-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Suoeqsdm1uB5TV0+T4h+zpz8Dt8vYe/81Ug2NPolQXUUvVYhAy4PK4NjlTqLBknC ePeS4KPvsIEHTERF0Qh5Bg== 0000916641-97-001200.txt : 19971229 0000916641-97-001200.hdr.sgml : 19971229 ACCESSION NUMBER: 0000916641-97-001200 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 30 FILED AS OF DATE: 19971224 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC SERVICE ENTERPRISE GROUP INC CENTRAL INDEX KEY: 0000788784 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 222625848 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-43241 FILM NUMBER: 97744177 BUSINESS ADDRESS: STREET 1: 80 PARK PLZ STREET 2: P O BOX 1171 CITY: NEWARK STATE: NJ ZIP: 07101 BUSINESS PHONE: 2014307000 S-3 1 PUBLIC SERVICE ENTERPRISE S-3 As filed with the Securities and Exchange Commission on December 24, 1997 Registration No. 333-_____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------- Enterprise Capital Trust I Public Service Enterprise Enterprise Capital Trust II Group Incorporated Enterprise Capital Trust III (Exact name of registrant as (Exact name of registrants as specified in charter) specified in Trust Agreements) Delaware New Jersey (State or other jurisdiction of incorporation or organization) To be applied for 22-2625848 (I.R.S. Employer Identification No.) 80 Park Plaza P.O. Box 1171 Newark, New Jersey 07101 (973) 430-7000 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) Robert C. Murray Vice President and Chief Financial Officer 80 Park Plaza P.O. Box 1171 Newark, New Jersey 07101 (973) 430-7000 (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 Associate General Counsel Brown & Wood LLP 80 Park Plaza One World Trade Center P.O. Box 1171 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. |_| -------------------
CALCULATION OF REGISTRATION FEE ==================================================================================================================================== Proposed Maximum Proposed Maximum Title of Each Class of Amount To Be Offering Price Per Aggregate Offering Amount of Securities To Be Registered Registered(1) Unit(2)(3) Price(2)(3) Registration Fee - ------------------------------------------------------------------------------------------------------------------------------------ Enterprise Capital Trust I, II and III Trust Preferred Securities............... - ------------------------------------------------------------------------------------------------------------------------------------ Public Service Enterprise Group Incorporated Guarantees with respect to Trust Preferred Securities(4)................... - ------------------------------------------------------------------------------------------------------------------------------------ Public Service Enterprise Group Incorporated Deferrable Interest Subordinated Debentures................................ - ------------------------------------------------------------------------------------------------------------------------------------ Total........................................ $225,000,000 100% $225,000,000 $66,375.00 ====================================================================================================================================
(1) There are being registered hereunder a presently indeterminate number of Trust Preferred Securities of Enterprise Capital Trust I, II and III with an aggregate initial offering price not to exceed $225,000,000 and related Guarantees and Deferrable Interest Subordinated Debentures of Public Service Enterprise Group Incorporated 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 Trust Preferred Securities. (4) This registration is deemed to include the rights of holders of the Trust 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. ================================================================================ Information contained herein is subject to completion or 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 offers 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. PROSPECTUS SUPPLEMENT - --------------------- (To Prospectus dated _____________, 1998) SUBJECT TO COMPLETION, DATED __________, 1998 __________ Preferred Securities Enterprise Capital Trust I _____% Trust Originated Preferred Securities(sm)("TOPrS(sm)") (liquidation amount $25 per Preferred Security) guaranteed to the extent Enterprise Capital Trust I has available funds as set forth herein by PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED --------------------------------- The _____% Trust Originated Preferred Securities (the "Series A Preferred Securities") offered hereby represent undivided beneficial interests in the assets of Enterprise Capital Trust I, a statutory business trust created under the laws of the State of Delaware (the "Series A Issuer"). Public Service Enterprise Group Incorporated ("Enterprise") is the owner of the beneficial (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 TO WHICH IT RELATES. 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 Security..................... $25.00 (2) $25.00 Total............................................... $___________ (2) $___________
----------------------- (1) Enterprise 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, under the Underwriting Agreement, Enterprise will pay to the Underwriters $__________ per Series A Preferred Security (or $__________ in the aggregate). See "Underwriting." (3) Expenses of the offering, which are payable by Enterprise, are estimated to be $450,000. --------------------------------- 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 in New York, New York on or about _________, 1998 against payment therefor in immediately available funds. - ----------------------- Merrill Lynch & Co. Goldman, Sachs & Co. --------------------------------- The date of this Prospectus Supplement is _______, 1998. (sm)"Trust Originated Preferred Securities" and "TOPrS" are service marks of Merrill Lynch & Co., Inc. (continued from previous page) interests represented by the common 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 Enterprise (the "Series A Debentures"). The Series A Preferred Securities have a preference over the Common Securities under certain circumstances with respect to cash distributions and amounts payable on redemption or liquidation. See "Description of the Preferred Securities - Subordination of Common Securities" in the accompanying Prospectus. Holders of the Series A Preferred Securities are 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 March 31, 1998. So long as no Debenture Event of Default has occurred and is continuing, Enterprise 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"), but not beyond the maturity or any redemption date of the Series A Debentures. 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 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." Enterprise 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, Enterprise agrees to make payments of Distributions and payments on redemption or liquidation with respect to the Series A Preferred Securities, but only to the extent that the Series A Issuer holds funds available therefor and has not made such payments. See "Description of the Guarantee" in the accompanying Prospectus. If Enterprise fails to make a payment on the Series A Debentures, the Series A Issuer will not have sufficient funds to make the related payment, including Distributions, on the Series A Preferred Securities. The Series A Guarantee does not cover any such payment when the Series A Issuer does not have sufficient funds available therefor. In such event, the Property Trustee or holders of the Series A Preferred Securities may 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 Enterprise under the Series A Guarantee are subordinate and junior in right of payment to all general liabilities of Enterprise and the obligations of Enterprise under the Series A Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness of Enterprise (as defined in the accompanying Prospectus). At November 30, 1997, the Senior Indebtedness of Enterprise aggregated approximately $75 million. The Series A Preferred Securities are subject to mandatory redemption upon payment of the Series A Debentures at maturity on _________, 2047, or upon earlier redemption. See "Certain Terms of the Series A Preferred Securities--Redemption." Enterprise has the option at any time on or after ________, 2003 to redeem, in whole or in part, the Series A Debentures. In addition, the Series A Debentures are subject to redemption, in whole but not in part, at the option of Enterprise upon the occurrence of certain special events described under "Certain Terms of the Series A Preferred Securities--Special Event Redemption." Enterprise has the right, at any time, subject to certain conditions, to dissolve the Series A Issuer and, after satisfaction of liabilities to creditors of the Series A Issuer, 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, Enterprise will use its best efforts to list them on the New York Stock Exchange. In the event of the dissolution and 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 therewith, 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 Dissolution" in the accompanying Prospectus. The Series A Preferred Securities are 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. CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SERIES A PREFERRED SECURITIES. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF SERIES A PREFERRED SECURITIES TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING." S-2 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 Enterprise Group Incorporated ("Enterprise") under the Guarantee (the "Series A Guarantee") issued for the benefit of the holders of the _____% Trust Originated Preferred Securities (the "Series A Preferred Securities") issued by Enterprise Capital Trust I (the "Series A Issuer") are unsecured and rank subordinate and junior in right of payment to all general liabilities of Enterprise. The obligations of Enterprise under its _____% Deferrable Interest Subordinated Debentures, Series A (the "Series A Debentures") issued pursuant to the Indenture dated as of ______, 1998 (as amended and supplemented from time to time, the "Indenture") between Enterprise and First Union National Bank, as trustee (the "Debenture Trustee"), are unsecured and rank subordinate and junior in right of payment to all Senior Indebtedness of Enterprise. At November 30, 1997, the Senior Indebtedness of Enterprise aggregated approximately $75 million. No terms of the Series A Preferred Securities, the Series A Debentures or the Series A Guarantee limit Enterprise'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. Enterprise is a holding company whose assets consist principally of the stock in its wholly owned subsidiaries, Public Service Electric and Gas Company ("PSE&G") and Enterprise Diversified Holdings Incorporated ("EDHI"). Therefore, Enterprise's rights and the rights of its creditors, including the holders of Series A Debentures, to participate in the assets of any subsidiary upon the latter's liquidation or recapitalization or otherwise will be subject to the prior claims of the subsidiary's creditors, except to the extent that claims of Enterprise itself as a creditor of the subsidiary may be recognized. The ability of the Series A Issuer to pay 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 Enterprise making the related payments on the Series A Debentures when due. Option to Extend Interest Payment Period; Tax Consequences So long as no event of default with respect to the Series A Debentures (a "Debenture Event of Default") under the Indenture has occurred and is continuing, Enterprise 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 period on the Series A Debentures for up to 20 consecutive quarters (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 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 of _____% per annum, compounded quarterly). During any Extension Period, Enterprise may not declare or pay any dividend on, or redeem, S-3 purchase, acquire or make a liquidation payment with respect to, any shares of Enterprise's capital stock. Prior to the termination of any Extension Period, Enterprise may shorten or further extend the interest payment period on the Series A Debentures, 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, Enterprise may elect to begin a new Extension Period, subject to the above requirements. 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. Should an Extension Period occur, an owner of Series A Preferred Securities (which represent undivided beneficial interests in the Series A Debentures) will continue to accrue interest income for federal income tax purposes in respect of its pro rata share of the Series A Debentures held by the Series A Issuer. 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." Enterprise 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 Enterprise 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 mere existence of Enterprise's right to defer interest payments on the Series A Debentures, the market price of the Series A Preferred Securities may be more volatile than other securities on which original issue discount accrues that are not subject to such deferrals. Trading Characteristics of the Series A Preferred Securities; Tax Consequences 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 prior to the record date for the payment 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." Special Event Redemption Upon the occurrence and continuation of a Tax Event or an Investment Company Event (each as defined in "Certain Terms of the Series A Preferred Securities--Special Event Redemption"), Enterprise 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. S-4 Distribution of Series A Debentures; Possible Adverse Effect on Market Price At any time, Enterprise may, in its sole discretion, dissolve the Series A Issuer and, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, cause the Series A Debentures to be distributed to the holders of the Trust Securities, provided that Enterprise shall have delivered to the Issuer Trustees (as defined herein) an opinion of nationally recognized tax counsel (which may be regular tax counsel to Enterprise 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 Enterprise 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 dissolution of the Series A Issuer were to occur. Accordingly, the Series A Debentures that a holder of Series A Preferred Securities may receive upon such a distribution, or the Series A Preferred Securities held pending such a distribution, 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 at Enterprise's sole discretion, 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 has been qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). First Union National Bank is the indenture trustee under the Series A Guarantee (the "Guarantee Trustee") for the purposes of compliance with the Trust Indenture Act and holds the Series A Guarantee for the benefit of the holders of the Series A Preferred Securities. Under the Series A Guarantee, Enterprise agrees to make the following payments to the holders of the Series A Preferred Securities, 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 dissolution and liquidation of the Series A Issuer (unless the Series A Debentures are distributed to holders of the Series A 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 upon such dissolution and 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 and 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 institute a legal proceeding directly against Enterprise 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 Enterprise defaults on its obligation to pay amounts payable on the Series A Debentures, the Series A Issuer will not have sufficient funds for the payment of Distributions, amounts payable on S-5 redemption of the Series A Preferred Securities or amounts payable upon liquidation of the Series A Issuer and, accordingly, holders of the Series A Preferred Securities will 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 may enforce the rights of the Series A Issuer under the Series A Debentures against Enterprise 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 Enterprise 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 aggregate 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 "--Removal of Issuer Trustees" in the accompanying Prospectus. ENTERPRISE CAPITAL TRUST I Enterprise Capital Trust I is a statutory business trust created under the laws of the State of Delaware and operated pursuant to the Trust Agreement. The exclusive business of the Series A Issuer is to issue and sell the Trust 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 to the foregoing. 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, Enterprise will be obligated to pay all expenses and liabilities of the Series A Issuer except the Series A Issuer's obligations under the Series A Preferred Securities. The Series A Issuer has a term of 54 years, but may be dissolved earlier as provided in the Trust Agreement. See "Description of the Preferred Securities--Liquidation Distribution Upon Dissolution" 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 officer of or affiliated with Enterprise, 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 as an indenture under the Trust Indenture Act and the Property Trustee is the indenture trustee thereunder for the purposes of compliance with the Trust Indenture Act. Concurrently with the issuance of the Series A Preferred Securities, Enterprise 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 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 Enterprise, as holder of the Common Securities, to payment of Distributions and payments upon redemption and liquidation will be subordinated to the rights of the holders of the Series A Preferred Securities. S-6 The principal place of business of the Series A Issuer is 80 Park Plaza, P.O. Box 1171, Newark, New Jersey 07101 and its telephone number is (973) 430-7000. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED General Enterprise is a public utility holding company that neither owns nor operates any physical properties. Enterprise has two direct, wholly owned subsidiaries, PSE&G and EDHI. Enterprise's principal subsidiary, PSE&G, is an operating public utility providing electric and gas service in certain areas of the State of New Jersey. EDHI is the parent of Enterprise's non-utility businesses: Community Energy Alternatives Incorporated, Public Service Resources Corporation, Energis Resources Incorporated, Enterprise Group Development Corporation, PSEG Capital Corporation and Enterprise Capital Funding Corporation. Ratio of Earnings to Fixed Charges Enterprise's ratio of earnings to fixed charges for each of the periods indicated is as follows: Years Ended December 31, - ------------------------------------------------------ 12 months ended 1992 1993 1994 1995 1996 September 30, 1997 - ---- ---- ---- ---- ---- ------------------ 2.33 2.57 2.84 2.78 2.68 2.56 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 Enterprise and its subsidiaries. Fixed charges consist of interest charges, an interest factor in rentals and preferred securities dividend requirements of subsidiaries. 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 Enterprise. The net proceeds from the sale of the Series A Debentures will be used by Enterprise for general corporate purposes, including additional investments in EDHI and the reimbursement of its treasury for funds expended therefor. 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. S-7 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 are 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 March 31, 1998. 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 no Debenture Event of Default has occurred and is continuing, Enterprise 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 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, Enterprise may not declare or pay any dividend on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any shares of Enterprise's capital stock. Prior to the termination of any Extension Period, Enterprise may shorten or further extend the interest payment period on the Series A Debentures, 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, Enterprise 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. Enterprise 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 are 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 in immediately available funds 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 other 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 or by wire transfer. In addition, if the Series A 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. S-8 Redemption Upon the payment of the Series A Debentures 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 paid in accordance with the Indenture and (ii) with respect to a distribution of Series A Debentures to holders of Trust Securities in connection with a dissolution 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. Special Event Redemption If a Tax Event or an Investment Company Event (each, a "Special Event") has occurred and is continuing, Enterprise 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 Enterprise shall have received an opinion of counsel (which may be counsel to Enterprise 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 Enterprise on the Series A Debentures is not, or will not be, deductible by Enterprise 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, Enterprise may, in its sole discretion, dissolve the Series A Issuer and, after satisfaction of liabilities of creditors of the Trust, 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 Enterprise shall have delivered to the Issuer Trustees an opinion of nationally recognized tax counsel (which may be regular tax counsel to Enterprise S-9 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 Dissolution" in the accompanying Prospectus. Liquidation Amount The amount payable on the Series A Preferred Securities in the event of the dissolution and liquidation of the Series A Issuer is $25 per Series A Preferred Security plus accumulated and unpaid Distributions to the date of payment, unless, in connection therewith, the Series A Debentures are distributed to the holders of the Trust Securities. 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 are unsecured and rank subordinate and junior in right of payment to all Senior Indebtedness of Enterprise. Interest Rate; Maturity Concurrently with the issuance of the Series A Preferred Securities, the Series A Issuer is investing the proceeds thereof, together with the consideration paid by Enterprise 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 ________, 2047. 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 March 31, 1998. 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 Enterprise 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 ________, 2003, in whole or in part, or (ii) if a Special Event has occurred 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 dissolution and liquidation of the Series A Issuer, the Series A Debentures will be issued 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 S-10 Securities, would act as depositary for the Series A Debentures. The depositary arrangements for the Series A Debentures would be substantially similar to those in effect for the Series A Preferred Securities. None of Enterprise, the Debenture Trustee, any paying agent or any other agent of Enterprise 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 in immediately available funds 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 the Series A Debentures will be exchangeable for Series A Debentures of other authorized denominations of a like aggregate principal amount, at the corporate office of the Debenture Trustee in Newark, New Jersey, or at the offices of any other paying agent or transfer agent appointed by Enterprise; provided, however, that payment of interest may be made at the option of Enterprise 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 dissolution and liquidation of the Series A Issuer, Enterprise 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 is the opinion of Ballard Spahr Andrews & Ingersoll, special tax counsel to Enterprise 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. S-11 In the opinion of Ballard Spahr Andrews & Ingersoll, the Series A Debentures will be treated as indebtedness for federal income tax purposes. However, 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, as described below. If the IRS were successful in such attempt, the Series A Debentures would be subject to redemption at the option of Enterprise as described under "Certain Terms of the Series A Debentures--Redemption" and "Certain Terms of the Series A Preferred Securities--Special Event Redemption." From time to time, the Clinton Administration has proposed certain tax law changes that would, among other things, generally deny interest deductions to a corporate issuer 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, if a proposal of this sort were to become effective retroactively, Enterprise would be precluded from deducting interest on the Series A Debentures. In the opinion of Ballard Spahr Andrews & Ingersoll, under current law, interest on the Series A Debentures is deductible. There can be no assurance, however, that a legislative proposal which would affect the ability of Enterprise to deduct interest on the Series A Debentures might not be adopted which, in turn, might give rise to a Tax Event and, accordingly, Enterprise's optional right to redeem the Series A Debentures, thereby causing a mandatory redemption of Series A Preferred Securities, as described under "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, in the opinion of Ballard Spahr Andrews & Ingersoll, under 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. 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 available to corporate taxpayers. Potential Extension of Interest Payment Period and Original Issue Discount Under the Indenture, Enterprise may from time to time extend the interest payment period 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. Enterprise's right to defer payments of interest by extending the interest payment period 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 S-12 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 (which represent undivided beneficial interests in the Series A Debentures) 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 the Series A Debentures. Gain or loss recognized by an owner of Series A Preferred Securities on the sale or exchange of Series A Preferred Securities generally will be taxable as capital gain or loss and in the case of non-corporate holders will be subject to tax at the rates applicable to mid-term gain if the Series A Preferred Securities have been held for more than one year but less than 18 months or at the rates applicable to adjusted net capital gains if the Series A Preferred Securities have been held for more than 18 months on the date of sale. 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 classes of stock of Enterprise, (b) the owner of the Series A Preferred Securities is not a controlled foreign corporation that is related to Enterprise 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 S-13 taxpayer identification number. Information reporting requirements and backup withholding will also apply to original issue discount allocable to noncorporate United States holders of the Series A Preferred Securities 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 a 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. Effective for payments made after December 31, 1998, subject to certain transition rules, certain modifications to the backup withholding and information rules described above will be applicable. Prospective investors should consult their own tax advisors concerning these new rules. Receipt of Series A Debentures Upon Liquidation of the Series A Issuer Enterprise may cause the Series A Issuer to be dissolved 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 Enterprise has delivered to the Issuer Trustees an opinion of nationally recognized tax counsel (which may be regular tax counsel to Enterprise 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 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. If such a dissolution is tax-free, the owner of Series A Preferred Securities will take an aggregate tax basis in the Series A Debentures equal to such owner's aggregate tax basis in the Series A Preferred Securities, and a holding period for such Series A Debentures which will include the period during which such owner owned the Series A Preferred Securities. 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 Merrill Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. 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 Merrill Lynch, Pierce, Fenner & Smith Incorporated............................... Goldman, Sachs & Co....................................... Total...................................... S-14 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 discount not in excess of $__________ per Series A Preferred Security to certain brokers and dealers. After the initial public offering, the public offering price, concession and discount may be changed. In view of the fact that the proceeds from the sale of the Series A Preferred Securities will be used to purchase the Series A Debentures, under the Underwriting Agreement, Enterprise 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 will be 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. The Representatives have advised Enterprise that they intend to make a market in the Series A Preferred Securities prior to the commencement of trading on the New York Stock Exchange, but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Series A Preferred Securities. Enterprise 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 Representatives, 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 Enterprise 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 representing the right to receive any of the foregoing securities, without the prior written consent of the Representatives. In connection with this offering, the rules of the Securities and Exchange Commission permit the Representatives to engage in transactions that stabilize the price of the Series A Preferred Securities. Such transactions may consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the Series A Preferred Securities. If the Underwriters create a short position in the Series A Preferred Securities in connection with this offering (i.e., if they sell more Series A Preferred Securities than are set forth on the cover page of this Prospectus Supplement), the Representatives may reduce that short position by purchasing Series A Preferred Securities in the open market. S-15 The Representatives also may impose a penalty bid on certain Underwriters and selling group members. This means that if the Representatives purchase Series A Preferred Securities in the open market to reduce the Underwriters' short position or to stabilize the price of the Series A Preferred Securities, they may reclaim the amount of the selling concession from the Underwriters and selling group members who sold that Series A Preferred Securities as part of this offering. In general, purchases of a security for the purpose of stabilization or to reduce a syndicate short position could cause the price of the security to be higher than it might otherwise be in the absence of such purchases. The imposition of a penalty bid might also have an effect on the price of a security to the extent that it were to discourage resales of the security by purchasers in the offering. None of Enterprise, the Series A Issuer or any of the Underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the Series A Preferred Securities. In addition, none of Enterprise, the Series A Issuer or any of the Underwriters makes any representation that the Representatives will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice. Enterprise and the Series A Issuer have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act. S-16 Information contained herein is subject to completion or 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 offers 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. PROSPECTUS SUBJECT TO COMPLETION DATED ______, 1998 Enterprise Capital Trust I Enterprise Capital Trust II Enterprise Capital Trust III Trust Preferred Securities guaranteed to the extent the Issuer thereof has available funds as set forth herein by PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED ----------------- Enterprise Capital Trust I, Enterprise Capital Trust II and Enterprise 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 trust preferred securities (the "Preferred Securities") representing undivided beneficial interests in the assets of such Issuer. Public Service Enterprise Group Incorporated, a New Jersey corporation ("Enterprise"), 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. Concurrently with the issuance by each Issuer of its Preferred Securities, such Issuer will invest the proceeds thereof, together with the consideration paid by Enterprise for the Common Securities of such Issuer, in a corresponding series of Enterprise'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 Enterprise. 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. Pursuant to a guarantee agreement to be entered into by Enterprise with respect to each series of Preferred Securities (each, a "Guarantee"), Enterprise will agree to make payments of cash distributions with respect to the Preferred Securities of each Issuer and payments on liquidation or redemption with respect to such Preferred Securities but only to the extent that such Issuer holds funds available therefor and has not made such payments. The obligations of Enterprise under each Guarantee will be subordinate and junior in right of payment to all general liabilities of Enterprise. As described herein, each Guarantee, together with Enterprise's obligations under the Debentures, the Indenture relating to such Debentures and the Amended and Restated Trust Agreement for each Issuer, will provide for Enterprise's full, irrevocable and unconditional guarantee of the Preferred Securities. 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 $225,000,000. 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) and frequency, the liquidation amount, redemption provisions, the right, if any, of Enterprise to dissolve such Issuer and, after satisfaction of liabilities to creditors of the Trust, cause the corresponding series of Debentures to be distributed to the holders of such Issuer's Preferred Securities and Common 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 contain information concerning material 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. -------------------- The date of this Prospectus is _______, 1998. STATEMENT OF AVAILABLE INFORMATION Public Service Enterprise Group Incorporated, a New Jersey corporation ("Enterprise"), 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 Enterprise's securities are listed. In addition, the SEC maintains a Web site that contains reports, proxy and other information regarding registrants that file electronically with the SEC. The address of such Web site is http://www.sec.gov. No separate financial statements of Enterprise Capital Trust I, Enterprise Capital Trust II or Enterprise 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. Enterprise and the Issuers do not consider that such financial statements would be material to holders of any Issuer's trust 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 holding as trust assets the corresponding series of deferrable interest subordinated debentures (the "Debentures") of Enterprise and issuing Preferred Securities and common securities (the "Common Securities," and together with the Preferred Securities, the "Trust Securities") representing undivided beneficial interests in such Debentures. See "The Issuers," "Description of the Preferred Securities" and "Description of the Debentures." INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by Enterprise with the SEC pursuant to the Exchange Act are incorporated herein by reference: 1. Enterprise's Annual Report on Form 10-K for the year ended December 31, 1996; and 2. Enterprise's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997. 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. 2 Enterprise 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 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 (973) 430-6503. THE ISSUERS Each of Enterprise Capital Trust I, Enterprise Capital Trust II and Enterprise Capital Trust III is a statutory business trust created under Delaware law pursuant to (i) a trust agreement executed by Enterprise, as sponsor for each Issuer, and the Issuer Trustees (as defined below) 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 and 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 to the foregoing. All of the Common Securities of each Issuer will be owned by Enterprise. 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 with respect to the corresponding series of Debentures (a "Debenture Event of Default") under the Indenture dated as of __________, 1998 (as amended and supplemented from time to time, the "Indenture") between Enterprise and First Union National Bank, as trustee (the "Debenture Trustee"), the rights of the holders of such Common Securities to payment of cash distributions ("Distributions") and payments upon redemption and liquidation will be subordinated to the rights of the holders of such Preferred Securities. The Indenture will be qualified as an indenture under the Trust Indenture Act. Each Issuer's business and affairs are conducted by three trustees, each appointed by Enterprise 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 Enterprise (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 aggregate 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, Enterprise will pay all fees and expenses related to that Issuer and the offering of its Preferred Securities and will pay, directly or indirectly, all ongoing costs, expenses and liabilities of that Issuer except such Issuer's obligations under its Preferred Securities. 3 The principal place of business of each Issuer is 80 Park Plaza, Newark, New Jersey 07101, and its telephone number is (973) 430-7000. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Public Service Enterprise Group Incorporated is a public utility holding company that neither owns nor operates any physical properties. Enterprise has two direct, wholly owned subsidiaries, Public Service Electric and Gas Company ("PSE&G") and Enterprise Diversified Holdings Incorporated ("EDHI"). Enterprise's principal subsidiary, PSE&G, is an operating public utility providing electric and gas service in certain areas of the State of New Jersey. EDHI is the parent of Enterprise's non-utility businesses: Community Energy Alternatives Incorporated, Public Service Resources Corporation, Energis Resources Incorporated, Enterprise Group Development Corporation, PSEG Capital Corporation and Enterprise Capital Funding Corporation. Enterprise's executive offices are located at 80 Park Plaza, Newark, New Jersey 07101, and its telephone number is (973) 430-7000. USE OF PROCEEDS 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 Enterprise. Unless otherwise specified in the accompanying Prospectus Supplement, the proceeds from the sale of the Debentures will be used by Enterprise for general corporate purposes. 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 an 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. Each of the Issuers is a legally separate entity and the assets of one are not available to satisfy the obligations of any 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 from Enterprise. 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 Enterprise for the benefit of the holders of each Issuer's Preferred Securities (each, a "Guarantee") will be subordinate and junior in right of payment to all general liabilities of Enterprise. Pursuant to each Guarantee, Enterprise will agree to make payments of Distributions and payments on redemption or liquidation with respect to such Preferred Securities, but only to the extent the related Issuer holds funds available therefor and has not made such payments. See "Description of the Guarantee." 4 It is anticipated that the assets of each Issuer available for distribution to the holders of its Preferred Securities will be limited to payments from Enterprise under the corresponding series of Debentures in which such Issuer will invest the proceeds from the issuance and sale of its Trust Securities. See "Description of the Debentures." If Enterprise fails to make a payment on a series of Debentures, the related Issuer will not have sufficient funds to make related payments, including Distributions, on the corresponding series of 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 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 (as defined below), 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 is referred to herein as 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 that any Preferred Securities are not in book-entry-only form, the relevant record date for such Preferred Securities will be specified in the applicable Prospectus Supplement. So long as no Debenture Event of Default has occurred and is continuing with respect to a series of Debentures, Enterprise will have the right at any time and from time to time to defer payments of interest by extending the interest payment period on such 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, 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 Preferred Securities would be entitled will continue to accumulate at the annual rate applicable to Distributions thereon, compounded with the same frequency with which Distributions are payable. During any Extension Period, Enterprise may not declare or pay any dividend on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any shares of Enterprise's capital stock. Prior to the termination of any Extension Period, Enterprise may shorten or further extend the interest payment period on a series of Debentures, provided that such Extension Period, together with all such 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, Enterprise may 5 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 payment of any series of Debentures at maturity or upon redemption, the proceeds from such payment will be applied by the Property Trustee to redeem a like amount of the corresponding Trust Securities of the Issuer thereof 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. If less than all the Trust Securities of the Issuer thereof are to be redeemed on a Redemption Date, then the aggregate amount of such Trust Securities to be redeemed shall be selected by the Property Trustee among such Issuer's Preferred Securities and Common Securities pro rata based on the respective aggregate liquidation amounts of such Preferred Securities and Common Securities, subject to the provisions of "--Subordination of Common Securities." 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 of such Trust Securities upon surrender thereof. 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 that 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, the Redemption Price will be payable 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 Issuer thereof or by Enterprise 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, Enterprise 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. 6 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 respective aggregate liquidation amounts of such Trust Securities; provided, however, that if a Debenture Event of Default has occurred and is continuing with respect to the corresponding series of Debentures, no payment of any Distribution on, or Redemption Price of, any of such 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, all of such Issuer's outstanding Preferred Securities then due and payable. If a Debenture Event of Default has occurred and is continuing with respect to a series of Debentures, 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 until the effect of such Debenture Event of Default has been cured, waived or otherwise eliminated. Until any 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 corresponding Preferred Securities and not on behalf of Enterprise, as holder of such 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 Dissolution Pursuant to its Trust Agreement, each Issuer shall be dissolved on the earliest to occur of: (i) the expiration of the term of such Issuer; (ii) the bankruptcy, dissolution or liquidation of Enterprise 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 Enterprise to dissolve such Issuer and, after satisfaction of liabilities to creditors of such Issuer, 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 dissolution of such Issuer shall have been entered by a court of competent jurisdiction. The election of Enterprise pursuant to clause (iii) above shall be made by Enterprise 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 a dissolution 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 Trust Securities, the aggregate liquidation amount per Trust Security specified in the accompanying Prospectus Supplement plus accumulated and unpaid Distributions thereon to the date of payment (such amount, the "Liquidation Distribution"). If the Liquidation Distribution with respect to an Issuer's Preferred Securities can be paid only in part because such Issuer 7 has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable by such Issuer on such Preferred Securities shall be paid on a pro rata basis. The holders 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 with respect to payment of such Liquidation Distribution. Trust Agreement Event of Default; Notice A Debenture Event of Default shall constitute a Trust Agreement Event of Default with respect to the Preferred Securities issued by the related Issuer under its Trust Agreement. 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 the corresponding Trust Securities, the Administrative Trustee and Enterprise, unless such Trust Agreement Event of Default shall have been cured or waived. Enterprise 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 has failed 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 corresponding Preferred Securities may institute a legal proceeding directly to enforce the Property Trustee's rights under the Trust Agreement or the Indenture with respect to Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities of such holder without first instituting a legal proceeding against the Property Trustee or any other person. 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. Notwithstanding the foregoing, if a Trust Agreement Event of Default attributable to Enterprise's failure to pay principal of or premium, if any, or interest on the Debentures of any series has occurred and is continuing, then each holder of Preferred Securities of the corresponding series may institute a legal proceeding directly against Enterprise for enforcement of any such payment to such holder, all as provided in the Indenture. If a Debenture Event of Default has occurred and is continuing with respect to a series of Debentures, the corresponding Preferred Securities shall have a preference over the related Issuer's Common Securities with respect to the payment of Distributions and amounts payable on redemption and liquidation as described above. See "--Liquidation Distribution Upon Dissolution" and "--Subordination of Common Securities." Removal of Issuer Trustees Unless a Trust Agreement Event of Default has 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 aggregate 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 8 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. Co-Trustees and Separate Property Trustee Unless a Trust Agreement Event of Default has 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 the applicable Trust Agreement. If a Trust Agreement Event of Default has occurred and is continuing, only the Property Trustee shall have power to make such appointment. Merger or Consolidation of Issuer Trustees Any corporation or other entity into which any Issuer Trustee 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 any Issuer Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all the corporate trust business of any Issuer Trustee, shall be the successor of such Issuer Trustee under the applicable Trust Agreement, 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 entity, except as described below or in "--Liquidation Distribution Upon Dissolution." An Issuer may, at the request of Enterprise, 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 such Preferred Securities other securities substantially similar to such 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) Enterprise expressly appoints a trustee of such successor entity possessing the same powers and duties as the Property Trustee with respect to 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 such Preferred Securities are then listed, (iv) such merger, consolidation, amalgamation or replacement does not cause such 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 such Preferred Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose substantially similar to that of such Issuer, (vii) prior to such merger, consolidation, amalgamation or replacement, Enterprise 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 9 holders of such 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 the Investment Company Act of 1940, as amended (the "Investment Company Act"), and (viii) Enterprise 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 its Preferred Securities, consolidate, amalgamate, merge with or into, or be replaced by, any other entity, or permit any other entity 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 not to be classified as 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 the applicable Trust Agreement, the holders of the Preferred Securities will have no voting rights. A Trust Agreement may be amended from time to time by Enterprise 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 Enterprise and the Issuer Trustees in any other respect, with the consent of the holders of at least a majority in aggregate liquidation amount of such Preferred Securities, except to (i) change the amount, timing or currency or otherwise adversely affect the method of payment of any Distribution or Liquidation Distribution, (ii) restrict the right of a holder of any such Preferred Security to institute suit for enforcement of any Distribution, Redemption Price or Liquidation Distribution, (iii) change the purpose of the related Issuer, (iv) authorize the issuance of any additional beneficial interests in the related Issuer, (v) change the redemption provisions, (vi) change the conditions precedent for Enterprise to elect to dissolve the related Issuer and distribute the corresponding series of Debentures to the holders of such Preferred Securities or (vii) affect the limited liability of any holder of such Preferred Securities, which amendment requires the consent of each holder of the related Preferred Securities affected thereby. Notwithstanding the foregoing, no amendment may be made without receipt by the related 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 the corresponding series of 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, where such consent shall be required, without, in each case, obtaining the consent 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 under the Indenture would require the consent of each holder of Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior consent of each holder of the corresponding 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 10 all holders of Preferred Securities of any notice received from the Debenture Trustee as a result of the Issuer thereof being the holder of the corresponding Debentures. In addition to obtaining the consent of the holders of the Preferred Securities of the corresponding series, prior to taking any of the foregoing actions, the Issuer Trustees shall obtain an opinion of counsel to the effect that the related 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 consent 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 the applicable Trust Agreement. Notwithstanding that holders of Preferred Securities are entitled to vote or consent under certain circumstances, any Preferred Securities that are owned by Enterprise, the Issuer Trustees or any affiliate of Enterprise 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 11 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. 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). Payments in respect of the Preferred Securities will be made in immediately available funds 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 Enterprise, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments in respect of the Preferred Securities to DTC are 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 Enterprise. 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. Enterprise, at its option, may decide to discontinue use of the system of book-entry transfers through DTC (or a successor depositary) as a result of such discontinuance or as a result of DTC's ineligibility to so act, in which case definitive certificates for such 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 definitive Preferred Securities certificates, owners of such Preferred Securities will become the registered holders of such Preferred Securities. 12 The information set forth above concerning DTC and DTC's book-entry system has been obtained from sources that the Issuers and Enterprise believe to be accurate, but the Issuers and Enterprise assume no responsibility for the accuracy thereof. Neither the Issuers nor Enterprise has any responsibility for the 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 office. Such Preferred Securities may be transferred or exchanged for one or more Preferred Securities upon surrender thereof at the corporate 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 any Trust Agreement at the request of any holder of Preferred Securities unless it 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 Enterprise 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) each Issuer will be classified as a grantor trust for federal income tax purposes and (iii) the Debentures held by such Issuers will be treated as indebtedness of Enterprise for federal income tax purposes. In this connection, Enterprise and the Administrative Trustee are authorized to take any action, not inconsistent with applicable law, the applicable certificate of trust of the related Issuer or the applicable Trust Agreement, that Enterprise and the Administrative Trustee determine in their 13 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. Holders of the Preferred Securities have no preemptive or similar rights. No Issuer may borrow money, issue debt, execute 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 Enterprise 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 will be qualified as an indenture under the Trust Indenture Act and First Union National Bank will act as indenture trustee (the "Guarantee Trustee") under each Guarantee for the purposes of compliance with the Trust Indenture Act. Reference under this caption 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 Enterprise will irrevocably 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 previously paid), 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 dissolution and 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 specified in the Prospectus Supplement 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 upon a dissolution and liquidation of such Issuer. Enterprise's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by Enterprise to the holders of the corresponding Preferred Securities or by causing the related Issuer to pay such amounts to such holders. While the assets of Enterprise 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 related Issuer does not have funds available therefor as described above, Enterprise has agreed under the applicable Trust Agreement to pay all expenses of such Issuer except such Issuer's obligations under its Preferred Securities. Accordingly, the applicable Guarantee, together with the backup undertakings consisting of Enterprise's obligations under the applicable Trust Agreement, the corresponding series of Debentures 14 and the Indenture, provide for Enterprise's full, irrevocable and unconditional guarantee of the Preferred Securities. No single document executed by Enterprise in connection with the issuance of a series of Preferred Securities will provide for Enterprise's full, irrevocable and unconditional guarantee of the Preferred Securities. It is only the combined operation of Enterprise's obligations under the applicable Guarantee, the applicable Trust Agreement, the corresponding series of Debentures and the Indenture that has the effect of providing a full, irrevocable and unconditional guarantee of an Issuer's obligations under its 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 Enterprise and will rank subordinate and junior in right of payment to all general liabilities of Enterprise. 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 Guarantees issued by Enterprise. Each Guarantee will constitute a guarantee of payment and not of collection (i.e., the guaranteed party may institute a legal proceeding directly against Enterprise to enforce its rights under the Guarantee without first instituting a legal proceeding against any other person or entity). Each Guarantee will not be discharged except by payment of the Guarantee Payments in full to the extent not previously paid or upon distribution to the holders of the Preferred Securities of the corresponding series of Debentures pursuant to the applicable 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 Enterprise 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 agreements contained in each Guarantee shall bind the successors, assigns, receivers, trustees and representatives of Enterprise and shall inure to the benefit of the holders of the corresponding Preferred Securities. Guarantee Events of Default An event of default under a Guarantee (a "Guarantee Event of Default") will occur upon the failure of Enterprise to perform any of its payment or other obligations thereunder, provided that except with respect to a Guarantee Event of Default resulting from a failure to make any of the Guarantee Payments, Enterprise 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 Enterprise or an affiliate thereof) will 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. 15 Any holder of the corresponding Preferred Securities may institute a legal proceeding directly against Enterprise to enforce such holder's rights under such Guarantee without first instituting a legal proceeding against the related Issuer, the Guarantee Trustee or any other person or entity. Enterprise, as guarantor, will be required to file annually with the Guarantee Trustee a certificate as to whether or not Enterprise is in compliance with all the conditions and covenants applicable to it under each 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 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 THE DEBENTURES General The Debentures will be issued in one or more series under the Indenture. Each series of Debentures will rank pari passu with all other series of Debentures. Each series of Debentures will be unsecured and will rank 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 Enterprise. See "--Subordination." The Indenture does not limit the incurrence or issuance of Senior Indebtedness by Enterprise. Enterprise is a holding company whose assets consist principally of the stock in its wholly owned subsidiaries, PSE&G and EDHI. Therefore, Enterprise's rights and the rights of its creditors, including the holders of the Debentures, to participate in the assets of any subsidiary upon the latter's liquidation or recapitalization or otherwise will be subject to the prior claims of the subsidiary's creditors, except to the extent that claims of Enterprise itself as a creditor of the subsidiary may be recognized. 16 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 shall be 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 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 relating to the applicable series of Debentures will be described in the accompanying Prospectus Supplement. Option to Extend Interest Payment Period Under the Indenture, Enterprise shall have the right at any time and from time to time, so long as no Debenture Event of Default has occurred and is continuing with respect to such 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, Enterprise shall be obligated to pay all interest then accrued and unpaid (together with interest thereon to the extent permitted by applicable law). During any Extension Period, Enterprise may not declare or pay any dividend on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any shares of Enterprise's capital stock. Prior to the termination of any Extension Period, Enterprise 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, Enterprise may elect to begin a new Extension Period, subject to the above requirements. Enterprise shall be 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 election to begin an Extension Period, or 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 corresponding series of Preferred Securities or payment of interest on such Debentures is required to be given to any national securities exchange on which such Debentures or such 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. Subordination All payments by Enterprise 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 Enterprise for money borrowed and (b) indebtedness evidenced by securities, debentures, bonds or other similar instruments issued by Enterprise; (ii) all capital lease obligations of Enterprise; (iii) all obligations of Enterprise issued or assumed as the deferred purchase price of property, all conditional sale obligations of Enterprise and all obligations of Enterprise under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (iv) certain obligations of Enterprise 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 Enterprise; (v) all obligations of the type referred to 17 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, Enterprise is responsible or liable as obligor, guarantor or otherwise (other than each Guarantee and obligations ranking pari passu with such 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 Enterprise (whether or not such obligation is assumed by Enterprise), except for any such indebtedness that is by its terms subordinated to or pari passu with the Debentures and for indebtedness between or among Enterprise and its affiliates. Upon any payment or distribution of assets or securities of Enterprise, upon any dissolution or winding-up or total or partial liquidation or reorganization of Enterprise, 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 such holders shall be entitled to receive from Enterprise 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 Enterprise 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 Enterprise, provided that all Senior Indebtedness shall be paid before holders of the Debentures are entitled to receive any payment from Enterprise of principal of, 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 Enterprise made on such Senior Indebtedness until the Debentures shall be paid in full. Certain Covenants of Enterprise Enterprise 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 shares of Enterprise's capital stock (i) during an Extension Period, (ii) if there has occurred and is continuing any event that is, or, with the giving of notice or the lapse of time or both would constitute, a Debenture Event of Default or (iii) if Enterprise 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 Any waiver of any Debenture Event of Default will require the approval of at least a majority of the aggregate principal amount of the corresponding series of Debentures or, if such 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, such Debentures may not be waived. Modification of the Indenture From time to time, Enterprise and the Debenture Trustee, without notice to or the consent of any holders of Debentures, may amend or supplement the Indenture 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 Enterprise; (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 Enterprise 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 any series of Debentures and the form of Debentures of such series. In addition, Enterprise and the Debenture Trustee may modify the Indenture or any supplemental indenture or waive future compliance by Enterprise 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 such Debentures, may (i) reduce the principal amount 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, or interest on, or the rate of interest on, such Debentures, (iv) change the redemption provisions applicable to such Debentures adversely to the holders thereof, (v) impair the right to institute suit for the enforcement of any payment with respect to such Debentures, (vi) change the currency in which payments with respect to such Debentures are to be made, or (vii) change the subordination provisions applicable to such Debentures adversely to the holders thereof, provided that if such Debentures are held by an Issuer, no modification 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 such 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 or the holder of each such Preferred Security, as applicable. 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 Enterprise of a "Notice of Default" in the performance of or failure to comply with any other covenant or agreement 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 Enterprise. In case a Debenture Event of Default has occurred and is continuing, other than one relating to bankruptcy, insolvency or reorganization of Enterprise, in which case the principal of, premium, if any, and any interest on, all of the Debentures of the applicable series shall become immediately due and payable, the Debenture Trustee or the holders of at least 25% in aggregate principal 19 amount of the Debentures of that 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 Debenture Event of Default has occurred and is continuing with respect to such Debentures and 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, if such Debentures are held by an Issuer, the holders of at least 25% in aggregate liquidation amount of the corresponding Preferred Securities shall have such right by written notice to Enterprise 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 such 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 the corresponding Preferred Securities. Enterprise will be required to furnish to the Debenture Trustee annually a statement as to the compliance by Enterprise with all conditions and covenants under the Indenture and the Debentures and as to any Debenture Event of Default. Consolidation, Merger, Sale or Conveyance Enterprise 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 Enterprise 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, has occurred and is continuing; and (iii) certain other conditions prescribed in the Indenture are met. Defeasance and Discharge Under the terms of the Indenture, Enterprise will be discharged from any and all obligations in respect of the Debentures of any series if Enterprise 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 corresponding 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 corresponding Preferred Securities (with each such series voting as a class), as applicable, 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 The Indenture will contain limitations on the right of the Debenture Trustee, as a creditor of Enterprise, 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 Enterprise or (ii) there is a default under the indenture(s) 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 on various indentures relating to PSE&G. Enterprise and its subsidiaries maintain 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 Payments of Distributions and redemption and liquidation payments due on a series of Preferred Securities (to the extent the Issuer thereof has funds available for such payments) will be guaranteed by Enterprise as and to the extent set forth under "Description of the Guarantee." No single document executed by Enterprise in connection with the issuance of a series of Preferred Securities will provide for Enterprise's full, irrevocable and unconditional guarantee of the Preferred Securities. It is only the combined operation of Enterprise's obligations under the applicable Guarantee, the applicable Trust Agreement, the corresponding series of Debentures and the Indenture that has the effect of providing a full, irrevocable and unconditional guarantee of an Issuer's obligations under its Preferred Securities. A holder of any corresponding Preferred Security may institute a legal proceeding directly against Enterprise 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. As long as Enterprise makes payments of interest and other payments when due on a series of Debentures, such payments will be sufficient to cover the payment of Distributions and redemption and Liquidation Distributions due on the corresponding Preferred Securities, primarily because (i) the aggregate principal amount of such 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 such series of Debentures will match the Distribution rate and Distribution and other payment dates for the corresponding Preferred Securities, (iii) the applicable Trust Agreement provides that Enterprise shall pay for all and any costs, expenses and liabilities of the Issuer of such Preferred Securities except such Issuer's obligations under such Preferred Securities, and (iv) the applicable Trust Agreements provide that no Issuer will engage in any activity that is not consistent with the limited purposes of such Issuer. If and to the extent that Enterprise does not make payments on any series of Debentures, such Issuer will not have funds available to make payments of Distributions or other amounts due on the corresponding Preferred Securities. A principal difference between the rights of a holder of a Preferred Security (which represents an undivided beneficial interest in the assets of the Issuer thereof) and a holder of a Debenture is that a 21 holder of a Debenture will accrue, and (subject to the permissible extension of the interest payment 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 such Issuer has funds available for the payment of such Distributions. Upon any voluntary or involuntary dissolution or liquidation of any Issuer not involving a distribution of any series of Debentures, after satisfaction of liabilities to creditors of such Issuer, 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 Dissolution." Upon any voluntary liquidation or bankruptcy of Enterprise, each Issuer, as holder of the Debentures, would be a creditor of Enterprise, 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 Enterprise receive payments or distributions. Since Enterprise will be the guarantor under each Guarantee and has agreed to pay for all costs, expenses and liabilities of each Issuer (other than an 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 Enterprise in the event of liquidation or bankruptcy of Enterprise 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. PROPOSED TAX LAW CHANGES From time to time, the Clinton Administration has proposed certain tax law changes that would, among other things, generally deny interest deductions to a corporate issuer if the debt instrument has a term exceeding 20 years and is not reflected as indebtedness on such issuer's consolidated balance sheet. The term of each series of Debentures may vary and may exceed 20 years. Enterprise cannot predict what effect, if any, a proposal of the sort discussed above will have on any series of Debentures; however, if any such proposal were to become effective retroactively, Enterprise would be precluded from deducting interest paid on such Debentures which might, depending on the specific terms of such Debentures and the corresponding series of Preferred Securities, give rise to the right of Enterprise to redeem such Debentures and thereby cause a mandatory redemption of the corresponding series of Preferred Securities. Federal income tax information and consequences and redemption provisions, if any, relating to each series of Debentures and corresponding series of Preferred Securities will be discussed as applicable in the accompanying Prospectus Supplement. 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 22 prevailing market prices or at negotiated prices. In connection with the sale of Preferred Securities, underwriters may be deemed to have received compensation from Enterprise 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 such underwriters. Any underwriting compensation paid by Enterprise 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 Enterprise and the Issuers, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by Enterprise for certain expenses. Underwriters and dealers may engage in transactions with, or perform services for, Enterprise 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 Enterprise by R. Edwin Selover, Esquire, Vice President and General Counsel of Enterprise or James T. Foran, Esquire, Associate General Counsel of Enterprise and by Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, special tax counsel to Enterprise and the Issuers, and by Richards, Layton & Finger, P.A., special Delaware counsel to Enterprise and the Issuers, and for the underwriters by Brown & Wood LLP, 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 LLP may rely on the opinion of Ballard Spahr Andrews & Ingersoll as to matters of Pennsylvania law and on the opinion of Richards, Layton & Finger, P.A. as to matters of Delaware law. Messrs. Selover and Foran are employees of PSE&G. EXPERTS The consolidated financial statements and the related financial statement schedules of Enterprise, incorporated in this Prospectus by reference from Enterprise's Annual Report on Form 10-K for the year ended December 31, 1996, have been audited by Deloitte & Touche, LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 23 ================================================================================ No person has been authorized to give any information or to make any representations other than those contained in this Prospectus Supplement or the Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized. This Prospectus Supplement and the Prospectus do not constitute an offer to sell or the solicitation of any offer to buy any securities other than the securities described in this Prospectus Supplement and the Prospectus 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 or the Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of Enterprise since the date hereof or 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 Risk Factors............................................................. Enterprise Capital Trust I............................................... Public Service Enterprise Group Incorporated............................. 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 Enterprise Group Incorporated............................. 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............................................................ Experts.................................................................. ================================================================================ ================================================================================ _________Preferred Securities Enterprise Capital Trust I _____% Trust Originated Preferred Securities(sm) ("TOPrS(sm)") guaranteed to the extent Enterprise Capital Trust I has available funds as set forth herein by PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED [LOGO] ---------- PROSPECTUS SUPPLEMENT ---------- Merrill Lynch & Co. Goldman, Sachs & Co. January __, 1998 ================================================================================ PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution.* Filing fees--Securities and Exchange Commission............... $ 66,375 Printing...................................................... $ 50,000 New York Stock Exchange listing fee........................... $ 62,000 Legal fees and Blue Sky fees and expenses..................... $100,000 Accounting fees............................................... $ 15,000 Fees and expenses of various Trustees......................... $ 20,000 Rating agencies fees and expenses............................. $118,000 Miscellaneous................................................. $ 18,625 --------- Total $450,000 - -------------------- * Estimated. Item 15. Indemnification of Directors and Officers. Enterprise's Certificate of Incorporation and By-laws provide as follows: Enterprise shall indemnify to the full 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 Enterprise or serves or served any other enterprise as a director, officer or employee at the request of Enterprise. Such right of indemnification shall inure to the benefit of the legal representative of any such person. To the full extent from time to time permitted by law, directors and officers of Enterprise shall not be personally liable to Enterprise or its shareholders for damages for breach of any duty owed to Enterprise or its shareholders. No amendment or repeal of this provision shall adversely affect any right or protection of a director or officer of Enterprise existing at the time of such amendment or repeal. Expenses incurred by 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 Enterprise or serves or served any other enterprise as a director, officer or employee at the request of Enterprise, shall be paid by Enterprise in advance of the final disposition of the action, suit or proceeding promptly upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by Enterprise. Enterprise, 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. Item 16. Exhibits Exhibit Numbers 1 Form of Underwriting Agreement. 3-1 Certificate of Trust for Enterprise Capital Trust I. 3-2 Certificate of Trust for Enterprise Capital Trust II. 3-3 Certificate of Trust for Enterprise Capital Trust III. 3-4 Trust Agreement for Enterprise Capital Trust I. 3-5 Trust Agreement for Enterprise Capital Trust II. 3-6 Trust Agreement for Enterprise Capital Trust III. 3-7 Form of Amended and Restated Trust Agreement for Enterprise Capital Trust I. 3-8 Form of Amended and Restated Trust Agreement for Enterprise Capital Trust II. 3-9 Form of Amended and Restated Trust Agreement for Enterprise Capital Trust III. 4-1 Form of Preferred Security Certificate for Enterprise Capital Trust I (included in Exhibit 3-7). 4-2 Form of Preferred Security Certificate for Enterprise Capital Trust II (included in Exhibit 3-8). 4-3 Form of Preferred Security Certificate for Enterprise Capital Trust III (included in Exhibit 3-9). 4-4 Form of Deferrable Interest Subordinated Debenture (included in Exhibit 4-5). 4-5 Form of Deferrable Interest Subordinated Debenture Indenture. 4-6 Form of Deferrable Interest Subordinated Debenture Supplemental Indenture. 4-7 Form of Guarantee Agreement for Enterprise Capital Trust I. 4-8 Form of Guarantee Agreement for Enterprise Capital Trust II. 4-9 Form of Guarantee Agreement for Enterprise Capital Trust III. 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, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Enterprise Capital Trust I, including consent. 5-3 Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Enterprise Capital Trust II, including consent. 5-4 Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Enterprise Capital Trust III, including consent. 8 Opinion of Ballard Spahr Andrews & Ingersoll, special tax counsel, as to tax matters, including consent. 12 Computations of Ratios of Earnings to Fixed Charges (incorporated by reference to Exhibit 12-1 to Enterprise's Annual Report on Form 10-K for the year ended December 31, 1996 and Enterprise's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, 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, P.A. (included in Exhibits 5-2, 5-3 and 5-4). 23-4 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 8). 24 Power of Attorney. 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 Enterprise 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 Enterprise Capital Trust II. 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 Enterprise 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 of Enterprise for Enterprise 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 of Enterprise for Enterprise 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 of Enterprise for Enterprise 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; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective 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 Enterprise 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 Enterprise'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 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. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrants, Enterprise Capital Trust I, Enterprise Capital Trust II and Enterprise 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 December, 1997. Enterprise Capital Trust I By: Public Service Enterprise Group Incorporated, as Sponsor By:/s/ E. James Ferland ------------------------------- E. James Ferland Chairman of the Board and President Enterprise Capital Trust II By: Public Service Enterprise Group Incorporated, as Sponsor By:/s/ E. James Ferland ------------------------------- E. James Ferland Chairman of the Board and President Enterprise Capital Trust III By: Public Service Enterprise Group Incorporated, as Sponsor By:/s/ E. James Ferland ------------------------------- E. James Ferland Chairman of the Board and President SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant, Public Service Enterprise Group Incorporated, 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 December, 1997. Public Service Enterprise Group Incorporated By:/s/ E. James Ferland ------------------------------- E. James Ferland Chairman of the Board and President 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 Board and December 23, 1997 - --------------------- President (Principal Executive E. James Ferland Officer) /s/ Robert C. Murray Vice President and Chief December 23, 1997 - --------------------- Financial Officer Robert C. Murray /s/ Patricia A. Rado Vice President and Controller December 23, 1997 - -------------------- Patricia A. Rado This Registration Statement has also been signed by Robert C. Murray, Attorney-in-Fact, on behalf of the following Directors on December 23, 1997 Lawrence R. Codey Irwin Lerner Ernest H. Drew Marilyn M. Pfalz T.J. Dermot Dunphy Forrest J. Remick Conrad K. Harper Richard J. Swift Josh S. Weston By:/s/ Robert C. Murray -------------------------- Robert C. Murray Attorney-in-Fact EXHIBIT INDEX Exhibit Numbers Description Page 1 Form of Underwriting Agreement. 3-1 Certificate of Trust for Enterprise Capital Trust I. 3-2 Certificate of Trust for Enterprise Capital Trust II. 3-3 Certificate of Trust for Enterprise Capital Trust III. 3-4 Trust Agreement for Enterprise Capital Trust I. 3-5 Trust Agreement for Enterprise Capital Trust II. 3-6 Trust Agreement for Enterprise Capital Trust III. 3-7 Form of Amended and Restated Trust Agreement for Enterprise Capital Trust I. 3-8 Form of Amended and Restated Trust Agreement for Enterprise Capital Trust II. 3-9 Form of Amended and Restated Trust Agreement for Enterprise Capital Trust III. 4-1 Form of Preferred Security Certificate for Enterprise Capital Trust I (included in Exhibit 3-7). 4-2 Form of Preferred Security Certificate for Enterprise Capital Trust II (included in Exhibit 3-8). 4-3 Form of Preferred Security Certificate for Enterprise Capital Trust III (included in Exhibit 3-9). 4-4 Form of Deferrable Interest Subordinated Debenture (included in Exhibit 4-5). 4-5 Form of Deferrable Interest Subordinated Debenture Indenture. 4-6 Form of Deferrable Interest Subordinated Debenture Supplemental Indenture. 4-7 Form of Guarantee Agreement for Enterprise Capital Trust I. 4-8 Form of Guarantee Agreement for Enterprise Capital Trust II. 4-9 Form of Guarantee Agreement for Enterprise Capital Trust III. 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, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Enterprise Capital Trust I, including consent. 5-3 Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Enterprise Capital Trust II, including consent. 5-4 Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Enterprise Capital Trust III, including consent. 8 Opinion of Ballard Spahr Andrews & Ingersoll, special tax counsel, as to tax matters, including consent. 12 Computations of Ratios of Earnings to Fixed Charges (incorporated by reference to Exhibit 12-1 to Enterprise's Annual Report on Form 10-K for the year ended December 31, 1996 and Enterprise's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, 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, P.A. (included in Exhibits 5-2, 5-3 and 5-4). 23-4 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 8). 24 Power of Attorney. 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 Enterprise 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 Enterprise Capital Trust II. 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 Enterprise 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 of Enterprise for Enterprise 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 of Enterprise for Enterprise 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 of Enterprise for Enterprise Capital Trust III. EX-1 2 UNDERWRITING AGREEMENT Enterprise Capital Trust _ _____% Trust Originated Preferred Securities (SM), Series _ (liquidation amount $25 per security) guaranteed to the extent the Trust has available funds by Public Service Enterprise Group Incorporated Underwriting Agreement __________, 1998 Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., [Other Representatives] As representatives (the "Representatives") of the several Underwriters named in Schedule I hereto, c/o Merrill Lynch & Co., World Financial Center, 10th Floor New York, New York 10281-1380 Dear Sirs: Enterprise Capital Trust _, a Delaware statutory business trust (the "Trust"), and Public Service Enterprise Group Incorporated, a New Jersey corporation ("Enterprise"), 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") _____,000 _____% Trust Originated Preferred Securities, Series _ (liquidation amount $25 per security), representing undivided beneficial interests in the assets of the Trust (the "Preferred Securities"), guaranteed by Enterprise as to the payment of distributions and payments upon liquidation or redemption, and benefitting from certain additional undertakings of Enterprise to the extent set forth (i) in the Guarantee Agreement between Enterprise and First Union National Bank, National Association, as trustee thereunder (the "Guarantee Trustee"), to be dated as of the Time of Delivery (as defined in Section 4 hereof) (the "Guarantee"), (ii) Enterprise's _____% Deferrable Interest Subordinated Debentures, Series _ (the "Subordinated Debentures"), to be executed at the Time of Delivery, (iii) the Indenture between Enterprise and First Union National Bank, National Association, as trustee thereunder (the "Debenture Trustee"), dated as of ______, 1998, to be supplemented by the First Supplemental Indenture thereto relating to the Subordinated Debentures (collectively the "Indenture") and (iv) the trust agreement between Enterprise, as depositor, and the trustees named therein (as amended and restated from time to time, the "Trust Agreement"). Concurrently with the issuance of the Preferred Securities and Enterprise'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 Enterprise and, to evidence such loan, Enterprise will issue and deliver to the Trust the Subordinated Debentures, which will be issued under the Indenture. 1. Each of the Trust and Enterprise, jointly and severally, represents and warrants to, and agrees with, each of the Underwriters that: (a) A registration statement on Form S-3 (File No. 333-_____), as amended by pre-effective amendment [no. 1] thereto, in respect of, among other things, the Preferred Securities, the Guarantee and the Subordinated Debentures (collectively, the "Registered Securities") has been filed with the Securities and Exchange Commission (the "Commission") pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"), and delivered to the Representatives; such registration statement and any post-effective amendment thereto, each in the form heretofore delivered to the Representatives, have been declared effective by the Commission in such form; no other document with respect to such registration statement or document incorporated by reference therein has heretofore been filed, or transmitted for filing, with the Commission; and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or thereafter filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is referred to herein as a "Preliminary Prospectus"; the various parts of such registration statement, including (i) all exhibits thereto, (ii) if applicable, the information contained in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be a part of the registration statement at the time it was declared effective and (iii) the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of such registration statement became effective, each as amended at the time such part of such registration statement became effective, are referred to herein collectively as the "Registration Statement"; the final prospectus, as supplemented by the related prospectus supplement, in the form first filed with respect to the Preferred Securities pursuant to Rule 424(b) under the Act, is referred to herein collectively as the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include 2 Enterprise's most recent annual report on Form 10-K (the "Form 10-K"), quarterly reports on Form 10-Q or current reports on Form 8-K, if any, filed pursuant to Section 13 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, the quarterly reports on form 10-Q and any current reports on Form 8-K are referred to herein collectively as the "Exchange Act Filings")); (b) No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which 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 Enterprise 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 Enterprise 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 3 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 Enterprise by an Underwriter through the Representatives expressly for use therein; (e) Deloitte & Touche LLP are independent public accountants with respect to Enterprise as required by the Act and the rules and regulations of the Commission thereunder; (f) Neither the Trust nor Enterprise 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 Enterprise 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 Enterprise 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 Enterprise, in each case otherwise than as set forth in or contemplated by the Prospectus; (g) The Trust has been duly created and is validly existing as a statutory business trust in good standing under the Business Trust Act of the State of Delaware (the "Delaware Business Trust Act") with the trust power and authority to own property and conduct its business as described in the Prospectus, and has conducted and will conduct no business other than the transactions contemplated by this Agreement and described in the Prospectus; the Trust is not a party to or bound by any agreement or instrument other than this Agreement, the Trust Agreement and the agreements and instruments contemplated by the Trust Agreement and described in the Prospectus; the Trust has no liabilities or obligations other than those arising out of the transactions contemplated by this Agreement and the Trust Agreement and described in the Prospectus; the Trust is not a party to or subject to any action, suit or proceeding of any nature; and the Trust is and will, under current law, be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation: (h) Enterprise 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) Each "significant subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X promulgated under the 1933 Act) of Enterprise and Enterprise Diversified Holdings Incorporated (each, a "Significant Subsidiary" and, collectively, the "Significant Subsidiaries") has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described 4 in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not result in a material adverse effect on the consolidated financial position, stockholders' equity or results of operations of Enterprise and its subsidiaries. Except as otherwise stated in the Registration Statement and the Prospectus, all of the issued and outstanding capital stock of each Significant Subsidiary has been duly authorized and is validly issued, fully paid and non-assessable and is owned by Enterprise, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. None of the outstanding shares of capital stock of any Significant Subsidiary was issued in violation of preemptive or other similar rights of any securityholder of such Significant Subsidiary. (j) 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 Enterprise, 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; (k) The issuance and sale of the Preferred Securities and the Common Securities by the Trust, the issuance by Enterprise of the Subordinated Debentures and the Guarantee, the compliance by Enterprise and the Trust with all of the provisions of this Agreement, the execution, delivery and performance by Enterprise of the Trust Agreement, the Guarantee, the Indenture and the Subordinated Debentures (collectively, the "Enterprise 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 Enterprise is a party or by which Enterprise is bound or to which any of the property or assets of Enterprise is subject, nor will such action result in any violation of the provisions of the charter or by-laws of Enterprise or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over Enterprise or any of its properties; 5 (l) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over the Trust or Enterprise 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 Enterprise of the Subordinated Debentures and the Guarantee, the purchase of the Subordinated Debentures by the Trust from Enterprise, 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 Enterprise of the Enterprise Agreements, or the consummation of the transactions contemplated herein or therein, except the registration of the Registered Securities under the Act, registration of the Preferred Securities under the Exchange Act, the qualification of the Trust Agreement, the Indenture and the Guarantee under the TIA and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the issuance and sale, as the case may be, of the Registered Securities; and (m) Other than as set forth in or contemplated by the Prospectus, there are no legal or governmental proceedings pending to which Enterprise is a party or of which any property of Enterprise is the subject which are reasonably likely to have a material adverse effect on the consolidated financial position, stockholders' equity or results of operations of Enterprise and its subsidiaries; and, to the best of Enterprise's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. 2. Subject to the terms and conditions herein set forth, the Trust agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase, at a purchase price per share of $25.00 per Preferred Security, the number of Preferred Securities set forth opposite the name of such Underwriter in Schedule I hereto. As compensation to the Underwriters for their commitments hereunder, and in view of the fact that the proceeds of the sale of the Preferred Securities will be used by the Trust to purchase the Subordinated Debentures of Enterprise, Enterprise hereby agrees to pay at the Time of Delivery to Merrill Lynch & Co., for the accounts of the several Underwriters, an amount equal to $0.__ per share for the Preferred Securities, except that such commission will be $0.__ per Preferred Security sold to certain institutions. 3. Upon the authorization by the Representatives of the release of the Preferred Securities, the several Underwriters propose to offer the Preferred Securities for sale upon the terms and conditions set forth in the Prospectus. 4. The Preferred Securities to be purchased by each Underwriter hereunder will be represented by a global certificate or certificates in book-entry form which will be deposited by 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 6 the Preferred Securities to Merrill Lynch & 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 Merrill Lynch & 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 __________, 1998, or at such other time and date as the Representatives, the Trust and Enterprise may agree upon in writing at the office of the Trust, 80 Park Plaza, Newark, New Jersey. At the Time of Delivery, Enterprise 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 Merrill Lynch & Co., on behalf of the Underwriters. 5. Each of the Trust and Enterprise, 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 Enterprise, prior to the termination of the offering of the Preferred Securities, to file promptly all reports and any definitive proxy or information statements required to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act; to advise the Representatives, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or Prospectus, of the suspension of the qualification of the Registered Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any prospectus relating to the Registered Securities or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) To use its best efforts to qualify the Registered Securities for offering and sale under the securities laws of such jurisdictions of the United States as the Representatives may designate and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Preferred Securities, provided that in 7 connection therewith neither the Trust nor Enterprise 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 Enterprise, 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 Enterprise's fiscal quarter next following the effective date (as defined in Rule 158) of the Registration Statement; (e) During the period beginning from the date hereof and continuing to and including the earlier of (i) the date, after the Time of Delivery, on which the distribution of the Preferred Securities ceases, as determined by the Representatives or (ii) 30 days after the Time of Delivery, not to offer, sell, contract to sell or otherwise dispose of any Preferred Securities, any other preferred beneficial interests in the Trust or any securities of Enterprise which are substantially similar to the Subordinated Debentures, the Guarantee or the Preferred Securities, or any securities convertible into or exchangeable for or representing the right to receive any of the afore-mentioned securities, without the prior written consent of the Representatives (other than the Preferred Securities or securities issued pursuant to Enterprise's stock option or other benefit or incentive plans maintained for its officers, directors, or employees); (f) In the case of Enterprise, 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 8 of the Trust to holders of the Preferred Securities, in each case on the New York Stock Exchange. 6. The Trust and Enterprise, 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 Enterprise'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 Services, Moody's Investors Service, Inc. or Duff & Phelps Credit Rating Co. (each, a "Rating Agency") for rating the Preferred Securities; (v) the reasonable costs and charges of the transfer agent or registrar; (vi) the costs of any depositary arrangements for the Preferred Securities with DTC or any successor depositary; (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 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 Enterprise herein are, at and as of the Time of Delivery, true and correct, the condition that the Trust and Enterprise 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: 9 (b) Brown & Wood LLP, counsel for the Underwriters, shall have furnished to the Representatives their written opinion, dated the Time of Delivery, with respect to the matters referred to in clauses (iii), (iv), (v), (vii), (viii), (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 Enterprise 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., Vice President and General Counsel, or James T. Foran, Esq., Associate General Counsel, of Enterprise shall have furnished to the Representatives his written opinion, dated the Time of Delivery, to the effect that: (i) Enterprise 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) The Enterprise Agreements each have been duly authorized, executed and delivered by Enterprise and constitute valid instruments or obligations, as the case may be, legally binding upon and enforceable against Enterprise (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; (iii) The Trust Agreement, the Indenture and the Guarantee have been duly qualified under the TIA; (iv) This Agreement has been duly authorized, executed and delivered by each of the Trust and Enterprise; (v) The franchises of Enterprise are sufficient authority for it to carry on its business as described in the Prospectus; (vi) 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 Enterprise, 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 10 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; (vii) The issuance and sale of the Preferred Securities and the Common Securities by the Trust, the issuance by Enterprise of the Guarantee and the Subordinated Debentures, the compliance by Enterprise and the Trust with all of the provisions of this Agreement, the execution, delivery and performance by Enterprise of the Enterprise 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 Enterprise is a party or by which Enterprise is bound or to which any of the property or assets of Enterprise is subject, nor will such action result in any violation of the provisions of the charter or by-laws of Enterprise or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over Enterprise or any of its properties; (viii) The Registered Securities conform as to legal matters to the statements concerning them in the Prospectus; and the summaries of the Enterprise Agreements contained in the Prospectus constitute correct summaries thereof for use therein; (ix) The statements set forth in the Prospectus under the captions "Description of the Preferred Securities," "Certain Terms of the Series _ Preferred Securities," "Description of the Guarantee," "Description of the Debentures," and "Certain Terms of the Series _ Debentures," insofar as they constitute summaries or matters of law or legal conclusions, fairly present the information set forth therein; (x) The statements made in Enterprise's Exchange Act Filings under "PSE&G-- Rate Matters" and "--Environmental Controls" in Item 1--Business and under Item 3--Legal Proceedings fairly present the information set forth therein; (xi) 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; 11 (xii) The documents incorporated by reference in the Prospectus or any further amendment or supplement thereto made by the Trust or Enterprise 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 Enterprise but without independent check or verification, such counsel has no reason to believe that any of such documents, when such documents were so filed, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (xiii) The Registration Statement and the Prospectus and any further amendments and supplements thereto made by the Trust or Enterprise 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 Enterprise 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 Enterprise prior to the Time of Delivery (other than the financial statements and related schedules therein and other financial data therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date or as of the Time of Delivery, the Prospectus or any further amendment or supplement thereto made by the Trust or Enterprise 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 Enterprise, shall have furnished to the Representatives their written opinion, dated the 12 Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that: (i) Neither the Trust nor Enterprise is an "investment company" or an entity "controlled" by an "investment company" required to be registered under the Investment Company Act of 1940, as amended; and (ii) The statements made in the Prospectus under the caption "United States Taxation," to the extent they constitute matters of law or legal conclusions, have been reviewed by such counsel and are accurate, complete and correct and fairly present the information set forth therein. (e) Richards, Layton & Finger, special Delaware counsel for the Trust and Enterprise, 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 Enterprise and the Trustees, enforceable against Enterprise and the Trustees, in accordance with its terms, subject, as to enforcement, to the effect upon the Trust Agreement of (a) bankruptcy, insolvency, moratorium, receivership, liquidation, fraudulent conveyance, reorganization and other similar laws relating to or affecting the remedies and rights of creditors, (b) principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered or applied in a proceeding in equity or at law) and (c) the effect of applicable public 13 policy on the enforceability of provisions relating to indemnification or contribution; (vi) The Preferred Securities have been duly authorized by the Trust Agreement and are duly and validly issued and, subject to the qualifications set forth herein, fully paid and non-assessable undivided beneficial interests in the assets of the Trust; the holders of the Preferred Securities, as beneficial owners of the Trust (the "Securityholders"), are entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; and provided that such counsel may note that the Securityholders may be obligated, pursuant to the Trust Agreement, to (a) provide indemnity and/or security in connection with and pay a sum sufficient to cover any taxes or governmental charges arising from transfers or exchanges of Preferred Securities certificates and the issuance of replacement Preferred Securities certificates and (b) provide security and/or indemnity in connection with requests of or directions to the Property Trustee (as defined in the Trust Agreement) to exercise its rights and powers under the Trust Agreement; and under the Delaware Business Trust Act and the Trust Agreement, the issuance of the Preferred Securities is not subject to preemptive or other similar rights; (vii) The Common Securities have been duly authorized by the Trust Agreement and are duly and validly issued and fully paid undivided beneficial interests in the assets of the Trust; and under the Delaware Business Trust Act and the Trust Agreement, the issuance of the Common Securities is not subject to preemptive or other similar rights; (viii) The issuance and sale by the Trust of the Preferred Securities and the Common Securities, the execution, delivery and performance by the Trust of this Agreement, the consummation by the Trust of the transactions contemplated herein and the compliance by the Trust with its obligations hereunder do not violate (a) any of the provisions of the Certificate of Trust of the Trust or the Trust Agreement or (b) any applicable Delaware law or Delaware administrative regulation; (ix) Assuming that the Trust derives no income from or connected with sources within the State of Delaware and has no assets, activities (other than having a Delaware trustee as required by the Delaware Business Trust Act and the filing of documents with the Secretary of State of the State of Delaware) or employees in the State of Delaware, no authorization, approval, consent or order of any Delaware court or Delaware governmental authority or Delaware agency is required to be obtained by the Trust solely as a result of the issuance and sale of the Preferred Securities, the consummation by the Trust of the transactions contemplated herein or the compliance by the Trust of its obligations hereunder; and 14 (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). (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 Enterprise 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 Enterprise and its subsidiaries included in Enterprise'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 Enterprise, (3) a reading of the minutes of the Annual Meeting of Shareholders and the latest minutes of Meetings of the Board of Directors of Enterprise 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 Enterprise 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 15 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 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 Enterprise's business) of Enterprise or any decrease in the consolidated net assets of Enterprise (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 Enterprise 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 Enterprise, there were any decreases, as compared with the corresponding period in the preceding year, in consolidated revenues or net income of Enterprise, 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 Enterprise; and (iv) in addition to the audits 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 Enterprise 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. 16 (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 Enterprise 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 Enterprise 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 Enterprise 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 Enterprise, in each case otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the reasonable judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public 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 Enterprise, 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 Enterprise contained herein are true and correct as if made at and as of the Time of Delivery; (iii) the Trust and Enterprise 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 Enterprise 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 17 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 Enterprise 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 Enterprise 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 Enterprise, in each case otherwise than as set forth or contemplated in the Prospectus. 8. (a) The Trust and Enterprise, jointly and severally, agree to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act, as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus or the Prospectus (or any amendment or 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 Enterprise 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 Enterprise; 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 Enterprise 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 18 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 Enterprise 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 Enterprise be liable under the indemnity agreement set forth in Section 8(a) hereof with respect to any claim made against any Underwriter or any such controlling person unless such party shall be notified in writing of the nature of the claim promptly after the assertion thereof, but failure to so notify such party shall not relieve it from any liability which it may have otherwise than on account of said indemnity agreement. The Trust or Enterprise, 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 Enterprise, 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 Enterprise, 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 Enterprise, 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 Enterprise, as the case may be, neither the Trust nor Enterprise shall have the right to assume the defense of such action on behalf of such Underwriter and the Trust or Enterprise, 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 Enterprise 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 Enterprise 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. 19 (c) Each Underwriter severally agrees that it will indemnify and hold harmless the Trust and Enterprise, 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 Enterprise by such Underwriter expressly for use in the Registration Statement, such Preliminary Prospectus, or the Prospectus, or any amendment or supplement thereto. In case any action shall be brought against the Trust or any person so indemnified based on the Registration Statement, such Preliminary Prospectus or the Prospectus, or any amendment or supplement thereto and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Trust and Enterprise, and the Trust and Enterprise 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 Enterprise, 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, Enterprise 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, Enterprise 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 Enterprise, 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 Enterprise, each officer of the Trust or Enterprise who signed the Registration Statement, and each person, if any, who controls the Trust or Enterprise within the meaning of Section 15 of the Act shall have the same rights to contribution as the Trust and Enterprise. 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 20 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 Enterprise 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 Enterprise that they have so arranged for the purchase of such Preferred Securities, or the Trust or Enterprise notifies the Representatives that it has so arranged for the purchase of such Preferred Securities, the Representatives or the Trust and Enterprise shall have the right to postpone the Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Trust and Enterprise 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 Enterprise 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 Enterprise 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 Enterprise 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 Enterprise 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 Enterprise, except for the expenses to be borne by the Trust, Enterprise 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. 21 10. This Agreement may be terminated by notice to the Trust and Enterprise 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 Enterprise'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 Enterprise's debt securities by any Rating Agency shall have been lowered since the time this Agreement was executed or if any Rating Agency shall have publicly announced since the time this Agreement was executed that it has placed its rating of the Preferred Securities or any of Enterprise'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, Enterprise 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, Enterprise or any officer or director or controlling person of the Trust or Enterprise, 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 Enterprise 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 Enterprise 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 Enterprise 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 Enterprise 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 Merrill Lynch & 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 Merrill Lynch & Co., World Financial Center, 10th Floor, New York, 22 New York 10281-1380, Attention: [ ]; and if to the Trust or Enterprise by mail to it at the address of the Trust or Enterprise at 80 Park Plaza, P.O. Box 1171, Newark, New Jersey 07101, Attention: M. A. Plawner. 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, Enterprise and, to the extent provided in Sections 8 and 11 hereof, the officers and directors of the Trust or Enterprise and each person who controls the Trust or Enterprise or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Preferred Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 15. Time shall be of the essence of this Agreement. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 16. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey (without regard to conflict of laws principles). 17. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 23 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 Enterprise, 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, Enterprise Capital Trust _ By: Public Service Enterprise Group Incorporated, as Depositor By: Name: Title: Public Service Enterprise Group Incorporated By: Name: Title: Accepted as of the date hereof: Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., [Other Representatives] By: Merrill Lynch, Pierce, Fenner & Smith Incorporated By: Name: Title: On behalf of themselves and as Representatives for each of the Underwriters named in Schedule I hereto 24 SCHEDULE I Total Number of Securities Underwriters to be Purchased Merrill Lynch, Pierce, Fenner & Smith Incorporated Goldman, Sachs & Co. ----------------- Total ================= EX-3.1 3 CERTIFICATE OF TRUST CERTIFICATE OF TRUST OF ENTERPRISE CAPITAL TRUST I THIS CERTIFICATE OF TRUST of Enterprise Capital Trust I (the "Trust"), dated as of December 22, 1997, 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. ss. 3801, et seq.). (i) Name. The name of the business trust being formed hereby is Enterprise 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, One Rodney Square, 920 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/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President FIRST UNION BANK OF DELAWARE, as Trustee By: /s/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President /s/ Fred F. Saunders --------------------------- Fred F. Saunders, as Trustee EX-3.2 4 CERTIFICATE OF TRUST CERTIFICATE OF TRUST OF ENTERPRISE CAPITAL TRUST II THIS CERTIFICATE OF TRUST of Enterprise Capital Trust II (the "Trust"), dated as of December 22, 1997, 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. ss. 3801, et seq.). (i) Name. The name of the business trust being formed hereby is Enterprise 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, One Rodney Square, 920 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/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President FIRST UNION BANK OF DELAWARE, as Trustee By: /s/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President /s/ Fred F. Saunders ---------------------------- Fred F. Saunders, as Trustee EX-3.3 5 CERTIFICATE OF TRUST CERTIFICATE OF TRUST OF ENTERPRISE CAPITAL TRUST III THIS CERTIFICATE OF TRUST of Enterprise Capital Trust III (the "Trust"), dated as of December 22, 1997, 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. ss. 3801, et seq.). (i) Name. The name of the business trust being formed hereby is Enterprise 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, One Rodney Square, 920 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/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President FIRST UNION BANK OF DELAWARE, as Trustee By: /s/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President /s/ Fred F. Saunders ---------------------------- Fred F. Saunders, as Trustee EX-3.4 6 TRUST AGREEMENT TRUST AGREEMENT This TRUST AGREEMENT, dated as of December 22, 1997 (this "Trust Agreement"), among Public Service Enterprise Group Incorporated, a New Jersey corporation, as "Depositor," and 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 "Enterprise 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. ss. 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 1 Preferred 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 Fred F. Saunders as its true and lawful attorney-in-fact and agent, 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 attorney-in-fact and agent 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 do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his 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 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 ENTERPRISE GROUP INCORPORATED, 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/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President FIRST UNION BANK OF DELAWARE, not in its individual capacity but solely as Trustee By: /s/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President /s/ Fred F. Saunders -------------------------------------- Fred F. Saunders, not in his individual capacity but solely as Trustee 3 EX-3.5 7 TRUST AGREEMENT TRUST AGREEMENT This TRUST AGREEMENT, dated as of December 22, 1997 (this "Trust Agreement"), among Public Service Enterprise Group Incorporated, a New Jersey corporation, as "Depositor," and 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 "Enterprise 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. ss. 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 1 Preferred 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 Fred F. Saunders as its true and lawful attorney-in-fact and agent, 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 attorney-in-fact and agent 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 do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his 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 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 ENTERPRISE GROUP INCORPORATED, 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/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President FIRST UNION BANK OF DELAWARE, not in its individual capacity but solely as Trustee By: /s/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President /s/ Fred F. Saunders ---------------------------------------- Fred F. Saunders, not in his individual capacity but solely as Trustee EX-3.6 8 TRUST AGREEMENT TRUST AGREEMENT This TRUST AGREEMENT, dated as of December 22, 1997 (this "Trust Agreement"), among Public Service Enterprise Group Incorporated, a New Jersey corporation, as "Depositor," and 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 "Enterprise 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. ss. 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 1 Preferred 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 Fred F. Saunders as its true and lawful attorney-in-fact and agent, 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 attorney-in-fact and agent 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 do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his 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 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 ENTERPRISE GROUP INCORPORATED, 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/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President FIRST UNION BANK OF DELAWARE, not in its individual capacity but solely as Trustee By: /s/ Frank Gallagher ----------------------- Name: Frank Gallagher Title: Vice President /s/ Fred F. Saunders ---------------------------------------- Fred F. Saunders, not in his individual capacity but solely as Trustee EX-3.7 9 TRUST AGREEMENT EXHIBIT 3-7 Amended and Restated Trust Agreement for Enterprise Capital Trust I among PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (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 ___________________________, 1998 TABLE OF CONTENTS Page ---- ARTICLE I Defined Terms Section 1.01. Definitions ................................................ 1 ARTICLE II Continuation of the Trust Section 2.01. Name ....................................................... 9 Section 2.02. Office of the Delaware Trustee; Principal Place of Business .......................................... 9 Section 2.03. Initial Contribution of Trust Property; Expenses of the Trust ...................................... 10 Section 2.04. Issuance of the Trust Securities ........................... 10 Section 2.05. Purchase of Debentures ..................................... 11 Section 2.06. Declaration of Trust ....................................... 11 Section 2.07. Authorization to Enter into Certain Transactions ............................................... 11 Section 2.08. Assets of Trust ............................................ 15 Section 2.09. Title to Trust Property .................................... 15 ARTICLE III Payment Account Section 3.01. Payment Account ............................................ 15 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 ......................................... 19 Section 4.05. Tax Returns and Reports .................................... 20 ARTICLE V Trust Securities Certificates Section 5.01. Initial Ownership .......................................... 20 Section 5.02. The Trust Securities Certificates .......................... 20 Section 5.03. Delivery of Trust Securities Certificates ............................................... 21 Section 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates .......................... 21 (i) Page ---- Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates .............................. 22 Section 5.06. Persons Deemed Securityholders ............................. 22 Section 5.07. Access to List of Securityholders' Names and Addresses .............................................. 22 Section 5.08. Maintenance of Office or Agency ............................ 23 Section 5.09. Appointment of Paying Agent ................................ 23 Section 5.10. No Transfer of Common Securities by Depositor .................................................. 24 Section 5.11. Book-Entry Preferred Securities Certificates; Common Securities Certificate ................................................ 24 Section 5.12. Definitive Preferred Securities Certificates ............................................... 24 Section 5.13. Rights of Securityholders .................................. 25 ARTICLE VI Acts of Securityholders; Meetings; Voting Section 6.01. Limitations on Voting Rights ............................... 25 Section 6.02. Notice of Meetings ......................................... 26 Section 6.03. Meetings of Preferred Securityholders ...................... 27 Section 6.04. Voting Rights .............................................. 27 Section 6.05. Proxies, etc ............................................... 27 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 .................................... 28 Section 6.09. Inspection of Records ...................................... 29 ARTICLE VII The Trustees Section 7.01. Certain Duties and Responsibilities ........................ 29 Section 7.02. Notice of Defaults; Direct Action by Securityholders ............................................ 30 Section 7.03. Certain Rights of Property Trustee ......................... 31 Section 7.04. Not Responsible for Recitals or Issuance of Securities .............................................. 32 Section 7.05. May Hold Securities ........................................ 32 Section 7.06. Compensation; Indemnity; Fees .............................. 32 Section 7.07. Corporate Property Trustee Required; Eligibility of Trustees .................................... 33 Section 7.08. Conflicting Interests ...................................... 34 Section 7.09. Co-Trustees and Separate Trustee ........................... 34 Section 7.10. Resignation and Removal; Appointment of Successor .................................................. 36 (ii) Page ---- Section 7.11. Acceptance of Appointment by Successor ..................... 37 Section 7.12. Merger, Conversion, Consolidation or Succession to Business ..................................... 38 Section 7.13. Preferential Collection of Claims Against Depositor or Trust ......................................... 38 Section 7.14. Reports by Property Trustee ................................ 38 Section 7.15. Reports to the Property Trustee ............................ 38 Section 7.16. Evidence of Compliance with Conditions Precedent .................................................. 39 Section 7.17. Statements Required in Officer's Certificate and Opinion of Counsel ......................... 39 Section 7.18. Number of Trustees ......................................... 39 Section 7.19. Delegation of Power ........................................ 40 Section 7.20. Voting ..................................................... 40 ARTICLE VIII Termination and Liquidation Section 8.01. Dissolution Upon Expiration Date ........................... 40 Section 8.02. Early Dissolution .......................................... 40 Section 8.03. Dissolution ................................................ 41 Section 8.04. Liquidation ................................................ 41 ARTICLE IX Mergers, Etc. Section 9.01. Mergers, Consolidations, Amalgamations or Replacements of the Trust .................................. 43 ARTICLE X Miscellaneous Provisions Section 10.01. Limitation of Rights of Securityholders .................... 44 Section 10.02. Amendment .................................................. 44 Section 10.03. Severability ............................................... 46 Section 10.04. Governing Law .............................................. 46 Section 10.05. Payments Due on Non-Business Day ........................... 46 Section 10.06. Successors and Assigns ..................................... 46 Section 10.07. Headings ................................................... 46 Section 10.08. Reports, Notices and Demands ............................... 46 Section 10.09. Agreement Not to Petition .................................. 47 Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act .............................................. 47 Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture .................................... 48 (iii) Enterprise Capital Trust I 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 - --------------- --------------- ss. 310(a)(1) ............................................................ 7.07 (a)(2) ............................................................ 7.07 (a)(3) ............................................................ 7.09 (a)(4) ...................................................... 2.07(a)(ii) (b) ............................................................... 7.08 ss. 311(a)................................................................ 7.13 (b)................................................................ 7.13 ss. 312(a)................................................................ 5.07 (b)................................................................ 5.07 (c)................................................................ 5.07 ss. 313(a)................................................................ 7.14 (b)................................................................ 7.14 (c)................................................................ 7.14 (d)................................................................ 7.14 ss. 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 ss. 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 ss. 316(a)....................................................... Not Applicable (a)(1)(A)................................................. Not Applicable (a)(1)(B)................................................. Not Applicable (a)(2).................................................... Not Applicable (b)....................................................... Not Applicable (c)....................................................... Not Applicable ss. 317(a)(1).................................................... Not Applicable (a)(2)................................................... Not Applicable (b)................................................................ 5.09 ss. 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. (iv) AMENDED AND RESTATED TRUST AGREEMENT of Enterprise Capital Trust I (the "Trust"), dated as of _____________, 1998 among (i) Public Service Enterprise Group Incorporated, 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, 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: 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 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: (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 2 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; or (iii) orders the liquidation of such Person. 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 established thereby 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 established thereby has delegated its authority, and in each case, delivered to the Trustees. "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. 3 "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 office of the Property Trustee located in the State of New 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, in its capacity as trustee under the 4 Indenture, or any successor thereto appointed in accordance with the terms and provisions of the Indenture. "Debentures" means the Depositor's _____% Deferrable Interest Subordinated Debentures, Series A, 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. ss. 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 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). "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 thereunder, 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. 5 "Indenture" means the Indenture, dated as of ___________, 1998 between the Depositor and the Debenture Trustee, as trustee thereunder, 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 paid in accordance with the Indenture and (b) with respect to a distribution of Debentures to Holders of Trust Securities in connection with a dissolution 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 dissolution 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. "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: 6 (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 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 7 company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Security" means a __% Trust Originated Preferred Security 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 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. "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 9.01. "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 8 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 _____________, 1998 among the Trust, the Depositor and the Underwriters named therein. ARTICLE II Continuation of the Trust Section 2.01. Name. The Trust continued hereby shall be known as "Enterprise Capital Trust I" 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 One Rodney Square, 920 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. 9 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 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 _________ 10 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 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, 11 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; (E) to the extent provided in this Trust Agreement, terminating 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); 12 (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, terminating 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; (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 and exchanges 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), 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 13 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; (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 14 (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 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 shall 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. 15 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 _____________, 1998 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 March 31, 1998. 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"). 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. 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 Extension 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 Extension Period on the Debentures. (c) Distributions on the Trust Securities shall be made from the Payment Account by the Property Trustee or any 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. 16 (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 calendar 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 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 Securities 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. 17 (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 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 is in the next succeeding 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 3% to the Common Securities and 97% 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 18 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 liquidation 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 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 or Liquidation Distribution of the Trust Securities shall be made in immediately available funds upon surrender of the Trust Securities 19 Certificate representing such Trust 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 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 Trust Securities. Trust 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 20 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 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. 21 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 Securities Registrar 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. 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, the Paying Agent 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 and Holder of such Trust Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and neither the Trustees, the Paying Agent 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 22 Depositor shall furnish or cause to be furnished 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 (a) to the Property Trustee, quarterly not later than 10 days prior to a Distribution 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 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 23 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 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 24 Securities Certificates or the Clearing Agency is no longer registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, and the Depositor is unable to locate a qualified successor within 90 days, (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 Book-Entry Preferred Securities Certificates by the Clearing Agency, accompanied by registration instructions, the Administrative Trustee shall execute 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 25 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 consent shall be required, without, in each case, obtaining the prior consent of the Holders of at least a majority in aggregate Liquidation Amount of all Outstanding Preferred Securities; provided, however, that where such consent under the Indenture would require the consent of each holder of Debentures affected thereby, no such consent 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 consent 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) dissolution the or liquidation 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 aggregate 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 26 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 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 Preferred 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 Preferred 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. 27 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 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 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 Trust 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 28 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. 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 29 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 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 has failed 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 institute a legal proceeding directly against any Person to enforce the Property Trustee's rights under this Trust Agreement or the Indenture with respect to Debentures having a principal amount equal to the aggregate Liquidation Amount of the Preferred Securities of such Securityholder without first instituting a legal proceeding against the Property Trustee or any other Person. 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 has not been taken by the Property Trustee. Notwithstanding the foregoing, if a Debenture Event of Default relating to the 30 Depositor's failure to pay the principal of or interest on the Debentures has occurred and is continuing thereby resulting in an Event of Default hereunder, then each Holder of Preferred Securities may institute a legal proceeding directly against the Depositor for enforcement of payment to such Holder, 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 within the scope of such experts' area of expertise shall be full and complete authorization and protection in respect of any action 31 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 compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); 32 (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. (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 33 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. 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 34 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 a Debenture Event of Default 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. (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. 35 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 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 36 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 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 37 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). 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) 38 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. 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. 39 (c) The death, resignation, retirement, removal, bankruptcy, dissolution, termination, incompetence or incapacity to perform the duties of a Trustee shall not operate to dissolve, terminate or 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. ARTICLE VIII Dissolution and Liquidation Section 8.01. Dissolution Upon Expiration Date. Unless earlier dissolved, the Trust shall automatically dissolve on ________ __, 2051 (the "Expiration Date"). Section 8.02. Early Dissolution. The earliest to occur of any of the following events is an "Early Dissolution Event" upon the occurrence of which the Trust shall be dissolved: (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; 40 (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 dissolution of the Trust shall have been entered by a court of competent jurisdiction. The election of the Depositor pursuant to Section 8.02(b) 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. Dissolution. The respective obligations and responsibilities of the Trustees and the Trust 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 Dissolution Event specified in clause (a), (c) or (d) of Section 8.02 occurs or upon the Expiration Date, the 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 Dissolution 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; 41 (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 8.02(c) or 8.04(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 Securites 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 dissolution 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 dissolved, by the Property Trustee in such manner as the Property Trustee determines. In such event, on the date of the dissolution of the Trust, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to 42 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 dissolution, 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 dissolution 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 all Holders 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 as an entirety or substantially as an entirety to any Person except as described below or under Article VIII. The Trust may, at the request of the Depositor, with the consent of the 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 the payment of 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 with respect to 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, (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, 43 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 similar 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 of the Preferred Securities, merge with or into, consolidate, amalgamate, or be replaced by, any other entity or permit any other entity 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 not to be classified as a grantor trust for United States Federal income tax purposes. ARTICLE X Miscellaneous Provisions Section 10.01. Limitation of Rights of Securityholders. The death or incapacity, bankruptcy, dissolution and termination of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement, or dissolve, terminate or annul the Trust, 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 44 amended by the Trustees and the Depositor with the consent of Holders of at least a majority of the aggregate 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 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 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; (vi) change the conditions precedent for the Depositor to elect to dissolve the Trust and distribute the Debentures to Holders of Trust Securities as set forth in Section 8.02; or (vii) 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 this Trust Agreement, the Property Trustee shall be entitled to receive, and (subject to Section 7.01) 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, a Trustee may, but shall not be obligated to, enter into any amendment to this Trust Agreement 45 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 to the date of payment on such succeeding day. 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 V 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 Enterprise Group Incorporated, 80 Park Plaza, Newark, New Jersey 07101, Attention: Treasurer, facsimile no.: (973) 596-6309. Such notice, demand or other communication to or upon a Securityholder or the Depositor shall be 46 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, 765 Broad Street, Newark, New Jersey 07101, Attention: Corporate Trust Office; (b) with respect to the Delaware Trustee, to One Rodney Square, 920 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 Enterprise Capital Trust I c/o Treasurer." Such notice, demand or other communication to or upon the Trust, the Delaware Trustee or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust, the Delaware Trustee 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 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 or Trustee, as applicable, 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 47 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 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 ENTERPRISE GROUP INCORPORATED, 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: Fred F. Saunders, as Administrative Trustee ----------------------------- 48 EXHIBIT A CERTIFICATE OF TRUST OF ENTERPRISE CAPITAL TRUST I THIS CERTIFICATE OF TRUST of Enterprise Capital Trust I (the "Trust"), dated as of December ___, 1997 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. ss. 3801 et seq.). (i) Name. The name of the business trust being formed hereby is Enterprise 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, One Rodney Square, 920 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 EXHIBIT B ------------- The Depository Trust Company 55 Water Street, 49th Floor New York, New York 10041-0099 Attention: General Counsel's Office Re: Enterprise Capital Trust I 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 Enterprise Capital Trust I _____% Trust Originated Preferred Securities (the "Preferred Securities"), of Enterprise Capital Trust I, a Delaware business trust (the "Issuer"), created pursuant to a Trust Agreement between Public Service Enterprise Group Incorporated ("Enterprise"), 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 Enterprise, to the extent the Issuer has funds available for the payment thereof and to the extent set forth in a Guarantee Agreement dated _____________, 1998 by Enterprise 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 _____________, 1998 by and among the Underwriters, the Issuer and Enterprise 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: 1. Prior to the closing of the sale of the Preferred Securities to the Underwriters, which is expected to occur on or about _____________, 1998 there shall be deposited with DTC one or more global certificates (individually and collectively, the B-1 "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 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 B-2 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 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: B-3 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 "Enterprise Capital Trust I _____% Trust Originated Preferred Securities". 8. Issuer or Agent shall provide automated notification of CUSIP-level detail for dividend payments to DTC no later than noon (Eastern Time) on the payment date. 9. Dividend payments shall be received by Cede & Co. as nominee of DTC, or its registered assigns in same-day funds or the equivalent no later than 2:30 p.m. (Eastern Time) on each payment date. Absent any other arrangements between Issuer or Trustee and DTC, such funds shall be wired as follows: The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Dividend Deposit Account 066-026776 Issuer or Agent shall provide dividend payment information to a standard announcement service subscribed to by DTC. In the unlikely event that no such service exists, Issuer agrees that it or Agent shall provide this information directly to DTC in advance of the dividend payment date as soon as the information is available. This information should be conveyed directly to DTC electronically. If electronic transmission is not available, such information should be sent by telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1886, and receipt of such notices shall be confirmed by telephoning (212) 709-1270. Notices to DTC pursuant to the above 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, NY 10004-2695 10. DTC shall receive maturity and redemption and CUSIP-level detail on the payable date in same-day funds by 2:30 p.m. (Eastern Time). Absent any other arrangements between Agent and DTC, such payments shall be wired as follows: B-4 The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Redemption Account 066-027306 in accordance with existing SDFS payment procedures in the manner set forth in DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously been furnished to Agent. 11. DTC shall receive all reorganization payments and CUSIP-level detail resulting from corporate actions (such as tender offers or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern Time). Absent any other arrangements between Agent and DTC, such payments shall be wired as follows: The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Reorganization Account 066-027608 12. 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. 13. 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. 14. 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 B-5 transfer reasonably requested by the Issuer or the Transfer Agent and Registrar. 15. 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. 16. Issuer: (a) understands that DTC has no obligation to, and will not, communicate to its Participants or to any person having an interest in the Securities any information contained in the Security certificate(s); and (b) acknowledges that neither DTC's Participants nor any person having an interest in the Securities shall be deemed to have notice of the provisions of the Security certificate(s) by virtue of submission of such certificate(s) to DTC. 17. 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. B-6 Nothing herein shall be deemed to require the Transfer Agent and Registrar to advance funds on behalf of the Issuer. Very truly yours, ENTERPRISE CAPITAL TRUST I (As Issuer) By: ----------------------------- Name: Fred F. Saunders, as Administrative Trustee FIRST UNION NATIONAL BANK ------------------------------ (As Transfer Agent and Registrar) By: ----------------------------- Name: Title: RECEIVED AND ACCEPTED: THE DEPOSITORY TRUST COMPANY By: - ----------------------------- Authorized Officer B-7 EXHIBIT C THIS CERTIFICATE IS NOT TRANSFERABLE Certificate Number C-1 Number of Common Securities ------- Certificate Evidencing Common Securities of Enterprise Capital Trust I _____% Common Securities (liquidation amount $25 per Common Security) Enterprise Capital Trust I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Public Service Enterprise Group Incorporated (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 _____________, 1998 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. IN WITNESS WHEREOF, the Administrative Trustee of the Trust has executed this certificate this ____ day of __________, 1998. ENTERPRISE CAPITAL TRUST I By: ----------------------------- Name: Fred F. Saunders Administrative Trustee C-1 EXHIBIT D Certificate Number ----- Number of Preferred Securities CUSIP NO. __________ Certificate Evidencing Preferred Securities of Enterprise Capital Trust I _____% Trust Originated Preferred Securities (liquidation amount $25 per Preferred Security) Enterprise Capital Trust I, 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 Enterprise Capital Trust I _____% Trust Originated Preferred Securities (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 _____________, 1998 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 Enterprise Group Incorporated, a New Jersey corporation, and First Union National Bank as guarantee trustee, dated as of _____________, 1998 (the "Guarantee") to the extent provided therein, together with the obligations of Public Service Enterprise Group Incorporated under the Trust Agreement, its Deferrable Interest Subordinated Debentures, Series A and the Indenture related to such Deferrable Interest Subordinated Debentures. The Trust will furnish a copy of the aforementioned agreements and instruments to the Holder without charge upon written request to the Trust at its principal place of business or registered office. D-1 Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. IN WITNESS WHEREOF, the Administrative Trustee of the Trust has executed this certificate this ____ day of __________, 1998. ENTERPRISE CAPITAL TRUST I By: ----------------------------- Name: Fred F. Saunders 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 previously 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 Enterprise Capital Trust I 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. D-2 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) EX-3.8 10 AMENDED AND RESTATED TRUST AGREEMENT Amended and Restated Trust Agreement for Enterprise Capital Trust II among PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (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 ___________________________, ____ TABLE OF CONTENTS Page ---- ARTICLE I Defined Terms Section 1.01. Definitions.................................................... 1 ARTICLE II Continuation of the Trust Section 2.01. Name........................................................... 9 Section 2.02. Office of the Delaware Trustee; Principal Place of Business.............................................. 9 Section 2.03. Initial Contribution of Trust Property; Expenses of the Trust..........................................10 Section 2.04. Issuance of the Trust Securities...............................10 Section 2.05. Purchase of Debentures.........................................11 Section 2.06. Declaration of Trust...........................................11 Section 2.07. Authorization to Enter into Certain Transactions...................................................11 Section 2.08. Assets of Trust................................................15 Section 2.09. Title to Trust Property........................................15 ARTICLE III Payment Account Section 3.01. Payment Account................................................15 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.............................................19 Section 4.05. Tax Returns and Reports........................................20 ARTICLE V Trust Securities Certificates Section 5.01. Initial Ownership..............................................20 Section 5.02. The Trust Securities Certificates..............................20 Section 5.03. Delivery of Trust Securities Certificates...................................................21 (i) Page ---- Section 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates..............................21 Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates..................................22 Section 5.06. Persons Deemed Securityholders.................................22 Section 5.07. Access to List of Securityholders' Names and Addresses..................................................22 Section 5.08. Maintenance of Office or Agency................................23 Section 5.09. Appointment of Paying Agent....................................23 Section 5.10. No Transfer of Common Securities by Depositor......................................................24 Section 5.11. Book-Entry Preferred Securities Certificates; Common Securities Certificate....................................................24 Section 5.12. Definitive Preferred Securities Certificates...................................................24 Section 5.13. Rights of Securityholders......................................25 ARTICLE VI Acts of Securityholders; Meetings; Voting Section 6.01. Limitations on Voting Rights...................................25 Section 6.02. Notice of Meetings.............................................26 Section 6.03. Meetings of Preferred Securityholders..........................27 Section 6.04. Voting Rights..................................................27 Section 6.05. Proxies, etc...................................................27 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........................................28 Section 6.09. Inspection of Records..........................................29 ARTICLE VII The Trustees Section 7.01. Certain Duties and Responsibilities............................29 Section 7.02. Notice of Defaults; Direct Action by Securityholders................................................30 Section 7.03. Certain Rights of Property Trustee.............................31 Section 7.04. Not Responsible for Recitals or Issuance of Securities..................................................32 Section 7.05. May Hold Securities............................................32 Section 7.06. Compensation; Indemnity; Fees..................................32 Section 7.07. Corporate Property Trustee Required; Eligibility of Trustees........................................33 Section 7.08. Conflicting Interests..........................................34 Section 7.09. Co-Trustees and Separate Trustee...............................34 (ii) Page ---- Section 7.10. Resignation and Removal; Appointment of Successor......................................................36 Section 7.11. Acceptance of Appointment by Successor.........................37 Section 7.12. Merger, Conversion, Consolidation or Succession to Business.........................................38 Section 7.13. Preferential Collection of Claims Against Depositor or Trust.............................................38 Section 7.14. Reports by Property Trustee....................................38 Section 7.15. Reports to the Property Trustee................................38 Section 7.16. Evidence of Compliance with Conditions Precedent......................................................39 Section 7.17. Statements Required in Officer's Certificate and Opinion of Counsel.............................39 Section 7.18. Number of Trustees.............................................39 Section 7.19. Delegation of Power............................................40 Section 7.20. Voting.........................................................40 ARTICLE VIII Dissolution and Liquidation Section 8.01. Dissolution Upon Expiration Date...............................40 Section 8.02. Early Dissolution..............................................40 Section 8.03. Dissolution....................................................41 Section 8.04. Liquidation....................................................41 ARTICLE IX Mergers, Etc. Section 9.01. Mergers, Consolidations, Amalgamations or Replacements of the Trust......................................43 ARTICLE X Miscellaneous Provisions Section 10.01. Limitation of Rights of Securityholders........................44 Section 10.02. Amendment......................................................44 Section 10.03. Severability...................................................46 Section 10.04. Governing Law..................................................46 Section 10.05. Payments Due on Non-Business Day...............................46 Section 10.06. Successors and Assigns.........................................46 Section 10.07. Headings.......................................................46 Section 10.08. Reports, Notices and Demands...................................46 Section 10.09. Agreement Not to Petition......................................47 Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act..................................................47 Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture........................................48 (iii) Enterprise Capital Trust II 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 --------------- --------------- ss. 310(a)(1).............................................................7.07 (a)(2).............................................................7.07 (a)(3).............................................................7.09 (a)(4)......................................................2.07(a)(ii) (b)................................................................7.08 ss. 311(a)................................................................7.13 (b)................................................................7.13 ss. 312(a)................................................................5.07 (b)................................................................5.07 (c)................................................................5.07 ss. 313(a)................................................................7.14 (b)................................................................7.14 (c)................................................................7.14 (d)................................................................7.14 ss. 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 ss. 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 ss. 316(a)......................................................Not Applicable (a)(1)(A)................................................Not Applicable (a)(1)(B)................................................Not Applicable (a)(2)...................................................Not Applicable (b)......................................................Not Applicable (c)......................................................Not Applicable ss. 317(a)(1)...................................................Not Applicable (a)(2)...................................................Not Applicable (b)................................................................5.09 ss. 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. (iv) AMENDED AND RESTATED TRUST AGREEMENT of Enterprise Capital Trust II (the "Trust"), dated as of _____________, ____ among (i) Public Service Enterprise Group Incorporated, 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, 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: 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 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: (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 2 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; or (iii) orders the liquidation of such Person. 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 established thereby 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 established thereby has delegated its authority, and in each case, delivered to the Trustees. "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. 3 "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 office of the Property Trustee located in the State of New 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, in its capacity as trustee under the 4 Indenture, or any successor thereto appointed in accordance with the terms and provisions of the Indenture. "Debentures" means the Depositor's _____% Deferrable Interest Subordinated Debentures, Series A, 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. ss. 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 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). "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 thereunder, 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. 5 "Indenture" means the Indenture, dated as of ___________, ____ between the Depositor and the Debenture Trustee, as trustee thereunder, 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 paid in accordance with the Indenture and (b) with respect to a distribution of Debentures to Holders of Trust Securities in connection with a dissolution 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 dissolution 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. "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: 6 (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 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 7 company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Security" means a __% Trust Originated Preferred Security 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 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. "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 9.01. "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 8 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. ARTICLE II Continuation of the Trust Section 2.01. Name. The Trust continued hereby shall be known as "Enterprise Capital Trust II" 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 One Rodney Square, 920 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. 9 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 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 _________ 10 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 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, 11 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; (E) to the extent provided in this Trust Agreement, terminating 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); 12 (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, terminating 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; (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 and exchanges 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), 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 13 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; (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 14 (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 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 shall 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. 15 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 _________ in arrears on ___________________________________ 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"). 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 _____________ period shall be computed on the basis of a 360-day year of twelve 30-day months. 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 Extension Period is equal to the aggregate amount of interest (including interest payable on unpaid interest at the rate per annum set forth above, compounded ___________) that accrues during any such Extension Period on the Debentures. (c) Distributions on the Trust Securities shall be made from the Payment Account by the Property Trustee or any 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. 16 (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 calendar __________, 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 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 Securities 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. 17 (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 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 is in the next succeeding 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 3% to the Common Securities and 97% 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 18 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 liquidation 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 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 or Liquidation Distribution of the Trust Securities shall be made in immediately available funds upon surrender of the Trust Securities 19 Certificate representing such Trust 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 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 Trust Securities. Trust 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 20 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 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. 21 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 Securities Registrar 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. 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, the Paying Agent 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 and Holder of such Trust Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and neither the Trustees, the Paying Agent 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 22 Depositor shall furnish or cause to be furnished a list, in such form as the Property Trustee may reasonably of the Securityholders as of the most recent record date require, of the names and addresses (a) to the Property Trustee, __________ not later than 10 days prior to a Distribution 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 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 23 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 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 24 Securities Certificates or the Clearing Agency is no longer registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, and the Depositor is unable to locate a qualified successor within 90 days, (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 Book-Entry Preferred Securities Certificates by the Clearing Agency, accompanied by registration instructions, the Administrative Trustee shall execute 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 25 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 consent shall be required, without, in each case, obtaining the prior consent of the Holders of at least a majority in aggregate Liquidation Amount of all Outstanding Preferred Securities; provided, however, that where such consent under the Indenture would require the consent of each holder of Debentures affected thereby, no such consent 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 consent 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 dissolution or liquidation 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 aggregate 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 26 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 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 Preferred 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 Preferred 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. 27 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 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 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 Trust 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 28 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. 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 29 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 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 has failed 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 institute a legal proceeding directly against any Person to enforce the Property Trustee's rights under this Trust Agreement or the Indenture with respect to Debentures having a principal amount equal to the aggregate Liquidation Amount of the Preferred Securities of such Securityholder without first instituting a legal proceeding against the Property Trustee or any other Person. 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 has not been taken by the Property Trustee. Notwithstanding the foregoing, if a Debenture Event of Default relating to the 30 Depositor's failure to pay the principal of or interest on the Debentures has occurred and is continuing thereby resulting in an Event of Default hereunder, then each Holder of Preferred Securities may institute a legal proceeding directly against the Depositor for enforcement of payment to such Holder, 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 within the scope of such experts' area of expertise shall be full and complete authorization and protection in respect of any action 31 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 compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); 32 (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. (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 33 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. 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 34 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 a Debenture Event of Default 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. (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. 35 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 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 36 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 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 37 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). 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) 38 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. 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. 39 (c) The death, resignation, retirement, removal, bankruptcy, dissolution, termination, incompetence or incapacity to perform the duties of a Trustee shall not operate to dissolve, terminate or 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. ARTICLE VIII Dissolution and Liquidation Section 8.01. Dissolution Upon Expiration Date. Unless earlier dissolved, the Trust shall automatically dissolve on __________, 2051 (the "Expiration Date"). Section 8.02. Early Dissolution. The earliest to occur of any of the following events is an "Early Dissolution Event" upon the occurrence of which the Trust shall be dissolved: (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; 40 (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 dissolution of the Trust shall have been entered by a court of competent jurisdiction. The election of the Depositor pursuant to Section 8.02(b) 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. Dissolution. The respective obligations and responsibilities of the Trustees and the Trust 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 Dissolution Event specified in clause (a), (c) or (d) of Section 8.02 occurs or upon the Expiration Date, the 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 Dissolution 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; 41 (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 8.02(c) or 8.04(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 Securities 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 dissolution 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 dissolved, by the Property Trustee in such manner as the Property Trustee determines. In such event, on the date of the dissolution of the Trust, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to 42 Security holders, 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 dissolution, 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 dissolution 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 all Holders 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 as an entirety or substantially as an entirety to any Person, except as described below or under Article VIII. The Trust may, at the request of the Depositor, with the consent of the 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 the payment of 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 with respect to 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, (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, 43 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 similar 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 of the Preferred Securities, merge with or into, consolidate, amalgamate, or be replaced by, any other entity or permit any other entity 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 not to be classified as a grantor trust for United States Federal income tax purposes. ARTICLE X Miscellaneous Provisions Section 10.01. Limitation of Rights of Securityholders. The death, incapacity, bankruptcy, dissolution and termination of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement or dissolve, terminate or annul the Trust, 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 44 amended by the Trustees and the Depositor with the consent of Holders of at least a majority of the aggregate 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 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 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; (vi) change the conditions precedent for the Depositor to elect to dissolve the Trust and distribute the Debentures to Holders of Trust Securities as set forth in Section 8.02; or (vii) 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 this Trust Agreement, the Property Trustee shall be entitled to receive, and (subject to Section 7.01) 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, a Trustee may, but shall not be obligated to, enter into any amendment to this Trust Agreement 45 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 to the date of payment on such succeeding day. 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 V 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 Enterprise Group Incorporated, 80 Park Plaza, Newark, New Jersey 07101, Attention: Treasurer, facsimile no.: (973) 596-6309. Such notice, demand or other communication to or upon a Securityholder or the Depositor shall be 46 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, 765 Broad Street, Newark, New Jersey 07101, Attention: Corporate Trust Office; (b) with respect to the Delaware Trustee, to One Rodney Square, 920 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 Enterprise Capital Trust II c/o Treasurer." Such notice, demand or other communication to or upon the Trust, the Delaware Trustee or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust, the Delaware Trustee 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 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 Trustee, as applicable, 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 47 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 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 ENTERPRISE GROUP INCORPORATED, 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: Fred F. Saunders, as Administrative Trustee 48 EXHIBIT A CERTIFICATE OF TRUST OF ENTERPRISE CAPITAL TRUST II THIS CERTIFICATE OF TRUST of Enterprise Capital Trust II (the "Trust"), dated as of December ___, 1997 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. ss. 3801 et seq.). (i) Name. The name of the business trust being formed hereby is Enterprise 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, One Rodney Square, 920 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 EXHIBIT B The Depository Trust Company 55 Water Street, 49th Floor New York, New York 10041-0099 Attention: General Counsel's Office Re: Enterprise Capital Trust II 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 Enterprise Capital Trust II _____% Trust Originated Preferred Securities (the "Preferred Securities"), of Enterprise Capital Trust II, a Delaware business trust (the "Issuer"), created pursuant to a Trust Agreement between Public Service Enterprise Group Incorporated ("Enterprise"), 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 Enterprise, to the extent the Issuer has funds available for the payment thereof and to the extent set forth in a Guarantee Agreement dated _____________, ____ by Enterprise 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 Enterprise 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: 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 B-1 "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 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 B-2 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 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: B-3 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 "Enterprise Capital Trust II _____% Trust Originated Preferred Securities". 8. Issuer or Agent shall provide automated notification of CUSIP-level detail for dividend payments to DTC no later than noon (Eastern Time) on the payment date. 9. Dividend payments shall be received by Cede & Co. as nominee of DTC, or its registered assigns in same-day funds or the equivalent no later than 2:30 p.m. (Eastern Time) on each payment date. Absent any other arrangements between Issuer or Trustee and DTC, such funds shall be wired as follows: The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Dividend Deposit Account 066-026776 Issuer or Agent shall provide dividend payment information to a standard announcement service subscribed to by DTC. In the unlikely event that no such service exists, Issuer agrees that it or Agent shall provide this information directly to DTC in advance of the dividend payment date as soon as the information is available. This information should be conveyed directly to DTC electronically. If electronic transmission is not available, such information should be sent by telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1886, and receipt of such notices shall be confirmed by telephoning (212) 709-1270. Notices to DTC pursuant to the above 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, NY 10004-2695 10. DTC shall receive maturity and redemption and CUSIP-level detail on the payable date in same-day funds by 2:30 p.m. (Eastern Time). Absent any other arrangements between Agent and DTC, such payments shall be wired as follows: B-4 The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Redemption Account 066-027306 in accordance with existing SDFS payment procedures in the manner set forth in DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously been furnished to Agent. 11. DTC shall receive all reorganization payments and CUSIP-level detail resulting from corporate actions (such as tender offers or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern Time). Absent any other arrangements between Agent and DTC, such payments shall be wired as follows: The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Reorganization Account 066-027608 12. 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. 13. 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. 14. 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 B-5 transfer reasonably requested by the Issuer or the Transfer Agent and Registrar. 15. 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. 16. Issuer: (a) understands that DTC has no obligation to, and will not, communicate to its Participants or to any person having an interest in the Securities any information contained in the Security certificate(s); and (b) acknowledges that neither DTC's Participants nor any person having an interest in the Securities shall be deemed to have notice of the provisions of the Security certificate(s) by virtue of submission of such certificate(s) to DTC. 17. 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. B-6 Nothing herein shall be deemed to require the Transfer Agent and Registrar to advance funds on behalf of the Issuer. Very truly yours, ENTERPRISE CAPITAL TRUST II (As Issuer) By: ------------------------------ Name: Fred F. Saunders, as Administrative Trustee FIRST UNION NATIONAL BANK --------------------------------- (As Transfer Agent and Registrar) By: ------------------------------ Name: Title: RECEIVED AND ACCEPTED: THE DEPOSITORY TRUST COMPANY By: -------------------------- Authorized Officer B-7 EXHIBIT C THIS CERTIFICATE IS NOT TRANSFERABLE Certificate Number C-1 Number of Common Securities ------- Certificate Evidencing Common Securities of Enterprise Capital Trust II _____% Common Securities (liquidation amount $25 per Common Security) Enterprise Capital Trust II, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Public Service Enterprise Group Incorporated (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. IN WITNESS WHEREOF, the Administrative Trustee of the Trust has executed this certificate this ____ day of __________, ----. ENTERPRISE CAPITAL TRUST II By: ------------------------------ Name: Fred F. Saunders Administrative Trustee C-1 EXHIBIT D Certificate Number ---------- Number of Preferred Securities CUSIP NO. __________ Certificate Evidencing Preferred Securities of Enterprise Capital Trust II _____% Trust Originated Preferred Securities (liquidation amount $25 per Preferred Security) Enterprise Capital Trust II, 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 Enterprise Capital Trust II _____% Trust Originated Preferred Securities (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 Enterprise Group Incorporated, a New Jersey corporation, and First Union National Bank as guarantee trustee, dated as of _____________, ____ (the "Guarantee") to the extent provided therein, together with the obligations of Public Service Enterprise Group Incorporated under the Trust Agreement, its Deferrable Interest Subordinated Debentures, Series A and the Indenture related to such Deferrable Interest Subordinated Debentures. The Trust will furnish a copy of the aforementioned agreements and instruments to the Holder without charge upon written request to the Trust at its principal place of business or registered office. D-1 Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. IN WITNESS WHEREOF, the Administrative Trustee of the Trust has executed this certificate this ____ day of __________, ____. ENTERPRISE CAPITAL TRUST II By: --------------------------- Name: Fred F. Saunders 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 previously 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 Enterprise Capital Trust II 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. D-2 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) EX-3.9 11 AMENDED AND RESTATED TRUST AGREEMENT Amended and Restated Trust Agreement for Enterprise Capital Trust III among PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (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 ___________________________, ____ TABLE OF CONTENTS Page ---- ARTICLE I Defined Terms Section 1.01. Definitions........................................... 1 ARTICLE II Continuation of the Trust Section 2.01. Name.................................................. 9 Section 2.02. Office of the Delaware Trustee; Principal Place of Business..................................... 9 Section 2.03. Initial Contribution of Trust Property; Expenses of the Trust................................. 10 Section 2.04. Issuance of the Trust Securities...................... 10 Section 2.05. Purchase of Debentures................................ 11 Section 2.06. Declaration of Trust.................................. 11 Section 2.07. Authorization to Enter into Certain Transactions.......................................... 11 Section 2.08. Assets of Trust....................................... 15 Section 2.09. Title to Trust Property............................... 15 ARTICLE III Payment Account Section 3.01. Payment Account....................................... 15 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.................................... 19 Section 4.05. Tax Returns and Reports............................... 20 ARTICLE V Trust Securities Certificates Section 5.01. Initial Ownership..................................... 20 Section 5.02. The Trust Securities Certificates..................... 20 Section 5.03. Delivery of Trust Securities Certificates.......................................... 21 (i) Page ---- Section 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates..................... 21 Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates......................... 22 Section 5.06. Persons Deemed Securityholders........................ 22 Section 5.07. Access to List of Securityholders' Names and Addresses......................................... 22 Section 5.08. Maintenance of Office or Agency....................... 23 Section 5.09. Appointment of Paying Agent........................... 23 Section 5.10. No Transfer of Common Securities by Depositor............................................. 24 Section 5.11. Book-Entry Preferred Securities Certificates; Common Securities Certificate........................................... 24 Section 5.12. Definitive Preferred Securities Certificates.......................................... 24 Section 5.13. Rights of Securityholders............................. 25 ARTICLE VI Acts of Securityholders; Meetings; Voting Section 6.01. Limitations on Voting Rights.......................... 25 Section 6.02. Notice of Meetings.................................... 26 Section 6.03. Meetings of Preferred Securityholders................. 27 Section 6.04. Voting Rights......................................... 27 Section 6.05. Proxies, etc.......................................... 27 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............................... 28 Section 6.09. Inspection of Records................................. 29 ARTICLE VII The Trustees Section 7.01. Certain Duties and Responsibilities................... 29 Section 7.02. Notice of Defaults; Direct Action by Securityholders....................................... 30 Section 7.03. Certain Rights of Property Trustee.................... 31 Section 7.04. Not Responsible for Recitals or Issuance of Securities......................................... 32 Section 7.05. May Hold Securities................................... 32 Section 7.06. Compensation; Indemnity; Fees......................... 32 Section 7.07. Corporate Property Trustee Required; Eligibility of Trustees............................... 33 Section 7.08. Conflicting Interests................................. 34 Section 7.09. Co-Trustees and Separate Trustee...................... 34 (ii) Page ---- Section 7.10. Resignation and Removal; Appointment of Successor............................................. 36 Section 7.11. Acceptance of Appointment by Successor................ 37 Section 7.12. Merger, Conversion, Consolidation or Succession to Business................................ 38 Section 7.13. Preferential Collection of Claims Against Depositor or Trust.................................... 38 Section 7.14. Reports by Property Trustee........................... 38 Section 7.15. Reports to the Property Trustee....................... 38 Section 7.16. Evidence of Compliance with Conditions Precedent............................................. 39 Section 7.17. Statements Required in Officer's Certificate and Opinion of Counsel.................... 39 Section 7.18. Number of Trustees.................................... 39 Section 7.19. Delegation of Power................................... 40 Section 7.20. Voting................................................ 40 ARTICLE VIII Dissolution and Liquidation Section 8.01. Dissolution Upon Expiration Date...................... 40 Section 8.02. Early Dissolution..................................... 40 Section 8.03. Dissolution........................................... 41 Section 8.04. Liquidation........................................... 41 ARTICLE IX Mergers, Etc. Section 9.01. Mergers, Consolidations, Amalgamations or Replacements of the Trust............................. 43 ARTICLE X Miscellaneous Provisions Section 10.01. Limitation of Rights of Securityholders............... 44 Section 10.02. Amendment............................................. 44 Section 10.03. Severability.......................................... 46 Section 10.04. Governing Law......................................... 46 Section 10.05. Payments Due on Non-Business Day...................... 46 Section 10.06. Successors and Assigns................................ 46 Section 10.07. Headings.............................................. 46 Section 10.08. Reports, Notices and Demands.......................... 46 Section 10.09. Agreement Not to Petition............................. 47 Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act......................................... 47 Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture............................... 48 (iii) Enterprise Capital Trust III 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 ----------- ------- ss. 310(a)(1)............................................................. 7.07 (a)(2).............................................................. 7.07 (a)(3).............................................................. 7.09 (a)(4)....................................................... 2.07(a)(ii) (b)................................................................. 7.08 ss. 311(a)................................................................ 7.13 (b)................................................................. 7.13 ss. 312(a)................................................................ 5.07 (b)................................................................. 5.07 (c)................................................................. 5.07 ss. 313(a)................................................................ 7.14 (b)................................................................. 7.14 (c)................................................................. 7.14 (d)................................................................. 7.14 ss. 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 ss. 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 ss. 316(a)...................................................... Not Applicable (a)(1)(A)................................................. Not Applicable (a)(1)(B)................................................. Not Applicable (a)(2).................................................... Not Applicable (b)....................................................... Not Applicable (c)....................................................... Not Applicable ss. 317(a)(1)................................................... Not Applicable (a)(2).................................................... Not Applicable (b)................................................................. 5.09 ss. 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. (iv) AMENDED AND RESTATED TRUST AGREEMENT of Enterprise Capital Trust III (the "Trust"), dated as of _____________, ____ among (i) Public Service Enterprise Group Incorporated, 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, 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: 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 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: (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 2 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; or (iii) orders the liquidation of such Person. and in each case the order or decree remain s 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 established thereby 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 established thereby has delegated its authority, and in each case, delivered to the Trustees. "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. 3 "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 office of the Property Trustee located in the State of New 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, in its capacity as trustee under the 4 Indenture, or any successor thereto appointed in accordance with the terms and provisions of the Indenture. "Debentures" means the Depositor's _____% Deferrable Interest Subordinated Debentures, Series A, 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. ss. 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 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). "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 thereunder, 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. 5 "Indenture" means the Indenture, dated as of ___________, ____ between the Depositor and the Debenture Trustee, as trustee thereunder, 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 paid in accordance with the Indenture and (b) with respect to a distribution of Debentures to Holders of Trust Securities in connection with a dissolution 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 dissolution 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. "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: 6 (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 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 7 company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Security" means a __% Trust Originated Preferred Security 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 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. "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 9.01. "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 8 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. ARTICLE II Continuation of the Trust Section 2.01. Name. The Trust continued hereby shall be known as "Enterprise Capital Trust III" 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 One Rodney Square, 920 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. 9 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 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 _________ 10 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 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, 11 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; (E) to the extent provided in this Trust Agreement, terminating 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); 12 (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, terminating 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; (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 and exchanges 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), 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 13 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; (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 14 (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 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 shall 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. 15 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 ___________ in arrears on ___________________________________ 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"). 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 __________ period shall be computed on the basis of a 360-day year of twelve 30-day months. 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 Extension Period is equal to the aggregate amount of interest (including interest payable on unpaid interest at the rate per annum set forth above, compounded _____________) that accrues during any such Extension Period on the Debentures. (c) Distributions on the Trust Securities shall be made from the Payment Account by the Property Trustee or any 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. 16 (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 calendar __________, 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 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 Securities 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. 17 (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 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 is in the next succeeding 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 3% to the Common Securities and 97% 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 18 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 liquidation 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 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 or Liquidation Distribution of the Trust Securities shall be made in immediately available funds upon surrender of the Trust Securities 19 Certificate representing such Trust 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 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 Trust Securities. Trust 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 20 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 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. 21 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 Security Registrar 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. 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, the Paying Agent 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 and Holder of such Trust Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and neither the Trustees, the Paying Agent 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 22 Depositor shall furnish or cause to be furnished 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 (a) to the Property Trustee, _________ not later than 10 days prior to a Distribution 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 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 23 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 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 24 Securities Certificates or the Clearing Agency is no longer registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, and the Depositor is unable to locate a qualified successor within 90 days, (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 Book-Entry Preferred Securities Certificates by the Clearing Agency, accompanied by registration instructions, the Administrative Trustee shall execute 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 25 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 consent shall be required, without, in each case, obtaining the prior consent of the Holders of at least a majority in aggregate Liquidation Amount of all Outstanding Preferred Securities; provided, however, that where such consent under the Indenture would require the consent of each holder of Debentures affected thereby, no such consent 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 consent 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 dissolution or liquidation 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 aggregate 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 26 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 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 Preferred 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 Preferred 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. 27 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 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 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 Trust 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 28 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. 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 29 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 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 has failed 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 institute a legal proceeding directly against any Person to enforce the Property Trustee's rights under this Trust Agreement or the Indenture with respect to Debentures having a principal amount equal to the aggregate Liquidation Amount of the Preferred Securities of such Securityholder without first instituting a legal proceeding against the Property Trustee or any other Person. 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 has not been taken by the Property Trustee. Notwithstanding the foregoing, if a Debenture Event of Default relating to the 30 Depositor's failure to pay the principal of or interest on the Debentures has occurred and is continuing thereby resulting in an Event of Default hereunder, then each Holder of Preferred Securities may institute a legal proceeding directly against the Depositor for enforcement of payment to such Holder, 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 within the scope of such experts' area of expertise shall be full and complete authorization and protection in respect of any action 31 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 compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); 32 (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. (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 33 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. 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 34 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 a Debenture Event of Default 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. (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. 35 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 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 36 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 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 37 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). 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) 38 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. 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. 39 (c) The death, resignation, retiement, removal, bankruptcy, dissolution, termination, incompetence or incapacity to perform the duties of a Trustee shall not operate to dissolve, terminate or 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. ARTICLE VIII Dissolution and Liquidation Section 8.01. Dissolution Upon Expiration Date. Unless earlier dissolved, the Trust shall automatically dissolve on ________, 2051 (the "Expiration Date"). Section 8.02. Early Dissolution. The earliest to occur of any of the following events is an "Early Dissolution Event" upon the occurrence of which the Trust shall be dissolved: (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; 40 (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 dissolution of the Trust shall have been entered by a court of competent jurisdiction. The election of the Depositor pursuant to Section 8.02(b) 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. Dissolution. The respective obligations and responsibilities of the Trustees and the Trust 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 Dissolution Event specified in clause (a), (c) or (d) of Section 8.02 occurs or upon the Expiration Date, the 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 Dissolution 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; 41 (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 8.02(c) or 8.04(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 Securities 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 dissolution 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 dissolved, by the Property Trustee in such manner as the Property Trustee determines. In such event, on the date of the dissolution of the Trust, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to 42 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 dissolution, 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 dissolution 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 all Holders 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 as an entirety or substantially as an entirety to any Person, except as described below or under Article VIII. The Trust may, at the request of the Depositor, with the consent of the 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 the payment of 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 with respect to 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, (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, 43 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 similar 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 of the Preferred Securities, merge with or into, consolidate, amalgamate, or be replaced by, any other entity or permit any other entity 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 not to be classified as a grantor trust for United States Federal income tax purposes. ARTICLE X Miscellaneous Provisions Section 10.01. Limitation of Rights of Securityholders. The death, incapacity, bankruptcy, dissolution and termination of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement or dissolve, terminate or annul the Trust, 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 44 amended by the Trustees and the Depositor with the consent of Holders of at least a majority of the aggregate 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 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 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; (vi) change the conditions precedent for the Depositor to elect to dissolve the Trust and distribute the Debentures to Holders of Trust Securities as set forth in Section 8.02; or (vii) 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 this Trust Agreement, the Property Trustee shall be entitled to receive, and (subject to Section 7.01) 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, a Trustee may, but shall not be obligated to, enter into any amendment to this Trust Agreement 45 which affects such 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 to the date of payment on such succeeding day. 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 V 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 Enterprise Group Incorporated, 80 Park Plaza, Newark, New Jersey 07101, Attention: Treasurer, facsimile no.: (973) 596-6309. Such notice, demand or other communication to or upon a Securityholder or the Depositor shall be 46 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, 765 Broad Street, Newark, New Jersey 07101, Attention: Corporate Trust Office; (b) with respect to the Delaware Trustee, to One Rodney Square, 920 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 Enterprise Capital Trust III c/o Treasurer." Such notice, demand or other communication to or upon the Trust, the Delaware Trustee or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust, the Delaware Trustee 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 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 or Trustee, as applicable, 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 47 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 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 ENTERPRISE GROUP INCORPORATED, 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: Fred F. Saunders, as Administrative Trustee --------------------------------- 48 EXHIBIT A CERTIFICATE OF TRUST OF ENTERPRISE CAPITAL TRUST III THIS CERTIFICATE OF TRUST of Enterprise Capital Trust III (the "Trust"), dated as of December ___, 1997 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. ss. 3801 et seq.). (i) Name. The name of the business trust being formed hereby is Enterprise 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, One Rodney Square, 920 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 EXHIBIT B ------------- The Depository Trust Company 55 Water Street, 49th Floor New York, New York 10041-0099 Attention: General Counsel's Office Re: Enterprise Capital Trust III 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 Enterprise Capital Trust III _____% Trust Originated Preferred Securities (the "Preferred Securities"), of Enterprise Capital Trust III, a Delaware business trust (the "Issuer"), created pursuant to a Trust Agreement between Public Service Enterprise Group Incorporated ("Enterprise"), 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 Enterprise, to the extent the Issuer has funds available for the payment thereof and to the extent set forth in a Guarantee Agreement dated _____________, ____ by Enterprise 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 Enterprise 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: 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 B-1 "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 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 B-2 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 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: B-3 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 "Enterprise Capital Trust III _____% Trust Originated Preferred Securities". 8. Issuer or Agent shall provide automated notification of CUSIP-level detail for dividend payments to DTC no later than noon (Eastern Time) on the payment date. 9. Dividend payments shall be received by Cede & Co. as nominee of DTC, or its registered assigns in same-day funds or the equivalent no later than 2:30 p.m. (Eastern Time) on each payment date. Absent any other arrangements between Issuer or Trustee and DTC, such funds shall be wired as follows: The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Dividend Deposit Account 066-026776 Issuer or Agent shall provide dividend payment information to a standard announcement service subscribed to by DTC. In the unlikely event that no such service exists, Issuer agrees that it or Agent shall provide this information directly to DTC in advance of the dividend payment date as soon as the information is available. This information should be conveyed directly to DTC electronically. If electronic transmission is not available, such information should be sent by telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1886, and receipt of such notices shall be confirmed by telephoning (212) 709-1270. Notices to DTC pursuant to the above 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, NY 10004-2695 10. DTC shall receive maturity and redemption and CUSIP-level detail on the payable date in same-day funds by 2:30 p.m. (Eastern Time). Absent any other arrangements between Agent and DTC, such payments shall be wired as follows: B-4 The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Redemption Account 066-027306 in accordance with existing SDFS payment procedures in the manner set forth in DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously been furnished to Agent. 11. DTC shall receive all reorganization payments and CUSIP-level detail resulting from corporate actions (such as tender offers or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern Time). Absent any other arrangements between Agent and DTC, such payments shall be wired as follows: The Chase Manhattan Bank ABA 012000021 For credit to A/C The Depository Trust Company Reorganization Account 066-027608 12. 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. 13. 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. 14. 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 B-5 transfer reasonably requested by the Issuer or the Transfer Agent and Registrar. 15. 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. 16. Issuer: (a) understands that DTC has no obligation to, and will not, communicate to its Participants or to any person having an interest in the Securities any information contained in the Security certificate(s); and (b) acknowledges that neither DTC's Participants nor any person having an interest in the Securities shall be deemed to have notice of the provisions of the Security certificate(s) by virtue of submission of such certificate(s) to DTC. 17. 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. B-6 Nothing herein shall be deemed to require the Transfer Agent and Registrar to advance funds on behalf of the Issuer. Very truly yours, ENTERPRISE CAPITAL TRUST III (As Issuer) By: --------------------------- Name: Fred F. Saunders, as Administrative Trustee FIRST UNION NATIONAL BANK ------------------------------ (As Transfer Agent and Registrar) By: --------------------------- Name: Title: RECEIVED AND ACCEPTED: THE DEPOSITORY TRUST COMPANY By: --------------------------- Authorized Officer B-7 EXHIBIT C THIS CERTIFICATE IS NOT TRANSFERABLE Certificate Number C-1 Number of Common Securities ------- Certificate Evidencing Common Securities of Enterprise Capital Trust III _____% Common Securities (liquidation amount $25 per Common Security) Enterprise Capital Trust III, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Public Service Enterprise Group Incorporated (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. IN WITNESS WHEREOF, the Administrative Trustee of the Trust has executed this certificate this ____ day of __________, ____. ENTERPRISE CAPITAL TRUST III By: --------------------------- Name: Fred F. Saunders Administrative Trustee C-1 EXHIBIT D Certificate Number ----- Number of Preferred Securities CUSIP NO. __________ Certificate Evidencing Preferred Securities of Enterprise Capital Trust III _____% Trust Originated Preferred Securities (liquidation amount $25 per Preferred Security) Enterprise Capital Trust III, 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 Enterprise Capital Trust III _____% Trust Originated Preferred Securities (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 Enterprise Group Incorporated, a New Jersey corporation, and First Union National Bank as guarantee trustee, dated as of _____________, ____ (the "Guarantee") to the extent provided therein, together with the obligations of Public Service Enterprise Group Incorporated under the Trust Agreement, its Deferrable Interest Subordinated Debentures, Series A and the Indenture related to such Deferrable Interest Subordinated Debentures. The Trust will furnish a copy of the aforementioned agreements and instruments to the Holder without charge upon written request to the Trust at its principal place of business or registered office. D-1 Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. IN WITNESS WHEREOF, the Administrative Trustee of the Trust has executed this certificate this ____ day of __________, ----. ENTERPRISE CAPITAL TRUST III By: --------------------------- Name: Fred F. Saunders 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 previously 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 Enterprise Capital Trust III 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. D-2 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) EX-4.5 12 INDENTURE PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED and FIRST UNION NATIONAL BANK, as Trustee INDENTURE Dated as of ____________, 1998 Providing for the Issuance of Deferrable Interest Subordinated Debentures in Series including _____% Deferrable Interest Subordinated Debentures, Series A 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.................... 10 SECTION 2.03 Payment of Principal and Interest............................ 11 SECTION 2.04 Execution, Authentication and Delivery....................... 13 SECTION 2.05 Registrar and Paying Agent................................... 15 SECTION 2.06 Paying Agent to Hold Money in Trust.......................... 16 SECTION 2.07 Debentureholder Lists........................................ 16 SECTION 2.08 Transfer and Exchange........................................ 16 SECTION 2.09 Replacement Debentures....................................... 17 SECTION 2.10 Outstanding Debentures; Determinations of Holders' Action....................................................... 18 SECTION 2.11 Temporary Debentures......................................... 18 SECTION 2.12 Book-Entry System............................................ 19 SECTION 2.13 Cancellation................................................. 20 ARTICLE 3 REDEMPTION SECTION 3.01 Redemption: Notice to Trustee................................ 21 SECTION 3.02 Selection of Debentures to be Redeemed....................... 21 SECTION 3.03 Notice of Redemption......................................... 21 SECTION 3.04 Effect of Notice of Redemption............................... 22 SECTION 3.05 Deposit of Redemption Price.................................. 22 SECTION 3.06 Debentures Redeemed in Part.................................. 22 ARTICLE 4 COVENANTS SECTION 4.01 Payment of Debentures........................................ 23 SECTION 4.02 Prohibition Against Dividends................................ 24 SECTION 4.03 SEC Reports.................................................. 24 SECTION 4.04 Compliance Certificates...................................... 24 SECTION 4.05 Further Instruments and Acts................................. 25 SECTION 4.06 Payments for Consents........................................ 25 SECTION 4.07 Payment of Expenses of Trust I............................... 25 ARTICLE 5 SUCCESSOR CORPORATION SECTION 5.01 When the Company May Merge................................... 25 ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01 Events of Default............................................ 26 SECTION 6.02 Acceleration................................................. 27 SECTION 6.03 Other Remedies............................................... 28 SECTION 6.04 Waiver of Past Defaults...................................... 29 SECTION 6.05 Control by Majority.......................................... 29 SECTION 6.06 Limitation on Suits.......................................... 29 SECTION 6.07 Rights of Holders to Receive Payment......................... 30 SECTION 6.08 Collection Suit by the Trustee............................... 30 SECTION 6.09 The Trustee May File Proofs of Claim......................... 30 SECTION 6.10 Priorities................................................... 31 SECTION 6.11 Undertaking for Costs........................................ 31 SECTION 6.12 Waiver of Stay............................................... 32 ARTICLE 7 THE TRUSTEE SECTION 7.01 Duties of the Trustee........................................ 32 SECTION 7.02 Rights of the Trustee........................................ 33 SECTION 7.03 Individual Rights of the Trustee............................. 34 SECTION 7.04 The Trustee's Disclaimer..................................... 34 SECTION 7.05 Notice of Defaults........................................... 34 SECTION 7.06 Reports by Trustee to Holders................................ 35 SECTION 7.07 Compensation and Indemnity................................... 35 SECTION 7.08 Replacement of Trustee....................................... 36 SECTION 7.09 Successor Trustee by Merger.................................. 37 SECTION 7.10 Eligibility: Disqualification................................ 37 SECTION 7.11 Preferential Collection of Claims Against the Company........ 37 ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONEYS SECTION 8.01 Satisfaction and Discharge of Indenture...................... 37 SECTION 8.02 Application by Trustee of Funds Deposited for Payment of Debentures................................................ 39 SECTION 8.03 Repayment of Moneys Held by Paying Agent..................... 39 SECTION 8.04 Return of Moneys Held by the Trustee and Paying Agent Unclaimed for Three Years.................................... 39 ARTICLE 9 AMENDMENTS SECTION 9.01 Without Consent of Holders................................... 39 SECTION 9.02 With Consent of Holders...................................... 40 SECTION 9.03 Compliance with Trust Indenture Act.......................... 41 SECTION 9.04 Revocation and Effect of Consents; Waivers and Actions....... 41 SECTION 9.05 Notation on or Exchange of Debentures........................ 42 SECTION 9.06 Trustee to Execute Supplemental Indentures................... 42 SECTION 9.07 Effect of Supplemental Indentures............................ 42 ARTICLE 10 SUBORDINATION SECTION 10.01 Debentures Subordinated to Senior Indebtedness............... 42 SECTION 10.02 Priority and Payment of Proceeds in Certain Events: Remedies Standstill.......................................... 43 SECTION 10.03 Payments which May Be Made Prior to Notice................... 44 SECTION 10.04 Rights of Holders of Senior Indebtedness Not to Be Impaired..................................................... 44 SECTION 10.05 Trustee May Take Action to Effectuate Subordination.......... 45 SECTION 10.06 Subrogation.................................................. 45 SECTION 10.07 Obligations of Company Unconditional; Reinstatement.......... 45 SECTION 10.08 Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice............................................ 46 SECTION 10.09 Right of Trustee to Hold Senior Indebtedness................. 47 ARTICLE 11 MISCELLANEOUS SECTION 11.01 Trust Indenture Act Controls................................. 47 SECTION 11.02 Notices...................................................... 47 SECTION 11.03 Communication by Holders with Other Holders.................. 48 SECTION 11.04 Certificate and Opinion as to Conditions Precedent........... 48 SECTION 11.05 Statements Required in Certificate or Opinion................ 48 SECTION 11.06 Severability Clause.......................................... 49 SECTION 11.07 Rules by Trustee, Paying Agent and Registrar................. 49 SECTION 11.08 Legal Holidays............................................... 49 SECTION 11.09 Governing Law................................................ 49 SECTION 11.10 No Recourse Against Others................................... 50 SECTION 11.11 Successors................................................... 50 SECTION 11.12 Multiple Original Copies of this Indenture................... 50 SECTION 11.13 No Adverse Interpretation of Other Agreements................ 50 SECTION 11.14 Table of Contents; Headings.................................. 50 SECTION 11.15 Benefits of the Indenture.................................... 50 Enterprise Indenture Certain Sections of this Indenture relating to Sections 310 through 318 of the Trust Indenture Act of 1939 Trust Indenture Indenture Act Section Section ----------- ------- ss.310(a)(1) . . . . . . . . . . . . . . . 7.10 (a)(2) . . . . . . . . . . . . . . . 7.10 (a)(3) . . . . . . . . . . . . . . . Not Applicable (a)(4) . . . . . . . . . . . . . . . Not Applicable (a)(5) . . . . . . . . . . . . . . . Not Applicable (b) . . . . . . . . . . . . . . . 7.08; 7.10; 11.01 (c) . . . . . . . . . . . . . . . Not Applicable ss.311(a) . . . . . . . . . . . . . . . 7.11 (b) . . . . . . . . . . . . . . . 7.11 (c) . . . . . . . . . . . . . . . Not Applicable ss.312(a) . . . . . . . . . . . . . . . 2.07 (b) . . . . . . . . . . . . . . . 11.03 (c) . . . . . . . . . . . . . . . 11.03 ss.313(a) . . . . . . . . . . . . . . . 7.06 (b)(1) . . . . . . . . . . . . . . . Not Applicable (b)(2) . . . . . . . . . . . . . . . 7.06 (c) . . . . . . . . . . . . . . . 7.06; 11.02 (d) . . . . . . . . . . . . . . . 7.06 ss.314(a) . . . . . . . . . . . . . . . 4.03; 11.02 (b) . . . . . . . . . . . . . . . Not Applicable (c)(1) . . . . . . . . . . . . . . . 2.02; 11.04; 11.05 (c)(2) . . . . . . . . . . . . . . . 2.02; 11.04; 11.05 (c)(3) . . . . . . . . . . . . . . . Not Applicable (d) . . . . . . . . . . . . . . . Not Applicable (e) . . . . . . . . . . . . . . . 11.05 (f) . . . . . . . . . . . . . . . Not Applicable ss.315(a) . . . . . . . . . . . . . . . 7.01(b) (b) . . . . . . . . . . . . . . . 7.05, 11.02 (c) . . . . . . . . . . . . . . . 7.01(a) (d) . . . . . . . . . . . . . . . 7.01(c) (e) . . . . . . . . . . . . . . . 6.11 ss.316(a)(1)(A) . . . . . . . . . . . . . . . 6.05 (a)(1)(B) . . . . . . . . . . . . . . . 6.04 (a)(2) . . . . . . . . . . . . . . . Not Applicable (a)(last sentence) . . . . . . . . . . . . . . . 2.10 (b) . . . . . . . . . . . . . . . 6.07 (c) . . . . . . . . . . . . . . . 1.05 ss.317(a)(1) . . . . . . . . . . . . . . . 6.08 (a)(2) . . . . . . . . . . . . . . . 6.09 (b) . . . . . . . . . . . . . . . 2.06 ss.318(a) . . . . . . . . . . . . . . . 11.01 (b) . . . . . . . . . . . . . . . Not Applicable (c) . . . . . . . . . . . . . . . 11.01 - ---------- Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to be a part of the Indenture. INDENTURE, dated as of ____________, 1998 by and between Public Service Enterprise Group Incorporated, 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 ____________, 1998 (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 Enterprise Capital Trust I, a Delaware business trust ("Trust I"). WHEREAS, Trust I intends to issue its Trust Securities, including its ____% Trust Originated Preferred Securities representing undivided beneficial interests in the assets of Trust I, 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 from the issuance and sale 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 securities issued hereunder, 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: 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 Enterprise Group Incorporated, 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. "Debentures" shall mean any of the securities of any series issued, authenticated and delivered under this Indenture. 2 "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 applicable 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 pari passu with 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 "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 Trust Originated 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 "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 Debentures of such series entitled to vote, consent, make a request or exercise any other right associated with such Debentures. "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 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 issued by the Company with respect to the Series A Preferred Securities, in which the Company irrevocably and unconditionally agrees to pay the Guarantee Payments (as defined in the Series A Guarantee Agreement) to the holders of 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 per security and having rights provided therefor in the Trust I Agreement. "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. 5 "Stated Maturity Date", with respect to any Debenture, means the date specified for such Debenture as the fixed date on which the principal of such Debenture 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 from the sale thereof to purchase Debentures. "Trust I" means Enterprise 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. ss. 3801, et seq. "Trust I Agreement" means the Amended and Restated Trust Agreement dated as of ____________, 1998 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. "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 6 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. "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. 7 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, as applicable, 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. (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 8 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 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, 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; 9 (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) the maximum duration of the Extension Period; (g) Issue Date or Dates and interest accrual provisions; (h) authorized denominations; (i) the place or places for the payment of principal (and premium, if any) and interest; (j) the aggregate principal amount of Debentures of such series which may be issued; (k) the optional and mandatory redemption provisions, if any; (l) provisions, if any, for any sinking or analogous fund; and (m) 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. 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 Enterprise Group Incorporated, ____% 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 10 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 _____________, 2047. (d) The interest rate of the Series __ Debentures is ____% per annum. The Interest Payment Dates for the Series __ Debentures are _______________, _______________________ of each year, commencing March 31, 1998. 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 calendar 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 immediately 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 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. 11 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 however, that (1) 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 available funds to the bank account number of such Holder specified in such request and entered on the Register by the Registrar and (2) payments made in respect of global Debentures shall be made in immediately available funds to the Depositary. 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 12 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 Holders 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. 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. 13 (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 Debentures; (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 a supplemental indenture 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: (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. 14 (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. 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 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 15 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 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 as 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. 16 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 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) and shall be entitled to all benefits of this Indenture equally and ratably with any and all other Debentures duly issued hereunder. 17 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 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. 18 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 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 19 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 indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Debentures to the Persons in whose names such Debentures are so registered. Except as provided above, owners 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. ARTICLE 3 REDEMPTION 20 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; (2) the Redemption Price; (3) the name and address of the Paying Agent; 21 (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. 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 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. 22 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 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) 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 become 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 no Event of Default with respect to such series of Debentures has 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 Extension 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 such Debentures). Prior to the termination of an Extension Period, the Company may shorten or may further extend the interest payment period for such series of Debentures, provided that such Extension Period together with all such previous and further extensions may not exceed the maximum duration of the Extension Period for such series of Debentures 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 the date payment of interest on such Debentures is required to 23 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 election to begin an Extension 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 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. 24 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 obligations, 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. 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 25 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: (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; 26 (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; (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 27 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 has, or the Holders of at least 25% in aggregate principal amount of the Debentures of that series have, failed 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. 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. Upon such an acceleration, 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 Securities of that Trust. No such rescission shall affect any subsequent Default or impair any right consequent thereto. 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. 28 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 aggregate liquidation amount of 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 of 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 aggregate 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 of (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 Holder of Debentures or holder 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 of Debentures or the holders of such Preferred Securities give to the Trustee written notice stating that an Event of Default with respect to the corresponding Debentures is continuing; (2) the Holders of at least 25% in aggregate 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; 29 (3) the Holders of Debentures 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 at least a majority in aggregate 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. 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 the principal of 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 such Holder. If the Debentures of a series are then held by a Trust, each holder of Preferred Securities of such Trust shall have the right to bring suit directly against the Company for the enforcement of payment to such holder in respect of Debentures of such series in 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: 30 (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, 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. Except as otherwise set forth in the Debentures, 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 31 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 of Debentures or holder of Preferred Securities pursuant to Section 6.07 hereof or a suit by Holders of Debentures 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 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 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. 32 (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. (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. 33 (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. 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 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. 34 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 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 willful misconduct 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 or premium, if any, or interest on particular Debentures pursuant to Section 2.06 or Section 8.01 hereof. 35 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. 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 acting. 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. 36 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. 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: 37 (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; (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, if the Debentures of such series are held by a Trust, such 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. 38 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 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; 39 (3) to provide for uncertificated Debentures in addition to or in place of certificated Debentures; (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 any 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 this 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 40 series or compliance with any covenant under this Indenture shall be effective, without the prior consent of the holders of at least a majority of the aggregate liquidation amount of the outstanding Preferred Securities of that Trust or the holder of each such Preferred Security, as applicable. 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 of Debentures or holders of Preferred Securities 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. 41 The Company may, but shall not be obligated to, fix a Record Date for the purpose of determining the Persons 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, only Holders of Debentures or holders of Preferred Securities, as applicable, on 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 such 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. 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 and, by their acceptance thereof, 42 the Holders of the Debentures (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, at 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, from holders of Senior Indebtedness or from any trustee, representative or agent therefor, or (ii) any other default affecting Senior Indebtedness as a result of which the maturity of Senior Indebtedness has been accelerated and the Trustee has received written notice from the Company, from holders of Senior Indebtedness or from any trustee, representative or agent therefor, and such default shall not have been cured or waived by or on behalf of the holders of such Senior Indebtedness. (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 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. 43 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. 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. 44 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. 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 or any Holder of Debentures or holder of Preferred Securities, as applicable, 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 45 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 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, representative 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 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 responsible Trust Officer in the Corporate Trust 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 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, representative or agent on behalf of such holder) to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee, representative or agent on behalf of any such holder. The Trustee shall not be 46 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: if to the Company: Public Service Enterprise Group Incorporated 80 Park Plaza P.O. Box 1171 Newark, New Jersey 07101 Facsimile No.: (973) 596-6309 Attention: Treasurer if to the Trustee: First Union National Bank 765 Broad Street Newark, New Jersey 07101 Facsimile No.: (973) 430-4963 Attention: Corporate Trust Department 47 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). 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; 48 (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. 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. 49 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. 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 otherwise expressly provided herein with respect to holders of Senior Indebtedness and 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. 50 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 ENTERPRISE GROUP INCORPORATED By: ____________________________________ Name: __________________________________ Title: _________________________________ FIRST UNION NATIONAL BANK, as Trustee By: ____________________________________ Name: __________________________________ Title: _________________________________ 51 Exhibit A PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED ___% Deferrable Interest Subordinated Debenture, Series A No. __ Public Service Enterprise Group Incorporated, 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 Enterprise Capital Trust I or registered assigns, the principal sum of $___________ Dollars on _____________, 2047 and to pay interest on said principal sum from _____________, 1998 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 March 31, 1998 (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. 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 calendar quarter, provided that if all of the Series A Debentures (as defined below) are then held by Enterprise 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 immediately 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 A Debentures not less than 7 calendar days prior to such Special Record Date, as more fully provided in the Indenture. 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 A-1 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 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 ____________, 1998 (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 ____% Trust Originated Preferred Securities (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 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 _____________, 2003 in whole or in part, and (ii) if a A-2 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 the Trust) 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" shall mean 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 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. 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 A-3 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 no Event of Default with respect to the Series A Debentures has 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 Extension Period and upon the payment of all amounts then due, the Company may elect to begin a new Extension Period, subject to the foregoing restrictions. 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 in form satisfactory to the Registrar duly executed by A-4 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 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 ENTERPRISE GROUP INCORPORATED By ____________________________________ [SEAL] Name: __________________________________ Title: _________________________________ Attest: ____________________________________ (Assistant) Secretary A-6 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 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 EX-4.6 13 EXHIBIT 4.6 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED and FIRST UNION NATIONAL BANK, as Trustee _____ SUPPLEMENTAL INDENTURE Dated as of _________________ to INDENTURE Dated as of ____________ __% Deferrable Interest Subordinated Debentures, Series __ TABLE OF CONTENTS
Page ARTICLE 1 DEFINITIONS.......................................................................................... 2 1.01 Definitions...................................................................................... 2 ARTICLE 2 THE SERIES __ DEBENTURES............................................................................. 2 2.01 Terms and Form of the Series __ Debentures....................................................... 3 ARTICLE 3 REDEMPTION........................................................................................... 4 3.01 Redemption; Notice to Trustee.................................................................... 4 ARTICLE 4 COVENANT............................................................................................. 4 ARTICLE 5 MISCELLANEOUS........................................................................................ 5 5.01 Confirmation of Indenture........................................................................ 5 5.02 Notices.......................................................................................... 5 5.03 Severability Clause.............................................................................. 6 5.04 No Recourse Against Others....................................................................... 6 5.05 Successors....................................................................................... 6 5.06 Multiple Original Copies of this Indenture....................................................... 6 5.07 Table of Contents; Headings, Etc................................................................. 6
_____ SUPPLEMENTAL INDENTURE, dated as of _________________ by and between Public Service Enterprise Group Incorporated, 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 Enterprise Capital Trust ___, a Delaware business trust ("Trust ____"). WHEREAS, Trust ____ intends to issue its Trust Securities (as defined in the Trust ____ Agreement), including its ____% Trust 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: 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 Enterprise 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, First 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. ARTICLE 2 THE SERIES __ DEBENTURES SECTION 2.01 Terms and Form of the Series __ Debentures. (a) The Series __ Debentures shall be designated "Public Service Enterprise Group Incorporated __% Deferrable Interest Subordinated Debentures, Series __." The Series __ Debentures and the Trustee's Certificate of Authentication shall be 2 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 _________ _____________________________________ 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 _______, 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 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. 3 (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. 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. 4 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 Enterprise Group Incorporated 80 Park Plaza Newark, New Jersey 07101 Facsimile No. (973) 596-6309 Attention: Treasurer if to the Trustee: First Union National Bank 765 Broad Street Newark, New Jersey 07101 Facsimile No. (973) 430-4963 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 Trust __ 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. 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. 5 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 _____ 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 _____ 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 _____ 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 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 ENTERPRISE GROUP INCORPORATED By:__________________________________ Name:________________________________ Title:_________________________________ FIRST UNION NATIONAL BANK, as Trustee By:__________________________________ Name:________________________________ Title:_________________________________ 7 Exhibit A PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED __% Deferrable Interest Subordinated Debenture, Series __ No. ___ Public Service Enterprise Group Incorporated, 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, in arrears on _______________________________________________, 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 _______, provided that if all of the Series __ Debentures (as defined below) are then held by Enterprise 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 seven days prior to such Special Record Date, as more fully provided in the Indenture. A-1 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 ________, ____ 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 Trust Preferred Securities, Series __ (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 A-2 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 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. A-3 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 _________, 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 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 Extension Period and upon the payment of all amounts then due, the Company may elect to begin a new Extension 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 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 A-4 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 ENTERPRISE GROUP INCORPORATED By:________________________________ [SEAL] Name: Title: Attest: - -------------------------------- [Assistant] Secretary A-5 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 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 EX-4.7 14 GUARANTEE AGREEMENT ================================================================================ Guarantee Agreement between PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (as Guarantor) and FIRST UNION NATIONAL BANK (as Guarantee Trustee) Dated as of __________, 1998 ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS SECTION 1.01. Definitions................................................... 1 ARTICLE II TRUST INDENTURE ACT SECTION 2.01. Trust Indenture Act; Application.............................. 3 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.............. 4 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.................... 5 SECTION 3.02. Certain Rights of Guarantee Trustee........................... 7 SECTION 3.03. Indemnity..................................................... 8 ARTICLE IV GUARANTEE TRUSTEE SECTION 4.01. Guarantee Trustee; Eligibility................................ 9 SECTION 4.02. Appointment, Removal and Resignation of the Guarantee Trustee............................................. 9 ARTICLE V GUARANTEE SECTION 5.01. Guarantee..................................................... 10 SECTION 5.02. Waiver of Notice and Demand................................... 10 SECTION 5.03. Obligations Not Affected...................................... 10 SECTION 5.04. Rights of Holders............................................. 11 SECTION 5.05. Guarantee of Payment.......................................... 12 (i) Page ---- SECTION 5.06. Subrogation................................................... 12 SECTION 5.07. Independent Obligations....................................... 12 ARTICLE VI COVENANTS AND SUBORDINATION SECTION 6.01. Subordination................................................. 12 SECTION 6.02. Pari Passu Guarantees......................................... 12 ARTICLE VII TERMINATION SECTION 7.01. Termination................................................... 13 ARTICLE VIII MISCELLANEOUS SECTION 8.01. Successors and Assigns........................................ 13 SECTION 8.02. Amendments.................................................... 13 SECTION 8.03. Notices....................................................... 13 SECTION 8.04. Benefit....................................................... 14 SECTION 8.05. Interpretation................................................ 14 SECTION 8.06. Governing Law................................................. 15 (ii) CROSS-REFERENCE TABLE* Section of Section of Trust Indenture Act Guarantee of 1939, as amended Agreement - ------------------- --------- 310(a)......................................................... 4.01(a) 310(b)......................................................... 4.01(c), 2.08 310(c)......................................................... Inapplicable 311(a)......................................................... 2.02(b) 311(b)......................................................... 2.02(b) 311(c)......................................................... Inapplicable 312(a)......................................................... 2.02(a) 312(b)......................................................... 2.02(b) 313 ........................................................ 2.03 314(a)......................................................... 2.04 314(b)......................................................... Inapplicable 314(c)......................................................... 2.05 314(d)......................................................... Inapplicable 314(e).........................................................1.01, 2.05, 3.02 314(f) ....................................................... 2.01, 3.02 315(a)......................................................... 3.01(d) 315(b)......................................................... 2.07 315(c)......................................................... 3.01 315(d)......................................................... 3.01(d) 316(a).........................................................1.01, 2.06, 5.04 316(b)......................................................... 5.03 316(c)......................................................... 8.02 317(a)......................................................... Inapplicable 317(b)......................................................... Inapplicable 318(a)......................................................... 2.01(b) 318(b)......................................................... 2.01 318(c)......................................................... 2.01(a) - ------------------------ * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. (iii) GUARANTEE AGREEMENT This GUARANTEE AGREEMENT, dated as of _______, 1998, is executed and delivered by Public Service Enterprise Group Incorporated, 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 Enterprise Capital Trust I, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Trust Agreement for Enterprise Capital Trust I (the "Trust Agreement"), dated as of _______, 1998 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 ___% Trust Originated Preferred Securities (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, have the following meaning. Each capitalized or otherwise defined term used but not otherwise defined herein shall have the meaning assigned to such terms in the 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 common 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, without duplication, with respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer pursuant to the Trust Agreement or by the Guarantor pursuant to the Indenture: (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 and 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 upon a termination and 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 "Indenture" means the Indenture dated as of ______, 1998, as amended or supplemented from time to time, between Public Service Enterprise Group Incorporated and First Union National Bank, as trustee thereunder. "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. 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. 3 (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 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; 4 (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 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 5 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. (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 6 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 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. 7 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 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 willful misconduct on the part of the Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the 8 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. 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. (b) The Guarantee Trustee shall not be removed until a new, eligible guarantee trustee has been appointed (a "Successor Guarantee Trustee") and has accepted such 9 appointment and assumed the applicable obligations hereunder by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.02 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. 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: 10 (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 this Guarantee Agreement; and (iv) any Holder may institute a legal proceeding 11 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 or on behalf of the Issuer pursuant to the Trust Agreement or by the Guarantor pursuant to the Indenture) 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 shall constitute an unsecured obligation of the Guarantor and shall 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 of Trust Preferred Securities issued by Enterprise Capital Trust II and Enterprise Capital Trust III. 12 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 VIII 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 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: 13 (a) if given to the Guarantor, to the address set forth below or such other address as the Guarantor may give notice of to the Holders: Public Service Enterprise Group Incorporated 80 Park Plaza P.O. Box 1171 Newark, NJ 07101 Facsimile No: (973) 596-6309 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: Enterprise Capital Trust I 80 Park Plaza Newark, NJ 07101 Facsimile No: (973) 596-6309 Attention: Treasurer with a copy to: First Union National Bank 765 Broad Street Newark, NJ 07101 Facsimile No: (973) 430-4963 Attention: Corporate Trust Department (c) if given to any Holder, at the address set forth in the Securities Register. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 8.04. Benefit. This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Preferred Securities. SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the context otherwise requires: 14 (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. 15 THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED, as Guarantor By: ---------------------------------------- Name: Title: FIRST UNION NATIONAL BANK, as Guarantee Trustee By: ---------------------------------------- Name: Title: 16 EX-4.8 15 GUARANTEE AGREEMENT ================================================================================ Guarantee Agreement between PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (as Guarantor) and FIRST UNION NATIONAL BANK (as Guarantee Trustee) Dated as of __________, ____ ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS SECTION 1.01. Definitions................................................... 1 ARTICLE II TRUST INDENTURE ACT SECTION 2.01. Trust Indenture Act; Application.............................. 3 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.............. 4 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.................... 5 SECTION 3.02. Certain Rights of Guarantee Trustee........................... 7 SECTION 3.03. Indemnity..................................................... 8 ARTICLE IV GUARANTEE TRUSTEE SECTION 4.01. Guarantee Trustee; Eligibility................................ 9 SECTION 4.02. Appointment, Removal and Resignation of the Guarantee Trustee............................................. 9 ARTICLE V GUARANTEE SECTION 5.01. Guarantee..................................................... 10 SECTION 5.02. Waiver of Notice and Demand................................... 10 SECTION 5.03. Obligations Not Affected...................................... 10 SECTION 5.04. Rights of Holders............................................. 11 SECTION 5.05. Guarantee of Payment.......................................... 12 (i) Page ---- SECTION 5.06. Subrogation................................................... 12 SECTION 5.07. Independent Obligations....................................... 12 ARTICLE VI COVENANTS AND SUBORDINATION SECTION 6.01. Subordination................................................. 12 SECTION 6.02. Pari Passu Guarantees......................................... 12 ARTICLE VII TERMINATION SECTION 7.01. Termination................................................... 13 ARTICLE VIII MISCELLANEOUS SECTION 8.01. Successors and Assigns........................................ 13 SECTION 8.02. Amendments.................................................... 13 SECTION 8.03. Notices....................................................... 13 SECTION 8.04. Benefit....................................................... 14 SECTION 8.05. Interpretation................................................ 14 SECTION 8.06. Governing Law................................................. 15 (ii) CROSS-REFERENCE TABLE* Section of Section of Trust Indenture Act Guarantee of 1939, as amended Agreement - ------------------- --------- 310(a)......................................................... 4.01(a) 310(b)......................................................... 4.01(c), 2.08 310(c)......................................................... Inapplicable 311(a)......................................................... 2.02(b) 311(b)......................................................... 2.02(b) 311(c)......................................................... Inapplicable 312(a)......................................................... 2.02(a) 312(b)......................................................... 2.02(b) 313 ........................................................ 2.03 314(a)......................................................... 2.04 314(b)......................................................... Inapplicable 314(c)......................................................... 2.05 314(d)......................................................... Inapplicable 314(e).........................................................1.01, 2.05, 3.02 314(f) ....................................................... 2.01, 3.02 315(a)......................................................... 3.01(d) 315(b)......................................................... 2.07 315(c)......................................................... 3.01 315(d)......................................................... 3.01(d) 316(a).........................................................1.01, 2.06, 5.04 316(b)......................................................... 5.03 316(c)......................................................... 8.02 317(a)......................................................... Inapplicable 317(b)......................................................... Inapplicable 318(a)......................................................... 2.01(b) 318(b)......................................................... 2.01 318(c)......................................................... 2.01(a) - ------------------------ * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. (iii) GUARANTEE AGREEMENT This GUARANTEE AGREEMENT, dated as of _______, ____, is executed and delivered by Public Service Enterprise Group Incorporated, 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 Enterprise Capital Trust II, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Trust Agreement for Enterprise Capital Trust II (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 ___% Trust Originated Preferred Securities (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, have the following meaning. Each capitalized or otherwise defined term used but not otherwise defined herein shall have the meaning assigned to such terms in the 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 common 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, without duplication, with respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer pursuant to the Trust Agreement or by the Guarantor pursuant to the Indenture: (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 and 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 upon a termination and 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 "Indenture" means the Indenture dated as of ______, ____, as amended or supplemented from time to time, between Public Service Enterprise Group Incorporated and First Union National Bank, as trustee thereunder. "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. 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. 3 (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 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; 4 (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 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 5 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. (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 6 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 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. 7 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 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 willful misconduct on the part of the Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the 8 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. 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. (b) The Guarantee Trustee shall not be removed until a new, eligible guarantee trustee has been appointed (a "Successor Guarantee Trustee") and has accepted such 9 appointment and assumed the applicable obligations hereunder by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.02 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. 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: 10 (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 this Guarantee Agreement; and (iv) any Holder may institute a legal proceeding 11 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 or on behalf of the Issuer pursuant to the Trust Agreement or by the Guarantor pursuant to the Indenture) 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 shall constitute an unsecured obligation of the Guarantor and shall 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 of Trust Preferred Securities issued by Enterprise Capital Trust I and Enterprise Capital Trust III. 12 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 VIII 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 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: 13 (a) if given to the Guarantor, to the address set forth below or such other address as the Guarantor may give notice of to the Holders: Public Service Enterprise Group Incorporated 80 Park Plaza P.O. Box 1171 Newark, NJ 07101 Facsimile No: (973) 596-6309 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: Enterprise Capital Trust II 80 Park Plaza Newark, NJ 07101 Facsimile No: (973) 596-6309 Attention: Treasurer with a copy to: First Union National Bank 765 Broad Street Newark, NJ 07101 Facsimile No: (973) 430-4963 Attention: Corporate Trust Department (c) if given to any Holder, at the address set forth in the Securities Register. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 8.04. Benefit. This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Preferred Securities. SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the context otherwise requires: 14 (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. 15 THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED, as Guarantor By: ------------------------------------------ Name: Title: FIRST UNION NATIONAL BANK, as Guarantee Trustee By: ------------------------------------------ Name: Title: 16 EX-4.9 16 GUARANTEE AGREEMENT ================================================================================ Guarantee Agreement between PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (as Guarantor) and FIRST UNION NATIONAL BANK (as Guarantee Trustee) Dated as of ____________, ______ ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS SECTION 1.01. Definitions................................................ 1 ARTICLE II TRUST INDENTURE ACT SECTION 2.01. Trust Indenture Act; Application........................... 3 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........... 4 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................. 5 SECTION 3.02. Certain Rights of Guarantee Trustee........................ 7 SECTION 3.03. Indemnity.................................................. 8 ARTICLE IV GUARANTEE TRUSTEE SECTION 4.01. Guarantee Trustee; Eligibility............................. 9 SECTION 4.02. Appointment, Removal and Resignation of the Guarantee Trustee.......................................... 9 ARTICLE V GUARANTEE SECTION 5.01. Guarantee.................................................. 10 SECTION 5.02. Waiver of Notice and Demand................................ 10 SECTION 5.03. Obligations Not Affected................................... 10 SECTION 5.04. Rights of Holders.......................................... 11 SECTION 5.05. Guarantee of Payment....................................... 12 (i) Page ---- SECTION 5.06. Subrogation................................................ 12 SECTION 5.07. Independent Obligations.................................... 12 ARTICLE VI COVENANTS AND SUBORDINATION SECTION 6.01. Subordination.............................................. 12 SECTION 6.02. Pari Passu Guarantees...................................... 12 ARTICLE VII TERMINATION SECTION 7.01. Termination................................................ 13 ARTICLE VIII MISCELLANEOUS SECTION 8.01. Successors and Assigns..................................... 13 SECTION 8.02. Amendments................................................. 13 SECTION 8.03. Notices.................................................... 13 SECTION 8.04. Benefit.................................................... 14 SECTION 8.05. Interpretation............................................. 14 SECTION 8.06. Governing Law.............................................. 15 (ii) CROSS-REFERENCE TABLE* Section of Section of Trust Indenture Act Guarantee of 1939, as amended Agreement - ------------------- --------- 310(a)..................................................... 4.01(a) 310(b)..................................................... 4.01(c), 2.08 310(c)..................................................... Inapplicable 311(a)..................................................... 2.02(b) 311(b)..................................................... 2.02(b) 311(c)..................................................... Inapplicable 312(a)..................................................... 2.02(a) 312(b)..................................................... 2.02(b) 313 .................................................... 2.03 314(a)..................................................... 2.04 314(b)..................................................... Inapplicable 314(c)..................................................... 2.05 314(d)..................................................... Inapplicable 314(e)..................................................... 1.01, 2.05, 3.02 314(f) ................................................... 2.01, 3.02 315(a)..................................................... 3.01(d) 315(b)..................................................... 2.07 315(c)..................................................... 3.01 315(d)..................................................... 3.01(d) 316(a)..................................................... 1.01, 2.06, 5.04 316(b)..................................................... 5.03 316(c)..................................................... 8.02 317(a)..................................................... Inapplicable 317(b)..................................................... Inapplicable 318(a)..................................................... 2.01(b) 318(b)..................................................... 2.01 318(c)..................................................... 2.01(a) - ---------- * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. (iii) GUARANTEE AGREEMENT This GUARANTEE AGREEMENT, dated as of _______, ____, is executed and delivered by Public Service Enterprise Group Incorporated, 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 Enterprise Capital Trust III, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Trust Agreement for Enterprise Capital Trust III (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 ___% Trust Originated Preferred Securities (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, have the following meaning. Each capitalized or otherwise defined term used but not otherwise defined herein shall have the meaning assigned to such terms in the 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 common 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, without duplication, with respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer pursuant to the Trust Agreement or by the Guarantor pursuant to the Indenture: (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 and 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 upon a termination and 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 "Indenture" means the Indenture dated as of ______, ____, as amended or supplemented from time to time, between Public Service Enterprise Group Incorporated and First Union National Bank, as trustee thereunder. "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. 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. 3 (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 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; 4 (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 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 5 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. (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 6 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 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. 7 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 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 willful misconduct on the part of the Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the 8 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. 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. (b) The Guarantee Trustee shall not be removed until a new, eligible guarantee trustee has been appointed (a "Successor Guarantee Trustee") and has accepted such 9 appointment and assumed the applicable obligations hereunder by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.02 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. 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: 10 (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 this Guarantee Agreement; and (iv) any Holder may institute a legal proceeding 11 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 or on behalf of the Issuer pursuant to the Trust Agreement or by the Guarantor pursuant to the Indenture) 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 shall constitute an unsecured obligation of the Guarantor and shall 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 of Trust Preferred Securities issued by Enterprise Capital Trust I and Enterprise Capital Trust II. 12 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 VIII 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 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: 13 (a) if given to the Guarantor, to the address set forth below or such other address as the Guarantor may give notice of to the Holders: Public Service Enterprise Group Incorporated 80 Park Plaza P.O. Box 1171 Newark, NJ 07101 Facsimile No: (973) 596-6309 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: Enterprise Capital Trust III 80 Park Plaza Newark, NJ 07101 Facsimile No: (973) 596-6309 Attention: Treasurer with a copy to: First Union National Bank 765 Broad Street Newark, NJ 07101 Facsimile No: (973) 430-4963 Attention: Corporate Trust Department (c) if given to any Holder, at the address set forth in the Securities Register. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 8.04. Benefit. This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Preferred Securities. SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the context otherwise requires: 14 (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. 15 THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED, as Guarantor By: _______________________________________ Name: Title: FIRST UNION NATIONAL BANK, as Guarantee Trustee By: _______________________________________ Name: Title: 16 EX-5.1 17 OPINION LETTER 3 Exhibit 5.1 December 23, 1997 Public Service Enterprise Group Incorporated 80 Park Plaza P.O. Box 1171 Newark, NJ 07101 Re: $225,000,000 aggregate principal amount of Trust Preferred Securities (collectively the "Preferred Securities") to be issued in one or more series by Enterprise Capital Trust I, Enterprise Capital Trust II and Enterprise Capital Trust III (the "Trusts") and Guarantees with respect to the Preferred Securities (the "Guarantees") and Deferrable Interest Subordinated Debentures (the "Subordinated Debentures") to be issued in one or more series by Public Service Enterprise Group Incorporated (the "Company"). Ladies and Gentlemen: I am Associate General 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 jurisdictions of the United States; (d) Prior to the 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 the laws of the State of New Jersey and rules, regulations and orders thereunder which are currently in effect. 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 EX-5.2 18 OPINION OF RICHARDS, LAYTON & FINGER [Letterhead of Richards, Layton & Finger] December 23, 1997 Enterprise Capital Trust I c/o Public Service Enterprise Group Incorporated 80 Park Plaza Newark, New Jersey 07101 Re: Enterprise Capital Trust I Ladies and Gentlemen: We have acted as special Delaware counsel for Public Service Enterprise Group Incorporated, a New Jersey corporation (the "Company"), and Enterprise 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 December 22, 1997 (the "Certificate"), as filed in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on December 22, 1997; (b) The Trust Agreement of the Trust, dated as of December 22, 1997, 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 __% Trust Originated Preferred Securities of the Trust representing preferred undivided beneficial interests in the assets 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 December 23, 1997; Enterprise Capital Trust I December 23, 1997 Page 2 (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 D thereto) (the "Trust Agreement"), attached as an exhibit to the Registration Statement; and (e) A Certificate of Good Standing for the Trust, dated December 23, 1997, 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 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 Enterprise Capital Trust I December 23, 1997 Page 3 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 that 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 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, /s/ Richards, Layton & Finger ----------------------------- EX-5.3 19 OPINION OF RICHARDS, LAYTON & FINGER [Letterhead of Richards, Layton & Finger] December 23, 1997 Enterprise Capital Trust II c/o Public Service Enterprise Group Incorporated 80 Park Plaza Newark, New Jersey 07101 Re: Enterprise Capital Trust II Ladies and Gentlemen: We have acted as special Delaware counsel for Public Service Enterprise Group Incorporated, a New Jersey corporation (the "Company"), and Enterprise 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 December 22, 1997 (the "Certificate"), as filed in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on December 22, 1997; (b) The Trust Agreement of the Trust, dated as of December 22, 1997, 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 __% Trust Preferred Securities of the Trust representing preferred undivided beneficial interests in the assets 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 December 23, 1997; (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 Enterprise Capital Trust II December 23, 1997 Page 2 holders, from time to time, of undivided beneficial interests in the assets of the Trust (including Exhibits A, C and D thereto) (the "Trust Agreement"), attached as an exhibit to the Registration Statement; and (e) A Certificate of Good Standing for the Trust, dated December 23, 1997, 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 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. Enterprise Capital Trust II December 23, 1997 Page 3 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 that 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 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, /s/ Richards, Layton & Finger EX-5.4 20 OPINION OF RICHARDS, LAYTON & FINGER [Letterhead of Richards, Layton & Finger] December 23, 1997 Enterprise Capital Trust III c/o Public Service Enterprise Group Incorporated 80 Park Plaza Newark, New Jersey 07101 Re: Enterprise Capital Trust III Ladies and Gentlemen: We have acted as special Delaware counsel for Public Service Enterprise Group Incorporated, a New Jersey corporation (the "Company"), and Enterprise 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 December 22, 1997 (the "Certificate"), as filed in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on December 22, 1997; (b) The Trust Agreement of the Trust, dated as of December 22, 1997, 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 __% Trust Preferred Securities of the Trust representing preferred undivided beneficial interests in the assets 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 December 23, 1997; (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 Enterprise Capital Trust III December 23, 1997 Page 2 holders, from time to time, of undivided beneficial interests in the assets of the Trust (including Exhibits A, C and D thereto) (the "Trust Agreement"), attached as an exhibit to the Registration Statement; and (e) A Certificate of Good Standing for the Trust, dated December 23, 1997, 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 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. Enterprise Capital Trust III December 23, 1997 Page 3 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 that 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 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, /s/ Richards, Layton & Finger ----------------------------- EX-8 21 TAX OPINION [LETTERHEAD BALLARD SPAHR ANDREWS & INGERSOLL] December 23, 1997 Public Service Enterprise Group Incorporated 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 Trust Preferred Securities to be issued by Enterprise Capital Trust I, Enterprise Capital Trust II and Enterprise 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, /s/ Ballard Spahr Andrews & Ingersoll EX-23.1 22 INDEPENDENT AUDITORS' CONSENT INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Public Service Enterprise Group Incorporated, Enterprise Capital Trust I, Enterprise Capital Trust II and Enterprise Capital Trust III on Form S-3 of our report dated February 14, 1997, appearing in the Annual Report on Form 10-K of Public Service Enterprise Group Incorporated for the year ended December 31, 1996 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche, LLP Parsippany, New Jersey December 23, 1997 EX-24 23 POWER OF ATTORNEY POWER OF ATTORNEY Each Director of Public Service Enterprise Group Incorporated whose signature appears below hereby appoints Robert C. Murray the agent for service named in this Registration Statement, as attorney-in-fact, to execute in the name of each such person and to file with the Securities and Exchange Commission any and all additional amendments, including post-effective amendments to this Registraton Statement. Signature Title Date --------- ----- ---- /s/ Lawrence R. Codey - ------------------------- Lawrence R. Codey Director December 16, 1997 /s/ Ernest H. Drew - ------------------------- Ernest H. Drew Director December 16, 1997 /s/ T.J. Dermot Dunphy - ------------------------- T.J. Dermot Dunphy Director December 16, 1997 - ------------------------- Raymond V. Gilmartin Director December , 1997 /s/ Conrad K. Harper - ------------------------- Conrad K. Harper Director December 16, 1997 /s/ Irwin Lerner - ------------------------- Irwin Lerner Director December 16, 1997 /s/ Marilyn M. Pfalz - ------------------------- Marilyn M. Pfalz Director December 16, 1997 /s/ Forrest J. Remick, Jr. - ------------------------- Forrest J. Remick, Jr. Director December 16, 1997 /s/ Richard J. Swift - ------------------------- Richard J. Swift Director December 16, 1997 /s/ Josh S. Weston - ------------------------- Josh S. Weston Director December 16, 1997 EX-25.1 24 STATEMENT OF ELIGIBILITY UNITED STATES 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.) 102 Pennsylvania Avenue, Avondale, PA 19311 (Address of Principal Executive Offices) (Zip Code) ---------- (Name, address and telephone number of agent for service) PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (Name of Obligor) New Jersey 22-2625848 (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) 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B - -------------------------------------------------------------------------------- Title of Class Amount Outstanding - -------------------------------------------------------------------------------- Item 4. Trusteeships 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 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in Col. C - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Whether the Amount owned Percentage of class securities are beneficially or represented by voting or held as amount given in nonvoting collateral Col. C. Title of Class Securities Security for obligations in default by Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- Not Applicable. 2 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C - -------------------------------------------------------------------------------- Nature of indebtedness Amount outstanding Date due - -------------------------------------------------------------------------------- Not Applicable 3 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. Listed below are all exhibits filed as part of this statement of eligibility. 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 333-40477). 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 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 December , 1997. First Union National Bank (Trustee) (CORPORATE SEAL) By: /s/ Frank Gallagher ---------------------------------- Frank Gallagher Vice President 5 EXHIBIT T-7 REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the First Fidelity Bank, National Association , at the close of business on September 30, 1997, 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............. 1,342,937 Interest-bearing balances...................................... 284,300 Securities....................................................... ///////// Hold-to-maturity securities.................................... 356,998 Available-for-sale securities.................................. 3,605,206 Federal funds sold and securities purchased under agreements to resell .............................................. 1,741,187 Loans and lease financing receivables: Loan and leases, net of unearned income...... 18,839,020 LESS: Allowance for loan and lease losses.... 217,076 LESS: Allocated transfer risk reserve........ 0 Loans and leases, net of unearned income, allowance, and reserve................................ 18,621,944 Assets held in trading accounts.................................. 0 Premises and fixed assets (including capitalized leases)......... 421,529 Other real estate owned.......................................... 30,927 Investment in unconsolidated subsidiaries and associated ////////// companies...................................................... 33,802 Customer's liability to this bank on acceptances outstanding..... 84,875 Intangible assets................................................ 392,926 Other assets..................................................... 770,806 Total assets..................................................... 27,687,437 LIABILITIES Deposits: In domestic offices....................................... 20,725,451 Noninterest-bearing........................ 3,229,608 Interest-bearing........................... 17,495,843 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................ 683,105 Noninterest-bearing................................... 76 Interest-bearing...................................... 588,055 Federal funds purchased and securities sold under agreements to repurchase .......................................... 2,500,263 Demand notes issued to the U.S. Treasury......................... 75,145 Trading liabilities.............................................. 0 Other borrowed money:............................................ ///////// With original maturity of one year or less.............. 2,156 With original maturity of more than one year............ 7,520 Mortgage indebtedness and obligations under capitalized leases .. 5,866 Bank's liability on acceptances executed and outstanding......... 85,165 Subordinated notes and debentures................................ 447,960 Other liabilities................................................ 863,272 Total liabilities................................................ 25,395,903 Limited-life preferred stock and related surplus................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 160,540 Common Stock..................................................... 452,156 Surplus.......................................................... 1,300,080 Undivided profits and capital reserves........................... 356,154 Net unrealized holding gains (losses) on available-for-sale ///////// securities...................................................... 22,604 Cumulative foreign currency translation adjustments.............. 0 Total equity capital............................................. 2,291,534 Total liabilities, limited-life preferred stock and equity ////////// capital........................................................ 27,687,437 Exhibit T-6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321 (b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Public Service Enterprise Group, Incorporated, we hereby consent that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. FIRST UNION NATIONAL BANK By: /s/ Frank Gallagher ----------------------------- Frank Gallagher Vice President Newark, NJ December 23, 1997 EX-25.2 25 STATEMENT OF ELIGIBILITY UNITED STATES 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.) 102 Pennsylvania Avenue, Avondale, PA 19311 (Address of Principal Executive Offices) (Zip Code) ---------- (Name, address and telephone number of agent for service) ENTERPRISE CAPITAL TRUST I (Name of Obligor) New Jersey 22-2625848 (State of Incorporation) (I.R.S. Employer Identification No.) 80 Park Plaza, Newark, New Jersey 07101 (Address of Principal Executive Offices) (Zip Code) ---------- ____% TRUST ORIGINATED PREFERRED SECURITIES (Title of Indenture Securities) 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B - -------------------------------------------------------------------------------- Title of Class Amount Outstanding - -------------------------------------------------------------------------------- Item 4. Trusteeships 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 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in Col. C - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Whether the Amount owned Percentage of class securities are beneficially or represented by voting or held as amount given in nonvoting collateral Col. C. Title of Class Securities Security for obligations in default by Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- Not Applicable. 2 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C - -------------------------------------------------------------------------------- Nature of indebtedness Amount outstanding Date due - -------------------------------------------------------------------------------- Not Applicable 3 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. Listed below are all exhibits filed as part of this statement of eligibility. 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 333-40477). 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 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 December , 1997. First Union National Bank (Trustee) (CORPORATE SEAL) By: /s/ Frank Gallagher ---------------------------------- Frank Gallagher Vice President EXHIBIT T-7 REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the First Fidelity Bank, National Association , at the close of business on September 30, 1997, 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............. 1,342,937 Interest-bearing balances...................................... 284,300 Securities....................................................... ///////// Hold-to-maturity securities.................................... 356,998 Available-for-sale securities.................................. 3,605,206 Federal funds sold and securities purchased under agreements to resell .............................................. 1,741,187 Loans and lease financing receivables: Loan and leases, net of unearned income...... 18,839,020 LESS: Allowance for loan and lease losses.... 217,076 LESS: Allocated transfer risk reserve........ 0 Loans and leases, net of unearned income, allowance, and reserve................................ 18,621,944 Assets held in trading accounts.................................. 0 Premises and fixed assets (including capitalized leases)......... 421,529 Other real estate owned.......................................... 30,927 Investment in unconsolidated subsidiaries and associated ////////// companies...................................................... 33,802 Customer's liability to this bank on acceptances outstanding..... 84,875 Intangible assets................................................ 392,926 Other assets..................................................... 770,806 Total assets..................................................... 27,687,437 LIABILITIES Deposits: In domestic offices....................................... 20,725,451 Noninterest-bearing........................ 3,229,608 Interest-bearing........................... 17,495,843 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................ 683,105 Noninterest-bearing................................... 76 Interest-bearing...................................... 588,055 Federal funds purchased and securities sold under agreements to repurchase .......................................... 2,500,263 Demand notes issued to the U.S. Treasury......................... 75,145 Trading liabilities.............................................. 0 Other borrowed money:............................................ ///////// With original maturity of one year or less.............. 2,156 With original maturity of more than one year............ 7,520 Mortgage indebtedness and obligations under capitalized leases .. 5,866 Bank's liability on acceptances executed and outstanding......... 85,165 Subordinated notes and debentures................................ 447,960 Other liabilities................................................ 863,272 Total liabilities................................................ 25,395,903 Limited-life preferred stock and related surplus................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 160,540 Common Stock..................................................... 452,156 Surplus.......................................................... 1,300,080 Undivided profits and capital reserves........................... 356,154 Net unrealized holding gains (losses) on available-for-sale ///////// securities...................................................... 22,604 Cumulative foreign currency translation adjustments.............. 0 Total equity capital............................................. 2,291,534 Total liabilities, limited-life preferred stock and equity ////////// capital........................................................ 27,687,437 Exhibit T-6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321 (b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Public Service Enterprise Group, Incorporated, we hereby consent that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. FIRST UNION NATIONAL BANK By: /s/ Frank Gallagher ----------------------------- Frank Gallagher Vice President Newark, NJ December 23, 1997 EX-25.3 26 STATEMENT OF ELIGIBILITY UNITED STATES 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.) 102 Pennsylvania Avenue, Avondale, PA 19311 (Address of Principal Executive Offices) (Zip Code) ---------- (Name, address and telephone number of agent for service) ENTERPRISE CAPITAL TRUST II (Name of Obligor) New Jersey 22-2625848 (State of Incorporation) (I.R.S. Employer Identification No.) 80 Park Plaza, Newark, New Jersey 07101 (Address of Principal Executive Offices) (Zip Code) ---------- ____% TRUST PREFERRED SECURITIES (Title of Indenture Securities) 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B - -------------------------------------------------------------------------------- Title of Class Amount Outstanding - -------------------------------------------------------------------------------- Item 4. Trusteeships 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 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in Col. C - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Whether the Amount owned Percentage of class securities are beneficially or represented by voting or held as amount given in nonvoting collateral Col. C. Title of Class Securities Security for obligations in default by Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- Not Applicable. 2 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C - -------------------------------------------------------------------------------- Nature of indebtedness Amount outstanding Date due - -------------------------------------------------------------------------------- Not Applicable 3 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. Listed below are all exhibits filed as part of this statement of eligibility. 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 333-40477). 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 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 December , 1997. First Union National Bank (Trustee) (CORPORATE SEAL) By: /s/ Frank Gallagher ---------------------------------- Frank Gallagher Vice President 5 EXHIBIT T-7 REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the First Fidelity Bank, National Association , at the close of business on September 30, 1997, 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............. 1,342,937 Interest-bearing balances...................................... 284,300 Securities....................................................... ///////// Hold-to-maturity securities.................................... 356,998 Available-for-sale securities.................................. 3,605,206 Federal funds sold and securities purchased under agreements to resell .............................................. 1,741,187 Loans and lease financing receivables: Loan and leases, net of unearned income...... 18,839,020 LESS: Allowance for loan and lease losses.... 217,076 LESS: Allocated transfer risk reserve........ 0 Loans and leases, net of unearned income, allowance, and reserve................................ 18,621,944 Assets held in trading accounts.................................. 0 Premises and fixed assets (including capitalized leases)......... 421,529 Other real estate owned.......................................... 30,927 Investment in unconsolidated subsidiaries and associated ////////// companies...................................................... 33,802 Customer's liability to this bank on acceptances outstanding..... 84,875 Intangible assets................................................ 392,926 Other assets..................................................... 770,806 Total assets..................................................... 27,687,437 LIABILITIES Deposits: In domestic offices....................................... 20,725,451 Noninterest-bearing........................ 3,229,608 Interest-bearing........................... 17,495,843 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................ 683,105 Noninterest-bearing................................... 76 Interest-bearing...................................... 588,055 Federal funds purchased and securities sold under agreements to repurchase .......................................... 2,500,263 Demand notes issued to the U.S. Treasury......................... 75,145 Trading liabilities.............................................. 0 Other borrowed money:............................................ ///////// With original maturity of one year or less.............. 2,156 With original maturity of more than one year............ 7,520 Mortgage indebtedness and obligations under capitalized leases .. 5,866 Bank's liability on acceptances executed and outstanding......... 85,165 Subordinated notes and debentures................................ 447,960 Other liabilities................................................ 863,272 Total liabilities................................................ 25,395,903 Limited-life preferred stock and related surplus................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 160,540 Common Stock..................................................... 452,156 Surplus.......................................................... 1,300,080 Undivided profits and capital reserves........................... 356,154 Net unrealized holding gains (losses) on available-for-sale ///////// securities...................................................... 22,604 Cumulative foreign currency translation adjustments.............. 0 Total equity capital............................................. 2,291,534 Total liabilities, limited-life preferred stock and equity ////////// capital........................................................ 27,687,437 Exhibit T-6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321 (b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Public Service Enterprise Group, Incorporated, we hereby consent that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. FIRST UNION NATIONAL BANK By: /s/ Frank Gallagher ----------------------------- Frank Gallagher Vice President Newark, NJ December 23, 1997 EX-25.4 27 STATEMENT OF ELIGIBILITY UNITED STATES 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.) 102 Pennsylvania Avenue, Avondale, PA 19311 (Address of Principal Executive Offices) (Zip Code) ---------- (Name, address and telephone number of agent for service) ENTERPRISE CAPITAL TRUST III (Name of Obligor) New Jersey 22-2625848 (State of Incorporation) (I.R.S. Employer Identification No.) 80 Park Plaza, Newark, New Jersey 07101 (Address of Principal Executive Offices) (Zip Code) ---------- ____% TRUST PREFERRED SECURITIES (Title of Indenture Securities) 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B - -------------------------------------------------------------------------------- Title of Class Amount Outstanding - -------------------------------------------------------------------------------- Item 4. Trusteeships 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 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in Col. C - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Whether the Amount owned Percentage of class securities are beneficially or represented by voting or held as amount given in nonvoting collateral Col. C. Title of Class Securities Security for obligations in default by Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- Not Applicable. 2 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C - -------------------------------------------------------------------------------- Nature of indebtedness Amount outstanding Date due - -------------------------------------------------------------------------------- Not Applicable 3 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. Listed below are all exhibits filed as part of this statement of eligibility. 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 333-40477). 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 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 December , 1997. First Union National Bank (Trustee) (CORPORATE SEAL) By: /s/ Frank Gallagher ---------------------------------- Frank Gallagher Vice President 5 EXHIBIT T-7 REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the First Fidelity Bank, National Association , at the close of business on September 30, 1997, 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............. 1,342,937 Interest-bearing balances...................................... 284,300 Securities....................................................... ///////// Hold-to-maturity securities.................................... 356,998 Available-for-sale securities.................................. 3,605,206 Federal funds sold and securities purchased under agreements to resell .............................................. 1,741,187 Loans and lease financing receivables: Loan and leases, net of unearned income...... 18,839,020 LESS: Allowance for loan and lease losses.... 217,076 LESS: Allocated transfer risk reserve........ 0 Loans and leases, net of unearned income, allowance, and reserve................................ 18,621,944 Assets held in trading accounts.................................. 0 Premises and fixed assets (including capitalized leases)......... 421,529 Other real estate owned.......................................... 30,927 Investment in unconsolidated subsidiaries and associated ////////// companies...................................................... 33,802 Customer's liability to this bank on acceptances outstanding..... 84,875 Intangible assets................................................ 392,926 Other assets..................................................... 770,806 Total assets..................................................... 27,687,437 LIABILITIES Deposits: In domestic offices....................................... 20,725,451 Noninterest-bearing........................ 3,229,608 Interest-bearing........................... 17,495,843 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................ 683,105 Noninterest-bearing................................... 76 Interest-bearing...................................... 588,055 Federal funds purchased and securities sold under agreements to repurchase .......................................... 2,500,263 Demand notes issued to the U.S. Treasury......................... 75,145 Trading liabilities.............................................. 0 Other borrowed money:............................................ ///////// With original maturity of one year or less.............. 2,156 With original maturity of more than one year............ 7,520 Mortgage indebtedness and obligations under capitalized leases .. 5,866 Bank's liability on acceptances executed and outstanding......... 85,165 Subordinated notes and debentures................................ 447,960 Other liabilities................................................ 863,272 Total liabilities................................................ 25,395,903 Limited-life preferred stock and related surplus................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 160,540 Common Stock..................................................... 452,156 Surplus.......................................................... 1,300,080 Undivided profits and capital reserves........................... 356,154 Net unrealized holding gains (losses) on available-for-sale ///////// securities...................................................... 22,604 Cumulative foreign currency translation adjustments.............. 0 Total equity capital............................................. 2,291,534 Total liabilities, limited-life preferred stock and equity ////////// capital........................................................ 27,687,437 Exhibit T-6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321 (b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Public Service Enterprise Group, Incorporated, we hereby consent that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. FIRST UNION NATIONAL BANK By: /s/ Frank Gallagher ----------------------------- Frank Gallagher Vice President Newark, NJ December 23, 1997 EX-25.5 28 STATEMENT OF ELIGIBILITY UNITED STATES 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.) 102 Pennsylvania Avenue, Avondale, PA 19311 (Address of Principal Executive Offices) (Zip Code) ---------- (Name, address and telephone number of agent for service) PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (Name of Obligor) New Jersey 22-2625848 (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 Enterprise Capital Trust I Preferred Securities (Title of Indenture Securities) 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B - -------------------------------------------------------------------------------- Title of Class Amount Outstanding - -------------------------------------------------------------------------------- Item 4. Trusteeships 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 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in Col. C - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Whether the Amount owned Percentage of class securities are beneficially or represented by voting or held as amount given in nonvoting collateral Col. C. Title of Class Securities Security for obligations in default by Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- Not Applicable. 2 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C - -------------------------------------------------------------------------------- Nature of indebtedness Amount outstanding Date due - -------------------------------------------------------------------------------- Not Applicable 3 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. Listed below are all exhibits filed as part of this statement of eligibility. 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 333-40477). 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 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 December , 1997. First Union National Bank (Trustee) (CORPORATE SEAL) By: /s/ Frank Gallagher ---------------------------------- Frank Gallagher Vice President 5 EXHIBIT T-7 REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the First Fidelity Bank, National Association , at the close of business on September 30, 1997, 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............. 1,342,937 Interest-bearing balances...................................... 284,300 Securities....................................................... ///////// Hold-to-maturity securities.................................... 356,998 Available-for-sale securities.................................. 3,605,206 Federal funds sold and securities purchased under agreements to resell .............................................. 1,741,187 Loans and lease financing receivables: Loan and leases, net of unearned income...... 18,839,020 LESS: Allowance for loan and lease losses.... 217,076 LESS: Allocated transfer risk reserve........ 0 Loans and leases, net of unearned income, allowance, and reserve................................ 18,621,944 Assets held in trading accounts.................................. 0 Premises and fixed assets (including capitalized leases)......... 421,529 Other real estate owned.......................................... 30,927 Investment in unconsolidated subsidiaries and associated ////////// companies...................................................... 33,802 Customer's liability to this bank on acceptances outstanding..... 84,875 Intangible assets................................................ 392,926 Other assets..................................................... 770,806 Total assets..................................................... 27,687,437 LIABILITIES Deposits: In domestic offices....................................... 20,725,451 Noninterest-bearing................................... 3,229,608 Interest-bearing...................................... 17,495,843 In foreign offices, Edge and Agreement subsidiaries, and IBFs.............................................. 683,105 Noninterest-bearing................................... 76 Interest-bearing...................................... 588,055 Federal funds purchased and securities sold under agreements to repurchase .......................................... 2,500,263 Demand notes issued to the U.S. Treasury......................... 75,145 Trading liabilities.............................................. 0 Other borrowed money:............................................ ///////// With original maturity of one year or less.............. 2,156 With original maturity of more than one year............ 7,520 Mortgage indebtedness and obligations under capitalized leases .. 5,866 Bank's liability on acceptances executed and outstanding......... 85,165 Subordinated notes and debentures................................ 447,960 Other liabilities................................................ 863,272 Total liabilities................................................ 25,395,903 Limited-life preferred stock and related surplus................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 160,540 Common Stock..................................................... 452,156 Surplus.......................................................... 1,300,080 Undivided profits and capital reserves........................... 356,154 Net unrealized holding gains (losses) on available-for-sale ///////// securities...................................................... 22,604 Cumulative foreign currency translation adjustments.............. 0 Total equity capital............................................. 2,291,534 Total liabilities, limited-life preferred stock and equity ////////// capital........................................................ 27,687,437 Exhibit T-6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321 (b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Public Service Enterprise Group, Incorporated, we hereby consent that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. FIRST UNION NATIONAL BANK By: /s/ Frank Gallagher ----------------------------- Frank Gallagher Vice President Newark, NJ December 23, 1997 EX-25.6 29 STATEMENT OF ELIGIBILITY UNITED STATES 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.) 102 Pennsylvania Avenue, Avondale, PA 19311 (Address of Principal Executive Offices) (Zip Code) ---------- (Name, address and telephone number of agent for service) PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (Name of Obligor) New Jersey 22-2625848 (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 Enterprise Capital Trust II Preferred Securities (Title of Indenture Securities) 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B - -------------------------------------------------------------------------------- Title of Class Amount Outstanding - -------------------------------------------------------------------------------- Item 4. Trusteeships 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 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in Col. C - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Whether the Amount owned Percentage of class securities are beneficially or represented by voting or held as amount given in nonvoting collateral Col. C. Title of Class Securities Security for obligations in default by Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- Not Applicable. 2 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C - -------------------------------------------------------------------------------- Nature of indebtedness Amount outstanding Date due - -------------------------------------------------------------------------------- Not Applicable 3 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. Listed below are all exhibits filed as part of this statement of eligibility. 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 333-40477). 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 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 December , 1997. First Union National Bank (Trustee) (CORPORATE SEAL) By: /s/ Frank Gallagher ---------------------------------- Frank Gallagher Vice President 5 EXHIBIT T-7 REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the First Fidelity Bank, National Association , at the close of business on September 30, 1997, 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............. 1,342,937 Interest-bearing balances...................................... 284,300 Securities....................................................... ///////// Hold-to-maturity securities.................................... 356,998 Available-for-sale securities.................................. 3,605,206 Federal funds sold and securities purchased under agreements to resell .............................................. 1,741,187 Loans and lease financing receivables: Loan and leases, net of unearned income...... 18,839,020 LESS: Allowance for loan and lease losses.... 217,076 LESS: Allocated transfer risk reserve........ 0 Loans and leases, net of unearned income, allowance, and reserve........................................... 18,621,944 Assets held in trading accounts.................................. 0 Premises and fixed assets (including capitalized leases)......... 421,529 Other real estate owned.......................................... 30,927 Investment in unconsolidated subsidiaries and associated ////////// companies...................................................... 33,802 Customer's liability to this bank on acceptances outstanding..... 84,875 Intangible assets................................................ 392,926 Other assets..................................................... 770,806 Total assets..................................................... 27,687,437 LIABILITIES Deposits: In domestic offices....................................... 20,725,451 Noninterest-bearing........................ 3,229,608 Interest-bearing........................... 17,495,843 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................ 683,105 Noninterest-bearing................................... 76 Interest-bearing...................................... 588,055 Federal funds purchased and securities sold under agreements to repurchase .......................................... 2,500,263 Demand notes issued to the U.S. Treasury......................... 75,145 Trading liabilities.............................................. 0 Other borrowed money:............................................ ///////// With original maturity of one year or less.............. 2,156 With original maturity of more than one year............ 7,520 Mortgage indebtedness and obligations under capitalized leases .. 5,866 Bank's liability on acceptances executed and outstanding......... 85,165 Subordinated notes and debentures................................ 447,960 Other liabilities................................................ 863,272 Total liabilities................................................ 25,395,903 Limited-life preferred stock and related surplus................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 160,540 Common Stock..................................................... 452,156 Surplus.......................................................... 1,300,080 Undivided profits and capital reserves........................... 356,154 Net unrealized holding gains (losses) on available-for-sale ///////// securities...................................................... 22,604 Cumulative foreign currency translation adjustments.............. 0 Total equity capital............................................. 2,291,534 Total liabilities, limited-life preferred stock and equity ////////// capital........................................................ 27,687,437 Exhibit T-6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321 (b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Public Service Enterprise Group, Incorporated, we hereby consent that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. FIRST UNION NATIONAL BANK By: /s/ Frank Gallagher ----------------------------- Frank Gallagher Vice President Newark, NJ December 23, 1997 EX-25.7 30 STATEMENT OF ELIGIBILITY UNITED STATES 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.) 102 Pennsylvania Avenue, Avondale, PA 19311 (Address of Principal Executive Offices) (Zip Code) ---------- (Name, address and telephone number of agent for service) PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (Name of Obligor) New Jersey 22-2625848 (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 Enterprise Capital Trust III Preferred Securities (Title of Indenture Securities) 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B - -------------------------------------------------------------------------------- Title of Class Amount Outstanding - -------------------------------------------------------------------------------- Item 4. Trusteeships 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 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in Col. C - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Percentage of Voting Amount owned securities represented Name of Owner Title of Class beneficially by amount given in 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D. - -------------------------------------------------------------------------------- Whether the Amount owned Percentage of class securities are beneficially or represented by voting or held as amount given in nonvoting collateral Col. C. Title of Class Securities Security for obligations in default by Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- Not Applicable. 2 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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. As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------- Amount owned Percentage of class beneficially or represented by held as amount given in collateral Col. C Security for Name of obligations in Issuer and Amount default by title of class outstanding Trustee - -------------------------------------------------------------------------------- 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: As of November 30, 1997 - -------------------------------------------------------------------------------- Col. A Col. B Col. C - -------------------------------------------------------------------------------- Nature of indebtedness Amount outstanding Date due - -------------------------------------------------------------------------------- Not Applicable 3 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. Listed below are all exhibits filed as part of this statement of eligibility. 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 333-40477). 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 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 December , 1997. First Union National Bank (Trustee) (CORPORATE SEAL) By: /s/ Frank Gallagher ---------------------------------- Frank Gallagher Vice President 5 EXHIBIT T-7 REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the First Fidelity Bank, National Association , at the close of business on September 30, 1997, 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............. 1,342,937 Interest-bearing balances...................................... 284,300 Securities....................................................... ///////// Hold-to-maturity securities.................................... 356,998 Available-for-sale securities.................................. 3,605,206 Federal funds sold and securities purchased under agreements to resell .............................................. 1,741,187 Loans and lease financing receivables: Loan and leases, net of unearned income...... 18,839,020 LESS: Allowance for loan and lease losses.... 217,076 LESS: Allocated transfer risk reserve........ 0 Loans and leases, net of unearned income, allowance, and reserve................................ 18,621,944 Assets held in trading accounts.................................. 0 Premises and fixed assets (including capitalized leases)......... 421,529 Other real estate owned.......................................... 30,927 Investment in unconsolidated subsidiaries and associated ////////// companies...................................................... 33,802 Customer's liability to this bank on acceptances outstanding..... 84,875 Intangible assets................................................ 392,926 Other assets..................................................... 770,806 Total assets..................................................... 27,687,437 LIABILITIES Deposits: In domestic offices....................................... 20,725,451 Noninterest-bearing........................ 3,229,608 Interest-bearing........................... 17,495,843 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................ 683,105 Noninterest-bearing................................... 76 Interest-bearing...................................... 588,055 Federal funds purchased and securities sold under agreements to repurchase .......................................... 2,500,263 Demand notes issued to the U.S. Treasury......................... 75,145 Trading liabilities.............................................. 0 Other borrowed money:............................................ ///////// With original maturity of one year or less.............. 2,156 With original maturity of more than one year............ 7,520 Mortgage indebtedness and obligations under capitalized leases .. 5,866 Bank's liability on acceptances executed and outstanding......... 85,165 Subordinated notes and debentures................................ 447,960 Other liabilities................................................ 863,272 Total liabilities................................................ 25,395,903 Limited-life preferred stock and related surplus................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 160,540 Common Stock..................................................... 452,156 Surplus.......................................................... 1,300,080 Undivided profits and capital reserves........................... 356,154 Net unrealized holding gains (losses) on available-for-sale ///////// securities..................................................... 22,604 Cumulative foreign currency translation adjustments.............. 0 Total equity capital............................................. 2,291,534 Total liabilities, limited-life preferred stock and equity ////////// capital........................................................ 27,687,437 Exhibit T-6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321 (b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Public Service Enterprise Group, Incorporated, we hereby consent that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. FIRST UNION NATIONAL BANK By: /s/ Frank Gallagher ----------------------------- Frank Gallagher Vice President Newark, NJ December 23, 1997 -----END PRIVACY-ENHANCED MESSAGE-----