneficial interests in the assets of the Trust and
having an aggregate liquidation amount equal to the principal amount of the
Series A Debentures, including the Trust's Cumulative Quarterly Income
Preferred Securities, Series A (the "Preferred Securities"). By the terms of
the Indenture, Debentures are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in the Indenture
provided. Reference is made to the Indenture for a description of the
rights, limitations of rights, obligations, duties and
A-2
<PAGE>
immunities thereunder of the Trustee, the Company and Holders of the
Debentures. Each term used in this Debenture which is defined in the
Indenture and not defined herein shall have the meaning assigned to it in the
Indenture.
At the option of the Company, the Series A Debentures are redeemable
prior to maturity (i) at any time on or after __________, 2001, in whole or
in part, and (ii) if a Special Event shall occur and be continuing, in whole
(but not in part), in each case at 100% of the principal amount thereof plus
accrued interest to the Redemption Date. A "Special Event" shall mean either
a "Tax Event" or an "Investment Company Event." "Tax Event" shall mean that
the Company shall have received an opinion of counsel (which may be regular
counsel to the Company or an Affiliate, but not an employee thereof and which
must be acceptable to the Property Trustee of Trust I) experienced in such
matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such interpretation or pronouncement is announced on or after the date of
original issuance of Preferred Securities, there is more than an
insubstantial risk that (i) the Trust is subject to United States Federal
income tax with respect to interest received on the Debentures, (ii) interest
payable by the Company to the Trust on the Series A Debentures will not be
deductible for United States Federal income tax purposes or (iii) the Trust
is subject to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges. "Investment Company Event" means
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act Law") to
the effect that the Trust is or will be considered an "investment company"
that is required to be registered under the Investment Company Act of 1940,
as amended, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities.
At least 30 days but not more than 60 days before the Redemption Date,
the Trustee shall mail or caused to be mailed a notice of redemption by
first-class mail, postage prepaid, to each Holder of Series A Debentures to
be redeemed.
In the event of redemption of this Debenture in part only, a new
Series A Debenture or Debentures for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Series A Debentures
occurs and is continuing, the principal of and premium, if any, and interest
on the Series A Debentures may (and, in certain circumstances, shall) be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
A-3
<PAGE>
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth therein.
Subject to certain exceptions in the Indenture which require the
consent of every Holder, the Company and the Trustee may amend the Indenture
or may waive future compliance by the Company with any provisions of the
Indenture, with the consent of the Holders of at least a majority in
aggregate principal amount of the Debentures of each series affected thereby
provided that if the Series A Debentures are held by the Trust, no such
amendment or waiver that adversely affects the holders of the Preferred
Securities shall be effective without the prior consent of the holders of at
least a majority in aggregate liquidation amount of the outstanding Preferred
Securities. Subject to certain exceptions in the Indenture, without the
consent of any Debentureholder, the Company and the Trustee may amend the
Indenture to cure any ambiguity, defect or inconsistency, to bind a successor
to the obligations of the Indenture, to provide for uncertificated Debentures
in addition to certificated Debentures, to comply with any requirements of
the Debentures and the Securities and Exchange Commission in connection with
the qualification of the Indenture under the TIA, or to make any change that,
in the reasonable judgment of the Company, does not adversely affect the
rights of any Debentureholder. Amendments bind all Holders and subsequent
Holders.
No reference herein to the Indenture and no provision of this
Debenture or the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
So long as an Event of Default with respect to the Series A Debentures
has not occurred and is continuing, the Company shall have the right at any
time and from time to time to extend the interest payment period of the
Series A Debentures for up to 20 consecutive quarters (the "Extension
Period"), provided that no Extension Period shall extend beyond the Stated
Maturity Date or Redemption Date of any Series A Debenture. At the end of the
Extension Period, the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Series A
Debentures, compounded quarterly, to the extent that payment of such interest
is enforceable under applicable law). During such Extension Period, the
Company may not declare or pay any dividend on, redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock. Prior
to the termination of any such Extension Period, the Company may further
extend such Extension Period, provided that such Extension Period, together
with all such previous and further extensions, shall not exceed 20
consecutive quarters and shall not extend beyond the Stated Maturity Date or
Redemption Date of any Series A Debenture. At the termination of any such
Extended Interest Payment Period and upon the payment of all amounts then
due, the Company may elect to begin a new Extended Interest Payment Period,
subject to the foregoing restrictions.
A-4
<PAGE>
Series A Debentures are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is exchangeable for a like aggregate principal amount
of Series A Debentures of a different authorized denomination, as requested
by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the Holder hereof upon
surrender of this Debenture for registration of transfer at the office or
agency of the Registrar accompanied by a written instrument or instruments of
transfer inform satisfactory to the Registrar duly executed by the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Series A Debentures of authorized denominations and for the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to presentment for registration of transfer of this Debenture,
the Company, the Trustee, any Paying Agent and any Registrar may deem and
treat the Holder hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee
nor any Paying Agent nor any Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
This Debenture shall not be valid until an authorized signatory of the
Trustee manually signs and dates the Trustee's Certificate of Authentication
below.
A-5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
manually or by facsimile by its duly authorized officers and a facsimile of
its corporate seal to be affixed hereto or imprinted hereon.
PUBLIC SERVICE ELECTRIC AND
GAS COMPANY
By
-------------------------------------------
[SEAL] Name:
Title:
Attest:
_______________________
(Assistant) Secretary
A-6
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures, of the series
designated, referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK, as Trustee
By: ____________________________
Authorized Signatory
Dated: __________________________
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign
and transfer this Debenture to:
-----------------------------------------------------------------------------
-
(Insert assignee's social security or tax I.D. number)
-----------------------------------------------------------------------------
-
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________ agent to transfer this Debenture
on the books of the Register. The agent may substitute another to act for
him.
Dated: _______________ Signature:
----------------------------------
(Sign exactly as your name appears on
the other side of this Debenture)
Signature Guaranty: ____________________
A-8
Exhibit 4.4
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
and
FIRST UNION NATIONAL BANK, as Trustee
_____ SUPPLEMENTAL INDENTURE
Dated as of _________________
to
INDENTURE
Dated as of ____________
__% Deferrable Interest Subordinated Debentures, Series __
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1.
DEFINITIONS . . . . . . . . . . . . . . 2
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2.
THE SERIES __ DEBENTURES . . . . . . . . . . . 3
SECTION 2.01 Terms and Form of the Series __ Debentures . . . . . . . 3
ARTICLE 3.
REDEMPTION . . . . . . . . . . . . . . 4
SECTION 3.01 Redemption; Notice to Trustee . . . . . . . . . . . . . . 4
ARTICLE 4.
COVENANT . . . . . . . . . . . . . . . 4
SECTION 4.01 Payment of Expenses of Trust I . . . . . . . . . . . . . 4
ARTICLE 5.
MISCELLANEOUS . . . . . . . . . . . . . 5
SECTION 5.01 Confirmation of Indenture . . . . . . . . . . . . . . . 5
SECTION 5.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.03 Severability Clause . . . . . . . . . . . . . . . . . . 6
SECTION 5.04 No Recourse Against Others . . . . . . . . . . . . . . . 6
SECTION 5.05 Successors. . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.06 Multiple Original Copies of this Indenture . . . . . . . 6
SECTION 5.07 Table of Contents; Headings, Etc . . . . . . . . . . . . 6
<PAGE>
_____ SUPPLEMENTAL INDENTURE, dated as of _________________ by and
between Public Service Electric and Gas Company, a corporation duly organized
and existing under the laws of the State of New Jersey (the "Company") and
First Union National Bank, a national banking association organized and
existing under the laws of the United States of America, as trustee (the
"Trustee") under the Indenture dated as of ____________ between the Company
and the Trustee.
WHEREAS, the Company executed and delivered the Indenture dated as of
____________ to the Trustee to provide for the issuance of its deferrable
interest subordinated debentures (the "Debentures") in series from time to
time as might be determined by the Company and pursuant thereto, the Company
has issued its [list prior series].
WHEREAS, pursuant to an Amended and Restated Trust Agreement dated as
of ____________________ (the "Trust ___ Agreement"), among the Company, as
depositor, First Union National Bank, as Property Trustee (the "Property
Trustee ___" the Delaware Trustee named therein and the Administrative
Trustees named therein, there has been declared and established PSE&G Capital
Trust ___, a Delaware business trust ("Trust ____").
WHEREAS, Trust ____ intends to issue its Trust Securities (as defined
in the Trust ____ Agreement), including its ____% Cumulative Quarterly Income
Preferred Securities, Series __, representing undivided beneficial interests
in the assets of Trust __ and having a liquidation amount of $25 per security
(the "Series __ Preferred Securities").
WHEREAS, the Company has authorized the issuance of a series of
additional debentures pursuant to Section 2.04 of the Indenture to be
designated as the Company's __% Deferrable Interest Subordinated Debentures,
Series __ (the "Series __ Debentures") to be purchased by Trust ____ with
the proceeds of the Trust Securities, and to provide therefor, the Company
has duly authorized the execution and delivery of this _____ Supplemental
Indenture.
WHEREAS, all things necessary to make the Series __ Debentures when
duly issued and executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company, and to make this _____
Supplemental Indenture a valid and binding agreement of the Company, in
accordance with its terms, have been done.
NOW THEREFORE:
Each of the Company and the Trustee, intending to be legally bound
hereby, agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the holders of the Debentures, including the
Series __ Debentures:
<PAGE>
ARTICLE 1.
DEFINITIONS
SECTION 1.01 Definitions.
-----------
The following terms used in this _____ Supplemental Indenture shall
have the following meanings:
"Debentureholder" or "Holder" means a Person in whose name a Series __
Debenture is registered on the Registrar's books.
"Series __ Debentures" means any of the Company's __% Deferrable
Interest Subordinated Debentures, Series __ issued under this Indenture.
"Series __ Guarantee Agreement" means that certain Guarantee Agreement
issued by the Company with respect to the Series __ Preferred Securities, in
which the Company irrevocably and unconditionally agrees to pay the Guarantee
Payments (as defined in the Guarantee Agreement) to the holders of the Series
__ Preferred Securities.
"Series __ Preferred Securities" means the undivided beneficial
interests in the assets of Trust _____, having a liquidation amount of $25
and having rights provided therefor in the Trust ____ Agreement __.
"Trust ____" means the PSE&G Capital Trust __, a Delaware business
trust created by the Trust Agreement.
"Trust [ ] Agreement" means the Amended and Restated Trust Agreement
dated as of _____________, among the Company, as Depositor, Fidelity Union
National Bank, as Property Trustee, the Delaware Trustee named therein and
the Administrative Trustees named therein, as the same may be amended and
modified from time to time.
Each of the other terms used in this _____ Supplemental Indenture that
is defined in the Indenture and not defined herein shall have the meaning
assigned to it in the Indenture.
2
<PAGE>
ARTICLE 2.
THE SERIES __ DEBENTURES
SECTION 2.01 Terms and Form of the Series __ Debentures.
------------------------------------------
(a) The Series __ Debentures shall be designated "Public Service
Electric and Gas Company __% Deferrable Interest Subordinated Debentures,
Series __." The Series __ Debentures and the Trustee's Certificate of
Authentication shall be substantially in the form of Exhibit A attached
hereto. [The Series ___ Debentures shall initially be issued as global
Debentures in accordance with the provisions of Section 2.12 of the Indenture
with ___________ as Depositary.] The terms and provisions contained in the
Series __ Debentures shall constitute, and are hereby expressly made, a part
of this _____ Supplemental Indenture. The Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
(b) The aggregate principal amount of Series __ Debentures
outstanding at any time may not exceed $__________ except as provided in
Section 2.09 of the Indenture. The Series ___ Debentures shall be
authenticated and delivered from time to time upon delivery to the Trustee of
the items specified in Section 2.04(d) of the Indenture.
(c) The Stated Maturity Date of the Series __ Debentures is
______________.
(d) The interest rate of the Series __ Debentures is __% per annum.
The Interest Payment Dates for the Series __ Debentures are March 31, June
30, September 30 and December 31 of each year, commencing__________________.
In the event that any date on which interest is payable on the Series __
Debentures is not a Business Day, then payment of interest payable on such
date will be made on the next day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date. The Regular Record Date for each
Interest Payment Date for the Series __ Debentures shall be the 15th day
(whether or not a Business Day) of the last month of each quarter, provided
that if Trust __ is the sole Holder of the Series __ Debentures or the Series
__ Debentures are issued in book-entry-only form, the Regular Record Date
shall be the close of business on the Business Day next preceding such
Interest Payment Date.
Each Series __ Debenture shall bear interest from its Issue Date or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for with respect to such Series __ Debenture; except that, so
long as there is no existing Defaulted Interest or Extension Period on the
Series __ Debentures, any Series __ Debenture
3
<PAGE>
authenticated by the Trustee between the Regular Record Date for any Interest
Payment Date and such Interest Payment Date shall bear interest from such
Interest Payment Date.
Overdue principal of, and interest on, any Series __ Debenture and
interest which has been deferred pursuant to Section 4.01(b) of the Indenture
shall bear interest (to the extent that the payment of such interest shall be
legally enforceable) at a rate per annum equal to the interest rate per annum
payable on such Series __ Debenture.
(e) The Series __ Debentures shall be issuable only in registered
form without coupons and only in denominations of $25 and any integral
multiple thereof.
(f) The maximum Extension Period for the Series ___ Debentures shall
be ______________.
(g) ___________ shall initially be the Paying Agent for the Series __
Debentures.
ARTICLE 3.
REDEMPTION
SECTION 3.01 Redemption; Notice to Trustee.
-----------------------------
(a) The Series __ Debentures are subject to redemption prior to
maturity as provided therein.
(b) Any redemption of the Series __ Debentures shall be made in the
manner, upon the terms and with the effect, all as provided in Sections
3.01(c), 3.02, 3.03, 3.04, 3.05 and 3.06 of the Indenture.
ARTICLE 4.
COVENANT
SECTION 4.01. Payment of Expenses of Trust __.
-------------------------------
The Company covenants for the benefit of the Holders of the Series __
Debentures to pay all of the costs and expenses of Trust __ in accordance
with Section 2.03(b) of the Trust __ Agreement and to pay the taxes of Trust
__ in accordance with Section 2.03(c) of the Trust __ Agreement in order to
permit Trust __ to make distributions on and redemptions of the Series __
Preferred Securities in accordance with Article IV of the Trust __ Agreement.
4
<PAGE>
ARTICLE 5.
MISCELLANEOUS
SECTION 5.01 Confirmation of Indenture.
-------------------------
As amended and supplemented by this _____ Supplemental Indenture, the
Indenture is in all respects ratified and confirmed and the Indenture and
this _____ Supplemental Indenture shall be read, taken and construed as one
and the same instrument.
SECTION 5.02 Notices.
-------
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing and delivered, telecopied or mailed by
first-class mail, postage prepaid, addressed as follows:
if to the Company:
Public Service Electric and Gas Company
80 Park Plaza, T6B
P.O. Box 570
Newark, New Jersey 07101
Facsimile No.
Attention: Treasurer
if to the Trustee:
First Union National Bank
765 Broad Street
Newark, New Jersey 07101
Facsimile No.
Attention: Corporate Trust Department
The Company or the Trustee, by giving notice to the other, may
designate additional or different addresses for subsequent notices of
communications. The Company shall notify the holder, if any, of Senior
Indebtedness of any such additional or different addresses of which the
Company receives notice from the Trustee.
Any notice or communication given to a Debentureholder other than the
Partnership shall be mailed to the Debentureholder at the Debentureholder's
address as it appears on the Register of the Registrar and shall be
sufficiently given if mailed within the time prescribed.
5
<PAGE>
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not received by the addresses.
If the Company mails a notice or communication to the
Debentureholders, it shall mail a copy to the Trustee and each Registrar,
Paying Agent or co-Registrar.
SECTION 5.03 Severability Clause.
-------------------
If any provision in this Indenture or in the Series __ Debentures
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 5.04 No Recourse Against Others.
--------------------------
No director, officer, employee or stockholder, as such, of the Company
shall have any liability for any obligations of the Company under the Series
__ Debentures or this _____ Supplemental Indenture or for any claim based on,
in respect of or by reason
of such obligations or their creation. By accepting a Series __ Debenture,
each Debentureholder shall waive and release all such liability. The waiver
and release shall be a part of the consideration for the issue of the Series
__ Debentures.
SECTION 5.05 Successors.
----------
All agreements of the Company in this _____ Supplemental Indenture and
the Series __ Debentures shall bind its successors and assigns. All
agreements of the Trustee in this _____ Supplemental Indenture shall bind its
successors and assigns.
SECTION 5.06 Multiple Original Copies of this Indenture.
------------------------------------------
The parties may sign any number of copies of this First Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement. Any signed copy shall be sufficient proof of
this First Supplemental Indenture.
SECTION 5.07 Table of Contents; Headings, Etc.
--------------------------------
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this First Supplemental Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof,
and shall in no way modify or restrict any of the terms or provisions hereof.
6
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this _____ Supplemental Indenture on behalf of the respective
parties hereto as of the date first above written.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
By:__________________________________
Name:________________________________
Title:_________________________________
FIRST UNION NATIONAL BANK, as Trustee
By:__________________________________
Name:________________________________
Title:_________________________________
7
<PAGE>
Exhibit A
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
__% Deferrable Interest Subordinated Debenture, Series __
No. ___
Public Service Electric and Gas Company, a New Jersey corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________ or registered assigns, the principal sum of
_____________________________________________________ Dollars ($____________)
on __________________, and to pay interest on said principal sum from
__________________ or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, quarterly in
arrears on March 31, June 30, September 30 and December 31 commencing
__________________ (each, an "Interest Payment Date") at the rate of __% per
annum until the principal hereof shall have become due and payable, and on
any overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at
the same rate per annum. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-
day months, and for any period shorter than thirty days, interest will be
computed on the basis of the actual number of days elapsed in such period.
In the event that any Interest Payment Date is not a Business Day, then
interest will be payable on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided in the
Indenture, be paid to the Person in whose name this Debenture is registered
at the close of business on the Regular Record Date for such interest
installment, which shall be the 15th day (whether or not a Business Day) of
the last month of each quarter, provided that if all of the Series __
Debentures (as defined below) are then held by PSE&G Capital Trust (the
"Trust") or the Series __ Debentures are held in book-entry-only form, the
Regular Record Date shall be the close of business on the Business Day next
preceding such Interest Payment Date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to
the Holders on such Regular Record Date, and may be paid to the Person in
whose name this Debenture is registered at the close of business on a Special
Record Date to be fixed by the Trustee (as defined below) for the payment of
such defaulted interest, notice whereof shall be given to the Holders of the
Series __ Debentures not less than 7 days prior to such Special Record Date,
as more fully provided in the Indenture.
A-1
<PAGE>
Payment of the principal of and interest on this Debenture will be
made in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. Payments
of interest on an Interest Payment Date will be made by check mailed to the
Holder hereof at the address shown in the Register or, at the option of the
Holder hereof, to such other place in the United States of America as Holder
hereof shall designate to the Trustee in writing. At the request of a Holder
of at least $10,000,000 aggregate principal amount of Series __ Debentures,
interest on such Debentures will be payable by wire transfer within the
continental United States in immediately available funds to the bank account
number specified in writing by such Holder to the Registrar prior to the
Regular Record Date.
The principal amount hereof and interest due on the Stated Maturity
Date or a Redemption Date (other than an Interest Payment Date) will be paid
only upon surrender of this Debenture at the principal corporate trust office
of ____________________, Paying Agent, in __________________, or at such
other office or agency of the Paying Agent as the Company shall designate by
written notice to the Holder of this Debenture.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is
issued subject to the provisions of the Indenture with respect thereto. The
Holder of this Debenture, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. The Holder of this
Debenture, by his acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Series __ Debentures"),
specified in the Indenture, limited in aggregate principal amount to
$__________ issued under and pursuant to an Indenture dated as of June 1,
1996 executed and delivered between the Company and First Union National
Bank, as trustee (the "Trustee"), as supplemented by the _______ Supplemental
Indenture dated as of _________________ between the Company and the Trustee
(said Indenture as so supplemented being hereinafter referred to as the
"Indenture"). The Series ___ Debentures are initially being issued to the
Trust, to be held on behalf of the Trust by its property trustee (the
"Property Trustee"). Concurrently with the issuance of the Series ___
Debentures, the Trust is issuing its trust securities, representing undivided
beneficial interests in the assets of the Trust and having an aggregate
liquidation amount equal to the principal amount of the Series ___
Debentures, including the Trust's Cumulative Quarterly Income Preferred
Securities, Series __ (the "Preferred Securities"). By the terms
A-2
<PAGE>
of the Indenture, Debentures are issuable in series which may vary as to
amount, date of maturity, rate of interest and in other respects as in the
Indenture Provided. Reference is made to the Indenture and all indentures
supplemental thereto for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Debentures. Each term used in this Debenture which is
defined in the Indenture and not defined herein shall have the meaning
assigned to it in the Indenture.
[Redemption Provisions]
At least 30 days but not more than 60 days before the Redemption Date,
the Trustee shall mail or caused to be mailed a notice of redemption by
first-class mail, postage prepaid, to each Holder of Series __ Debentures to
be redeemed.
In the event of redemption of this Debenture in part only, a new
Series __ Debenture or Debentures for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Series ___ Debentures
occurs and is continuing, the principal of and interest on all of the Series
___ Debentures may (and, in certain circumstances shall) be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth therein.
Subject to certain exceptions in the Indenture which require the
consent of every Holder, the Company and the Trustee may amend the Indenture
or may waive future compliance by the Company with any provisions of the
Indenture with the consent of the Holders of at least a majority in aggregate
principal amount of the Debentures of each series affected thereby provided
that if the Series ___ Debentures are held by the Trust, no such amendment or
waiver that adversely affects the holders of the Preferred Securities shall
be effective without the prior consent of the holders of at least a majority
in aggregate liquidation amount of the outstanding Preferred Securities
issued under the Indenture at the time outstanding. Subject to certain
exceptions in the Indenture, without the consent of any Holder of the
Debentures issued under the Indenture, the Company and the Trustee may amend
the Indenture to cure any ambiguity, defect or inconsistency, to bind a
successor to the obligations of the Indenture, to provide for uncertificated
Debentures in addition to
A-3
<PAGE>
certificated Debentures, to comply with any requirements of the Debentures
and the Securities and Exchange Commission in connection with the
qualification of the Indenture under the TIA, or to make any change that, in
the reasonable judgment of the Company, does not adversely affect the rights
of any Holder of the Debentures. Amendments bind all Holders and subsequent
Holders of Debentures.
No reference herein to the Indenture and no provision of this
Debenture or the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
So long as an Event of Default with respect to the Series __
Debentures has not occurred and is continuing, the Company shall have the
right at any time and from time to time to extend the interest payment period
of the Series ___ Debentures to up to _______________________ (the "Extension
Period"), provided that no Extension Period shall extend beyond the Stated
Maturity Date or Redemption Date of any Series ___ Debenture. At the end of
the Extension Period, the Company shall pay all interest then accrued and
unpaid (together with interest thereon at the rate specified for the Series
___ Debentures, compounded quarterly, to the extent that payment of such
interest is enforceable under applicable law). During such Extension Period,
the Company may not declare or pay any dividend on, redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital stock.
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such Extended Interest
Payment Period together with all such previous and further extensions thereof
shall not exceed _______________________ and shall not extend beyond the
Stated Maturity Date or Redemption Date of any Series ___ Debenture. At the
termination of any such Extended Interest Payment Period and upon the payment
of all amounts then due, the Company may elect to begin a new Extended
Interest Payment Period, subject to the foregoing restrictions.
Series __ Debentures are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is exchangeable for a like aggregate principal amount
of Series __ Debentures of a different authorized denomination, as requested
by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the Holder hereof upon
surrender of this Debenture for registration of transfer at the office or
agency of the Registrar accompanied by a written instrument or instruments of
transfer in form satisfactory to the Registrar duly executed by the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Series __ Debentures of authorized denominations and for the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be
A-4
<PAGE>
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to presentment for registration of transfer of this Debenture,
the Company, the Trustee, any Paying Agent and any Registrar may deem and
treat the Holder hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee
nor any Paying Agent nor any Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
This Debenture shall not be valid until an authorized signatory of the
Trustee manually signs and dates the Trustee's Certificate of Authentication
below.
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
manually or by facsimile by a duly authorized officer and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
By:________________________________
[SEAL] Name:
Title:
Attest:
________________________________
[Assistant] Secretary
A-5
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures, of the series designated, referred to in the
within-mentioned _____ Supplemental Indenture.
FIRST UNION NATIONAL BANK, as Trustee
By:____________________________________________
Name:
Authorized Signatory
Dated: ___________________________
A-6
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign
and transfer this Debenture to:
(Insert assignee's social security or tax I.D. number)
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________ agent to transfer this
Debenture on the books of the Register. The agent may substitute another to
act for him.
Dated:_____________________ Signature:_________________________________
(Sign exactly as your name appears on the
other side of this Debenture)
Signature Guaranty:___________________
A-7
Exhibit 4.5
========================================================================
Guarantee Agreement
between
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(as Guarantor)
and
FIRST UNION NATIONAL BANK
(as Guarantee Trustee)
Dated as of
__________, ____
========================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application . . . . . . . . . . 4
SECTION 2.02. List of Holders . . . . . . . . . . . . . . . . . . . 4
SECTION 2.03. Reports by the Guarantee Trustee . . . . . . . . . . 4
SECTION 2.04. Periodic Reports to Guarantee Trustee . . . . . . . . 4
SECTION 2.05. Evidence of Compliance with Conditions Precedent . . 5
SECTION 2.06. Events of Default; Waiver . . . . . . . . . . . . . . 5
SECTION 2.07. Event of Default; Notice . . . . . . . . . . . . . . 5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Guarantee Trustee . . . . . 6
SECTION 3.02. Certain Rights of Guarantee Trustee . . . . . . . . . 8
SECTION 3.03. Indemnity . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01. Guarantee Trustee; Eligibility . . . . . . . . . . . 10
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(i)
<PAGE>
Page
----
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.02. Waiver of Notice and Demand . . . . . . . . . . . . . 11
SECTION 5.03. Obligations Not Affected . . . . . . . . . . . . . . 11
SECTION 5.04. Rights of Holders . . . . . . . . . . . . . . . . . . 12
SECTION 5.05. Guarantee of Payment . . . . . . . . . . . . . . . . 13
SECTION 5.06. Subrogation . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.07. Independent Obligations . . . . . . . . . . . . . . . 13
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.01. Subordination . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.02. Pari Passu Guarantees . . . . . . . . . . . . . . . . 13
ARTICLE VII
TERMINATION
SECTION 7.01. Termination . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Successors and Assigns . . . . . . . . . . . . . . . 14
SECTION 8.02. Amendments . . . . . . . . . . . . . . . . . . . . . 14
SECTION 8.03. Notices . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.04. Benefit . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.05. Interpretation . . . . . . . . . . . . . . . . . . . 16
SECTION 8.06. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 16
(ii)
<PAGE>
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement Agreement
- ----------------------------- -------------
310(a) . . . . . . . . . . . . . . . . . . . . . . . 4.01(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . 4.01(c),2.08
310(c) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
313 . . . . . . . . . . . . . . . . . . . . . . . 2.03
314(a) . . . . . . . . . . . . . . . . . . . . . . . 2.04
314(b) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . 2.05
314(d) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . .
1.01, 2.05, 3.02
314(f) . . . . . . . . . . . . . . . . . . . . . . 2.01, 3.02
315(a) . . . . . . . . . . . . . . . . . . . . . . . 3.01(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . 2.07
315(c) . . . . . . . . . . . . . . . . . . . . . . . 3.01
315(d) . . . . . . . . . . . . . . . . . . . . . . . 3.01(d)
316(a) . . . . . . . . . . . . . . . . . . . . . . .
1.01, 2.06, 5.04
316(b) . . . . . . . . . . . . . . . . . . . . . . . 5.03
316(c) . . . . . . . . . . . . . . . . . . . . . . . 8.02
317(a) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . 2.01(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . 2.01
318(c) . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
________________________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
(iii)
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of _______, ____, is executed and
delivered by Public Service Electric and Gas Company, a New Jersey
corporation (the "Guarantor"), to First Union National Bank, a national
banking association duly organized and existing under the laws of the
United States of America, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of PSE&G Capital Trust ___, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of ______, ____ among the Trustees named therein,
the Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing
$________ aggregate liquidation amount of its ___% Cumulative Quarterly
Income Preferred Securities, Series ___ (liquidation amount of $25 per
preferred security) (the "Preferred Securities") representing undivided
beneficial interests in the assets of the Issuer and having the terms set
forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the sale by the Issuer of
its Common Securities will be used to purchase the Debentures (as defined
in the Trust Agreement) of the Guarantor which will be deposited with First
Union National Bank, as Property Trustee under the Trust Agreement, as
Trust Property (as defined in the Trust Agreement); and
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the
extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. As used in this Guarantee Agreement, each
of the terms set forth below shall, unless the context otherwise requires,
has the following meaning.
<PAGE>
Each capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meaning assigned to such terms in the Trust Agreement
as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing undivided
beneficial interests in the assets of the Issuer and having the rights
provided therefor in the Trust Agreement.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, that
except with respect to a default resulting from a failure to pay any
Guarantee Payment, the Guarantor shall have received notice of default and
shall not have cured such default within 60 days after receipt of such
notice.
"Guarantee Payments" means the following payments or Distributions (as
defined in the Trust Agreement) , without duplication, with respect to the
Preferred Securities, to the extent not paid or made by or on behalf of the
Issuer: (i) any accumulated and unpaid Distributions required to be paid
on the Preferred Securities, to the extent the Issuer shall have funds
available therefor, (ii) the redemption price, including all accumulated
and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by
the Issuer to the extent the Issuer shall have funds available therefor,
and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer, unless Debentures are distributed to the
Holders, the lesser of (a) the aggregate of the liquidation amount of $25
per Preferred Security plus accumulated and unpaid Distributions on the
Preferred Securities to the date of payment to the extent the Issuer shall
have funds available therefor and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means First Union National Bank, until a Successor
Guarantee Trustee (as defined below) has been appointed and has accepted
such appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Guarantee Trustee.
"Holder" means a Person in whose name a Preferred Security is registered
in the Securities Register; provided, however, that in determining whether
the holders of the requisite percentage of Preferred Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee or any Affiliate of the
Guarantor or the Guarantee Trustee.
2
<PAGE>
"Indenture" means the Indenture dated as of June 1, 1996, between the
Guarantor and First Union National Bank, as trustee.
"List of Holders" has the meaning specified in Section 2.02(a).
"Majority in liquidation amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holders, of
more than 50% of the aggregate liquidation amount of all then outstanding
Preferred Securities issued by the Issuer.
"Officers' Certificate" means a certificate signed by the Chairman, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Guarantor.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Vice President, any Assistant Vice President, any Trust Officer or
Assistant Trust Officer or any other officer of the Corporate Trust
Department of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge
of and familiarity with the particular subject.
"Senior Indebtedness" means Senior Indebtedness as defined in the
Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939, as so amended.
3
<PAGE>
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.02. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before January 15 and July 15
of each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of a date not more than 15 days prior to the delivery
thereof, and (b) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of
any such request, a List of Holders as of a date not more than 15 days
prior to the time such list is furnished, in each case to the extent
such information is in the possession or control of the Guarantor and is
not identical to a previously supplied List of Holders or has not
otherwise been received by the Guarantee Trustee in its capacity as
such. The Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), Section 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.03. Reports by the Guarantee Trustee. Within 60 days after
May 31 of each year, the Guarantee Trustee shall provide to the Holders
such reports as are required by Section 313 of the Trust Indenture Act, if
any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee, the Securities and Exchange
Commission and the Holders such documents, reports and information, if any,
as required by Section 314 of the Trust Indenture
4
<PAGE>
Act and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form and manner and at the times required by Section
314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Each Officers' Certificate and Opinion
of Counsel delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate or Opinion of Counsel has read the covenant or condition and
the definition relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate or Opinion of Counsel and upon which the statements
contained therein are based;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
liquidation amount of the Preferred Securities may, by vote, on behalf of
the Holders, waive any past Event of Default and its consequences. Upon
such waiver, any such Event of Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.07. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the
Guarantee Trustee, unless such defaults have been cured before the
giving of such notice, provided, that, except in the case of a default
in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the Board of
Directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Guarantee Trustee
5
<PAGE>
in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received
written notice, or a Responsible Officer charged with the administration
of the Trust Agreement shall have obtained written notice, of such Event
of Default.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall
not transfer this Guarantee Agreement to any Person except a Holder
exercising his or her rights pursuant to Section 5.04(iv) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically
vest in any Successor Guarantee Trustee upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder and such
vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit
of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and no implied
covenants shall be read into this Guarantee Agreement against the
Guarantee Trustee. In case an Event of Default has occurred and is
continuing (and has not been cured or waived pursuant to Section 2.06),
the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of
care and skill in its exercise thereof, as a prudent person would
exercise or use in the conduct of his or her own affairs.
6
<PAGE>
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct,
except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in
liquidation amount of the Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or
power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured
7
<PAGE>
to it under the terms of this Guarantee Agreement or reasonable
indemnity against such risk or liability is not reasonably assured
to it.
SECTION 3.02. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.01:
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting to take any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request from the
Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel,
and the written advice or Opinion of Counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or
opinion. Such legal counsel may be legal counsel to the Guarantor
or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such reasonable
indemnity as would satisfy a reasonable person in the position of
the Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction;
provided that, nothing contained in this
8
<PAGE>
Section 3.02(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Guarantee
Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through its agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Guarantee Trustee (A) may
request instructions from the Holders, (B) may refrain from
enforcing such remedy or right or taking such other action until
such instructions are received, and (C) shall be protected in
acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or in
which the Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Guarantee Trustee shall be construed to be
a duty to act in accordance with such power and authority.
SECTION 3.03. Indemnity. The Guarantor agrees to indemnify the
Guarantee Trustee for, and to hold it harmless against, any loss, liability
or expense incurred without negligence or bad faith on the part of the
Guarantee Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
9
<PAGE>
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and shall be
a corporation meeting the requirements of Section 310(a) of the
Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority, then, for the purposes
of this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.02(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture
Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act. In
determining whether the Guarantee Trustee has a "conflicting interest"
within the meaning of Section 310(b)(1) of the Trust Indenture Act, the
provisions contained in the proviso to Section 310(b)(1) of the Trust
Indenture Act and the Guarantee Trustee's Statement of Eligibility on
Form T-1 shall be deemed incorporated herein.
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
10
<PAGE>
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing
executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.02 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders of the Outstanding Preferred
Securities the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer pursuant to the Trust
Agreement or by the Guarantor pursuant to the Indenture), as and when due,
regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to
the Holders.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Guarantee Trustee, the Issuer or
any other Person before proceeding against the Guarantor, protest, notice
of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall
in no way be affected or impaired by reason of the happening from time to
time of any of the following:
11
<PAGE>
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions (other than an extension of time for
payment of Distributions that results from an Extension Period on the
Debentures as so provided in the Indenture), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of
the Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the
Preferred Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, termination, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or detect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) to the extent permitted by law, any other circumstance
whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor, it being the intent of this Section
5.03 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Guarantee
Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the
Holders; (iii) the Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of this Guarantee Agreement or exercise or direct the exercise
of any trust or power conferred upon the Guarantee Trustee under
12
<PAGE>
this Guarantee Agreement; and (iv) if the Guarantee Trustee fails to
enforce this Guarantee Agreement as above provided, any Holder may, after
such Holder's written request to the Guarantee Trustee to enforce this
Guarantee Agreement, institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the
Issuer or any other Person.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will
not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Trust Agreement.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all
(if any) rights of the Holders against the Issuer in respect of any amounts
paid to the Holders by the Guarantor under this Guarantee Agreement and
shall have the right to waive payment by the Issuer pursuant to Section
5.01; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise
any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Guarantee Agreement, if, at the time of any such payment, any amounts
are due and unpaid under this Guarantee Agreement. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such
amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Securities and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.03 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.01. Subordination. This Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank subordinate and
junior in right of payment to all general liabilities of the Guarantor.
SECTION 6.02. Pari Passu Guarantees. This Guarantee Agreement shall
rank pari passu with any similar Guarantee Agreements issued by the
Guarantor on behalf of the holders
13
<PAGE>
of Cumulative Quarterly Income Preferred Securities issued by PSE&G Capital
Trust II and PSE&G Capital Trust III and on behalf of the holders of the 9-
3/8% Cumulative Monthly Income Preferred Securities, Series A and the 8%
Cumulative Monthly Income Preferred Securities, Series B issued by Public
Service Electric and Gas Capital, L.P.
ARTICLE VII
TERMINATION
SECTION 7.01. Termination. This Guarantee Agreement shall terminate
and be of no further force and effect upon (i) full payment by the Issuer
or the Guarantor, as the case may be, of the Redemption Price for all
Preferred Securities, (ii) the distribution of the Debentures to the
Holders in accordance with Article IX of the Trust Agreement upon
liquidation of the Issuer or (iii) full payment by the Issuer or the
Guarantor, as the case may be, of the amounts payable in accordance with
the Trust Agreement upon liquidation of the Issuer. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will
be reinstated, as the case may be, if at any time any Holder must restore
payment of any sums paid with respect to Preferred Securities or this
Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to
the benefit of the Holders of the Preferred Securities then outstanding.
The Guarantor may not consolidate with or merge with or into, or sell,
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety (either in one transaction or a series of
transactions) to, any Person unless permitted under Article Five of the
Indenture. In connection with a consolidation, merger or sale involving
the Guarantor that is permitted under Article Five of the Indenture the
Person formed by or surviving such consolidation or merger or to which such
sale, conveyance, transfer or lease shall have been made, if other than the
Guarantor, shall expressly assume all of the obligations of the Guarantor
hereunder and under the Trust Agreement.
SECTION 8.02. Amendments. Except with respect to any changes which do
not adversely affect the rights of the Holders in any material respect (in
which case no consent of the Holders will be required), this Guarantee
Agreement may only be amended with the prior
14
<PAGE>
approval of the Holders of a Majority in liquidation amount of the
Preferred Securities (excluding any Preferred Securities held by the
Guarantor or an affiliate thereof). The provisions of Article VI of the
Trust Agreement concerning meetings of the Holders shall apply to the
giving of such approval.
SECTION 8.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing and
delivered, telecopied or mailed by first class mail, postage prepaid, as
follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders:
Public Service Electric and Gas Company
80 Park Plaza
P.O. Box 570
Newark, NJ 07101
Facsimile No:
Attention: Treasurer
(b) if given to the Issuer, in care of the Guarantee Trustee, at
the Issuer's (and the Guarantee Trustee's) address set forth below or
such other address as the Guarantee Trustee on behalf of the Issuer may
give notice to the Holders:
PSE&G Capital Trust ___
Facsimile No:
Attention:
with a copy to:
First Union National Bank
Facsimile No:
Attention:
(c) if given to any Holder, at the address set forth in the
Securities Register.
15
<PAGE>
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 8.04. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the
Preferred Securities.
SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(b) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(c) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(d) a reference to the singular includes the plural and vice
versa; and
(e) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06. GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW JERSEY AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN
THE STATE OF NEW JERSEY WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
16
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
By:
---------------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
as Guarantee Trustee
By:
---------------------------------------------
Name:
Title:
17
Exhibit 5.1
April 23, 1996
Public Service Electric and Gas Company
80 Park Plaza
P.O. Box 570
Newark, New Jersey 07102
RE: $350,000,000 aggregate principal amount of Cumulative Quarterly Income
Preferred Securities (collectively, the "Preferred Securities") to be
issued in one or more series by PSE&G Capital Trust I, PSE&G Capital Trust
II and PSE&G Capital Trust III (the "Trusts") and Guarantees with respect
to the Preferred Securities (the "Guarantees") and Deferrable Interest
Subordinated Debentures (the "Subordinated Dentures") to be issued in one
or more series by Public Service Electric and Gas Company (the "Company").
Ladies and Gentlemen:
I am General Corporate Counsel of the Company and, in that capacity, I have
represented the Company in connection with the proposed issuance, from time to
time, by the Trusts of the Preferred Securities and the execution and delivery
by the Company of the Guarantees and the Subordinated Debentures. The
Subordinated Debentures will be issued under an indenture (as supplemented from
time to time, the "Indenture") between the Company and First Union National Bank
as Trustee. All capitalized terms used herein unless defined herein shall have
the meanings specified in the Registration Statement hereinafter described.
I and/or attorneys working under my supervision have conducted such
investigations of laws and regulations as I have deemed necessary or appropriate
for the purpose of rendering the opinions hereinafter expressed.
The opinions expressed below are based on the following assumptions:
(a) Each of the Trusts have been duly created and are validly existing
under the laws of the State of Delaware;
(b) The Registration Statement on Form S-3 (the "Registration Statement")
filed by the Company and the Trusts with respect to the Preferred
Securities, the Guarantees and the Subordinated Debentures will become
effective;
(c) The proposed transactions contemplated by the Registration Statement
will be carried out on the basis set forth therein and in conformity
with the authorizations, approvals, consents or exemptions under the
securities laws of various states and other
<PAGE>
- 2 -
jurisdictions of the United States;
(d) Prior to issuance of any series of Preferred Securities, Guarantees
and Subordinated Debentures:
(i) the depositor of the Trust will authorize the issuance of, and
determine the terms of, such series of Preferred Securities;
(ii) the Indenture will have been executed and delivered by the
Company, and the Board of Directors of the Company, a committee
thereof or the Sale and Pricing Committee ("Committee") of the
Company pursuant to delegated authority from such Board, will
have authorized the issuance of, and established the terms of,
the series of the Subordinated Debentures related to such series
of Preferred Securities; and
(iii) the Guarantee related to such series of Preferred Securities
will have been executed and delivered by the Company in
accordance with appropriate resolutions of the Board of
Directors of the Company, a committee thereof or the
Committee pursuant to such delegated authority.
(e) The Indenture and the Guarantees will each have been qualified in
accordance with the provisions of the Trust Indenture Act of 1939, as
amended.
Based upon the foregoing and subject to the limitations herein, I am of the
opinion that:
1. The Company is a corporation duly organized and validly existing
and authorized to exercise its corporate powers, rights and privileges
under the laws of the State of New Jersey.
2. When properly executed, authenticated, delivered and paid for as
provided in the Indenture, the Subordinated Debentures will be legally
issued, valid and binding obligations of the Company.
3. When executed and delivered by the Company, the Guarantees will
be valid and binding obligations of the Company.
I express no opinions as to matters of law in jurisdictions other then the
State of New Jersey. My opinions are rendered only with respect to New Jersey
laws and rules, regulations and orders thereunder which are currently in effect.
<PAGE>
- 3 -
This opinion does not cover the necessity of filings under the provisions
of securities laws of any state in which the Preferred Securities may be sold.
I hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement and to the references to me under the heading "Experts"
in the Prospectus and Prospectus Supplement contained therein.
Very truly yours,
/s/ James T. Foran
James T. Foran
General Corporate Counsel
Exhibit 5.2
[Letterhead of Richards, Layton & Finger]
April 23, 1996
PSE&G Capital Trust I
c/o Public Service Electric and Gas Company
80 Park Plaza
Newark, New Jersey 07101
Re: PSE&G Capital Trust I
---------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Public Service Electric
and Gas Company, a New Jersey corporation (the "Company"), and PSE&G Capital
Trust I, a Delaware business trust (the "Trust"), in connection with the matters
set forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of April 19, 1996
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on April 19, 1996;
(b) The Trust Agreement of the Trust, dated as of April 19, 1996,
among the Company, as Depositor, and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form
S-3, including a preliminary prospectus (the "Prospectus") and preliminary
prospectus supplement, relating to the __% Cumulative Quarterly Income Preferred
Securities, Series A, of the Trust representing preferred undivided beneficial
interests in the assets
<PAGE>
PSE&G Capital Trust I
April 23, 1996
Page 2
of the Trust (each, a "Preferred Security" and collectively, the "Preferred
Securities"), as proposed to be filed by the Company, the Trust and others as
set forth therein with the Securities and Exchange Commission on or about April
23, 1996;
(d) A form of Amended and Restated Trust Agreement of the Trust, to
be entered into among the Company, as Depositor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust (including Exhibits A, C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated April 23,
1996, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to
<PAGE>
PSE&G Capital Trust I
April 23, 1996
Page 3
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Preferred Security is to be issued by
the Trust (collectively, the "Preferred Security Holders") of a Preferred
Securities Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Trust Agreement and
the Registration Statement, and (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission
<PAGE>
PSE&G Capital Trust I
April 23, 1996
Page 4
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other Person
for any purpose.
Very truly yours,
PMA/BJK/ds
Exhibit 5.3
[Letterhead of Richards, Layton & Finger]
April 23, 1996
PSE&G Capital Trust II
c/o Public Service Electric and Gas Company
80 Park Plaza
P.O. Box 570
Newark, New Jersey 07101
Re: PSE&G Capital Trust II
----------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Public Service Electric
and Gas Company, a New Jersey corporation (the "Company"), and PSE&G Capital
Trust II, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of April 19, 1996
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on April 19, 1996;
(b) The Trust Agreement of the Trust, dated as of April 19, 1996,
among the Company, as Depositor, and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form
S-3, including a preliminary prospectus (the "Prospectus"), relating to the __%
Cumulative Quarterly Income Preferred Securities of the Trust representing
preferred undivided beneficial interests in the assets of the Trust (each, a
"Preferred Security" and
<PAGE>
PSE&G Capital Trust II
April 23, 1996
Page 2
collectively, the "Preferred Securities"), as proposed to be filed by the
Company, the Trust and others as set forth therein with the Securities and
Exchange Commission on or about April 23, 1996;
(d) A form of Amended and Restated Trust Agreement of the Trust, to
be entered into among the Company, as Depositor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust (including Exhibits A, C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated April 23,
1996, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to
<PAGE>
PSE&G Capital Trust II
April 23, 1996
Page 3
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Preferred Security is to be issued by
the Trust (collectively, the "Preferred Security Holders") of a Preferred
Securities Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Trust Agreement and
the Registration Statement, and (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission
<PAGE>
PSE&G Capital Trust II
April 23, 1996
Page 4
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other Person
for any purpose.
Very truly yours,
PMA/BJK/ds
Exhibit 5.4
[Letterhead of Richards, Layton & Finger]
April 23, 1996
PSE&G Capital Trust III
c/o Public Service Electric and Gas Company
80 Park Plaza
P.O. Box 570
Newark, New Jersey 07101
Re: PSE&G Capital Trust III
-----------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Public Service Electric
and Gas Company, a New Jersey corporation (the "Company"), and PSE&G Capital
Trust III, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of April 19, 1996
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on April 19, 1996;
(b) The Trust Agreement of the Trust, dated as of April 19, 1996,
among the Company, as Depositor, and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form
S-3, including a preliminary prospectus (the "Prospectus"), relating to the __%
Cumulative Quarterly Income Preferred Securities of the Trust representing
preferred undivided beneficial interests in the assets of the Trust (each, a
"Preferred Security" and
<PAGE>
PSE&G Capital Trust III
April 23, 1996
Page 2
collectively, the "Preferred Securities"), as proposed to be filed by the
Company, the Trust and others as set forth therein with the Securities and
Exchange Commission on or about April 23, 1996;
(d) A form of Amended and Restated Trust Agreement of the Trust, to
be entered into among the Company, as Depositor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust (including Exhibits A, C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated April 23,
1996, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to
<PAGE>
PSE&G Capital Trust III
April 23, 1996
Page 3
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Preferred Security is to be issued by
the Trust (collectively, the "Preferred Security Holders") of a Preferred
Securities Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Trust Agreement and
the Registration Statement, and (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission
<PAGE>
PSE&G Capital Trust III
April 23, 1996
Page 4
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other Person
for any purpose.
Very truly yours,
PMA/BJK/ds
Exhibit 8
April 23, 1996
Public Service Electric and Gas Company
80 Park Plaza
Newark, NJ 07101
Ladies and Gentlemen:
We have acted as special counsel to you (the "Company") in
connection with the registration of Cumulative Quarterly Income Preferred
Securities to be issued by PSE&G Capital Trust I, PSE&G Capital Trust II
and PSE&G Capital Trust III, and the registration of the related Guarantee
Agreement and Deferrable Interest Subordinated Debentures of the Company
and hereby confirm to you our opinion as set forth under the heading
"United States Taxation" in the Prospectus included in the Registration
Statement filed on Form S-3.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"United States Taxation" in the Prospectus included in the Registration
Statement.
Very truly yours,
Ballard Spahr Andrews & Ingersoll
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Public Service Electric and Gas Company, PSE&G Capital Trust I, PSE&G
Capital Trust II and PSE&G Capital Trust III on Form S-3 of our report dated
February 14, 1996, appearing in the Annual Report on Form 10-K of Public
Service Electric and Gas Company for the year ended December 31, 1995 and to
the reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.
Deloitte & Touche LLP
Parsippany, New Jersey
April 23, 1996
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS A TRUSTEE
-------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
---
-------------------------
FIRST UNION NATIONAL BANK
(Name of Trustee)
22-1147033
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a U.S. National Bank) Identification No.)
101 NORTHSIDE PLAZA, ELKTON, MARYLAND 21921
(Address of Principal Executive Offices) (Zip Code)
-------------------------
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Name of Obligor)
New Jersey 22-1212800
(State of Incorporation) (I.R.S. Employer
Identification No.)
80 Park Plaza, Newark, New Jersey 07101
(Address of Principal Executive Offices) (Zip Code)
%Deferrable Interest Subordinated Debentures
------
(Title of Indenture Securities)
<PAGE>
GENERAL
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject:
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities of
the trustee:
- -------------------------------------------------------------------------------
Col. A. Col. B.
- -------------------------------------------------------------------------------
Title of Class Amount Outstanding
- -------------------------------------------------------------------------------
Not Applicable.
Item 4. Trusteeship under Other Indentures:
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not Applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the trusteeship under any such other indenture, including
a statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.
Not Applicable.
Item 5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
<PAGE>
Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D.
- -------------------------------------------------------------------------------
Percentage of Voting
securities represented
Name of Title of Amount owned by amount given in
owner class beneficially Col. C
- -------------------------------------------------------------------------------
Not Applicable
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Percentage of
voting securities
represented by
Name of Amount owned amount given in
owner Title of Class beneficially Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for the obligations in default by
the trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Whether the
securities are Amount owned beneficially Percent of class
voting or or held as collateral represented by
Title nonvoting security for obligations amount given in
of Class securities in default Col.C.
- -------------------------------------------------------------------------------
Not Applicable
Item 9. Securities of the Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
2
<PAGE>
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not applicable
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of Voting
Name of or held as collateral securities
issuer and Amount security for obligations represented by amount
title of class outstanding in default by Trustee given in Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the Trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C.
- -------------------------------------------------------------------------------
Nature of indebtedness Amount outstanding Date due
- -------------------------------------------------------------------------------
Not Applicable
3
<PAGE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. Lists of Exhibits.
1* -Copy of Articles of Association of the Trustee as now in effect.
2 -No certificate of authority of the Trustee to commence business is
furnished since this authority is contained in the Articles of
Association of the Trustee.
3* -Copy of the authorization of the Trustee to exercise corporate trust
powers.
4* -Copy of the existing By-Laws of the Trustee, as now in effect.
5 -Not applicable.
6* -The consent of the Trustee required by Section 321 (b) of the Act.
7 -A copy of the latest report of Condition of the Trustee published
pursuant to the law or the requirements of its supervising or
examining authority.
8 -Not Applicable
9 -Not Applicable
- -------------------------
*Exhibits thus designated have heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 22-13279).
In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Newark, and State of New Jersey, on the 23rd day
of April, 1996.
First Union National Bank
(Trustee)
(CORPORATE SEAL)
By: Melissa Matthews
--------------------------------
Vice President
5
<PAGE>
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association , at the close of business on December 29, 1995, published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161. Charter Number 33869 Comptroller of the Currency
Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,876,439
Interest-bearing balances.................................. 35,650
Securities................................................... /////////
Hold-to-maturity securities................................ 672,202
Available-for-sale securities.............................. 4,786,380
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold..................................... 30,000
Securities purchased under agreements to resell........ 369,072
Loans and lease financing receivables:
Loan and leases, net of unearned income...... 23,027,860
LESS: Allowance for loan and lease losses....... 469,305
LESS: Allocated transfer risk reserve................. 0
Loans and leases, net of unearned income, allowance, and
reserve................................................. 22,558,555
Assets held in trading accounts............................... 76,675
Premises and fixed assets (including capitalized leases)...... 374,903
Other real estate owned....................................... 104,196
Investment in unconsolidated subsidiaries and associated //////////
companies..................................................... 19,166
Customer's liability to this bank on acceptances outstanding... 134,499
Intangible assets............................................. 785,891
Other assets.................................................. 863,227
Total assets.................................................. 32,686,855
LIABILITIES
Deposits:
In domestic offices..................................... 24,886,995
Noninterest-bearing................................... 4,687,403
Interest-bearing...................................... 20,199,592
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,304,436
Noninterest-bearing................................... 207
Interest-bearing...................................... 960,051
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 1,304,436
Securities sold under agreements to repurchase.......... 882,846
Demand notes issued to the U.S. Treasury...................... 97,451
Trading liabilities........................................... 0
Other borrowed money:......................................... /////////
With original maturity of one year or less.............. 252,296
With original maturity of more than one year............ 1,602
Mortgage indebtedness and obligations under capitalized leases 17,369
Bank's liability on acceptances executed and outstanding..... 134,499
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 934,256
Total liabilities............................................ 29,647,008
Limited-life preferred stock and related surplus............. 0
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 160,540
Common Stock.................................................. 452,156
Surplus....................................................... 1,300,080
Undivided profits and capital reserves........................ 1,127,557
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................... ( 486)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 3,039,847
Total liabilities, limited-life preferred stock and equity.... //////////
capital..................................................... 32,686,855
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS A TRUSTEE
-------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
---
-------------------------
FIRST UNION NATIONAL BANK
(Name of Trustee)
22-1147033
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a U.S. National Bank) Identification No.)
101 NORTHSIDE PLAZA, ELKTON, MARYLAND 21921
(Address of Principal Executive Offices) (Zip Code)
------------------------
PSE&G CAPITAL TRUST I
(Name of Obligor)
Delaware To Be Applied For
(State of Incorporation) (I.R.S. Employer
Identification No.)
80 Park Plaza, Newark, New Jersey 07101
(Address of Principal Executive Offices) (Zip Code)
% Cumulative Quarterly Income Preferred Securities, Series A
----
(Title of Indenture Securities)
<PAGE>
GENERAL
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject:
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities of
the trustee:
- -------------------------------------------------------------------------------
Col. A. Col. B.
- -------------------------------------------------------------------------------
Title of Class Amount Outstanding
- -------------------------------------------------------------------------------
Not Applicable.
Item 4. Trusteeship under Other Indentures:
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not Applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the trusteeship under any such other indenture, including
a statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.
Not Applicable.
Item 5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
<PAGE>
Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D.
- -------------------------------------------------------------------------------
Percentage of Voting
securities represented
Name of Title of Amount owned by amount given in
owner class beneficially Col. C
- -------------------------------------------------------------------------------
Not Applicable
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Percentage of
voting securities
represented by
Name of Amount owned amount given in
owner Title of Class beneficially Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for the obligations in default by
the trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Whether the
securities are Amount owned beneficially Percent of class
voting or or held as collateral represented by
Title nonvoting security for obligations amount given in
of Class securities in default Col.C.
- -------------------------------------------------------------------------------
Not Applicable
Item 9. Securities of the Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
2
<PAGE>
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not applicable
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of Voting
Name of or held as collateral securities
issuer and Amount security for obligations represented by amount
title of class outstanding in default by Trustee given in Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the Trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C.
- -------------------------------------------------------------------------------
Nature of indebtedness Amount outstanding Date due
- -------------------------------------------------------------------------------
Not Applicable
3
<PAGE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. Lists of Exhibits.
1* -Copy of Articles of Association of the Trustee as now in effect.
2 -No certificate of authority of the Trustee to commence business is
furnished since this authority is contained in the Articles of
Association of the Trustee.
3* -Copy of the authorization of the Trustee to exercise corporate trust
powers.
4* -Copy of the existing By-Laws of the Trustee, as now in effect.
5 -Not applicable.
6* -The consent of the Trustee required by Section 321 (b) of the Act.
7 -A copy of the latest report of Condition of the Trustee published
pursuant to the law or the requirements of its supervising or
examining authority.
8 -Not Applicable
9 -Not Applicable
- -------------------------
*Exhibits thus designated have heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 22-13279).
In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Newark, and State of New Jersey, on the 23rd day
of April, 1996.
First Union National Bank
(Trustee)
(CORPORATE SEAL)
By: Melissa Matthews
--------------------------------
Vice President
5
<PAGE>
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association , at the close of business on December 29, 1995, published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161. Charter Number 33869 Comptroller of the Currency
Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,876,439
Interest-bearing balances.................................. 35,650
Securities................................................... /////////
Hold-to-maturity securities................................ 672,202
Available-for-sale securities.............................. 4,786,380
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold..................................... 30,000
Securities purchased under agreements to resell........ 369,072
Loans and lease financing receivables:
Loan and leases, net of unearned income...... 23,027,860
LESS: Allowance for loan and lease losses....... 469,305
LESS: Allocated transfer risk reserve................. 0
Loans and leases, net of unearned income, allowance, and
reserve................................................. 22,558,555
Assets held in trading accounts............................... 76,675
Premises and fixed assets (including capitalized leases)...... 374,903
Other real estate owned....................................... 104,196
Investment in unconsolidated subsidiaries and associated //////////
companies..................................................... 19,166
Customer's liability to this bank on acceptances outstanding... 134,499
Intangible assets............................................. 785,891
Other assets.................................................. 863,227
Total assets.................................................. 32,686,855
LIABILITIES
Deposits:
In domestic offices..................................... 24,886,995
Noninterest-bearing................................... 4,687,403
Interest-bearing...................................... 20,199,592
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,304,436
Noninterest-bearing................................... 207
Interest-bearing...................................... 960,051
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 1,304,436
Securities sold under agreements to repurchase.......... 882,846
Demand notes issued to the U.S. Treasury...................... 97,451
Trading liabilities........................................... 0
Other borrowed money:......................................... /////////
With original maturity of one year or less.............. 252,296
With original maturity of more than one year............ 1,602
Mortgage indebtedness and obligations under capitalized leases 17,369
Bank's liability on acceptances executed and outstanding..... 134,499
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 934,256
Total liabilities............................................ 29,647,008
Limited-life preferred stock and related surplus............. 0
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 160,540
Common Stock.................................................. 452,156
Surplus....................................................... 1,300,080
Undivided profits and capital reserves........................ 1,127,557
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................... ( 486)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 3,039,847
Total liabilities, limited-life preferred stock and equity.... //////////
capital..................................................... 32,686,855
EXHIBIT 25.3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS A TRUSTEE
-------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
---
-------------------------
FIRST UNION NATIONAL BANK
(Name of Trustee)
22-1147033
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a U.S. National Bank) Identification No.)
101 NORTHSIDE PLAZA, ELKTON, MARYLAND 21921
(Address of Principal Executive Offices) (Zip Code)
-------------------------
PSE&G CAPITAL TRUST II
(Name of Obligor)
Delaware To be Applied For
(State of Incorporation) (I.R.S. Employer
Identification No.)
80 Park Plaza, Newark, New Jersey 07101
(Address of Principal Executive Offices) (Zip Code)
% Cumulative Quarterly Income Preferred Securities, Series B
----
(Title of Indenture Securities)
<PAGE>
GENERAL
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject:
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities of
the trustee:
- -------------------------------------------------------------------------------
Col. A. Col. B.
- -------------------------------------------------------------------------------
Title of Class Amount Outstanding
- -------------------------------------------------------------------------------
Not Applicable.
Item 4. Trusteeship under Other Indentures:
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not Applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the trusteeship under any such other indenture, including
a statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.
Not Applicable.
Item 5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
<PAGE>
Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D.
- -------------------------------------------------------------------------------
Percentage of Voting
securities represented
Name of Title of Amount owned by amount given in
owner class beneficially Col. C
- -------------------------------------------------------------------------------
Not Applicable
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Percentage of
voting securities
represented by
Name of Amount owned amount given in
owner Title of Class beneficially Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for the obligations in default by
the trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Whether the
securities are Amount owned beneficially Percent of class
voting or or held as collateral represented by
Title nonvoting security for obligations amount given in
of Class securities in default Col.C.
- -------------------------------------------------------------------------------
Not Applicable
Item 9. Securities of the Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
2
<PAGE>
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not applicable
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of Voting
Name of or held as collateral securities
issuer and Amount security for obligations represented by amount
title of class outstanding in default by Trustee given in Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the Trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C.
- -------------------------------------------------------------------------------
Nature of indebtedness Amount outstanding Date due
- -------------------------------------------------------------------------------
Not Applicable
3
<PAGE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. Lists of Exhibits.
1* -Copy of Articles of Association of the Trustee as now in effect.
2 -No certificate of authority of the Trustee to commence business is
furnished since this authority is contained in the Articles of
Association of the Trustee.
3* -Copy of the authorization of the Trustee to exercise corporate trust
powers.
4* -Copy of the existing By-Laws of the Trustee, as now in effect.
5 -Not applicable.
6* -The consent of the Trustee required by Section 321 (b) of the Act.
7 -A copy of the latest report of Condition of the Trustee published
pursuant to the law or the requirements of its supervising or
examining authority.
8 -Not Applicable
9 -Not Applicable
- -------------------------
*Exhibits thus designated have heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 22-13279).
In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Newark, and State of New Jersey, on the 23rd day
of April, 1996.
First Union National Bank
(Trustee)
(CORPORATE SEAL)
By: Melissa Matthews
--------------------------------
Vice President
5
<PAGE>
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association , at the close of business on December 29, 1995, published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161. Charter Number 33869 Comptroller of the Currency
Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,876,439
Interest-bearing balances.................................. 35,650
Securities................................................... /////////
Hold-to-maturity securities................................ 672,202
Available-for-sale securities.............................. 4,786,380
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold..................................... 30,000
Securities purchased under agreements to resell........ 369,072
Loans and lease financing receivables:
Loan and leases, net of unearned income...... 23,027,860
LESS: Allowance for loan and lease losses....... 469,305
LESS: Allocated transfer risk reserve................. 0
Loans and leases, net of unearned income, allowance, and
reserve................................................. 22,558,555
Assets held in trading accounts............................... 76,675
Premises and fixed assets (including capitalized leases)...... 374,903
Other real estate owned....................................... 104,196
Investment in unconsolidated subsidiaries and associated //////////
companies..................................................... 19,166
Customer's liability to this bank on acceptances outstanding... 134,499
Intangible assets............................................. 785,891
Other assets.................................................. 863,227
Total assets.................................................. 32,686,855
LIABILITIES
Deposits:
In domestic offices..................................... 24,886,995
Noninterest-bearing................................... 4,687,403
Interest-bearing...................................... 20,199,592
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,304,436
Noninterest-bearing................................... 207
Interest-bearing...................................... 960,051
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 1,304,436
Securities sold under agreements to repurchase.......... 882,846
Demand notes issued to the U.S. Treasury...................... 97,451
Trading liabilities........................................... 0
Other borrowed money:......................................... /////////
With original maturity of one year or less.............. 252,296
With original maturity of more than one year............ 1,602
Mortgage indebtedness and obligations under capitalized leases 17,369
Bank's liability on acceptances executed and outstanding..... 134,499
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 934,256
Total liabilities............................................ 29,647,008
Limited-life preferred stock and related surplus............. 0
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 160,540
Common Stock.................................................. 452,156
Surplus....................................................... 1,300,080
Undivided profits and capital reserves........................ 1,127,557
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................... ( 486)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 3,039,847
Total liabilities, limited-life preferred stock and equity.... //////////
capital..................................................... 32,686,855
EXHIBIT 25.4
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS A TRUSTEE
-------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
---
-------------------------
FIRST UNION NATIONAL BANK
(Name of Trustee)
22-1147033
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a U.S. National Bank) Identification No.)
101 NORTHSIDE PLAZA, ELKTON, MARYLAND 21921
(Address of Principal Executive Offices) (Zip Code)
-------------------------
PSE&G CAPITAL TRUST III
(Name of Obligor)
Delaware To Be Applied For
(State of Incorporation) (I.R.S. Employer
Identification No.)
80 Park Plaza, Newark, New Jersey 07101
(Address of Principal Executive Offices) (Zip Code)
% Cumulative Quarterly Income Preferred Securities, Series C
----
(Title of Indenture Securities)
<PAGE>
GENERAL
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject:
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities of
the trustee:
- -------------------------------------------------------------------------------
Col. A. Col. B.
- -------------------------------------------------------------------------------
Title of Class Amount Outstanding
- -------------------------------------------------------------------------------
Not Applicable.
Item 4. Trusteeship under Other Indentures:
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not Applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the trusteeship under any such other indenture, including
a statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.
Not Applicable.
Item 5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
<PAGE>
Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D.
- -------------------------------------------------------------------------------
Percentage of Voting
securities represented
Name of Title of Amount owned by amount given in
owner class beneficially Col. C
- -------------------------------------------------------------------------------
Not Applicable
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Percentage of
voting securities
represented by
Name of Amount owned amount given in
owner Title of Class beneficially Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for the obligations in default by
the trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Whether the
securities are Amount owned beneficially Percent of class
voting or or held as collateral represented by
Title nonvoting security for obligations amount given in
of Class securities in default Col.C.
- -------------------------------------------------------------------------------
Not Applicable
Item 9. Securities of the Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
2
<PAGE>
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not applicable
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of Voting
Name of or held as collateral securities
issuer and Amount security for obligations represented by amount
title of class outstanding in default by Trustee given in Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the Trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C.
- -------------------------------------------------------------------------------
Nature of indebtedness Amount outstanding Date due
- -------------------------------------------------------------------------------
Not Applicable
3
<PAGE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. Lists of Exhibits.
1* -Copy of Articles of Association of the Trustee as now in effect.
2 -No certificate of authority of the Trustee to commence business is
furnished since this authority is contained in the Articles of
Association of the Trustee.
3* -Copy of the authorization of the Trustee to exercise corporate trust
powers.
4* -Copy of the existing By-Laws of the Trustee, as now in effect.
5 -Not applicable.
6* -The consent of the Trustee required by Section 321 (b) of the Act.
7 -A copy of the latest report of Condition of the Trustee published
pursuant to the law or the requirements of its supervising or
examining authority.
8 -Not Applicable
9 -Not Applicable
- -------------------------
*Exhibits thus designated have heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 22-13279).
In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Newark, and State of New Jersey, on the 23rd day
of April, 1996.
First Union National Bank
(Trustee)
(CORPORATE SEAL)
By: Melissa Matthews
--------------------------------
Vice President
5
<PAGE>
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association , at the close of business on December 29, 1995, published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161. Charter Number 33869 Comptroller of the Currency
Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,876,439
Interest-bearing balances.................................. 35,650
Securities................................................... /////////
Hold-to-maturity securities................................ 672,202
Available-for-sale securities.............................. 4,786,380
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold..................................... 30,000
Securities purchased under agreements to resell........ 369,072
Loans and lease financing receivables:
Loan and leases, net of unearned income...... 23,027,860
LESS: Allowance for loan and lease losses....... 469,305
LESS: Allocated transfer risk reserve................. 0
Loans and leases, net of unearned income, allowance, and
reserve................................................. 22,558,555
Assets held in trading accounts............................... 76,675
Premises and fixed assets (including capitalized leases)...... 374,903
Other real estate owned....................................... 104,196
Investment in unconsolidated subsidiaries and associated //////////
companies..................................................... 19,166
Customer's liability to this bank on acceptances outstanding... 134,499
Intangible assets............................................. 785,891
Other assets.................................................. 863,227
Total assets.................................................. 32,686,855
LIABILITIES
Deposits:
In domestic offices..................................... 24,886,995
Noninterest-bearing................................... 4,687,403
Interest-bearing...................................... 20,199,592
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,304,436
Noninterest-bearing................................... 207
Interest-bearing...................................... 960,051
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 1,304,436
Securities sold under agreements to repurchase.......... 882,846
Demand notes issued to the U.S. Treasury...................... 97,451
Trading liabilities........................................... 0
Other borrowed money:......................................... /////////
With original maturity of one year or less.............. 252,296
With original maturity of more than one year............ 1,602
Mortgage indebtedness and obligations under capitalized leases 17,369
Bank's liability on acceptances executed and outstanding..... 134,499
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 934,256
Total liabilities............................................ 29,647,008
Limited-life preferred stock and related surplus............. 0
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 160,540
Common Stock.................................................. 452,156
Surplus....................................................... 1,300,080
Undivided profits and capital reserves........................ 1,127,557
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................... ( 486)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 3,039,847
Total liabilities, limited-life preferred stock and equity.... //////////
capital..................................................... 32,686,855
EXHIBIT 25.5
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS A TRUSTEE
-------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
---
-------------------------
FIRST UNION NATIONAL BANK
(Name of Trustee)
22-1147033
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a U.S. National Bank) Identification No.)
101 NORTHSIDE PLAZA, ELKTON, MARYLAND 21921
(Address of Principal Executive Offices) (Zip Code)
-------------------------
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Name of Obligor)
New Jersey 22-1212800
(State of Incorporation) (I.R.S. Employer
Identification No.)
80 Park Plaza, Newark, New Jersey 07101
(Address of Principal Executive Offices) (Zip Code)
Guarantee of PSE&G Capital Trust I % Cumulative Quarterly Income
-----
Preferred Securities, Series A
(Title of Indenture Securities)
<PAGE>
GENERAL
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject:
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities of
the trustee:
- -------------------------------------------------------------------------------
Col. A. Col. B.
- -------------------------------------------------------------------------------
Title of Class Amount Outstanding
- -------------------------------------------------------------------------------
Not Applicable.
Item 4. Trusteeship under Other Indentures:
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not Applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the trusteeship under any such other indenture, including
a statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.
Not Applicable.
Item 5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
<PAGE>
Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D.
- -------------------------------------------------------------------------------
Percentage of Voting
securities represented
Name of Title of Amount owned by amount given in
owner class beneficially Col. C
- -------------------------------------------------------------------------------
Not Applicable
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Percentage of
voting securities
represented by
Name of Amount owned amount given in
owner Title of Class beneficially Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for the obligations in default by
the trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Whether the
securities are Amount owned beneficially Percent of class
voting or or held as collateral represented by
Title nonvoting security for obligations amount given in
of Class securities in default Col.C.
- -------------------------------------------------------------------------------
Not Applicable
Item 9. Securities of the Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
2
<PAGE>
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not applicable
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of Voting
Name of or held as collateral securities
issuer and Amount security for obligations represented by amount
title of class outstanding in default by Trustee given in Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the Trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C.
- -------------------------------------------------------------------------------
Nature of indebtedness Amount outstanding Date due
- -------------------------------------------------------------------------------
Not Applicable
3
<PAGE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. Lists of Exhibits.
1* -Copy of Articles of Association of the Trustee as now in effect.
2 -No certificate of authority of the Trustee to commence business is
furnished since this authority is contained in the Articles of
Association of the Trustee.
3* -Copy of the authorization of the Trustee to exercise corporate trust
powers.
4* -Copy of the existing By-Laws of the Trustee, as now in effect.
5 -Not applicable.
6* -The consent of the Trustee required by Section 321 (b) of the Act.
7 -A copy of the latest report of Condition of the Trustee published
pursuant to the law or the requirements of its supervising or
examining authority.
8 -Not Applicable
9 -Not Applicable
- -------------------------
*Exhibits thus designated have heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 22-13279).
In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Newark, and State of New Jersey, on the 23rd day
of April, 1996.
First Union National Bank
(Trustee)
(CORPORATE SEAL)
By: Melissa Matthews
--------------------------------
Vice President
5
<PAGE>
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association , at the close of business on December 29, 1995, published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161. Charter Number 33869 Comptroller of the Currency
Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,876,439
Interest-bearing balances.................................. 35,650
Securities................................................... /////////
Hold-to-maturity securities................................ 672,202
Available-for-sale securities.............................. 4,786,380
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold..................................... 30,000
Securities purchased under agreements to resell........ 369,072
Loans and lease financing receivables:
Loan and leases, net of unearned income...... 23,027,860
LESS: Allowance for loan and lease losses....... 469,305
LESS: Allocated transfer risk reserve................. 0
Loans and leases, net of unearned income, allowance, and
reserve................................................. 22,558,555
Assets held in trading accounts............................... 76,675
Premises and fixed assets (including capitalized leases)...... 374,903
Other real estate owned....................................... 104,196
Investment in unconsolidated subsidiaries and associated //////////
companies..................................................... 19,166
Customer's liability to this bank on acceptances outstanding... 134,499
Intangible assets............................................. 785,891
Other assets.................................................. 863,227
Total assets.................................................. 32,686,855
LIABILITIES
Deposits:
In domestic offices..................................... 24,886,995
Noninterest-bearing................................... 4,687,403
Interest-bearing...................................... 20,199,592
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,304,436
Noninterest-bearing................................... 207
Interest-bearing...................................... 960,051
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 1,304,436
Securities sold under agreements to repurchase.......... 882,846
Demand notes issued to the U.S. Treasury...................... 97,451
Trading liabilities........................................... 0
Other borrowed money:......................................... /////////
With original maturity of one year or less.............. 252,296
With original maturity of more than one year............ 1,602
Mortgage indebtedness and obligations under capitalized leases 17,369
Bank's liability on acceptances executed and outstanding..... 134,499
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 934,256
Total liabilities............................................ 29,647,008
Limited-life preferred stock and related surplus............. 0
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 160,540
Common Stock.................................................. 452,156
Surplus....................................................... 1,300,080
Undivided profits and capital reserves........................ 1,127,557
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................... ( 486)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 3,039,847
Total liabilities, limited-life preferred stock and equity.... //////////
capital..................................................... 32,686,855
EXHIBIT 25.6
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS A TRUSTEE
-------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
---
-------------------------
FIRST UNION NATIONAL BANK
(Name of Trustee)
22-1147033
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a U.S. National Bank) Identification No.)
101 NORTHSIDE PLAZA, ELKTON, MARYLAND 21921
(Address of Principal Executive Offices) (Zip Code)
-------------------------
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Name of Obligor)
New Jersey 22-1212800
(State of Incorporation) (I.R.S. Employer
Identification No.)
80 Park Plaza, Newark, New Jersey 07101
(Address of Principal Executive Offices) (Zip Code)
Guarantee of PSE&G Capital Trust II % Cumulative Quarterly Income
-----
Preferred Securities, Series B
(Title of Indenture Securities)
<PAGE>
GENERAL
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject:
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities of
the trustee:
- -------------------------------------------------------------------------------
Col. A. Col. B.
- -------------------------------------------------------------------------------
Title of Class Amount Outstanding
- -------------------------------------------------------------------------------
Not Applicable.
Item 4. Trusteeship under Other Indentures:
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not Applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the trusteeship under any such other indenture, including
a statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.
Not Applicable.
Item 5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
<PAGE>
Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D.
- -------------------------------------------------------------------------------
Percentage of Voting
securities represented
Name of Title of Amount owned by amount given in
owner class beneficially Col. C
- -------------------------------------------------------------------------------
Not Applicable
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Percentage of
voting securities
represented by
Name of Amount owned amount given in
owner Title of Class beneficially Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for the obligations in default by
the trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Whether the
securities are Amount owned beneficially Percent of class
voting or or held as collateral represented by
Title nonvoting security for obligations amount given in
of Class securities in default Col.C.
- -------------------------------------------------------------------------------
Not Applicable
Item 9. Securities of the Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
2
<PAGE>
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not applicable
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of Voting
Name of or held as collateral securities
issuer and Amount security for obligations represented by amount
title of class outstanding in default by Trustee given in Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the Trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C.
- -------------------------------------------------------------------------------
Nature of indebtedness Amount outstanding Date due
- -------------------------------------------------------------------------------
Not Applicable
3
<PAGE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. Lists of Exhibits.
1* -Copy of Articles of Association of the Trustee as now in effect.
2 -No certificate of authority of the Trustee to commence business is
furnished since this authority is contained in the Articles of
Association of the Trustee.
3* -Copy of the authorization of the Trustee to exercise corporate trust
powers.
4* -Copy of the existing By-Laws of the Trustee, as now in effect.
5 -Not applicable.
6* -The consent of the Trustee required by Section 321 (b) of the Act.
7 -A copy of the latest report of Condition of the Trustee published
pursuant to the law or the requirements of its supervising or
examining authority.
8 -Not Applicable
9 -Not Applicable
- -------------------------
*Exhibits thus designated have heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 22-13279).
In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Newark, and State of New Jersey, on the 23rd day
of April, 1996.
First Union National Bank
(Trustee)
(CORPORATE SEAL)
By: Melissa Matthews
--------------------------------
Vice President
5
<PAGE>
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association , at the close of business on December 29, 1995, published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161. Charter Number 33869 Comptroller of the Currency
Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,876,439
Interest-bearing balances.................................. 35,650
Securities................................................... /////////
Hold-to-maturity securities................................ 672,202
Available-for-sale securities.............................. 4,786,380
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold..................................... 30,000
Securities purchased under agreements to resell........ 369,072
Loans and lease financing receivables:
Loan and leases, net of unearned income...... 23,027,860
LESS: Allowance for loan and lease losses....... 469,305
LESS: Allocated transfer risk reserve................. 0
Loans and leases, net of unearned income, allowance, and
reserve................................................. 22,558,555
Assets held in trading accounts............................... 76,675
Premises and fixed assets (including capitalized leases)...... 374,903
Other real estate owned....................................... 104,196
Investment in unconsolidated subsidiaries and associated //////////
companies..................................................... 19,166
Customer's liability to this bank on acceptances outstanding... 134,499
Intangible assets............................................. 785,891
Other assets.................................................. 863,227
Total assets.................................................. 32,686,855
LIABILITIES
Deposits:
In domestic offices..................................... 24,886,995
Noninterest-bearing................................... 4,687,403
Interest-bearing...................................... 20,199,592
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,304,436
Noninterest-bearing................................... 207
Interest-bearing...................................... 960,051
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 1,304,436
Securities sold under agreements to repurchase.......... 882,846
Demand notes issued to the U.S. Treasury...................... 97,451
Trading liabilities........................................... 0
Other borrowed money:......................................... /////////
With original maturity of one year or less.............. 252,296
With original maturity of more than one year............ 1,602
Mortgage indebtedness and obligations under capitalized leases 17,369
Bank's liability on acceptances executed and outstanding..... 134,499
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 934,256
Total liabilities............................................ 29,647,008
Limited-life preferred stock and related surplus............. 0
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 160,540
Common Stock.................................................. 452,156
Surplus....................................................... 1,300,080
Undivided profits and capital reserves........................ 1,127,557
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................... ( 486)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 3,039,847
Total liabilities, limited-life preferred stock and equity.... //////////
capital..................................................... 32,686,855
EXHIBIT 25.7
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS A TRUSTEE
-------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
---
-------------------------
FIRST UNION NATIONAL BANK
(Name of Trustee)
22-1147033
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a U.S. National Bank) Identification No.)
101 NORTHSIDE PLAZA, ELKTON, MARYLAND 21921
(Address of Principal Executive Offices) (Zip Code)
-------------------------
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Name of Obligor)
New Jersey 22-1212800
(State of Incorporation) (I.R.S. Employer
Identification No.)
80 Park Plaza, Newark, New Jersey 07101
(Address of Principal Executive Offices) (Zip Code)
Guarantee of PSE&G Capital Trust III % Cumulative Quarterly Income
-----
Preferred Securities, Series C
(Title of Indenture Securities)
<PAGE>
GENERAL
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject:
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities of
the trustee:
- -------------------------------------------------------------------------------
Col. A. Col. B.
- -------------------------------------------------------------------------------
Title of Class Amount Outstanding
- -------------------------------------------------------------------------------
Not Applicable.
Item 4. Trusteeship under Other Indentures:
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not Applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the trusteeship under any such other indenture, including
a statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.
Not Applicable.
Item 5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
<PAGE>
Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D.
- -------------------------------------------------------------------------------
Percentage of Voting
securities represented
Name of Title of Amount owned by amount given in
owner class beneficially Col. C
- -------------------------------------------------------------------------------
Not Applicable
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Percentage of
voting securities
represented by
Name of Amount owned amount given in
owner Title of Class beneficially Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for the obligations in default by
the trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Whether the
securities are Amount owned beneficially Percent of class
voting or or held as collateral represented by
Title nonvoting security for obligations amount given in
of Class securities in default Col.C.
- -------------------------------------------------------------------------------
Not Applicable
Item 9. Securities of the Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee.
2
<PAGE>
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not applicable
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of Voting
Name of or held as collateral securities
issuer and Amount security for obligations represented by amount
title of class outstanding in default by Trustee given in Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the Trustee.
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C. Col. D.
- -------------------------------------------------------------------------------
Amount owned beneficially Percent of class
Name of or held as collateral represented by
issuer and Amount security for obligations amount given in
title of class outstanding in default by Trustee Col. C.
- -------------------------------------------------------------------------------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
- -------------------------------------------------------------------------------
Col. A. Col. B. Col. C.
- -------------------------------------------------------------------------------
Nature of indebtedness Amount outstanding Date due
- -------------------------------------------------------------------------------
Not Applicable
3
<PAGE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. Lists of Exhibits.
1* -Copy of Articles of Association of the Trustee as now in effect.
2 -No certificate of authority of the Trustee to commence business is
furnished since this authority is contained in the Articles of
Association of the Trustee.
3* -Copy of the authorization of the Trustee to exercise corporate trust
powers.
4* -Copy of the existing By-Laws of the Trustee, as now in effect.
5 -Not applicable.
6* -The consent of the Trustee required by Section 321 (b) of the Act.
7 -A copy of the latest report of Condition of the Trustee published
pursuant to the law or the requirements of its supervising or
examining authority.
8 -Not Applicable
9 -Not Applicable
- -------------------------
*Exhibits thus designated have heretofore been filed with the Securities and
Exchange Commission, have not been amended since filing and are incorporated
herein by reference (see Exhibit T-1 Registration Number 22-13279).
In answering any item in this statement of eligibility and qualification
which relates to matters peculiarly within the knowledge of the obligor or of
its directors or officers, or an underwriter for the obligor, the undersigned,
First Union National Bank, has relied upon information furnished to it by the
obligor or such underwriter.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Newark, and State of New Jersey, on the 23rd day
of April, 1996.
First Union National Bank
(Trustee)
(CORPORATE SEAL)
By: Melissa Matthews
--------------------------------
Vice President
5
<PAGE>
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association , at the close of business on December 29, 1995, published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161. Charter Number 33869 Comptroller of the Currency
Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,876,439
Interest-bearing balances.................................. 35,650
Securities................................................... /////////
Hold-to-maturity securities................................ 672,202
Available-for-sale securities.............................. 4,786,380
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold..................................... 30,000
Securities purchased under agreements to resell........ 369,072
Loans and lease financing receivables:
Loan and leases, net of unearned income...... 23,027,860
LESS: Allowance for loan and lease losses....... 469,305
LESS: Allocated transfer risk reserve................. 0
Loans and leases, net of unearned income, allowance, and
reserve................................................. 22,558,555
Assets held in trading accounts............................... 76,675
Premises and fixed assets (including capitalized leases)...... 374,903
Other real estate owned....................................... 104,196
Investment in unconsolidated subsidiaries and associated //////////
companies..................................................... 19,166
Customer's liability to this bank on acceptances outstanding... 134,499
Intangible assets............................................. 785,891
Other assets.................................................. 863,227
Total assets.................................................. 32,686,855
LIABILITIES
Deposits:
In domestic offices..................................... 24,886,995
Noninterest-bearing................................... 4,687,403
Interest-bearing...................................... 20,199,592
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,304,436
Noninterest-bearing................................... 207
Interest-bearing...................................... 960,051
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 1,304,436
Securities sold under agreements to repurchase.......... 882,846
Demand notes issued to the U.S. Treasury...................... 97,451
Trading liabilities........................................... 0
Other borrowed money:......................................... /////////
With original maturity of one year or less.............. 252,296
With original maturity of more than one year............ 1,602
Mortgage indebtedness and obligations under capitalized leases 17,369
Bank's liability on acceptances executed and outstanding..... 134,499
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 934,256
Total liabilities............................................ 29,647,008
Limited-life preferred stock and related surplus............. 0
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 160,540
Common Stock.................................................. 452,156
Surplus....................................................... 1,300,080
Undivided profits and capital reserves........................ 1,127,557
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................... ( 486)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 3,039,847
Total liabilities, limited-life preferred stock and equity.... //////////
capital..................................................... 32,686,855