Exhibit 1(iii)
VIRGINIA ELECTRIC AND POWER COMPANY
Senior Subordinated 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 Subordinated Notes (the Senior Subordinated 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 Subordinated Notes. Schedule I specifies
the aggregate principal amount of the Senior Subordinated Notes, the initial
public offering price of the Senior Subordinated 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 Subordinated 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 Subordinated Notes. The Senior Subordinated Notes will
be issued under the Company's Senior Subordinated 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. 33-59581 on Form S-3 for the
registration of the Senior Subordinated 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 Subordinated Notes included in the Registration
Statement, which prospectus is now proposed to be supplemented
by a supplement relating to the Senior Subordinated 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
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therein or necessary to make the statements therein not
misleading, and, on the Closing Date, the Registration
Statement and the Prospectus (including any amendments and
supplements thereto) will conform in all respects to the
requirements of the Securities Act, the Trust Indenture Act
and the Rules and Regulations, and neither of such documents
will include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, that the foregoing representations and warranties in
this paragraph (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.
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(f) The Senior Subordinated 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 Subordinated Notes.
(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 Subordinated 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 Subordinated 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 Subordinated 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
Subordinated 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 Subordinated Notes, in fully registered form, to or upon your order. The
Senior Subordinated 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 Subordinated Notes upon original issuance and registered in the name
of Cede & Co., as nominee for the Depositary Trust Company.
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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
Subordinated Notes, (iii) any fees and expenses of the Trustee
and (iv) the printing and delivery to the Underwriters in
reasonable quantities of copies of the Registration Statement
and the Prospectus (each as originally filed and as
subsequently amended). The Company also will pay all taxes, if
any, except transfer taxes, on the issue of the Senior
Subordinated 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 Subordinated 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
Subordinated 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 Subordinated 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 Subordinated 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
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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 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
Subordinated Notes.
(h) The Company will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the
Senior Subordinated 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
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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 Subordinated 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 Subordinated Notes, a certificate dated
the Closing Date and signed by the President or any
Vice President of the Company to the effect that no
such stop order is in effect and that no proceedings
for such purpose are pending before or, to the
knowledge of the Company, threatened by the
Commission.
(ii) At the Closing Date an order or orders of the Virginia
Commission permitting the issuance and sale of the
Senior Subordinated 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 V.
(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
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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 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
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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 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 Subordinated 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 Subordinated 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
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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 Subordinated
Notes on the terms and in the manner contemplated in
the Prospectus and in this Agreement.
(vi) On the Closing Date, the representations and
warranties of the Company in this Agreement shall be
true and correct as if made on and as of such date,
and the Company shall have performed all obligations
and satisfied all conditions required of it under this
Agreement; and, at the Closing Date, the
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 Subordinated 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 Subordinated 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
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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 Subordinated 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.
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 Subordinated 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,
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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 Subordinated Notes.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its officers and directors, each other
Underwriter, and each person who controls any 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 Subordinated 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
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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 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
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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 Subordinated Notes which it or they
have agreed to purchase hereunder, and the aggregate principal amount of the
Senior Subordinated 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 Subordinated Notes, the other
Underwriters shall be obligated severally in the proportions which the principal
amount of the Senior Subordinated Notes set forth opposite their respective
names in Schedule II bears to the aggregate principal amount of the Senior
Subordinated Notes, or in such other proportions as the Underwriters may
specify, to purchase the Senior Subordinated 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
Subordinated Notes and the aggregate principal amount of the Senior Subordinated
Notes with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of the Senior Subordinated Notes and arrangements
satisfactory to the Underwriters and the Company for the purchase of such Senior
Subordinated 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 Subordinated Notes.
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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
Subordinated 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.
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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.
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SCHEDULE I
Title of Senior Subordinated Notes: Senior Subordinated Notes of 199_,
Series _, ____%, due [date]
Aggregate Principal Amount: $_____________
Initial Price to Public:
% of the principal amount of the Senior Subordinated
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 Subordinated
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 Subordinated Notes will be available for inspection by the
Representative at: 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX
Address for Notices to the Underwriters:
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SCHEDULE II
Principal Amount
Underwriter of Senior Subordinated Notes to be Purchased
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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 Subordinated 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 Subordinated Notes, Series __ due
___ (the Senior Subordinated Notes) under and pursuant to a Senior Subordinated
Indenture, dated as of ___________, ____ (the Senior Subordinated Indenture)
between the Company and The Chase Manhattan Bank, as trustee (the Trustee), and
the offering of the Senior Subordinated 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
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independently established, relied upon certifications by officers of the
Company, the Trustee and other appropriate persons and statements contained in
the Registration Statement hereinafter mentioned. All legal proceedings taken as
of the date hereof in connection with the transactions contemplated by the
Underwriting Agreement have been satisfactory to us.
In addition, we attended the closing held today at the offices of
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 Subordinated 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 Subordinated 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 Subordinated Indenture and delivered and
paid for as provided in the Underwriting Agreement, will have been duly issued
under the Senior Subordinated Indenture and will constitute valid and binding
obligations of the Company entitled to the benefits provided by the Senior
Subordinated 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 Subordinated
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 Subordinated Notes
in the manner therein specified.
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The Registration Statement and the Prospectus (except the financial
statements incorporated by reference therein, as to which we express no opinion)
appear on their face to be appropriately responsive in all material respects to
the requirements of the Securities Act, and to the applicable rules and
regulations of the Commission thereunder.
As to the statements 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 Subordinated 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 Subordinated 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 Subordinated 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 Subordinated Notes in such states) and the carrying out
of the provisions of the Underwriting Agreement.
G. The Senior Subordinated Notes conform to their description in the
Underwriting Agreement and to the statements with respect thereto contained in
the Registration Statement and the Prospectus.
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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,
XxXxxxx, Xxxxx Battle & Xxxxxx, L.L.P.
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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 Subordinated Notes of 199_
Series _, ____%, due [date]
[Closing Date]
[name and address of
Representative]
Sirs:
The arrangements for issuance of up to U.S. $[ ] aggregate principal
amount of Senior Subordinated Notes, Series ___, due ___ (the Senior
Subordinated Notes), of Virginia Electric and Power Company (the Company) under
a Senior Subordinated Indenture, dated as of ___________, ____ (the Senior
Subordinated 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
- 23 -
[representative]
[date]
Page 24
officials, certificates of officers and representatives of the Company and of
the Trustee, and other documents, as we have deemed it necessary to require as a
basis for the opinions hereinafter expressed. As to various questions of fact
material to such opinions, we have, when relevant facts were not independently
established, relied upon certifications by officers of the Company, the Trustee
and other appropriate persons and statements contained in the Registration
Statement hereinafter mentioned. All legal proceedings taken as of the date
hereof in connection with the transactions contemplated by the Underwriting
Agreement have been satisfactory to us.
In regard to the title of the Company to its properties, we have made
no independent investigation of original records but our opinion is based (a)
with respect to land and rights of way for electric lines of 69,000 volts or
more, solely on reports and opinions by counsel in whom we have confidence and
(b) with respect to rights of way for electric lines of less than 69,000 volts
and various matters of fact in regard to all other properties, solely on
information from officers of the Company.
On this basis we are of the opinion that:
1. The Company is a corporation duly organized and existing under the
laws of Virginia and is duly qualified as a foreign corporation in West Virginia
and North Carolina. Neither the nature of the Company's business nor the
properties it owns or holds under lease makes necessary qualification as a
foreign corporation in any state where it is not now so qualified, and the
Company has corporate power to conduct its business and to issue the Senior
Subordinated Notes.
2. All requisite corporate and governmental authorizations have been
given for the issuance of the Senior Subordinated Notes under the Senior
Subordinated Indenture.
3. The Underwriting Agreement is a valid and legally enforceable
obligation of the Company.
4. The Senior Subordinated 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 Subordinated 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 Subordinated Indenture and issued,
delivered and paid for in accordance with the Underwriting Agreement, will have
been duly issued under the Senior Subordinated Indenture and will constitute
valid and binding obligations of the Company entitled to the benefits provided
by the Senior Subordinated Indenture, except that the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar
- 24 -
[representative]
[date]
Page 25
laws affecting creditors' rights generally from time to time in force and
general principles of equity.
6. The Registration Statement, as amended, with respect to the Senior
Subordinated 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 Subordinated Notes in the manner therein
specified.
The statements in regard to our firm under the caption EXPERTS in the
Prospectus relating to the Senior Subordinated 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 Subordinated
Indenture and the terms of the Senior Subordinated 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.
- 25 -
[representative]
[date]
Page 26
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.
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
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