VIRGINIA ELECTRIC AND POWER COMPANY
1999 Series B 7.20% Senior Notes, Due November 1, 2004
UNDERWRITING AGREEMENT
October 27, 0000
Xxxx xx Xxxxxxx Securities LLC
Chase Securities Inc.
as Representatives for the Underwriters
listed in Schedule II hereto
c/o Banc of America Securities LLC
000 X. Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned, Virginia Electric and Power Company (the Company), hereby
confirms its agreement with the Underwriters named in Schedule II hereto (the
Agreement) with respect to the sale to the Underwriters of certain of its Senior
Notes (the Senior Notes) specified in Schedule I hereto, and the public offering
thereof by the Underwriters, upon the terms specified in Schedule I hereto.
1. Underwriters and Representatives. The term "Underwriters" as used
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herein shall be deemed to mean the several persons, firms or corporations
(including the Representatives hereinafter mentioned) named in Schedule II
hereto, and the term "Representatives" as used herein shall be deemed to mean
the representatives to whom this Agreement is addressed, who by signing this
Agreement represent that they have been authorized by the other Underwriters to
execute this Agreement on their behalf and to act for them in the manner herein
provided. If there shall be only one person, firm or corporation named in
Schedule II hereto, the term "Underwriters" and the term "Representatives" as
used herein shall mean that person, firm or corporation. All obligations of the
Underwriters hereunder are several and not joint. Any action under or in respect
of this Agreement taken by the Representatives will be binding upon all the
Underwriters.
2. Description of the Senior Notes. Schedule I specifies the aggregate
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principal amount of the Senior Notes, the initial public offering price of the
Senior Notes, the purchase price to be paid by the Underwriters, and any
concession from the initial public offering price to be allowed to
dealers or brokers, and sets forth the date, time and manner of delivery of the
Senior Notes and payment thereof. Schedule I also specifies (to the extent not
set forth in the Registration Statement and Prospectus referred to below) the
terms and provisions for the purchase of such Senior Notes. The Senior Notes
will be issued under the Company's Senior Indenture dated as of June 1, 1998
between the Company and The Chase Manhattan Bank, as Trustee (the Trustee), as
supplemented by a First Supplemental Indenture dated as of June 1, 1998, a
Second Supplemental Indenture dated as of June 1, 1999, and to be further
supplemented by a Third Supplemental Indenture dated as of November 1, 1999
(collectively, the Senior Indenture).
3. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, the Underwriters that:
(a) A registration statement on Form S-3 (Reg. No. 333-47119) for the
registration of the Senior Notes under the Securities Act of 1933, as
amended (the Securities Act), heretofore filed with the Securities and
Exchange Commission (the Commission), a copy of which as so filed has been
delivered to you, has become effective. The registration statement,
including all exhibits thereto, as amended through the date hereof, is
hereinafter referred to as the "Registration Statement"; the prospectus
relating to the Senior Notes included in the Registration Statement, which
prospectus is now proposed to be supplemented by a supplement relating to
the Senior Notes to be filed with the Commission under the Securities Act,
as so supplemented, is hereinafter referred to as the "Prospectus." As used
herein, the terms "Registration Statement," "prospectus" and "Prospectus"
include all documents (including any Current Report on Form 8-K)
incorporated therein by reference, and shall include any documents
(including any Current Report on Form 8-K) filed after the date of such
Registration Statement, prospectus or Prospectus and incorporated therein
by reference from the date of filing of such incorporated documents
(collectively, the Incorporated Documents).
(b) No order suspending the effectiveness of the Registration
Statement or otherwise preventing or suspending the use of the Prospectus
has been issued by the Commission and is in effect and no proceedings for
that purpose are pending before or, to the knowledge of the Company,
threatened by the Commission. The Registration Statement and the Prospectus
comply in all material respects with the provisions of the Securities Act,
the Securities Exchange Act of 1934, as amended (the Securities Exchange
Act), and the Trust Indenture Act of 1939, as amended (the Trust Indenture
Act), and the rules, regulations and releases of the Commission thereunder
(the Rules and Regulations), and, on the date hereof, neither the
Registration Statement nor the Prospectus contains an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and, on
the Closing Date, the Registration Statement and the Prospectus (including
any amendments and supplements thereto) will conform in all respects to the
requirements of the Securities Act, the Trust Indenture Act and the Rules
and Regulations, and neither of such documents will include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, that the foregoing representations and warranties in
this paragraph
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(b) shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters or on
the Underwriters' behalf through the Representatives for use in the
Registration Statement or Prospectus; and provided, further, that the
foregoing representations and warranties are given on the basis that any
statement contained in an Incorporated Document shall be deemed not to be
contained in the Registration Statement or Prospectus if such statement has
been modified or superseded by any statement in a subsequently filed
Incorporated Document or in the Registration Statement or Prospectus or in
any amendment or supplement thereto.
(c) Deloitte & Touche LLP, who have examined certain of the Company's
financial statements filed with the Commission and incorporated by
reference in the Registration Statement, are independent public accountants
as required by the Securities Act and the rules and regulations of the
Commission thereunder.
(d) Except as reflected in, or contemplated by, the Registration
Statement and Prospectus, since the respective most recent dates as of
which information is given in the Registration Statement and Prospectus,
there has not been any material adverse change in the condition of the
Company, financial or otherwise. The Company has no material contingent
financial obligation that is not disclosed in each of the Registration
Statement and Prospectus.
(e) The Company has taken all corporate action necessary to be taken
by it to authorize the execution by it of this Agreement and the
performance by it of all obligations on its part to be performed hereunder;
and the consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, or other agreement or instrument to which the
Company is now a party, or the charter of the Company, as amended, or any
order, rule or regulation applicable to the Company of any federal or state
regulatory board or body or administrative agency having jurisdiction over
the Company or over its property.
(f) The Senior Notes, upon issuance thereof, will conform in all
respects to the terms of the relevant order or orders of the State
Corporation Commission of Virginia (the Virginia Commission) now or
hereafter in effect with respect to the Senior Notes.
4. Public Offering. On the basis of the representations and warranties
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herein contained, but subject to the terms and conditions set forth in this
Agreement, the Company agrees to sell to each of the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company, at
the price, place and time hereinafter specified, the principal amount of the
Senior Notes set forth opposite the name of such Underwriter in Schedule II
hereto. The Underwriters agree to make a public offering of their respective
Senior Notes specified in Schedule II hereto at the initial public offering
price specified in Schedule I hereto. It is understood that after such initial
offering the Underwriters reserve the right to vary the offering price and
further reserve the right to withdraw, cancel or modify such offering without
notice.
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5. Time and Place of Closing. Delivery of the Senior Notes to, and
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payment therefor by, the Representatives for the accounts of the Underwriters
shall be made at the time, place and date specified in Schedule I or such other
time, place and date as the Representatives and the Company may agree upon in
writing, and subject to the provisions of Section 10 hereof. The hour and date
of such delivery and payment are herein called the "Closing Date." Unless
otherwise specified in Schedule I hereto, payment for the Senior Notes shall be
made to the Company by wire transfer in federal funds at the Closing Date
against delivery of the Senior Notes, in fully registered form, registered in
the name of Cede & Co., as nominee for The Depository Trust Company. The
certificate(s) for the Senior Notes will be made available at the location
specified on Schedule I for examination by the Representatives not later than
12:00 Noon, New York time, on the last business day prior to the Closing Date.
6. Covenants of the Company. The Company agrees that:
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(a) The Company, at or prior to the Closing Date, will deliver to the
Representatives conformed copies of the Registration Statement as
originally filed, including all exhibits filed therewith, any related
preliminary prospectus supplement, the Prospectus and all amendments and
supplements to each such document, in each case as soon as available and in
such quantities as are reasonably requested from time to time by the
Representatives.
(b) The Company will pay all expenses in connection with (i) the
preparation and filing by it of the Registration Statement and Prospectus,
(ii) the preparation, issuance and delivery of the Senior Notes, (iii) any
fees and expenses of the Trustee and (iv) the printing and delivery to the
Underwriters in reasonable quantities of copies of the Registration
Statement and the Prospectus (each as originally filed and as subsequently
amended or supplemented). The Company also will pay all taxes, if any, on
the issuance of the Senior Notes. In addition, the Company will pay the
reasonable fees and disbursements of Underwriters' counsel, Xxxx &
Valentine, L.L.P., including fees and disbursements incurred in connection
with the qualification of the Senior Notes under state securities or blue
sky laws or investment laws (if and to the extent such qualification is
required by the Underwriters or the Company).
(c) If, at any time when a prospectus relating to the Senior Notes is
required to be delivered under the Securities Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Securities
Act, the Company promptly will (i) notify the Representatives to suspend
solicitation of purchases of the Senior Notes, (ii) at its expense, prepare
and file with the Commission an amendment or supplement which will correct
such statement or omission or an amendment which will effect such
compliance, and (iii) at its expense, furnish to the Representatives a
reasonable quantity of the prospectus as so supplemented or amended. In
case any Underwriter is required to deliver a prospectus in connection with
the sale of any Senior Notes after the expiration of the period specified
in
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the preceding sentence, the Company, upon the request of the
Representatives, will furnish to the Representatives, at the expense of
such Underwriter, a reasonable quantity of the prospectus as supplemented
or amended, complying with Section 10(a) of the Securities Act. During the
period specified in the second sentence of this paragraph, the Company will
continue to prepare and file with the Commission on a timely basis all
documents or amendments required to be filed by the Company under the
Securities Exchange Act and the applicable rules and regulations of the
Commission thereunder; provided, that the Company shall not file such
documents or amendments without also furnishing copies thereof to the
Representatives and Xxxx & Valentine, L.L.P.
(d) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement. As soon as the Company is advised thereof, it will
advise the Representatives of the issuance of any stop order under the
Securities Act with respect to the Registration Statement or any part
thereof, or the institution by the Commission of any stop order proceedings
with respect to the Registration Statement or of any part thereof and will
use its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(e) The Company will make generally available to its security holders,
as soon as it is practicable to do so, an earnings statement of the Company
(which need not be audited) in reasonable detail, covering a period of at
least 12 months beginning within three months after the effective date of
the Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Securities Act.
(f) For a period of five years following the Closing Date, the Company
will deliver to the Representatives, as soon as practicable after the end
of each fiscal year, a balance sheet of the Company as of the end of such
year and statements of income and earnings reinvested in business for such
year, all as certified by independent public or certified public
accountants, and will deliver to the Representatives upon request, as soon
as practicable after the end of each quarterly period, statements of income
and earnings reinvested in business for the 12-month period ending with the
end of such quarterly period.
(g) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it hereunder prior to the Closing
Date and to satisfy all conditions precedent required of it to the delivery
by it of the Senior Notes.
(h) The Company will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the Senior Notes
for offer and sale under the securities or blue sky laws of such states as
the Representatives may designate; provided, however, that the Company
shall not be required in any state to qualify as a foreign corporation, or
to file a general consent to service of process, or to submit to any
requirements which it deems unduly burdensome.
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(i) Fees and disbursements of Xxxx & Valentine, L.L.P., who are acting
as counsel for the Underwriters (exclusive of fees and disbursements of
such counsel which are to be paid as set forth in paragraph 6(b)), shall be
paid by the Underwriters; provided, however, that if this Agreement is
terminated in accordance with the provisions of Sections 7 or 8 hereof, the
Company shall reimburse the Representatives for the account of the
Underwriters for the amount of such fees and disbursements.
7. Conditions of Underwriters' Obligations; Termination by the
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Underwriters.
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(a) The obligations of the Underwriters to purchase and pay for the
Senior Notes shall be subject to the following conditions:
(i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect on the Closing Date and no
proceedings for that purpose shall be pending before, or to the
knowledge of the Company threatened by, the Commission on such date.
The Representatives shall have received, prior to payment for the
Senior Notes, a certificate dated the Closing Date and signed by the
President or any Vice President of the Company to the effect that no
such stop order is in effect and that no proceedings for such purpose
are pending before or, to the knowledge of the Company, threatened by
the Commission.
(ii) At the Closing Date an order or orders of the Virginia
Commission permitting the issuance and sale of the Senior Notes
substantially in accordance with the terms and conditions hereof shall
be in full force and effect and shall contain no provision unacceptable
to the Representatives or the Company (but all provisions of such order
or orders heretofore entered are deemed acceptable to the
Representatives and the Company, and all provisions of such order or
orders hereafter entered shall be deemed acceptable to the
Representatives and the Company unless within 24 hours after receiving
a copy of any such order either shall give notice to the other to the
effect that such order contains an unacceptable provision).
(iii) On the Closing Date, the Representatives shall receive, on
behalf of the Underwriters, the opinions of Xxxx & Valentine, L.L.P.,
counsel to the Underwriters, and McGuire, Woods, Battle & Xxxxxx LLP,
counsel to the Company, substantially in the forms attached hereto as
Schedules III and IV respectively.
(iv) On the date of this Agreement and on the Closing Date, the
Representatives shall receive, on behalf of the Underwriters, from
Deloitte & Touche LLP a letter addressed to the Representatives, dated
the date of this Agreement and the Closing Date, respectively (A)
confirming that they are independent public accountants as required by
the Securities Act; (B) stating in effect that, in their opinion, the
audited financial statements included in or incorporated by reference
in the Registration Statement and the Prospectus and audited by them as
stated in their report incorporated by reference in the Registration
Statement (the Audited Financial
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Statements), comply as to form in all material respects with the
applicable accounting requirements adopted pursuant to the Securities
Exchange Act; (C) stating, in effect, that on the basis of a reading of
the minutes of the meetings of the Board of Directors of the Company
and of committees of the Board since the end of the period covered by
the Audited Financial Statements, a reading of the unaudited financial
statements incorporated by reference in the Prospectus (if any), of the
unaudited statement of income for any interim period for which
information is included in the Prospectus under the caption "Selected
Financial Information" or any section updating such information, and of
the latest available unaudited financial statements of the Company
covering a period of twelve months ending after the end of the period
covered by the Audited Financial Statements (if any), and inquiries of
officials of the Company responsible for financial and accounting
matters (which procedures did not constitute an audit made in
accordance with generally accepted auditing standards), nothing came to
their attention that caused them to believe that such unaudited
financial statements incorporated by reference in the Prospectus are
not in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the Audited Financial
Statements; and (D) stating, in effect, that on the basis of more
limited procedures than those set forth in the foregoing clause (C),
consisting merely of the reading of the minutes referred to in such
clause and inquiries of officials of the Company responsible for
financial and accounting matters, nothing came to their attention at a
date not more than five business days prior to the date of such letter
that caused them to believe that (1) at such date there was any
decrease in common stockholder's equity or any increase in funded debt
of the Company or any decrease in net assets as compared with the
amounts shown in the balance sheet included in the most recent
financial statements incorporated by reference in the Registration
Statement and the Prospectus, or (2) for the period from the date of
the most recent unaudited financial statements included in or
incorporated by reference in the Registration Statement and the
Prospectus to a date not more than five business days prior to the date
of such letter there were any decreases, as compared with the
corresponding period in the preceding year, in the operating revenues,
operating income or net income, except (with respect to (1) or (2)) in
all instances for changes or decreases that the Registration Statement
discloses have occurred or may occur; provided, however, that these
letters may vary from the requirements specified in clause (D) hereof
in such manner as the Representatives in its sole discretion may deem
to be acceptable. These letters shall also state that the dollar
amounts, percentages and other financial information (in each case to
the extent that such dollar amounts, percentages and other financial
information, either directly or by analysis or computation, are derived
from the general accounting records of the Company) that appear (1) in
the Prospectus under the captions "Selected Financial Information" and
"Other Selected Data" and under any caption contained in a supplement
to the Prospectus updating such dollar amounts, percentages and other
financial information (limited to total assets and utility plant
expenditures), (2) in the Company's most recent Annual Report on Form
10-K under the caption "Selected Financial Data" or (3) in the
Registration Statement under the caption "Ratio of Earnings to Fixed
Charges" have been compared with the general
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accounting records of the Company and such dollar amounts, percentages
and financial information have been found to be in agreement with the
accounting records of the Company and the computations have been found
to be arithmetically correct. These letters shall relate to the
Registration Statement and Prospectus as amended or supplemented to the
date of each letter.
(v) Subsequent to the execution of this Agreement and prior to
the Closing Date, (A) except as reflected in, or contemplated by, the
Registration Statement and the Prospectus, there shall not have
occurred (1) any change in the Senior Notes of the Company (other than
a decrease in the aggregate principal amount thereof outstanding), (2)
any material adverse change in the general affairs, financial condition
or earnings of the Company (whether or not arising in the ordinary
course of business) or (3) any material transaction entered into by the
Company other than a transaction in the ordinary course of business,
the effect of which in each such case in the judgment of the
Representatives is so material and so adverse that it makes it
inadvisable to proceed with the public offering or delivery of the
Senior Notes on the terms and in the manner contemplated in the
Prospectus and this Agreement, or (B) there shall not have occurred (1)
a downgrading in the rating accorded the Company's senior unsecured
notes by any "nationally recognized statistical rating organization"
(as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act), (2) any general suspension of
trading in securities on the New York Stock Exchange or any limitation
on prices for such trading or any restrictions on the distribution of
securities established by the New York Stock Exchange or by the
Commission or by any federal or state agency or by the decision of any
court, (3) a banking moratorium declared either by federal or New York
State authorities or (4) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of
war by the United States Congress or any other substantial national or
international calamity or crisis resulting in the declaration of a
national emergency, the effect of which outbreak, escalation,
declaration, calamity or crisis, in the reasonable judgment of the
Representatives, makes it impracticable or inadvisable to proceed with
the public offering or delivery of the Senior Notes on the terms and in
the manner contemplated in the Prospectus and in this Agreement.
(vi) On the Closing Date, the representations and warranties of
the Company in this Agreement shall be true and correct as if made on
and as of such date, and the Company shall have performed all
obligations and satisfied all conditions required of it under this
Agreement; and, at the Closing Date, the Representatives shall have
received a certificate to such effect signed by the President or any
Vice President of the Company.
(vii) All legal proceedings to be taken in connection with the
issuance and sale of the Senior Notes shall have been satisfactory in
form and substance to Xxxx & Valentine, L.L.P.
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(b) In case any of the conditions specified above in paragraph 7(a)
shall not have been fulfilled, this Agreement may be terminated by the
Representatives upon mailing or delivering written notice thereof to the
Company; provided, however, that in case the conditions specified in
subparagraphs 7(a)(v) and (vi) shall not have been fulfilled, this
Agreement may not be so terminated by the Representatives unless
Underwriters who have agreed to purchase in the aggregate 50% or more of
the aggregate principal amount of the Senior Notes shall have consented to
such termination and the aforesaid notice shall so state. Any such
termination shall be without liability of any party to any other party
except as otherwise provided in Section 9 and in paragraphs 6(b), 6(i) and
7(c) hereof.
(c) If this Agreement shall be terminated by the Representatives
pursuant to paragraph (b) above or because of any failure or refusal on the
part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be
unable to perform its obligations under this Agreement, then in any such
case, the Company will reimburse the Underwriters, severally, for all
out-of-pocket expenses (in addition to the fees and disbursements of their
counsel as provided in paragraph 6(i)) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder and, upon such reimbursement, the Company shall be absolved from
any further liability hereunder, except as provided in paragraph 6(b) and
Section 9.
8. Conditions of the Obligation of the Company. The obligation of the
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Company to deliver the Senior Notes shall be subject to the conditions set forth
in the first sentence of subparagraph 7(a)(i) and the sole sentence of
subparagraph 7(a)(ii). In case those conditions shall not have been fulfilled,
this Agreement may be terminated by the Company by mailing or delivering written
notice thereof to the Representatives. Any such termination shall be without
liability of any party to any other party except as otherwise provided in
paragraphs 6(b) and 6(i) and in Sections 9 and 10 hereof.
9. Indemnification. (a) The Company agrees to indemnify and hold
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harmless each Underwriter and each person who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Securities Exchange Act, or any other statute or
common law and to reimburse each such Underwriter and controlling person for any
legal or other expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with investigating any
such losses, claims, damages, or liabilities, or in connection with defending
any actions, insofar as such losses, claims, damages, liabilities, expenses or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus as originally filed, or in either such document as amended or
supplemented (if any amendments or supplements thereto shall have been
furnished), or any Preliminary Prospectus (if and when used prior to the
effective date of the Registration Statement), or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that the
foregoing indemnity agreement, insofar as it relates to any Preliminary
Prospectus, shall not inure to the benefit of any
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Underwriter (or to the benefit of any person who controls such Underwriter) on
account of any losses, claims, damages or liabilities arising out of the sale of
any of the Senior Notes by such Underwriter to any person if it shall be
established that a copy of the Prospectus (as supplemented or amended, if the
Company shall have made any supplements or amendments which have been furnished
to the Representatives), excluding any documents incorporated by reference,
shall not have been sent or given by or on behalf of such Underwriter to such
person at or prior to the written confirmation of the sale to such person in any
case where such delivery is required by the Securities Act, if the misstatement
or omission leading to such loss, claim, damage or liability was corrected in
the Prospectus (excluding any documents incorporated by reference) as amended or
supplemented, and such correction would have cured the defect giving rise to
such loss, claim, damage, or liability; and provided further, however, that the
indemnity agreement contained in this paragraph 9(a) shall not apply to any such
losses, claims, damages, liabilities, expenses or actions arising out of or
based upon any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in reliance
upon and in conformity with information furnished in writing to the Company by
any Underwriter or through the Representatives on behalf of any Underwriter for
use in the Registration Statement or any amendment thereto, in the Prospectus or
any supplement thereto, or in any Preliminary Prospectus. The indemnity
agreement of the Company contained in this paragraph 9(a) and the
representations and warranties of the Company contained in Section 3 hereof
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or any such controlling
person, and shall survive the delivery of the Senior Notes.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its officers and directors, each other
Underwriter, and each person who controls any of the foregoing within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Securities
Exchange Act, against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Securities Exchange Act, or any other statute or common law and to
reimburse each of them for any legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred by them in connection
with investigating any such losses, claims, damages or liabilities or in
connection with defending any actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus as originally filed, or in either such
document as amended or supplemented (if any amendments or supplements thereto
shall have been furnished), or any Preliminary Prospectus (if and when used
prior to the effective date of the Registration Statement), or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by such Underwriter or through the Representatives on
behalf of such Underwriter for use in the Registration Statement or the
Prospectus or any amendment or supplement to either thereof, or any Preliminary
Prospectus. The indemnity agreement of the respective Underwriters contained in
this paragraph 9(b) shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Company, or any such
other Underwriter or any such controlling person, and shall survive the delivery
of the Senior Notes.
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(c) The Company and each of the Underwriters agrees that, upon the
receipt of notice of the commencement of any action against the Company or any
of its officers or directors, or any person controlling the Company, or against
such Underwriter or controlling person as aforesaid, in respect of which
indemnity may be sought on account of any indemnity agreement contained herein,
it will promptly give written notice of the commencement thereof to the party or
parties against whom indemnity shall be sought hereunder, but the omission so to
notify such indemnifying party or parties of any such action shall not relieve
such indemnifying party or parties from any liability which it or they may have
to the indemnified party otherwise than on account of such indemnity agreement.
In case such notice of any such action shall be so given, such indemnifying
party shall be entitled to participate at its own expense in the defense or, if
it so elects, to assume (in conjunction with any other indemnifying parties) the
defense of such action, in which event such defense shall be conducted by
counsel chosen by such indemnifying party (or parties) and reasonably
satisfactory to the indemnified party or parties who shall be defendant or
defendants in such action, and such defendant or defendants shall bear the fees
and expenses of any additional counsel retained by them; provided that, if the
defendants in any such action include both the indemnified party and the
indemnifying party (or parties) and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party (or parties), the indemnified party shall have the right
to select separate counsel to assert such legal defenses and to participate
otherwise in the defense of such action on behalf of such indemnified party. The
indemnifying party shall bear the reasonable fees and expenses of counsel
retained by the indemnified party if (i) the indemnified party shall have
retained such counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, representing the indemnified parties under
paragraphs 9(a) or 9(b), as the case may be, who are parties to such action),
(ii) the indemnifying party shall have elected not to assume the defense of such
action, (iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the commencement of the action, or (iv) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which
indemnification may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such a proceeding), unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
paragraphs (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Company, on the one hand, and of the Underwriters, on the
other, in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations, including relative benefit. The
relative fault shall be determined by
11
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading relates to information supplied by the Company on the one
hand or by the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this paragraph (d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
paragraph (d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this paragraph (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Senior
Notes underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations under this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
10. Termination by the Company. If any one or more of the Underwriters
--------------------------
shall fail or refuse to purchase the Senior Notes which it or they have agreed
to purchase hereunder, and the aggregate principal amount of the Senior Notes
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount of the
Senior Notes, the other Underwriters shall be obligated severally in the
proportions which the principal amount of the Senior Notes set forth opposite
their respective names in Schedule II bears to the aggregate underwriting
obligations of all non-defaulting Underwriters, or in such other proportions as
the Underwriters may specify, to purchase the Senior Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase. If any
Underwriter or Underwriters shall so fail or refuse to purchase Senior Notes and
the aggregate principal amount of the Senior Notes with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of the
Senior Notes and arrangements satisfactory to the Underwriters and the Company
for the purchase of such Senior Notes are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter (except as provided in paragraph 6(i) and Section 9)
or of the Company (except as provided in paragraph 6(b) and Section 9). In any
such case not involving a termination, either the Representatives or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven calendar days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this Section 10 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
11. Representations, Warranties and Agreements to Survive Delivery. All
--------------------------------------------------------------
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the
12
Company submitted pursuant hereto shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person of any Underwriter, or by or on behalf of the Company,
and shall survive delivery of the Senior Notes.
12. Miscellaneous. The validity and interpretation of this Agreement
-------------
shall be governed by the laws of the State of New York. This Agreement shall
inure to the benefit of the Company, the Underwriters and, with respect to the
provisions of Section 9 hereof, each controlling person and each officer and
director of the Company referred to in said Section 9, and their respective
successors, assigns, executors and administrators. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. The term "successors" as used in
this Agreement shall not include any purchaser, as such, of any of the Senior
Notes from any of the Underwriters.
13
13. Notices. All communications hereunder shall be in writing and if to
-------
the Underwriters shall be mailed, telexed, telecopied or delivered to the
Representatives at the address set forth on Schedule I hereto, or if to the
Company shall be mailed, telexed, telecopied or delivered to it, attention of
Treasurer, Virginia Electric and Power Company, 000 X. Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000-0000.
Please sign and return to us a counterpart of this letter, whereupon this
letter will become a binding agreement between the Company and the Underwriters
in accordance with its terms.
VIRGINIA ELECTRIC AND POWER COMPANY
By:_________________________________
Name:
Title:
The foregoing agreement is
hereby confirmed and accepted,
as of the date first above
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
acting individually and as Representatives
of the Underwriters named in Schedule II hereto
By: Banc of America Securities LLC
--------------------------------
Name:
Title:
By: Chase Securities Inc.
---------------------------------
Name:
Title:
14
SCHEDULE I
Title of Senior Notes: 1999 Series B 7.20% Senior Notes, due November 1, 2004
Aggregate Principal Amount: $75,000,000
Denominations: $1,000 and any integral multiple thereof
Initial Price to Public:
99.123% of the principal amount of the Senior Notes plus accrued
interest, if any, from the date of issuance
Initial Purchase Price to be paid by Underwriters:
98.523% of the principal amount of the Senior Notes
Concessions and reallowances to dealers and brokers:
Concession: Up to .350% of the principal amount of the Senior Notes
Reallowance: Up to .250% of the principal amount of the Senior Notes
Specified funds for payment of purchase price: Federal funds (by wire transfer).
Time of Delivery: November 1, 1999, 9:00 a.m.
Closing Location: One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
The Senior Notes will be available for inspection by the Representatives at:
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Address for Notices to the Underwriters:
Banc of America Securities LLC
000 X. Xxxxx Xxxxxx Capital Markets Division
Xxxxxxxxx, XX 00000
Mail Code: NC1007-06-07
Chase Securities Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
with a copy of any notice pursuant to Section 9(c) also sent to:
Banc of America Securities LLC
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx XxXxxx
Chase Securities Inc.
0 Xxxxx Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Legal Department
I-2
SCHEDULE II
Principal
Amount of
1999 Series B
Underwriter Senior Notes
----------- -------------
Banc of America Securities LLC $37,500,000
Chase Securities Inc. 37,500,000
-----------
Total: $75,000,000
===========
SCHEDULE III
PROPOSED FORM OF OPINION
OF
XXXX & VALENTINE, L.L.P.
Bank of America Center
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: VIRGINIA ELECTRIC AND POWER COMPANY
1999 Series B ___% Senior Notes,
due November 1, 2004
November __, 0000
Xxxx xx Xxxxxxx Securities LLC
Chase Securities Inc.
as Representatives of the Underwriters
c/o Banc of America Securities LLC
000 X. Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
We have acted as counsel for you in connection with arrangements for
the issuance by Virginia Electric and Power Company (the Company) of up to U.S.
$75,000,000 aggregate principal amount of its 1999 Series B ___% Senior Notes,
due November 1, 2004 (the Senior Notes) under and pursuant to a Senior
Indenture, dated as of June 1, 1998 between the Company and The Chase Manhattan
Bank, as trustee (the Trustee), as supplemented by the First Supplemental
Indenture dated as of June 1, 1998, a Second Supplemental Indenture dated as of
June 1, 1999, and a Third Supplemental Indenture dated as of November __, 1999
(collectively, the Senior Indenture), and the offering of the Senior Notes by
you pursuant to an Underwriting Agreement dated October __, 1999 by and between
you and the Company (the Underwriting Agreement). All terms not otherwise
defined herein shall have the meanings set forth in the Underwriting Agreement.
We have examined originals, or copies certified to our satisfaction of
such corporate records of the Company, indentures, agreements and other
instruments, certificates of public officials, certificates of officers and
representatives of the Company and of the Trustee, and other documents, as we
have deemed necessary as a basis for the opinions hereinafter expressed. As to
various questions of fact material to such opinions, we have, when relevant
facts were not independently established, relied upon certifications by officers
of the Company, the Trustee and other appropriate persons and statements
contained in the Registration Statement hereinafter mentioned. All legal
proceedings taken as of the date hereof in connection with the transactions
contemplated by the Underwriting Agreement have been satisfactory to us.
In addition, we attended the closing held today at the offices of
McGuire, Woods, Battle & Xxxxxx LLP, One Xxxxx Center, Richmond, Virginia, at
which the Company satisfied the conditions contained in Section 7 of the
Underwriting Agreement that are required to be satisfied as of the Closing Date.
Based upon the foregoing, and having regard to legal considerations
that we deem relevant, we are of the opinion that:
A. The Company is a corporation duly incorporated and existing under
the laws of Virginia and is duly qualified as a foreign corporation in West
Virginia and North Carolina, and has corporate power to transact its business as
described in the Prospectus.
B. The Underwriting Agreement has been duly authorized by all
necessary corporate action and has been duly executed and delivered by the
Company.
C. The Senior Indenture has been duly authorized, executed and
delivered by, and constitutes a valid and binding obligation of, the Company and
has been duly qualified under the Trust Indenture Act, except that we express no
opinion as to the validity or enforceability of any covenant to pay interest on
defaulted interest, and except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law).
D. The Senior Notes have been duly authorized by the Company and, when
executed by the Company and completed and authenticated by the Trustee in
accordance with the Senior Indenture and delivered and paid for as provided in
the Underwriting Agreement, will have been duly issued under the Senior
Indenture and will constitute valid and binding obligations of the Company
entitled to the benefits provided by the Senior Indenture, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles (regardless of whether enforcement is considered
in a proceeding in equity or at law).
E. The Registration Statement (Reg. No. 333-47119) with respect to the
Senior Notes filed pursuant to the Securities Act, has become effective and
remains in effect at this date,
III-2
and the Prospectus may lawfully be used for the purposes specified in the
Securities Act in connection with the offer for sale and the sale of Senior
Notes in the manner therein specified.
The Registration Statement and the Prospectus (except the financial
statements incorporated by reference therein, as to which we express no opinion)
appear on their face to be appropriately responsive in all material respects to
the requirements of the Securities Act, and to the applicable rules and
regulations of the Commission thereunder.
As to the statements relating to the Senior Notes under DESCRIPTION OF
THE SENIOR NOTES AND SENIOR SUBORDINATED NOTES in the prospectus initially filed
as part of the Registration Statement, as supplemented by the statements under
the DESCRIPTION OF THE 1999 SERIES B SENIOR NOTES in the Prospectus Supplement
dated October __, 1999 (the Prospectus Supplement), we are of the opinion that
the statements are accurate and do not omit any material fact required to be
stated therein or necessary to make such statements not misleading. As to the
statistical statements in the Registration Statement (which includes the
Incorporated Documents), we have relied solely on the officers of the Company.
As to the other matters, we have not undertaken to determine independently the
accuracy or completeness of the statements contained or incorporated by
reference in the Registration Statement or in the Prospectus. We accordingly
assume no responsibility for the accuracy or completeness of the statements made
in the Registration Statement except as stated above in regard to the above
captions. We note that we were not involved in the preparation of the
Registration Statement or the prospectus initially filed as part thereof, and
that the Incorporated Documents were prepared and filed by the Company without
our participation. We have, however, participated in conferences with counsel
for and representatives of the Company in connection with the preparation of the
Prospectus Supplement, and we have reviewed the Incorporated Documents and such
of the corporate records of the Company as we deemed advisable. None of the
foregoing disclosed to us any information that gives us reason to believe that
the Registration Statement or the Prospectus (except the financial statements
incorporated by reference therein, as to which we express no opinion) contained
on the date the Registration Statement became effective or now contains any
untrue statement of a material fact or omitted on said date or now omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The foregoing opinion is given on the basis
that any statement contained in an Incorporated Document shall be deemed not to
be contained in the Registration Statement or Prospectus if the statement has
been modified or superseded by any statement in a subsequently filed
Incorporated Document or in the Registration Statement or Prospectus.
F. An appropriate order of the Virginia Commission with respect to the
sale of the Senior Notes on the terms and conditions set forth in the
Underwriting Agreement has been issued, and such order remains in effect at this
date and constitutes valid and sufficient authorization for the sale of the
Senior Notes as contemplated by the Underwriting Agreement. We understand such
order does not contain any provision unacceptable to you under the Underwriting
Agreement. No approval or consent by any public regulatory body, other than such
order and notification of effectiveness by the Commission, is legally required
in connection with the sale of the Senior Notes as contemplated by the
Underwriting Agreement (except to the extent that compliance with the provisions
of securities or blue sky laws of certain states may be
III-3
required in connection with the sale of the Senior Notes in such states) and the
carrying out of the provisions of the Underwriting Agreement.
G. The Senior Notes conform in all material respects to their
description in the Underwriting Agreement and to the statements with respect
thereto contained in the Registration Statement and the Prospectus.
To the extent that the opinion expressed in paragraph A involves
matters governed by the laws of North Carolina and West Virginia, we have relied
upon certificates of public officials in those states as to the Company's good
standing and due authorization to transact business in those states.
The opinion expressed in paragraph E is given on the basis that any
statement contained in an Incorporated Document shall be deemed not to be
contained in the Registration Statement or Prospectus if the statement has been
modified or superseded by any statement in a subsequently filed Incorporated
Document or in the Registration Statement or Prospectus.
Very truly yours,
XXXX & VALENTINE, L.L.P.
III-4
SCHEDULE IV
PROPOSED FORM OF OPINION
OF
MCGUIRE, WOODS, BATTLE & XXXXXX LLP
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: VIRGINIA ELECTRIC AND POWER COMPANY
1999 Series B _____% Senior Notes
due November 1, 2004
November __, 0000
Xxxx xx Xxxxxxx Securities LLC
Chase Securities Inc.
as Representatives for the Underwriters
c/o Banc of America Securities LLC
000 X. Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
The arrangements for issuance of up to U.S. $75,000,000 aggregate principal
amount of 1999 Series B ____% Senior Notes, due November 1, 2004 (the Senior
Notes), of Virginia Electric and Power Company (the Company) under a Senior
Indenture dated as of June 1, 1998 between the Company and The Chase Manhattan
Bank, as trustee (the Trustee), as supplemented by a First Supplemental
Indenture dated as of June 1, 1998, a Second Supplemental Indenture dated as of
June 1, 1999, and a Third Supplemental Indenture dated as of November __, 1999
(collectively, the Senior Indenture), and pursuant to an Underwriting Agreement
dated October __, 1999, by and between the Company and the Underwriters listed
on Schedule II as attached thereto (the Underwriting Agreement), have been taken
under our supervision as counsel for the Company. Terms not otherwise defined
herein have the meanings set forth in the Underwriting Agreement.
We have examined originals, or copies certified to our satisfaction, of
such corporate records of the Company, indentures, agreements, and other
instruments, certificates of public officials, certificates of officers and
representatives of the Company and of the Trustee, and other documents, as we
have deemed it necessary to require as a basis for the opinions hereinafter
expressed. As to various questions of fact material to such opinions, we have,
when relevant facts were not independently established, relied upon
certifications by officers of the Company, the Trustee and other appropriate
persons and statements contained in the Registration Statement hereinafter
mentioned. All legal proceedings taken as of the date hereof in connection with
the transactions contemplated by the Underwriting Agreement have been
satisfactory to us.
In regard to the title of the Company to its properties, we have made no
independent investigation of original records but our opinion is based (a) with
respect to land and rights of way for electric lines of 69,000 volts or more,
solely on reports and opinions by counsel in whom we have confidence and (b)
with respect to rights of way for electric lines of less than 69,000 volts and
various matters of fact in regard to all other properties, solely on information
from officers of the Company.
On this basis we are of the opinion that:
1. The Company is a corporation duly organized and existing under the laws
of Virginia and is duly qualified as a foreign corporation in West Virginia and
North Carolina. Neither the nature of the Company's business nor the properties
it owns or holds under lease makes necessary qualification as a foreign
corporation in any state where it is not now so qualified or where the failure
to be so qualified would have a material adverse effect on the Company and its
subsidiaries taken as a whole, and the Company has corporate power to conduct
its business as described in the Prospectus and to issue the Senior Notes.
2. All requisite corporate and governmental authorizations have been given
for the issuance of the Senior Notes under the Senior Indenture.
3. The Underwriting Agreement has been duly authorized by all necessary
corporate action and has been duly executed and delivered by the Company.
4. The Senior Indenture has been duly authorized, executed, and delivered
by, and constitutes a valid and binding obligation of, the Company and has been
duly qualified under the Trust Indenture Act, except that we express no opinion
as to the validity or enforceability of any covenant to pay interest on
defaulted interest, and except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law).
5. The Senior Notes have been duly authorized by the Company and, when duly
executed by the Company and completed and authenticated by the Trustee in
accordance with the Senior Indenture and issued, delivered and paid for in
accordance with the Underwriting
IV-2
Agreement, will have been duly issued under the Senior Indenture and will
constitute valid and binding obligations of the Company entitled to the benefits
provided by the Senior Indenture, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law).
6. The Registration Statement (Reg. No. 333-47119) with respect to the
Senior Notes filed pursuant to the Securities Act, has become effective and
remains in effect at this date, and the Prospectus may lawfully be used for the
purposes specified in the Securities Act in connection with the offer for sale
and the sale of the Senior Notes in the manner therein specified.
The statements in regard to our firm under the caption EXPERTS in the
Prospectus relating to the Senior Notes are correct, and we are of the opinion
that, so far as governed by the laws of the United States, North Carolina or
Virginia, the legal conclusions relating to franchises, title to its properties,
rates, environmental and other regulatory matters and litigation in the
Company's Annual Report on Form 10-K incorporated in the Prospectus by reference
and the description of the provisions of the Senior Indenture and the terms of
the Senior Notes contained in the prospectus initially filed as part of the
Registration Statement under DESCRIPTION OF THE SENIOR NOTES AND SENIOR
SUBORDINATED NOTES, as supplemented by the statements under DESCRIPTION OF THE
1999 SERIES B SENIOR NOTES in the Prospectus Supplement dated October __, 1999,
are substantially accurate and fair. As to the statistical statements in the
Registration Statement (which includes the Incorporated Documents), we have
relied solely on the officers of the Company. As to other matters of fact, we
have consulted with officers and other employees of the Company to inform them
of the disclosure requirements of the Securities Act. We have examined various
reports, records, contracts and other documents of the Company and orders and
instruments of public officials, which our investigation led us to deem
pertinent. In addition, we attended the due diligence meetings with
representatives of the Company and the closing at which the Company satisfied
the conditions contained in Section 7 of the Underwriting Agreement. We have
not, however, undertaken to make any independent review of the other records of
the Company. We accordingly assume no responsibility for the accuracy or
completeness of the statements made in the Registration Statement except as
stated above in regard to the aforesaid captions. But such consultation,
examination and attendance disclosed to us no information with respect to such
other matters that gives us reason to believe that the Registration Statement or
the Prospectus contained on the date the Registration Statement became effective
or contains now any untrue statement of a material fact or omitted on said date
or omits now to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. We are of the opinion that the
Registration Statement (excepting the financial statements incorporated therein
by reference, as to which we express no opinion) complies as to form in all
material respects with all legal requirements and is now effective.
The Registration Statement and the Prospectus (except the financial
statements incorporated by reference therein, as to which we express no opinion)
appear on their face to be
IV-3
appropriately responsive in all material respects to the requirements of the
Securities Act, and to the applicable rules and regulations of the Commission
thereunder.
7. The titles and interests of the Company in and to its properties are
reasonably adequate to enable the Company to carry on its business and the
Company holds such franchises, permits and licenses as are reasonably adequate
to enable the Company to carry on its business, and, as to any franchises,
permits and licenses that the Company does not hold, the absence thereof will
not materially adversely affect the operation, business and properties of the
Company as a whole.
8. Except as set forth in the Registration Statement, there are no pending
legal, administrative or judicial proceedings with respect to the Company that
are required to be described in Form S-3.
The opinions in paragraphs 6 and 8 hereof are given on the basis that any
statement contained in an Incorporated Document shall be deemed not to be
contained in the Registration Statement or Prospectus if the statement has been
modified or superseded by any statement in a subsequently filed Incorporated
Document or in the Registration Statement or Prospectus.
Yours very truly,
MCGUIRE, WOODS, BATTLE
& XXXXXX LLP
IV-4
