EXHIBIT 1
VIRGINIA ELECTRIC AND POWER COMPANY
First and Refunding Mortgage Bonds
UNDERWRITING AGREEMENT
February 20, 1997
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
as Representative for
the Several Underwriters
named in Schedule II hereto
Dear Sirs:
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 First and Refunding Mortgage Bonds (the Mortgage Bonds) specified
in Schedule I hereto (the Mortgage Bonds so specified being referred to herein
as the Bonds), 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
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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 Bonds. Schedule I specifies the aggregate
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principal amount of the Bonds, the initial public offering price of the Bonds,
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 Bonds 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 Bonds. The
Bonds will be issued under the Company's Indenture of Mortgage dated November 1,
1935 between the Company and The Chase Manhattan Bank, as Trustee (the Trustee),
as supplemented and modified to the date hereof and as to be supplemented by a
Supplemental Indenture substantially in the form contained as an exhibit to the
Registration Statement referred to below (the Supplemental Indenture).
3. Representations and Warranties of the Company. The Company
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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 Mortgage Bonds under the Securities Act of
1933, as amended (the Securities Act), which constitutes Post-Effective
Amendment No. 1 of Registration Statement No. 33-50423 pursuant to Rule
429 under 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 been declared effective (any preliminary
prospectus included in such registration statement being hereinafter
called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto other than the
Statement of Eligibility on Form T-1 of the Trustee under the Trust
Indenture Act of 1939, as amended (the Trust Indenture Act), each as
amended at the time such part became effective, being hereinafter
collectively called the "Registration Statement"; the prospectus
relating to the Mortgage Bonds included in the Registration Statement,
which prospectus is now proposed to be supplemented by a supplement
relating to the Bonds to be filed with the Commission pursuant to Rule
424(b) under the Securities Act in the form in which it is first so
filed, as so supplemented, and as may be supplemented pursuant to the
following sentence, being hereinafter called the "Prospectus").
Whenever the term "Registration Statement", "prospectus", "Preliminary
Prospectus" or "Prospectus" is used herein, it shall be deemed to
include all documents or portions thereof incorporated therein by
reference(the Incorporated Documents) pursuant to the requirements of
Form S-3 under the Securities Act, and any reference to any amendment
or supplement to any prospectus, Preliminary Prospectus or the
Prospectus shall be deemed to refer to and
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include any documents filed after the date of such prospectus,
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the Securities Exchange
Act), and incorporated therein by reference. So long as the
Underwriters are required pursuant to the Securities Act to deliver a
prospectus to purchasers of the Bonds, the Company will not file any
amendment or supplement to the Registration Statement or the Prospectus
unless the Representative shall have been advised of the proposed
amendment or supplement and the same shall not have been disapproved as
to substance by the Representative or as to form by McGuire, Woods,
Battle & Boothe, L.L.P., who are acting as counsel for the
Underwriters.
(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 and the
Trust Indenture Act, and the rules, regulations and releases of the
Commission thereunder, and 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; 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 to be modified or superseded for purposes of
the Registration Statement or Prospectus to the extent that the
statement has been modified or superseded by any statement in a
subsequently filed Incorporated Document or in the Registration
Statement or Prospectus.
(c) Deloitte & Touche LLP, who have examined certain of
the financial statements filed with the Commission and incorporated by
reference in the Registration Statement, are independent public
accountants as required by the Securities
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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 Bonds, 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 Bonds.
4. Public Offering. On the basis of the representations and warranties
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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
Bonds set forth opposite the name of such Underwriter in Schedule II hereto. The
several Underwriters agree to make a public offering of their respective Bonds
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.
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5. Time and Place of Closing. Delivery of the Bonds to, and payment
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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 Bonds shall be made to
the Company or its order by wire transfer of immediately available funds at the
Closing Date. The Bonds shall be in the form of definitive fully registered
Bonds without coupons in such authorized denominations and registered in such
names as the Representative shall specify. For the purpose of expediting the
checking of such Bond certificates by the Representative, the Company agrees to
make the certificates available to the Representative for such purpose before
the Closing Date, at the place specified in Schedule I.
6. Covenants of the Company. The Company agrees that:
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(a) The Company, at or prior to the Closing Date, will deliver
to the Representative conformed copies of the Registration Statement as
originally filed and of all amendments thereto, heretofore or hereafter
made, including any post-effective amendment (in each case including
all exhibits filed therewith, and including unsigned copies of each
consent and certificate included therein or filed as an exhibit
thereto, except exhibits incorporated by reference unless specifically
requested). As soon as the Company is advised thereof, it will advise
the Representative orally of the issuance of any stop order under the
Securities Act with respect to the Registration Statement, or the
institution of any proceedings therefor, of which the Company shall
have received notice, and will use its best efforts to prevent the
issuance of any stop order and to secure the prompt removal thereof, if
issued. The Company will deliver to the Representative sufficient
conformed copies of the Registration Statement and Prospectus and of
all amendments thereto (in each case without exhibits) for distribution
of one to each Underwriter and will deliver to the Underwriters, in
accordance with the Representative's instructions, from time to time,
as many copies of the Prospectus as the Representative may reasonably
request for the purposes contemplated by the Securities Act or the
Securities Exchange Act.
(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
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this Agreement and the Supplemental Indenture, (ii) the preparation,
issue and delivery of certificates for the Bonds, (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 Bonds. In addition, the
Company will pay the reasonable fees and disbursements of Underwriters'
counsel, McGuire, Woods, Battle & Boothe, L.L.P., in connection with
the qualification of the Bonds 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) The Company will furnish the Representative with copies of
each further amendment and supplement to the Prospectus relating to the
offering of the Bonds in such quantities as the Representative may from
time to time reasonably request. If during the period when the delivery
of a prospectus shall be required by law in connection with the sale of
any Bonds by an Underwriter or dealer, any event relating to or
affecting the Company, or of which the Company shall be advised in
writing by the Representative, shall occur, which in the opinion of the
Company or of Underwriters' counsel should be set forth in a supplement
to or an amendment of the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances when it is delivered,
or if for any other reason it shall be necessary during such period to
amend or supplement the Prospectus or to file under the Securities
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Securities Act, the Securities Exchange Act
or the Trust Indenture Act, the Company forthwith will (i) notify the
Representative to suspend solicitation of purchases of the Bonds and
(ii) at its expense, make any such filing or prepare and furnish to the
Representative a reasonable number of copies of a supplement or
supplements or amendment or amendments to the Prospectus which will
supplement or amend the Prospectus so that, as supplemented or amended,
it will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered, not misleading or which will effect any other necessary
compliance. In case any Underwriter is required to deliver a prospectus
in connection with the sale of any Bonds after the expiration of the
period specified in the
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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 & Boothe, L.L.P.
(d) 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.
(e) 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 Form 10-K of the Company, 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, a Form 10-Q.
(f) 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 Bonds.
(g) The Company will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the Bonds 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.
(h) Fees and disbursements of McGuire, Woods, Battle &
Boothe, L.L.P. who are acting as counsel for the
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Underwriters (exclusive of fees and disbursements of such counsel which
are to be paid as set forth in subparagraph (b) of this paragraph 6),
shall be paid by the Underwriters; provided, however, that if this
Agreement is terminated in accordance with the provisions of Sections
7, 8, 10(b) or 10(c) 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
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Underwriters. The obligations of the Underwriters to purchase and pay for the
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Bonds shall be subject to the following conditions:
(a) 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. If
filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall
have been filed in the manner and within the time period required by
Rule 424(b). The Representative shall have received, prior to payment
for the Bonds, 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.
(b) At the Closing Date an order or orders of the Virginia
Commission permitting the issuance and sale of the Bonds 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).
(c) At the Closing Date the Representative shall receive, on
behalf of the several Underwriters, the opinions of McGuire, Woods,
Battle & Boothe, L.L.P., Hunton & Williams and Jackson & Kelly,
substantially in the forms attached hereto as Schedules III through V.
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(d) 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, (i) confirming that they are
independent public accountants as required by the Securities Act; (ii)
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; (iii) 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 (iv)
stating, in effect, that on the basis of more limited procedures than
those set forth in the foregoing clause (iii), 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 long-term debt of the Company
(including amounts due within one year, but excluding unamortized
discount (net of premium)) as compared with the amounts shown in the
balance sheet included in the most recent financial statements
incorporated by reference, or (2) for
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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 (iv)
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.
(e) Since the respective most recent dates as of which
information is given in the Registration Statement and Prospectus and
up to the Closing Date, there shall not have been any material adverse
change in the condition of the Company, financial or otherwise; since
such dates and up to the Closing Date, the Company shall not have any
material contingent liability, except as reflected in or contemplated
by the Registration Statement and Prospectus, and there shall not have
been any material transaction entered into by the Company other than
transactions contemplated by the Registration Statement or the
Prospectus and transactions in the ordinary course of business; 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
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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 Chairman of the Board, 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 Bonds shall have been satisfactory in form and
substance to McGuire, Woods, Battle & Boothe, L.L.P.
In case any of the conditions specified above in this paragraph 7 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 subparagraph 7(e) 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 Bonds 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 paragraphs 6(b), 6(h), 9 and 10(c) hereof.
8. Conditions of the Obligation of the Company. The obligation of the
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Company to deliver the Bonds shall be subject to the conditions set forth in the
first sentence of paragraph 7(a) and in paragraph 7(b). 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(h), 9 and 10(c) hereof.
9. Indemnification. (a) The Company agrees to indemnify and hold
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harmless each Underwriter and each person who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Securities Exchange Act, or any other statute or
common law and to reimburse each such Underwriter and controlling person for any
legal or other expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with investigating any
such losses, claims, damages, or liabilities, or in connection with defending
any actions, insofar as such losses, claims, damages, liabilities, expenses or
actions arise out of or are based upon
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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 Bonds by such Underwriter to
any person if a copy of the Prospectus (as supplemented or amended, if the
Company shall have made any supplements or amendments which have been furnished
to the 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; and provided further, however, that the indemnity agreement
contained in this paragraph 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 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 Bonds.
(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
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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 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 Bonds.
Each Underwriter represents and warrants that its commitment to buy the
Bonds will not result in a violation of the financial responsibility
requirements of Rule 15c3-1 under the Securities Exchange Act.
(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
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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 (a) or (b), as the case may be, of
this paragraph 9 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 paragraph 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subparagraph (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 subparagraph
(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 subparagraph (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities
- 14 -
(or actions in respect thereof) referred to above in this subparagraph (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.
10. Termination by the Company. (a) If any one or more of the
--------------------------
Underwriters shall fail or refuse to purchase the Bonds which it or they have
agreed to purchase hereunder, and the aggregate principal amount of the Bonds
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
Bonds, the other Underwriters shall be obligated severally in the proportions
which the principal amount of the Bonds set forth opposite their respective
names in Schedule II bears to the aggregate principal amount of the Bonds, or in
such other proportions as the Underwriters may specify, to purchase the Bonds
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 Bonds and the aggregate principal amount of the Bonds with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of the Bonds and arrangements satisfactory to the Underwriters and the
Company for the purchase of such Bonds 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 paragraphs 6(h) and 9) or of
the Company (except as provided in paragraphs 6(b) and 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.
(b) This Agreement may be terminated at any time prior to the
Closing Date by the Representative upon notice thereof to the Company, if prior
to such time (i) there shall have occurred a downgrading in the rating accorded
the Company's mortgage bonds 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, (ii) there shall have occurred any general
suspension of trading in securities on the New York Stock Exchange or there
shall have been established by
- 15 -
the New York Stock Exchange or by the Commission or by any federal or state
agency or by the decision of any court, any limitation on prices for such
trading or any restrictions on the distribution of securities, (iii) a banking
moratorium shall have been declared either by federal or New York State
authorities or (iv) the United States shall have become engaged in any outbreak
(or escalation) of hostilities or other national or international calamity or
crisis resulting in the declaration of a national emergency, the effect of
which, in the case of this clause (iv), in your judgement makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the Bonds
on the terms and in the manner contemplated in the Prospectus.
(c) If this Agreement shall be terminated by the Representative
pursuant to subparagraph (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(h)) 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
paragraphs 6(b) and 9.
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 Bonds.
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 paragraph 9 hereof, each controlling person and each officer and
director of the Company referred to in said paragraph 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 Bonds
from any of the several Underwriters.
- 16 -
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, One James River Plaza, Richmond,
Virginia 23219.
[remainder of page intentionally blank]
- 17 -
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: /s/ James P. Carney
_________________________________
James P. Carney
Assistant Treasurer and Assistant
Corporate Secretary
[remainder of page intentionally blank]
- 18 -
The foregoing agreement is hereby confirmed and accepted, as of the date first
above written.
J.P. MORGAN SECURITIES INC.
By /s/ Maria Sramek
------------------------------------
Name: Maria Sramek
Title: Vice President
Acting individually and on behalf of the other several Underwriters named in
Schedule II hereto.
[remainder of page intentionally blank]
- 19 -
SCHEDULE I
Title of Bonds: First and Refunding Mortgage Bonds of 1997,
Series A, 6 3/4%%, due February 1, 2007
Aggregate Principal Amount: $200,000,000
Initial Price to Public:
98.736% of the principal amount of the Bonds plus
accrued interest, if any, from the date of issuance
Initial Purchase Price to be paid by Underwriters:
98.490% of the principal amount of the Bonds
Specified funds for payment of purchase price (wire transfer of immediately
available funds unless otherwise specified).
Time of Delivery: February 25, 1997, 10:00 a.m.
Closing Location: 200 Park Avenue, 43rd Floor
New York, New York
The Bonds will be available for inspection by the
Representative at: 200 Park Avenue, 43rd Floor
New York, New York
Address for Notices to the Underwriters:
J.P. Morgan Securities Inc.
Att: Lisa Guarracino
60 Wall Street
New York, New York 10260-0060
- 20 -
SCHEDULE II
Principal Amount
Underwriter Bonds to be Purchased
- ----------- ---------------------
J.P. Morgan Securities Inc. $ 97,500,000
Salomon Brothers Inc 97,500,000
Oppenheimer & Co., Inc. 5,000,000
-----------------
Total $ 200,000,000
- 21 -
SCHEDULE III
PROPOSED FORM OF OPINION
OF
MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
One James Center
Richmond, VA 23219
Re: VIRGINIA ELECTRIC AND POWER COMPANY
First and Refunding Mortgage Bonds of 1997
Series A, ____%, due February 1, 2007
February 25, 1997
[name and address of
Representative]
Dear Sirs:
We have acted as counsel for the several Underwriters described below
in connection with arrangements for the issuance by Virginia Electric and Power
Company (the "Company") of $200,000,000 aggregate principal amount of its First
and Refunding Mortgage Bonds of 1997, Series A, ____% due February 1, 2007 (the
"Bonds"), the terms of which are specified in Schedule I of the Underwriting
Agreement referred to below and in the Prospectus referred to therein, under and
pursuant to an Indenture of Mortgage of the Company, dated November 1, 1935, as
supplemented and modified by eighty-five supplemental indentures (said Indenture
of Mortgage as so supplemented and modified being hereinafter called the
"Mortgage"), under which The Chase Manhattan Bank, a New York banking
corporation, is now Trustee, and the purchase of the Bonds by the several
Underwriters pursuant to the Underwriting Agreement dated February 20, 1997
between you, acting individually and as Representative of the several
Underwriters named in Schedule II thereto, and the Company (the "Underwriting
Agreement"). Unless otherwise defined herein, capitalized terms used 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,
- 22 -
indentures, agreements and other instruments, certificates of public officials,
certificates of officers and representatives of the Company and of the Trustee,
and other documents, as we have deemed it necessary to require as a basis for
the opinions hereinafter expressed. As to various questions of fact material to
such opinions, we have, when relevant facts were not independently established,
relied upon certifications by officers of the Company, the Trustee and other
appropriate persons and statements contained in the Registration Statement. All
legal proceedings taken as of the date hereof in connection with the issuance
and sale of the Bonds have been satisfactory in form and substance to us.
In addition, we attended the closing held today at 200 Park Avenue, New
York, New York, at which the Company delivered to the Representative, for the
accounts of the several Underwriters, certificates for the Bonds, in accordance
with the Underwriting Agreement, against payment therefor.
Based upon the foregoing, and having regard to legal considerations
which 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, and constitutes a valid obligation of the Company.
C. The Registration Statement 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 Bonds in the manner
therein specified.
The Registration Statement and the Prospectus (except the
financial statements and other financial or statistical information
included or 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 the
Trust Indenture Act, and to the applicable rules and regulations of
the Commission thereunder.
- 23 -
We express no opinion with reference to the statements under
"Security and Priority" under the caption DESCRIPTION OF THE BONDS in
the Prospectus for the reasons indicated in the concluding paragraph
of this opinion; but except as aforesaid, and subject to the
concluding paragraph of this opinion, we are of the opinion that the
statements under DESCRIPTION OF THE BONDS are accurate and do not omit
any material fact required to be stated therein or necessary to make
such statements not misleading. 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 representatives of
the Company in connection with the preparation of the Registration
Statement and the Prospectus, and we have reviewed all documents
incorporated by reference in the Prospectus through the date hereof
pursuant to the requirements of Form S-3 (the "Incorporated
Documents") and such of the corporate records of the Company as we
deemed advisable. None of the foregoing disclosed to us any
information which gives us reason to believe that the Registration
Statement or the Prospectus (except the financial statements and other
financial or statistical information included or incorporated by
reference therein, as to which we express no opinion) contained on the
date the Registration Statement became effective, or now contains, any
untrue statement of a material fact or omitted on said date or now
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The foregoing
is made 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.
D. An appropriate order of the Virginia Commission with
respect to the issue and sale of the Bonds on the terms and conditions
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 Bonds as contemplated by
the Underwriting Agreement. We understand said order does not contain
any provision unacceptable to the Representative 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 issue and sale of the Bonds as contemplated by the
Underwriting Agreement (except
- 24 -
compliance with the provisions of securities or blue sky laws
of certain states in connection with the sale of the Bonds in such
states) and the carrying out of the provisions of the Underwriting
Agreement.
E. The Mortgage has been duly authorized by all necessary
corporate action and has been duly executed and delivered, and
conforms to the statements with respect thereto contained in the
Registration Statement and the Prospectus; the Mortgage, so far as it
relates to properties in Virginia, North Carolina and West Virginia,
subject, as to real properties acquired after the admission of the
Eighty-Fifth Supplemental Indenture to recordation, to due and prompt
recordation of the Eighty-Fifth Supplemental Indenture in all the
recording offices within the jurisdiction of which such properties are
located before any sale of any such properties, and subject, as to the
mortgaged personal properties in West Virginia, to due and prompt
filing of the Eighty-Fifth Supplemental Indenture in the office of the
Secretary of State of West Virginia, constitutes a valid mortgage
legally effective to create a lien (as to the ranking of which
reference is made to the below-mentioned opinions of Messrs. Hunton &
Williams and Messrs. Jackson & Kelly, including the statements made in
the Prospectus on their authority) for the security of the Bonds (pari
passu with all other bonds of the same or other series that are or may
hereafter be issued under the Mortgage) upon the interest of the
Company in the property, including franchises, now owned by the
Company, except as otherwise provided in the Mortgage as to specific
property or specific classes of property; the Mortgage contains
customary provisions for the enforcement of the security provided for
therein, certain of which may be limited by the laws of Virginia, West
Virginia or North Carolina (but such laws do not, in our opinion, make
inadequate the remedies necessary for the realization of the benefits
of such security) and, as to nuclear facilities, by the Atomic Energy
Act of 1954, as amended, and regulations thereunder, and may also be
limited or rendered unavailable by bankruptcy, moratorium and similar
laws from time to time in force or general principles of equity. We
express no opinion as to the validity or enforceability of any
covenant to pay interest on defaulted interest.
The Mortgage has been duly qualified under the Trust
Indenture Act.
F. The Bonds conform to their description in the Underwriting
Agreement and to the statements with respect thereto contained in the
Registration Statement and the
- 25 -
Prospectus, and have been duly authorized and are duly issued
under the Mortgage and entitled to the benefits and security thereof
and are valid, binding and legal obligations of the Company according
to their tenor and effect (subject, as to enforceability, to
bankruptcy, moratorium and similar laws from time to time in force or
general principles of equity).
We have made no examination of the Company's title to property
purported to be owned by it, the description of such property contained in the
Mortgage, the validity and sufficiency of the franchises under which the Company
operates, the ranking of the lien created by the Mortgage, the absence of liens
or encumbrances on property of the Company other than the lien of the Mortgage
and the permitted liens referred to therein, the due recordation prior to the
date hereof of the original Indenture of Mortgage and the first eighty-four
supplemental indentures, the form (for purposes of recording) of the Mortgage,
or the due filing prior to the date hereof of a financing statement or any other
instrument to protect the lien of the Mortgage upon personal property in West
Virginia. We express no opinion on such matters and, to the extent that the
opinions herein expressed involve such matters, we have relied upon the opinion
addressed to you by Messrs. Hunton & Williams of Richmond, Virginia, and
Raleigh, North Carolina, and Messrs. Jackson & Kelly of Charleston, West
Virginia, each dated the date hereof (including the statements made in the
Prospectus on their authority), which opinions are satisfactory in scope and
form to us, and upon which opinions we believe you and we may properly rely.
Likewise, we have relied upon the opinions of such counsel as to all matters of
West Virginia and North Carolina law.
Very truly yours,
McGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
- 26 -
SCHEDULE IV
PROPOSED FORM OF OPINION
OF
HUNTON & WILLIAMS
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Re: VIRGINIA ELECTRIC AND POWER COMPANY
First and Refunding Mortgage Bonds of 1997
Series A, ____%, due February 1, 2007
February 25, 1997
[name and address of
Representative]
Dear Sirs:
We have acted as counsel for Virginia Electric and Power Company (the
Company) in connection with arrangements for the issuance by the Company of
$200,000,000 aggregate principal amount of its First and Refunding Mortgage
Bonds of 1997, Series A, ____%, due February 1, 2007 (the Bonds) the terms of
which are specified in Schedule I of the Underwriting Agreement referred to
below and in the Prospectus referred to therein, under and pursuant to an
Indenture of Mortgage of the Company, dated November 1, 1935, as supplemented
and modified by eighty-five supplemental indentures (such Indenture of Mortgage
as so supplemented and modified being hereinafter called the Mortgage), under
which The Chase Manhattan Bank, a New York banking corporation, is now Trustee,
and the purchase of the Bonds by the several Underwriters pursuant to the
Underwriting Agreement dated February 20, 1997 between you, acting individually
and as Representative of the several Underwriters named in Schedule II thereto,
and the Company (the Underwriting Agreement). Unless otherwise defined herein,
capitalized terms used herein shall have the meanings set forth in the
Underwriting Agreement.
- 27 -
We have examined originals, or copies certified to our satisfaction, of
such corporate records of the Company, indentures, agreements and other
instruments, certificates of public officials, certificates of officers and
representatives of the Company and of the Trustee, and other documents, as we
have deemed it necessary to require as a basis for the opinions hereinafter
expressed. As to various questions of fact material to such opinions, we have,
when relevant facts were not independently established, relied upon
certifications by officers of the Company, the Trustee and other appropriate
persons and statements contained in the Registration Statement. 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 the Company 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 Bonds.
2. All requisite corporate and governmental authorizations
have been given for the issuance of the Bonds and the sale of the Bonds
under the Underwriting Agreement.
3. The Mortgage has been duly authorized, executed and
delivered and so far as it relates to properties in North Carolina and
Virginia is valid and binding except as stated below, and constitutes a
valid lien to the extent that it purports to be one for the benefit of
the holders of the bonds issued thereunder (except that the lien may be
defeated as to real property acquired after recordation of any latest
supplemental indenture by its sale before recordation of a further
supplemental indenture and our opinion, so far as relating to the lien
on certain
- 28 -
properties now owned, is accordingly subject to recordation of the
Eighty-Fifth Supplemental Indenture and except that the lien as to
personal property of the Company held by bailees may be defeated). The
Mortgage contains customary provisions for the enforcement of the
security provided for therein, certain of which may be limited by the
laws of Virginia, West Virginia or North Carolina (but such laws do
not, in our opinion, make inadequate the remedies necessary for the
realization of the benefits of such security) and, as to nuclear
facilities, by the Atomic Energy Act of 1954, as amended, and
regulations thereunder, and may also be limited or rendered unavailable
by bankruptcy, moratorium and similar laws from time to time in force.
We express no opinion as to the validity or enforceability of any
covenant to pay interest on defaulted interest.
4. All the Bonds have been duly executed, authenticated and
delivered and are valid and binding obligations of the Company,
enforceable in accordance with their terms (subject, as to
enforceability, to applicable bankruptcy, moratorium and similar laws
from time to time in force or general principles of equity).
5. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company and is a valid obligation of the
Company.
6. The Registration Statement with respect to the Bonds filed
pursuant to the Securities Act of 1933, as amended (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 Bonds in the manner therein specified.
The statements in regard to our firm made under the caption
EXPERTS in the Prospectus 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
properties, limitations upon the issuance of bonds and preferred stock
in the Company's Annual Report on Form 10-K incorporated in the
Prospectus by reference and the description of the Bonds contained in
the Prospectus under DESCRIPTION OF THE BONDS are substantially
accurate and fair, including the statements as to North Carolina and
Virginia titles and defects therein and franchises and permits. As to
the statistical statements in the Registration Statement (which
includes the documents incorporated therein by reference), we have
relied solely on the officers of the Company. As to
- 29 -
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 held today 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 therein not
misleading. We are of the opinion that the Registration Statement and
the Prospectus (except the financial statements and the other financial
information included or incorporated therein by reference, as to which
we express no opinion) comply as to form in all material respects to
the requirements of the Securities Act, the Securities Exchange Act and
the Trust Indenture Act, and to the applicable rules and regulations of
the Commission thereunder. We are further of the opinion that the
Mortgage has been duly qualified under the Trust Indenture Act.
7. Except as set forth in the Registration Statement, there
are no pending legal, administrative or judicial proceedings with
respect to the Company required to be described by Form S-3.
The opinions in paragraphs 6 and 7 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.
We understand that you are relying (we believe that you are justified
in relying, and for our part we rely) on the opinion of Jackson & Kelly as to
all matters governed by the laws
- 30 -
of West Virginia, including the statements made in the Prospectus
on their authority.
Yours very truly,
HUNTON & WILLIAMS
- 31 -
SCHEDULE V
PROPOSED FORM OF OPINION
OF
JACKSON & KELLY
1600 Laidley Tower
P. O. Box 553
Charleston, West Virginia 25322
Re: VIRGINIA ELECTRIC AND POWER COMPANY
First and Refunding Mortgage Bonds of 1997
Series A, ____%, due February 1, 2007
February 25, 1997
Virginia Electric and Power Company
P. O. Box 26666
Richmond, Virginia 23261
[name and address of
Representative]
Dear Sirs:
We are familiar with the arrangements for the issuance of $200,000,000
aggregate principal amount of First and Refunding Mortgage Bonds of 1997, Series
A, ____%, due February 1, 2007 (the Bonds), of Virginia Electric and Power
Company (the Company) under an Indenture of Mortgage dated November 1, 1935, as
supplemented and modified by eighty-five supplemental indentures (the Mortgage),
and the sale thereof pursuant to an Underwriting Agreement dated February 20,
1997 between the Company and the Underwriters named in Schedule II thereto (the
Underwriting Agreement), and we have acted as West Virginia counsel for the
Company in that regard.
We are of the opinion that, so far as governed by the laws of West
Virginia:
- 32 -
1. The Company is duly qualified as a foreign corporation in
West Virginia and has corporate power to conduct its business in West
Virginia and issue the Bonds.
2. No governmental authorization is requisite for the
issuance of the Bonds and their sale under the Underwriting
Agreement.
3. The Mortgage has been duly authorized, executed and
delivered, is valid and binding (except as stated below) and so far as
it relates to properties in West Virginia constitutes a valid lien to
the extent that it purports to be one for the benefit of the holders of
the bonds issued thereunder (subject as to mortgaged personal
properties, to the filing of the Eighty-Fifth Supplemental Indenture in
the office of the Secretary of State of West Virginia and except that
the lien may be defeated as to real property acquired after recordation
of any latest supplemental indenture and before recordation of a
further supplemental indenture and our opinion, so far as relating to
the lien on certain properties now owned, is accordingly subject to
recordation of the Eighty-Fifth Supplemental Indenture). The Mortgage
contains customary provisions for the enforcement of the security
provided for therein, certain of which may be limited by the laws of
West Virginia (but such laws do not, in our opinion, make inadequate
the remedies necessary for the realization of the benefits of such
security) and may also be limited or rendered unavailable by
bankruptcy, moratorium and similar laws from time to time in force. We
express no opinion as to the validity or enforceability of any covenant
to pay interest on defaulted interest.
We have assumed, for purposes of the opinions herein expressed, that
all the Bonds have been duly executed, authenticated and delivered and are valid
and binding obligations of the Company, enforceable in accordance with their
terms.
The statements in regard to our firm made under EXPERTS in the
Prospectus relating to the Bonds are correct, and we are of the opinion that the
statements in the Prospectus referred to as being made on our authority
(including the statements as to West Virginia titles and defects therein and
franchises) are substantially accurate and fair. In regard to titles to some of
the properties in West Virginia, we have made no independent investigation of
original records, but our opinion is based solely on reports and opinions by
counsel in whom we have confidence. We assume no responsibility for the accuracy
or completeness of any other statements in the Registration Statement, but we do
not know of any reason to believe that it contains any untrue statement of a
material fact or omits to
- 33 -
state a material fact required to be stated or necessary to make the statements
not misleading. The foregoing is made on the basis that any statement contained
in a document incorporated by reference in the Registration Statement or the
Prospectus shall be deemed not to be contained in the Registration Statement or
Prospectus if the statement has been modified or superseded by any statement in
a subsequently filed incorporated document or in the Registration Statement or
Prospectus.
Very truly yours,
JACKSON & KELLY
- 34 -