Exhibit 1
Old Dominion Electric Cooperative
Debt Securities
Underwriting Agreement
July 23, 2003
The Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
Old Dominion Electric Cooperative, a Virginia utility aggregation
cooperative (the "Company"), proposes to issue and sell to the underwriters
listed in Schedule II hereto (the "Underwriters") the principal amount of its
debt securities identified in Schedule I hereto (the "Securities"), to be issued
under the indenture specified in Schedule I hereto (the "Indenture") between the
Company and the Trustee identified in such Schedule I (the "Trustee").
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (the file number of which is set forth in Schedule I hereto) on Form
S-3, relating to certain debt securities (the "Shelf Securities") to be issued
from time to time by the Company. The Company also has filed with, or proposes
to file with, the Commission pursuant to Rule 424 under the Securities Act a
prospectus supplement specifically relating to the Securities. The registration
statement as amended to the date of this Agreement is hereinafter referred to as
the "Registration Statement" and the related prospectus covering the Shelf
Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "Basic Prospectus." The Basic Prospectus as
supplemented by the prospectus supplement specifically relating to the
Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "Prospectus." If the Company has filed an
abbreviated registration statement pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement. Any reference in this Agreement to the Registration
Statement, the Basic Prospectus, any preliminary form of Prospectus (a
"preliminary prospectus") previously filed with the Commission 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 Securities Act which were
filed under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act"), on
or before the date of this Agreement or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be; and any reference
to "amend," "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include any documents filed under the Exchange
Act after the date of this Agreement, or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be, which are deemed
to be incorporated by reference therein.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Securities to the several
Underwriters as hereinafter provided, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective principal amount of Securities set forth
opposite such Underwriter's name in Schedule II hereto at the purchase price set
forth in Schedule I hereto plus accrued interest, if any, from the date
specified in Schedule I hereto to the date of payment and delivery.
2. The Company understands that the Underwriters intend (i) to make a
public offering of their respective portions of the Securities as soon after (A)
the Registration Statement has become effective and (B) the parties hereto have
executed and delivered this Agreement, as in the judgment of the Underwriters is
advisable and (ii) initially to offer the Securities upon the terms set forth in
the Prospectus.
3. Payment for the Securities shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Underwriters on
the date and at the place set forth in Schedule I hereto (or at such other date
and place, not later than the fifth Business Day (as defined below) thereafter,
as the Underwriters and the Company may agree upon in writing). The date of such
payment is referred to herein as the "Closing Date." As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York City.
Payment for the Securities shall be made against delivery to the nominee of
The Depository Trust Company for the respective accounts of the several
Underwriters of one or more global bonds (collectively, the "Global Bonds")
representing the Securities, with any transfer taxes payable in connection with
the transfer to the Underwriters of the Securities duly paid by the Company. The
Global Bonds will be made available for inspection by the Underwriters at the
place set forth in Schedule I hereto, not later than 1:00 P.M., New York City
time, on the Business Day prior to the Closing Date.
4. The Company represents and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary prospectus
relating to the Securities filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant to Rule
424 under the Securities Act, complied when so filed in all material respects
with the Securities Act, 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 light of the circumstances under which they
were made, not misleading; provided that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter expressly for use therein;
(b) the Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that purpose
has been instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material respects
with the Securities Act and the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Trust
Indenture Act"), and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the date of
the Prospectus and any amendment or
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supplement thereto, respectively, contain 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, and the Prospectus, as
amended or supplemented, if applicable, at the Closing Date will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; except that the foregoing representations and
warranties shall not apply to (i) information contained in the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the Trust
Indenture Act, and (ii) statements or omissions in the Registration Statement or
the Prospectus made in reliance upon and in conformity with information relating
to any Underwriter furnished to the Company in writing by such Underwriter
expressly for use therein;
(c) the documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, 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 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 become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, 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 light of the circumstances under which they were made,
not misleading;
(d) the financial statements, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the periods
specified; and said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis, and the
supporting schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein;
(e) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change in the patronage capital, margins or long-term debt of the
Company, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, patronage capital, margins
or results of operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; and except as set
forth or contemplated in the Prospectus neither the Company nor any of its
subsidiaries has entered into any transaction or agreement (whether or not in
the ordinary course of business) material to the Company and its subsidiaries
taken as a whole;
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(f) the Company has been duly organized and is validly existing as a
utility aggregation cooperative in good standing under the laws of the
Commonwealth of Virginia, with power and authority to enter into and perform its
obligations under this Agreement, the Indenture and the Securities, to own its
properties and conduct its business as described in the Prospectus; neither the
character of the property owned or leased by the Company nor the nature of the
business transacted by it makes the licensing or qualification of the Company as
a foreign corporation necessary in any state or jurisdiction other than
Delaware; the Company is duly qualified as a foreign corporation for the
transaction of business and is in good standing in Delaware;
(g) each of the Company's subsidiaries has been duly organized and is
validly existing under the laws of its jurisdiction of organization, with power
and authority to own its properties and conduct its business as described in the
Prospectus; neither the character of the property owned or leased by any
subsidiary of the Company nor the nature of the business transacted by such
subsidiary makes the licensing or qualification of such subsidiary necessary in
any state or jurisdiction other than Rock Springs Generation LLC in Maryland;
Rock Springs Generation LLC is duly qualified to do business in and is in good
standing in Maryland; and all the outstanding shares of capital stock or
membership interests of each subsidiary of the Company have been duly authorized
and validly issued, are fully-paid and non-assessable, and are owned by the
Company, free and clear of all liens, encumbrances, security interests and
claims;
(h) this Agreement has been duly authorized, executed and delivered by
the Company;
(i) the Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and the Indenture, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits provided by the
Indenture; the Indenture has been duly authorized and qualified under the Trust
Indenture Act and, when the Sixteenth Supplemental Indenture is executed and
delivered by the Company and the Trustee, the Indenture will constitute a valid
and binding instrument enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law; and the Securities and the Indenture will conform to the descriptions
thereof in the Prospectus;
(j) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its Articles of Incorporation or Bylaws or other organizational
documents or any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them or any of their respective properties is
bound, except for violations and defaults which individually and in the
aggregate do not have a material adverse effect on the Company and its
subsidiaries taken as a whole or to the holders of the Securities; the issue and
sale of the Securities and the performance by the Company of its obligations
under the Securities, the Indenture and this Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach 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 the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will any such action result in any violation of the provisions of the Articles
of Incorporation or the Bylaws of the Company or the organizational documents of
any of its subsidiaries or any applicable law or statute or any order, rule or
regulation
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of any court or governmental agency or body having jurisdiction over the
Company, its subsidiaries or any of their respective properties or result in the
creation or imposition of any lien upon any of the properties of the Company or
any of its subsidiaries; and no consent, approval, authorization, order,
license, filing, registration or qualification of or with, any such court or
federal, state or local governmental agency or body or the members of the
Company or any trustee or holder of any indebtedness or other obligation is now
or under existing law in the future will be required for the issue and sale of
the Securities or the execution, delivery and performance of this Agreement or
the Indenture, except such consents, approvals, authorizations, orders,
licenses, filings, registrations or qualifications as have been made or obtained
under the Securities Act, the Trust Indenture Act and the Federal Power Act, as
amended, and the filings and recordings described in paragraph (s) below and as
may be required under state securities or blue sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(k) other than as set forth or contemplated in the Prospectus, there are
no legal or governmental inquiries, investigations, actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries or any of their respective
properties or to which the Company or any of its subsidiaries is or may be a
party or to which any property of the Company or any of its subsidiaries is or
may be the subject which is required by the Securities Act to be described in
the Registration Statement or Prospectus, and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and there are no existing or proposed
statutes, regulations, contracts or other documents that are required to be
filed as an exhibit to the Registration Statement or required to be described in
the Registration Statement or the Prospectus which are not filed or described as
required;
(l) immediately after any sale of Securities by the Company hereunder,
the aggregate amount of Securities which have been issued and sold by the
Company hereunder and of any securities of the Company (other than the
Securities) that shall have been issued and sold pursuant to the Registration
Statement will not exceed the amount of securities registered under the
Registration Statement;
(m) Ernst & Young LLP, which has certified certain financial statements
of the Company, is to the knowledge of the Company, an independent public
accountant as required by the Securities Act;
(n) the Company and its subsidiaries have good and marketable title to
all items of real property and good title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects except
such as are described or referred to in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made or proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, existing and
enforceable leases with such exceptions as are described or referred to in the
Prospectus or do not materially interfere with the use made or proposed to be
made of such property and buildings by the Company or its subsidiaries; no
notice has been given to the Company or its subsidiaries by any governmental
authority of any proceeding to condemn or otherwise acquire any of the property
of the Company or its subsidiaries and to the best of the Company's knowledge,
no such proceeding is contemplated;
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(o) no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers,
members or stockholders (as applicable), customers or suppliers of the Company
or any of its subsidiaries on the other hand, which is required by the
Securities Act to be described in the Registration Statement and the Prospectus
which is not so described;
(p) the Company is not and, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" or an entity "controlled" by
an "investment company," as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act");
(q) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing business
with the Government of Cuba or with any person or affiliate located in Cuba;
(r) the Company is not a "holding company" or a "subsidiary company" of
a "holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended;
(s) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals and
other authorizations (collectively, "Authorizations") from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities (including foreign regulatory agencies), all self-regulatory
organizations and all courts and other tribunals, domestic or foreign, necessary
to own or lease, as the case may be, and to operate its properties and to carry
on its business as conducted as of the date hereof, except as described in the
Registration Statement and the Prospectus or where the failure to own, possess
or obtain such Authorizations or make such declarations and filings could not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and neither the Company nor any such subsidiary
has received any actual notice of any proceeding relating to revocation or
modification of any such Authorization, except as described in the Registration
Statement and the Prospectus or where the revocation or modification of such
Authorization could not reasonably be expected to have a material adverse effect
on the Company and its subsidiaries, taken as a whole; and each of the Company
and its subsidiaries is in compliance with all laws and regulations relating to
the conduct of its business as conducted as of the date hereof (including
without limitation all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002,
as amended, and the rules of the Commission promulgated thereunder), except
where such noncompliance could not reasonably be expected to have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(t) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which are likely to have a material adverse effect on the Company
and its subsidiaries taken as a whole;
(u) the Indenture (excluding the Sixteenth Supplemental Indenture)
constitutes, and when the Sixteenth Supplemental Indenture is executed and
delivered by the Company and the Trustee and filed and recorded the Indenture
will constitute, a direct and valid first lien upon all of the properties and
assets of the Company specifically or generally described or referred to in the
Indenture as being subject to the lien thereof, subject only to the exceptions
referred to in the Indenture, and will create a similar lien upon all properties
and assets acquired by the Company after the date hereof (until the Release Date
(as defined in the Indenture)) which are required to be
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subjected to the lien of the Indenture, when acquired by the Company, subject
only to the exceptions referred to in the Indenture and free from all other
prior liens, charges and encumbrances subject, as to real property, to the
recordation of a supplement to the Indenture describing such after-acquired
property; the descriptions of all such properties and assets contained in the
granting clauses of the Indenture are correct and adequate for the purposes of
the Indenture; and the Indenture (excluding the Sixteenth Supplemental
Indenture) has been duly recorded as a mortgage and deed of trust of real
estate, and any required filings (other than with respect to filing the
Sixteenth Supplemental Indenture) with respect to personal property and fixtures
subject to the lien of the Indenture have been duly made in each place in which
such recording or filing is required to protect, preserve and perfect the lien
of the Indenture; and all taxes and recording and filing fees required to be
paid with respect to the execution, recording or filing of the Indenture, the
filing of financing statements related thereto and similar documents and the
issuance of the Securities (other than with respect to filing the Sixteenth
Supplemental Indenture) have been paid; the Sixteenth Supplemental Indenture
will be duly recorded or filed on or prior to the Closing Date in the real and
personal property records in each place in which the Indenture (excluding the
Sixteenth Supplemental Indenture) has been recorded or filed and in all other
places required to protect, preserve and perfect the lien of the Indenture, and
all taxes and recording and filing fees required to be paid with respect to the
execution, recording or filing of the Sixteenth Supplemental Indenture will be
paid.
5. The Company covenants and agrees with each of the several Underwriters
as follows:
(a) to file the Prospectus in a form approved by you pursuant to Rule 424
under the Securities Act not later than the Commission's close of business on
the Business Day next succeeding the date of determination of the offering price
of the Securities or, if applicable, such earlier time as may be required by
Rule 424(b);
(b) to deliver, at the expense of the Company, to each of the Underwriters
and counsel for the Underwriters, a certified copy of the signed Registration
Statement (as originally filed) and each amendment thereto, in each case
including exhibits and documents incorporated by reference therein, and, during
the period mentioned in paragraph (e) below, to furnish each of the Underwriters
as many copies of the Prospectus (including all amendments and supplements
thereto) and documents incorporated by reference therein as the Underwriters may
reasonably request;
(c) before filing any amendment or supplement to the Registration Statement
or the Prospectus relating to or affecting the Securities, to furnish to each
Underwriter a copy of the proposed amendment or supplement for review, and not
to file any such proposed amendment or supplement to which the Underwriters
reasonably object in writing; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for
so long as, in the opinion of counsel for the Underwriters, a prospectus is
required to be delivered in connection with sales of the Securities by any
Underwriter or dealer, and before filing any such reports or information, to
furnish each Underwriter a copy of the proposed reports or information;
(d) to advise the Underwriters promptly, and to confirm such advice in
writing if requested, (i) when any amendment to the Registration Statement
relating to or affecting the Securities has been filed or becomes effective,
(ii) when any supplement to the Prospectus or any amendment to the Prospectus
has been filed and to furnish the Underwriters with copies thereof, (iii) of any
request by the Commission for any amendment to the Registration Statement
relating to
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or affecting the Securities or any amendment or supplement to the Prospectus or
for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus or the
Prospectus or the initiation or threatening of any proceeding for that purpose,
(v) of the occurrence of any event, within the period referenced in paragraph
(e) below, 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 in order to make the statements therein, in light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
and (vi) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use every reasonable effort to prevent the issuance of any such
stop order, or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any order suspending any such qualification
of the Securities, or notification of any such order thereof and, if issued, to
obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Securities as in the opinion of counsel for the Underwriters a
prospectus relating to the Securities is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriters and to the dealers
(whose names and addresses the Underwriters will furnish to the Company) to
which Securities may have been sold by the Underwriters and to any other dealers
upon request, such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus will comply with law;
(f) to endeavor to qualify the Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as the Underwriters shall
reasonably request, including filing a general consent to service of process in
any jurisdiction, and to continue such qualification in effect so long as
reasonably required for distribution of the Securities; provided that the
Company shall not be required to qualify to do business in any jurisdiction or
take any action which would subject it to service of process other than service
of process arising out of the offer or sale of Securities in any jurisdiction
where it is not now subject;
(g) to make generally available to its security holders and to the
Underwriters as soon as practicable an earnings statement which will satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months beginning
with the first fiscal quarter of the Company occurring after the "effective
date" (as defined in Rule 158) of the Registration Statement;
(h) for a period of five years after the date hereof, to furnish to the
Underwriters (i) copies of all reports or other communications (financial or
other) furnished to holders of the Securities, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange, (ii) copies of each annual report of the Company furnished
to its members and (iii) such other information concerning the Company as the
Underwriters reasonably may request;
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(i) during the period beginning on the date hereof and continuing to and
including the Business Day after the Closing Date, not to offer, sell, contract
to sell, or otherwise dispose of any debt securities of or guaranteed by the
Company which are substantially similar to the Securities;
(j) to use the net proceeds received by the Company from the sale of the
Securities pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Plan of Finance and Use of Proceeds";
(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all fees, costs and
expenses (i) incident to the preparation, issuance, execution, authentication
and delivery of the Securities, including any fees and expenses of the Trustee,
(ii) incident to the preparation, printing, reproduction, and filing under the
Securities Act of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification
and determination of eligibility for investment of the Securities under the laws
of such jurisdictions as the Underwriters may designate (including fees of
counsel for the Underwriters and their disbursements but not with respect to any
legal investment survey), (iv) related to any filing with National Association
of Securities Dealers, Inc., (v) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the Form T-1,
the Indenture, the preliminary and supplemental blue sky memoranda (but not any
legal investment survey) and the furnishing to Underwriters and dealers of
copies of the Registration Statement, the Prospectus and any preliminary
prospectus, including mailing and shipping, as herein provided, (vi) payable to
rating agencies in connection with the rating of the Securities, (vii) incurred
by the Company in connection with a "road show" presentation to potential
investors, (viii) of any transfer agent, (ix) of independent public accountants
in connection with the offering of the Securities, (x) in connection with any
credit enhancement for the Securities and (xi) of counsel for the Underwriters
in connection with this Agreement and the actions contemplated by this
Agreement.
6. The several obligations of the Underwriters hereunder to purchase the
Securities on the Closing Date are subject to the performance by the Company of
its obligations hereunder and to the following additional conditions:
(a) no stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission; the Prospectus shall have been
filed with the Commission pursuant to Rule 424 within the applicable time period
prescribed for such filing by the rules and regulations under the Securities
Act; and all requests for additional information shall have been complied with
to the satisfaction of the Underwriters;
(b) the representations and warranties of the Company contained herein are
true and correct on and as of the Closing Date as if made on and as of the
Closing Date and the Company shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date;
c) subsequent to the execution and delivery of this Agreement and prior to
the Closing Date, there shall not have occurred any downgrading, nor shall any
notice have been given of (i) any downgrading, (ii) any intended or potential
downgrading or (iii) any review or possible change that
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does not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(d) since the date of the most recent audited financial statements included
or incorporated by reference in the Prospectus or, with respect to information
included or incorporated by reference in the Prospectus as of a more recent
date, since such more recent date, otherwise than as set forth or contemplated
in the Prospectus, there shall not have been (i) any change in the patronage
capital, margins or long-term debt of the Company, (ii) any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, business, properties, prospects, management,
financial position, patronage capital, margins or results of operations of the
Company and its subsidiaries, taken as a whole, or (iii) any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, the effect of which in the judgment of the
Underwriters makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the Closing Date on the terms and
in the manner contemplated in the Prospectus;
(e) the Underwriters shall have received on and as of the Closing Date a
certificate of the Senior Vice President of Accounting and Finance, to the
effect set forth in subsections (a) through (c) (with respect to the respective
representations, warranties, agreements and conditions of the Company) of this
section and to the further effect that there has not occurred any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, properties, prospects,
management, financial position, equities, margins or results of operations of
the Company and its subsidiaries taken as a whole from that set forth or
contemplated in the Registration Statement and as to such other matters as you
may reasonably request;
(f) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, special counsel for the Company,
shall have furnished to the Underwriters its written opinion, dated the Closing
Date, in form and substance satisfactory to the Underwriters; the opinion of
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein;
(g) ▇▇▇▇▇▇▇ ▇▇▇▇, A Professional Corporation, general counsel for the
Company, shall have furnished to the Underwriters its written opinion, dated the
Closing Date, in form and substance satisfactory to the Underwriters; the
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇, A Professional Corporation described above shall be
rendered to the Underwriters at the request of the Company and shall so state
therein;
(h) on the date hereof and also on the Closing Date, Ernst & Young LLP
shall have furnished to you a letter, dated such date, in form and substance
satisfactory to you, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus;
(i) the Underwriters shall have received on and as of the Closing Date an
opinion of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Underwriters, with
respect to the validity of the Indenture and the Securities, the Registration
Statement, the Prospectus and other related matters as
10
the Underwriters may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(j) on and as of the Closing Date the Secretary of the Company shall have
furnished to the Underwriters a certificate, satisfactory to the Underwriters,
attaching a true and correct copy of the Company's Articles of Incorporation and
Bylaws and attaching such other documents and certifying as to such other
matters as you may reasonably request;
(k) on or prior to the Closing Date the Company shall have furnished to the
Underwriters such further opinions, certificates and documents as the
Underwriters shall reasonably request and shall have obtained such consents and
approvals as may be required in connection with the issuance and sale of the
Securities and the execution, delivery and performance of this Agreement and the
Indenture;
(l) on or prior to the Closing Date the Federal Energy Regulatory
Commission ("FERC") shall have issued a final order approving the issuance of
the Securities and allowing for exemption from FERC's competitive bidding
procedures and negotiated placement requirements;
7. The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, the reasonable legal fees and other expenses incurred in connection
with any suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made (i) in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter expressly for use therein or (ii) in the preliminary prospectus
(or any amendment or supplement thereto) but not in the Prospectus in the case
of losses, claims, damages or liabilities of an Underwriter to a purchaser of
the Securities to whom such Underwriter failed to confirm the purchase and sale
of the Securities by delivery of a Prospectus.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter expressly for use in the Registration Statement,
the Prospectus, any amendment or supplement thereto, or any preliminary
prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified
11
Person and any others the Indemnifying Person may designate in such proceeding
and shall pay the fees and expenses of such counsel related to such proceeding.
In any such proceeding, any Indemnified Person shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and the Indemnified Person shall
be advised by counsel in writing that representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed as they are incurred. Any such separate firm for
the Underwriters and such control persons of Underwriters shall be designated in
writing by ▇.▇. ▇▇▇▇▇▇ Securities Inc. and any such separate firm for the
Company, its directors, its officers who sign the Registration Statement and
such control persons of the Company shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for the reasonable fees
and expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs of this
Section 7 is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of such Securities (before deducting expenses) received by the Company and the
total underwriting discounts and the commissions received by the Underwriters
bear to the
12
aggregate public offering price of the Securities. The relative fault of the
Company on the one hand and the Underwriters on the other shall be determined by
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
relates to information supplied by the Company or by the Underwriters 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 Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities 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 to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of Securities set forth opposite their names in
Schedule II hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law of in equity.
The indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf of the
Company, its officers or directors or any other person controlling the Company
and (iii) acceptance of and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Underwriters, by written notice
given to the Company, if after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of or
guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, (iv) there shall have occurred a material interruption of
securities settlement or clearance services in the United States, or (v) there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Underwriters, is material and adverse and which, in the judgment of the
Underwriters, makes it impracticable to market the Securities on the terms and
in the manner contemplated in the Prospectus.
13
9. This Agreement shall become effective upon the execution and delivery
hereto by the parties hereto.
10. If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase Securities which it or they have agreed to purchase
hereunder, and the aggregate principal amount of Securities 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 Securities,
the other Underwriters shall be obligated severally in the proportions that the
principal amount of Securities set forth opposite their respective names in
Schedule II bears to the aggregate principal amount of Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Underwriters may specify, to purchase the Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the principal amount of
Securities that any Underwriter has agreed to purchase pursuant to Section 1 be
increased pursuant to this Section 10 by an amount in excess of one-tenth of
such principal amount of Securities without the written consent of such
Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail
or refuse to purchase Securities, and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased, and arrangements
satisfactory to the Underwriters and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case that does not result in termination of this Agreement,
either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven 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 paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
11. If this Agreement shall be terminated by the Underwriters, or any of
them, 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 or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering of Securities.
12. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriters, any controlling persons referred to herein and their
respective successors andassigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give 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. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
13. Any action by the Underwriters hereunder may be taken by you jointly or
by the first of the named Underwriters set forth on Schedule I hereto alone on
behalf of the Underwriters, and any such action taken by you jointly or by the
first of the named Underwriters set forth on Schedule I hereto alone shall be
binding upon the Underwriters. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given at the
14
addresses set forth in Schedule I hereto. Notices to the Company shall be given
to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telefax:
804-747-3742); Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
14. This Agreement may be signed in counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
15
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
Old Dominion Electric Cooperative
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President of Accounting and Finance
Accepted: July 23, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
Banc of America Securities LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇ ▇▇▇▇▇
Principal
16
SCHEDULE I
Underwriters: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
Banc of America Securities LLC
Registration Statement
No.: 333-100577
Securities: $250,000,000 5.676% 2003 Series A Bonds Due 2028
Purchase Price: $247,727,500
Price to Public: 100% of the principal amount of the Securities,
plus accrued interest, if any, from the Closing
Date.
Indenture: The Indenture of Mortgage and Deed of Trust
dated as of May 1, 1992 between the Company and
Crestar Bank, as Trustee, as amended and
supplemented through and including the Sixteenth
Supplemental Indenture, dated as of July 1,
2003.
Closing Date: July 29, 2003
Location for
Inspection of
Global Bonds: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Washington Harbour, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Closing Location: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Washington Harbour, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Addresses for Notices
to Underwriters: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Old Dominion Transaction Execution Group
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: High Grade Capital Markets Desk
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE II
Amount of
---------
Underwriter Securities To Be Purchased
----------- --------------------------
▇.▇. ▇▇▇▇▇▇ Securities Inc. $175,000,000
Banc of America Securities LLC $ 75,000,000
Totals $250,000,000
