Exhibit 1(ii)
VIRGINIA ELECTRIC AND POWER COMPANY
Senior Notes
Series _, ____%, Due __________
FORM OF UNDERWRITING AGREEMENT
[Date]
[Name of Underwriter]
as Representative for
the Several Underwriters
named in Schedule II hereto
[Address of Underwriter]
Ladies and Gentlemen:
The undersigned, Virginia Electric and Power Company (the Company),
hereby confirms its agreement with the several Underwriters named in Schedule II
hereto (the Agreement) with respect to the sale to the several Underwriters of
certain of its Senior Notes (the Senior Notes) specified in Schedule I hereto,
and the public offering thereof by the several Underwriters, upon the terms
specified in Schedule I hereto.
1. Underwriters and Representative. The term "Underwriters" as used
herein shall be deemed to mean the several persons, firms or corporations
(including the Representative hereinafter mentioned) named in Schedule II
hereto, and the term "Representative" as used herein shall be deemed to mean the
representative to whom this Agreement is addressed, who by signing this
Agreement represents that it has 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 "Representative" 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 Representative will be binding upon all the
Underwriters.
2. Description of the Senior Notes. Schedule I specifies the aggregate
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 therefor. 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 _________, ____ between
the Company and The Chase Manhattan Bank, as Trustee (the Trustee).
3. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) A registration statement, No. 33-______ on Form S-3 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 (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 contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and,
on the Closing Date, the Registration Statement and the
Prospectus (including any amendments and
- 2 -
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 (b) shall not apply to statements in or
omissions from the Registration Statement or the Prospectus
made in reliance upon information furnished herein or in
writing to the Company by the Underwriters or on the
Underwriters' behalf 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 the 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 [and
the audited results for ____ for which financial statements
have not yet been released], 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.
- 3 -
(g) The Company has complied and will comply with all of the
provisions of Florida H.B. 1771, codified as Section 517.075
of the Florida statutes, and all regulations promulgated
thereunder related to issuers of securities doing business
with Cuba.
4. Public Offering. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions in this Agreement set
forth, the Company agrees to sell to each of the several 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 several 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 several Underwriters reserve the right to vary the offering
price and further reserve the right to withdraw, cancel or modify such offering
without notice.
5. Time and Place of Closing. Delivery of the Senior Notes to, and
payment therefor by, the Representative for the accounts of the several
Underwriters shall be made at the time, place and date specified in Schedule I
or such other time, place and date as the Representative 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 or its order by check or checks in New York
Clearing House funds at the Closing Date against delivery of the Senior Notes,
in fully registered form, to or upon your order. The Senior Notes shall be
delivered in certificated form or in the form of a global note in the
denominations equal to the aggregate principal amount of the Senior Notes upon
original issuance and registered in the name of Cede & Co., as nominee for the
Depositary Trust Company.
6. Covenants of the Company. The Company agrees that:
(a) The Company, at or prior to the Closing Date, will deliver to
the Representative conformed copies of the Registration
Statement as originally filed, including all exhibits, 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 by the Representative.
(b) The Company will pay all expenses in connection with (i) the
preparation and filing by it of the Registration Statement and
Prospectus and the printing of this Agreement, (ii) the
preparation, issue and delivery of certificates for the Senior
Notes, (iii) any fees and expenses of the Trustee and (iv) the
printing and delivery to the
- 4 -
Underwriters in reasonable quantities of copies of the
Registration Statement and the Prospectus (each as originally
filed and as subsequently amended). The Company also will pay
all taxes, if any, except transfer taxes, on the issue of the
Senior Notes. In addition, the Company will pay the reasonable
fees and disbursements of Underwriters' counsel, McGuire,
Woods, Battle & Xxxxxx, L.L.P., 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
Representative to suspend solicitation of purchases of the
Senior Notes and (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. 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 the
preceding sentence, the Company, upon the request of the
Representative, will furnish to the Representative, at the
expense of such Underwriter, a reasonable quantity of a
supplemented or amended prospectus, or supplements or
amendments to the Prospectus, 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 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 Representative and McGuire, Woods, Battle & Xxxxxx,
L.L.P.
(d) The Company will advise the Representative promptly of any
proposal to amend or supplement the Registration Statement or
the Prospectus and will afford the Representative a reasonable
opportunity to comment on any such proposed amendment or
supplement; and the Company will also advise the
Representative promptly of the filing of any such amendment or
supplement and of the institution by the Commission of any
stop order proceedings in respect of 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
- 5 -
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 Representative, 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 Representative 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 Representative 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.
(i) Fees and disbursements of McGuire, Woods, Battle & Xxxxxx,
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 Representative for
the account of the Underwriters for the amount of such fees
and disbursements.
7. Conditions of Underwriters' Obligations; Termination by the
Underwriters.
(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
Representative shall have received, prior to payment
for the Senior Notes, a certificate dated
- 6 -
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 Representative or the Company (but all provisions
of such order or orders heretofore entered are deemed
acceptable to the Representative and the Company, and
all provisions of such order or orders hereafter
entered shall be deemed acceptable to the
Representative 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) At the Closing Date the Representative shall receive,
on behalf of the several Underwriters, the opinions of
McGuire, Woods, Battle & Xxxxxx, L.L.P., Hunton &
Xxxxxxxx and Xxxxxxx & Xxxxx, substantially in the
forms attached hereto as Schedules III and IV.
(iv) On the date of this Agreement and on the Closing Date,
the Representative shall have received from Deloitte &
Touche LLP a letter addressed to the Representative,
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
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
- 7 -
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 said 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, or (2) for the period from the date of
the most recent unaudited financial statements
included 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 said letters may vary from the
requirements specified in clause (D) hereof in such
manner as the Representative in its sole discretion
may deem to be acceptable. Said 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
accounting records
- 8 -
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. Each such letter shall relate
to the Registration Statement and Prospectus as
amended or supplemented to the date of each such
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
Representative 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 Unites 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
Representative, 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
- 9 -
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 Representative 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 McGuire,
Woods, Battle & Xxxxxx, L.L.P.
(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 Representative 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 Representative 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 paragraphs 6(b), 6(i) and 7(c) hereof.
(c) If this Agreement shall be terminated by the Representative
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
Company to deliver the Senior Notes shall be subject to the conditions set forth
in the first sentence of subparagraph 7(a)(i) and in subparagraph 7(a)(ii). In
case said conditions shall not have been fulfilled, this Agreement may be
terminated by the Company by mailing or delivering written notice thereof to the
Representative. Any such termination shall be without liability of any party to
any other party except as otherwise provided in paragraphs 6(b), 6(i), 9 and
10(c) hereof.
- 10 -
9. Indemnification. (a) The Company agrees to indemnify and hold
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, 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 agreement, insofar as it relates to any
Preliminary Prospectus, shall not inure to the benefit of any 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, excluding any documents incorporated by reference (as
supplemented or amended, if the Company shall have made any supplements or
amendments which have been furnished to the Representative), 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
information furnished herein or otherwise in writing to the Company by or 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
(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
- 11 -
any thereof 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, 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 information furnished herein or
in writing to the Company by or 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.
(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 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
- 12 -
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 paragraph 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 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.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
paragraph (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 you, 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 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 you 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 you 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. 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
- 13 -
proportions which the principal amount of the Senior Notes set forth opposite
their respective names in Schedule II bears to the aggregate principal amount of
the Senior Notes, 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 Representative 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 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 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 several Underwriters.
13. Notices. All communications hereunder shall be in writing and if to
the Underwriters shall be mailed, telexed, telecopied or delivered to the
Representative 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.
- 14 -
Please sign and return to us a counterpart of this letter, whereupon
this letter will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
VIRGINIA ELECTRIC AND POWER COMPANY
By:_________________________________
Title:
The foregoing agreement is hereby confirmed and accepted, as of the date first
above written.
[Name of Underwriter]
By:________________________________
Title:
Acting individually and on
behalf of the other several
Underwriters named in
Schedule II hereto.
- 15 -
SCHEDULE I
Title of Senior Notes: Senior Notes of 199_, Series _, ____ %, due [date]
Aggregate Principal Amount: $_____________
Initial Price to Public:
% 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:
% of the principal amount of the Senior Notes
Specified funds for payment of purchase price (N.Y. Clearing House Funds unless
otherwise specified).
Time of Delivery: [Closing Date and time]
Closing Location: 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX
The Senior Notes will be available for inspection by the
Representative at:200 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX
Address for Notices to the Underwriters:
- 16 -
SCHEDULE II
Principal Amount
Underwriter of Senior Notes to be Purchased
- 17 -
SCHEDULE III
PROPOSED FORM OF OPINION
OF
MCGUIRE, WOODS, BATTLE & XXXXXX, L.L.P.
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Re: VIRGINIA ELECTRIC AND POWER COMPANY
Senior Notes of 199_
Series _, ____%, due [date]
[Closing Date]
[name and address of
Representative]
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.
$[ ] aggregate principal amount of its Senior Notes, Series __ due ___ (the
Senior Notes) under and pursuant to a Senior Indenture, dated as of
____________, ____ (the Senior Indenture) between the Company and The Chase
Manhattan Bank, as trustee (the Trustee), and the offering of the Senior Notes
by you pursuant to an Underwriting Agreement dated [ ] 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
- 18 -
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
Hunton & Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 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.
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 that the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally from time
to time in force and general principles of equity.
E. The Registration Statement 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 in the form filed as part of the Registration
Statement, including all Incorporated Documents constituting a part thereof, 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
- 19 -
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 under DESCRIPTION OF THE DEBT SECURITIES, subject
to the concluding paragraph of this opinion, 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 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 have, however,
participated in conferences with counsel for and representative of the Company
in connection with the preparation of the Registration Statement and the
Prospectus, and we have reviewed all 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 contained (except the financial
statements incorporated by reference therein, as to which we express no opinion)
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 condition set forth in the
Underwriting Agreement has been issued, and said 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 said
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 compliance with the provisions of securities or
blue-sky laws of certain states 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 to their description in the Underwriting
Agreement and to the statements with respect thereto contained in the
Registration Statement and the Prospectus.
- 20 -
To the extent that the foregoing opinions involve matters governed by
the laws of North Carolina and West Virginia, we have relied upon the opinion of
Messrs. Hunton & Xxxxxxxx concurrently delivered to you, and we believe that you
are justified in relying thereon.
Very truly yours,
McGuire, Woods, Battle & Xxxxxx, L.L.P.
- 21 -
SCHEDULE IV
PROPOSED FORM OF OPINION
OF
HUNTON & XXXXXXXX
Riverfront Plaza, East Tower
000 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: VIRGINIA ELECTRIC AND POWER COMPANY
Senior Notes of 199_
Series _, ____%, due [date]
[Closing Date]
[name and address of
Representative]
Dear Sirs:
The arrangements for issuance of up to U.S. $[ ] aggregate principal
amount of Senior Notes, Series ___, due ___ (the Senior Notes), of Virginia
Electric and Power Company (the Company) under a Senior Indenture, dated as of
__________, ____ (the Senior Indenture), between the Company and The Chase
Manhattan Bank, as trustee (the Trustee), pursuant to an Underwriting Agreement
dated [ ] by and between the Company and [ ] (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
- 22 -
[representative]
[date]
Page 23
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, and the
Company has corporate power to conduct its business 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 is a valid and legally enforceable
obligation of 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.
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 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 that
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally from time to time in force and general principles of equity.
- 23 -
[representative]
[date]
Page 24
6. The Registration Statement, as amended, 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 under DESCRIPTION OF THE DEBT
SECURITIES 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 and facilitated the
assembly of relevant data. 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 Paragraph 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 herein 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 appropriately responsive in all material respects to
the requirements of the Securities Act, and to the applicable rules and
regulations of the Commission thereunder.
- 24 -
[representative]
[date]
Page 25
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 operations, 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,
HUNTON & XXXXXXXX
- 25 -