U.S. $2,000,000,000
VIRGINIA ELECTRIC AND POWER COMPANY
Medium-Term Notes
Series __
DISTRIBUTION AGREEMENT
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_____________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
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The undersigned, Virginia Electric and Power Company (the Company),
hereby confirms its agreement with each of you with respect to the issuance and
sale by the Company of the below-described Notes.
Subject to the terms and conditions stated herein, the Company (i)
hereby appoints each of _______________, _______________, _______________,
_______________, _______________, and _______________, as an agent of the
Company, for the purpose of soliciting and receiving offers to purchase such
Notes from the Company by others, and (ii) hereby agrees that whenever the
Company determines to sell such Notes directly to one or more of you as
principal for resale to others it will, if requested by any of you to whom such
Notes are to be sold, enter into a Terms Agreement relating to such sale in
accordance with the provisions of Section 3(b) hereof. The Company reserves the
right to sell such Notes directly on its own behalf to investors, and to or
through any of you or any other person whom the Company may appoint as agent in
the future. As used herein, the terms "Agent", "you", "your" and the like shall
refer to each of _______________, _______________, _______________,
_______________, _______________, and _______________, and any other agent named
by the Company who becomes a party to
this Agreement, individually, and, as the context requires, to all of such firms
collectively.
1. Description of Notes. The Company proposes to issue and sell up to
U.S. $2,000,000,000 aggregate principal amount of its Medium-Term Notes, Series
H due 9 months or more from the date of issue (the Notes). The Notes will have
the maturity ranges, interest rates per annum, redemption and repayment
provisions and other terms specified from time to time in the Prospectus
referred to below. The Notes are to be issued pursuant to the Company's
Indenture, dated as of June 1, 1998, between the Company and JPMorgan Chase
Bank, formerly The Chase Manhattan Bank, as Trustee (the Trustee), as previously
supplemented, and as further supplemented by a ______ Supplemental Indenture,
dated as of ____________ (such Indenture, as supplemented, is referred to herein
as the Indenture). All capitalized terms not defined herein have the meanings
ascribed to them in the Indenture.
2. Representations and Warranties of the Company. The Company represents
and warrants to you that:
(a) The registration statement on Form S-3 (Reg. No. ____________) for
the registration of First and Refunding Mortgage Bonds, debt securities,
including the Notes, junior subordinated debentures, trust preferred
securities and related guarantee and preferred stock under the Securities
Act of 1933, as amended (the Securities Act), heretofore filed with the
Securities and Exchange Commission (the Commission), has been declared
effective. The registration statement, including all exhibits thereto, (and
any further registration statements which may be filed by the Company for
the purpose of registering additional Notes and in connection with which
this Agreement is included as an exhibit) and the prospectus constituting a
part of such registration statement, and any prospectus supplement relating
to the Notes, as from time to time amended or supplemented by the filing of
documents pursuant to the Securities Act, the Securities Exchange Act of
1934, as amended (the Exchange Act) or otherwise, are referred to herein as
the "Registration Statement" and the "Prospectus", respectively. As used
herein, the terms "Registration Statement" and "Prospectus" include all
documents or portions thereof (including any Current Report on Form 8-K)
incorporated therein by reference, and shall include any documents or
portions thereof (including any Current Report on Form 8-K) filed after the
date of such Registration Statement 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
_________________________
* Or the equivalent in foreign currencies or composite currencies as specified
in a pricing supplement (with U.S. dollars or such specified foreign currencies
or composite currencies being referred to herein as the "Specified Currency").
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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
Exchange Act, the Trust Indenture Act of 1939, as amended (the Trust
Indenture Act), and the related rules, regulations and releases of the
Commission (the Rules and Regulations), and neither the Registration
Statement on the date it was declared effective (the Effective Date) nor
the Prospectus on the date hereof contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that the foregoing representations and
warranties in this Section 2 (b) shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished in writing to
the Company by you or on behalf of any of you for use in the Registration
Statement or Prospectus or to that part of the Registration Statement
constituting the Trustee's Statement of Eligibility and Qualification under
the Trust Indenture Act; and provided, further, that the foregoing
representations and warranties are given on the basis that any statement
contained in an Incorporated Document shall be deemed not to be contained
in the Registration Statement or Prospectus if such statement has been
modified or superseded by any statement in a subsequently filed
Incorporated Document or in the Registration Statement or Prospectus.
(c) The Indenture qualifies under, and conforms in all material
respects to the requirements of, the Trust Indenture Act.
(d) Deloitte & Touche LLP, who have audited certain of the Company's
financial statements filed with the Commission and incorporated by
reference in the Registration Statement, are independent public accountants
as required by the Securities Act and the Rules and Regulations relating to
the Securities Act.
(e) Except as reflected in, or contemplated by, the Registration
Statement and Prospectus (exclusive of any amendments or supplements after
the date hereof), since the respective most recent dates as of which
information is given in the Registration Statement and Prospectus
(exclusive of any amendments or supplements after the date hereof), there
has not been any material adverse change or event which would result in a
material adverse effect on the condition of the Company and its
subsidiaries taken as a whole, financial or otherwise (a Material Adverse
Effect). The Company has no material contingent liability which is not
disclosed in the Registration Statement and the Prospectus.
(f) 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 contemplated in this Agreement and
in the Registration Statement (including the issuance and sale of the Notes
and the use of the proceeds from the
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sale of the Notes as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations under this
Agreement, the Indenture and the Notes do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, to which the Company is a party or by which it may be bound, or
to which any of the property or assets of the Company is subject (except
for such conflicts, breaches or defaults or liens, charges or encumbrances
that would not have a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or bylaws of the Company,
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its properties,
assets or operations, and the Company has full power and authority to
authorize, issue and sell the Notes as contemplated by this Agreement.
(g) The 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 these Notes and no other filings or regulatory
approvals are necessary.
(h) This Agreement has been duly authorized, executed and delivered by
the Company.
(i) The Indenture has been duly authorized, executed and delivered by
the Company and is a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and except further as enforcement thereof may be limited by
requirements that a claim with respect to any debt securities issued under
the Indenture that are payable in a foreign or composite currency (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
(j) The Notes have been duly authorized by the Company for offer,
sale, issuance and delivery pursuant to this Agreement and, when issued,
authenticated and delivered in the manner provided for in the Indenture and
delivered against payment of the consideration therefor, will constitute
valid and legally binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy,
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insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding
in equity or at law), and except further as enforcement thereof may be
limited by requirements that a claim with respect to any Notes payable in a
foreign or composite currency (or a foreign or composite currency judgment
in respect of such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or by
governmental authority to limit, delay or prohibit the making of payments
outside the United States; the Notes will be substantially in the form
attached as Exhibits 4.2 and 4.3 to the Company's Current Report on Form
8-K, filed with the Commission on or about ____________, and each holder of
Notes will be entitled to the benefits of the Indenture.
(k) There are no Significant Subsidiaries of the Company as such term
is defined in Rule 1-02 of Regulation S-X
(l) The Company is not, and, after giving effect to the offering and
sale of the Notes and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" or a company
"controlled" by an "investment company" which is required to be registered
under the Investment Company Act of 1940, as amended.
3. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein
set forth, each of you agree, as agent of the Company, to use your best
efforts to solicit offers to purchase the Notes upon the terms and
conditions set forth in the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Notes in any Specified Currency, for
any period of time or permanently. Upon receipt of instructions from the
Company, you will, as soon as practicable, but in no event later than one
business day after receipt of instruction from the Company, suspend
solicitation of offers to purchase the Notes from the Company until such
time as the Company has advised you that such solicitation may be resumed.
The Company agrees to pay you a commission, at the time of settlement
of each sale of Notes by the Company as a result of a solicitation made by
you, in an amount in U.S. dollars (which, in the case of Notes denominated
in currency units or in currencies other than U.S. dollars, shall be based
on the Exchange Rate (as defined below)) equal to the applicable percentage
of the aggregate principal amount of each Note sold as set forth in
Schedule A attached hereto.
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Unless otherwise agreed to, as agent, you are authorized to solicit
orders for the Notes at the principal amount thereof only in the
denominations specified in the applicable pricing supplement (which will be
either U.S. $25* or U.S. $1,000* and integral multiples of such
denominations in excess thereof) at a purchase price equal to 100% of the
principal amount thereof, unless otherwise specified in a supplement to the
Prospectus. You shall communicate to the Company, orally or in writing,
each offer to purchase Notes received by you as agent, other than those
rejected by you. The Company shall have the sole right to accept offers to
purchase Notes and may reject any such offer in whole or in part. You shall
have the right, in your discretion reasonably exercised, to reject any
offer received by you to purchase the Notes, in whole or in part, and any
such rejection shall not be deemed a breach of your agreement contained
herein.
No Note which the Company has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold, by
the Company until such Note shall have been delivered to the purchaser
thereof against payment by such purchaser.
The "Exchange Rate" on a given date for a Specified Currency other
than U.S. dollars means the noon dollar buying rate in New York City on
such date for cable transfers for the Specified Currency as certified for
customs purposes (or if not so certified, as otherwise determined) by the
Federal Reserve Bank of New York.
(b) Purchases as Principal. Each sale of Notes to you as principal
shall be made in accordance with the terms of this Agreement and a separate
agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, you. Each such separate agreement
(which may be oral or written, and which may be substantially in the form
of Exhibit A hereto or which may take the form of an exchange of any
standard form of written telecommunication between you and the Company) is
herein referred to as a "Terms Agreement". Your commitment to purchase
Notes as principal, whether pursuant to a Terms Agreement or otherwise,
shall be deemed to have been made on the basis of the representations and
warranties of the Company herein contained and shall be subject to the
terms and conditions herein set forth. Each agreement by you to purchase
Notes as principal shall specify the principal amount of Notes to be
purchased by you pursuant thereto, the price to be paid to the Company for
such Notes, and such other terms, conditions and requirements as may be
agreed upon between us. Each such agreement shall also specify any
requirements for officers' certificates, opinions of counsel and letters
from the independent public accountants of the Company pursuant to Section
7 hereof. A Terms Agreement may also specify certain provisions relating to
the reoffering of such Notes by you. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each
such Note equivalent to the applicable commission
___________________
* Or the equivalent of U.S. $25 or U.S. $1,000, as the case may be, in the
Specified Currency.
6
set forth in Schedule A hereto. You may utilize a selling or dealer group
in connection with the resale of the Notes purchased by you as principal.
If the Company and two or more Agents enter into an agreement pursuant
to which such Agents agree to purchase Notes from the Company as principal
and one or more of such Agents shall fail at the Settlement Date to
purchase the Notes which it or they are obligated to purchase (the
"Defaulted Notes"), then the nondefaulting Agents shall have the right,
within 24 hours thereafter, to make arrangements for one of them or one or
more other Agents or underwriters to purchase all, but not less than all,
of the Defaulted Notes in such amounts as may be agreed upon and upon the
terms herein set forth; provided, however, that if such arrangements shall
not have been completed within such 24-hour period, then:
(1) if the aggregate principal amount of Defaulted Notes does not
exceed 10% of the aggregate principal amount of Notes to be so purchased by
all of such Agents on the Settlement Date, the nondefaulting Agents shall
be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective initial underwriting
obligations bear to the underwriting obligations of all nondefaulting
Agents; or
(2) if the aggregate principal amount of Defaulted Notes exceeds 10%
of the aggregate principal amount of Notes to be so purchased by all of
such Agents on the Settlement Date, such agreement shall terminate without
liability on the part of any nondefaulting Agent.
No action taken pursuant to this paragraph shall relieve any
defaulting Agent from liability in respect of its default. In the event of
any such default which does not result in a termination of such agreement,
either the nondefaulting Agents or the Company shall have the right to
postpone the Settlement Date for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
4. Administrative Procedures. Procedural details relating to the issuance
and delivery of Notes, the solicitation of offers to purchase by others, and
purchase by you as principal, of Notes, and the payment in each case therefor,
shall be agreed upon between the Company and each of you, as applicable (the
Administrative Procedures), and shall be furnished to the Trustee. Each of you
and the Company agree to perform, and the Company agrees to cause the Trustee to
perform, the respective duties and obligations substantially as provided to be
performed by each in the Administrative Procedures, attached hereto as Exhibit
D, as amended from time to time.
5. Time and Place of Closing. The documents required to be delivered on
the "Closing Date" pursuant to Section 7 hereof shall be delivered at
____________, ____________, at _______, ____________ time, on ____________, or
at such other time and/or place as you and the Company may agree upon in
writing, the time and date of such delivery being herein called the "Closing
Date".
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6. Covenants of the Company. The Company agrees that:
(a) On or prior to the Closing Date, the Company will deliver
to you conformed copies of the Registration Statement as originally
filed and of all amendments or supplements thereto, including any
post-effective amendment (in each case including all exhibits filed
therewith and including copies of each consent and certificate included
therein or filed as an exhibit thereto, except exhibits incorporated by
reference unless specifically requested). After the Closing Date, the
Company will deliver to you as many copies of the Registration
Statement and Prospectus and of all amendments thereto (in each case
without exhibits) as you may reasonably request for the purposes
contemplated by the Securities Act or the Exchange Act.
(b) As soon as the Company is advised thereof, it will advise
you orally of: (i) 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 (ii) any change in the rating assigned 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)
to any debt securities (including the Notes) of the Company, or any
notification from such an organization of any intended or potential
downgrading or of any review for a possible change with possible
negative implications in its ratings of such securities. The Company
will use its best efforts to prevent the issuance of any stop order and
to secure the prompt removal thereof, if issued.
(c) The Company will pay all expenses in connection with (i)
the preparation and filing by it of the Registration Statement and
Prospectus, (ii) the preparation, issuance and delivery of the Notes,
(iii) any fees and expenses of the Trustee and (iv) the printing and
delivery to you in accordance with this Agreement of copies of the
Registration Statement and Prospectus (each as originally filed and as
subsequently amended or supplemented). The Company also will pay all
taxes, if any, on the issuance of the Notes. In addition, the Company
will pay the reasonable fees and disbursements of your counsel,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, including fees and disbursements incurred in
connection with qualifying the Notes under state securities or blue-sky
laws or investment laws (if and to the extent such qualification is
required by you or the Company), your reasonable out-of-pocket expenses
in connection with the transactions contemplated hereby and your
advertising expenses, which have been approved, in writing in advance,
by the Company.
(d) The Company will furnish you with copies of each further
amendment and supplement to the Prospectus in such quantities as you
may from time to time reasonably request. If at any time when the
delivery of the Prospectus shall be required by law in connection with
the sale of any Note, any
8
event relating to or affecting the Company, or of which the Company
shall be advised in writing by you, shall occur, which in the opinion
of the Company or of your 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 any document incorporated by
reference in the Prospectus in order to comply with the Securities
Act, the Exchange Act or the Trust Indenture Act, the Company
forthwith will (i) notify you to suspend solicitation of purchases of
Notes and (ii) at its expense, prepare and furnish to you a reasonable
number of copies of the supplement or supplements or the amendment or
amendments to the Prospectus so that the Prospectus, as supplemented
or amended, 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. During the period specified in the preceding
sentence, the Company will continue to prepare and file with the
Commission on a timely basis all documents or amendments required to
be filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act; provided, however, that the Company shall not
file its reports on Forms 10-Q or 10-K, including any amendments
thereto (other than amendments to Form 10-K filed solely pursuant to
General Instruction A to Form 11-K), without also furnishing copies
thereof to you and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP. Notwithstanding any other
provision of this Section 6(d), if before the earlier of: (i) the
expiration of thirty (30) days after the Prospectus has been amended
or (ii) the distribution of any Notes you may own as principal has
been completed, an event described above in this Section 6(d) occurs,
the Company will, at its own expense, forthwith prepare and cause to
be filed promptly with the Commission an amendment or supplement to
the Registration Statement or Prospectus, as then amended or
supplemented, satisfactory in all respects to you; will supply such
amended or supplemented Prospectus to you in such quantities as you
may reasonably request; and will furnish to you pursuant to Sections
7(c), 7(d) and 7(h) such documents, certificates, opinions and letters
as you may request in connection with the preparation and filing of
such amendment or supplement.
(e) The Company will advise you promptly of any proposal to amend
or supplement the Registration Statement or the Prospectus relating to
the Notes (other than by filing a document under the Exchange Act
which will be incorporated by reference into the Registration
Statement or Prospectus, or an amendment or supplement providing
solely for a specification of the interest rates or other terms of the
Notes commonly included in a pricing supplement, or an amendment or
supplement relating solely to an offering of securities other than the
Notes) and will afford you a reasonable opportunity to comment on any
such proposed amendment or supplement.
9
(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 to the
delivery by it of the Notes.
(g) The Company will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the Notes for
offer and sale under the securities or blue-sky laws of such states as
you 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 that it deems unduly burdensome.
(h) If required pursuant to the terms of a Terms Agreement,
between the dates of any Terms Agreement and the settlement date with
respect to such Terms Agreement, the Company will not, without your
prior written consent, offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company in a public offering
which are substantially similar to the Notes.
(i) If the Company enters into any amendment to this Agreement,
then such amendment shall be entered into by each of you; provided,
however, that this Agreement may be terminated in accordance with
Sections 7 or 12 herein as to any one of you without being terminated
as to the others of you.
(j) If the Company adds a new agent with respect to the Notes,
then such agent shall enter into an agreement substantially similar to
this Agreement, as such may be amended from time to time.
7. Conditions of Your Obligations. Your obligations as agent of the
Company to initiate solicitations of offers to purchase Notes and to
continue such solicitations, as the case may be, and your obligations to
purchase Notes as principal pursuant to any Terms Agreement or otherwise,
shall be subject to the continuing accuracy of the representations and
warranties on the part of the Company contained herein, to the accuracy of
the statements of the Company's officers made in any certificate furnished
pursuant to the provisions hereof, to the performance and observance by the
Company of all covenants and agreements contained herein on its part to be
performed and observed and to the following additional conditions:
(a) An order or orders of the Virginia Commission permitting the
issuance and sale of the Notes shall be in full force and effect and
shall contain no provision unacceptable to you or the Company (but all
provisions of such order or orders heretofore entered, copies of which
have heretofore been delivered to you, are deemed acceptable to you
and the Company, and all provisions of such order or orders hereafter
entered shall be deemed acceptable to you and the Company unless
within 24 hours after receiving a copy of any such order any party to
this Agreement shall give notice to the other parties to the effect
that such order contains an unacceptable provision).
10
(b) You shall receive on the Closing Date the opinion of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ LLP, dated the Closing Date, substantially in the form
attached hereto as Exhibit B.
(c) You shall receive (i) on the Closing Date, (ii) on any date
that the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing
solely for the specification of the variable terms of the Notes
commonly included in a pricing supplement or an amendment or
supplement relating solely to an offering of securities other than the
Notes), including an amendment effected by the filing of a document
that is incorporated by reference into the Registration Statement or
Prospectus (other than (A) a Current Report on Form 8-K containing
only information responsive to Item 5 or Item 9 thereof, or Item 10 as
proposed or substantially as proposed in Securities Act Release No.
33-8090 (Item 10), and any exhibits relating to such information or
(B) an amendment to the Company's annual report on Form 10-K filed
solely pursuant to General Instruction A to Form 11-K) and (iii) each
time, if so indicated in the applicable Terms Agreement or otherwise,
the Company sells Notes to you as principal, the legal opinion of
McGuireWoods LLP or other counsel satisfactory to you in your
reasonable judgment, dated the Closing Date, the date of such
amendment, supplement, incorporation by reference or settlement date,
relating to a sale of Notes pursuant to a Terms Agreement or
otherwise, as the case may be, substantially in the form attached
hereto as Exhibit C. In lieu of such opinion to be delivered upon such
amendment, supplement, incorporation by reference or settlement date
relating to a sale of Notes under a Terms Agreement or otherwise, each
counsel last furnishing such an opinion to you shall furnish you with
a letter to the effect that you may rely upon such last opinion to the
same extent as though it were dated the date of such letter
authorizing reliance (except that statements in such last opinion
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such
letter authorizing reliance).
(d) You shall receive (i) on the Closing Date, (ii) on any date
that the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information (other than
by an amendment or supplement relating solely to the issuance and/or
offering of securities other than the Notes), including an amendment
effected by the filing of a document that is incorporated by reference
into the Registration Statement or Prospectus (other than a Current
Report on Form 8-K containing only information responsive to Item 5,
Item 9 or Item 10 thereof and any exhibits relating to such
information) and (iii) each time, if so indicated in the applicable
Terms Agreement or otherwise, the Company sells Notes to you as
principal, from Deloitte & Touche LLP, or another independent public
accounting firm satisfactory to you, a letter addressed to you, dated
the Closing Date, the date of such amendment, supplement,
incorporation or settlement date relating to a sale pursuant to a
Terms Agreement or otherwise, as the case may be, containing
statements and information of the type ordinarily included in
accountants' SAS 72 "comfort
11
letters" to underwriters with respect to financial statements and
certain financial information contained or incorporated by reference
into the Prospectus, including any pro forma financial information.
(e) Since the date of the most recent audited or unaudited
financial statements included in or incorporated by reference in the
Registration Statement and Prospectus, and, in the case of your
obligation to solicit offers to purchase Notes, up to the time of such
solicitations or since the date of any agreement by you to purchase
Notes as principal and, in the case of your obligation to purchase
Notes as principal, up to the settlement date relating to such
purchase pursuant to a Terms Agreement or otherwise, there shall not
have been any material adverse change or event which would result in a
Material Adverse Effect.
(f) Since the respective most recent dates as of which
information is given (i) in the Registration Statement and Prospectus,
as amended or supplemented through the date of this Agreement,
including by incorporation by reference therein, 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
or Prospectus as so amended or supplemented, (ii) in the Registration
Statement and Prospectus as amended or supplemented through the date
of any agreement by you to purchase Notes as principal, including by
incorporation by reference, and prior to each corresponding settlement
date, the Company shall not have any material contingent liability,
except as reflected in or contemplated by the Registration Statement
or Prospectus as so amended or supplemented.
(g) The representations and warranties of the Company in this
Agreement shall be true and correct and the Company shall have
performed all obligations and satisfied all conditions required of it
under this Agreement (i) on the Closing Date and (ii) on any date that
the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing
solely for the specification of the variable terms of the Notes
commonly included in a pricing supplement or an amendment or
supplement relating solely to an offering of securities other than the
Notes), including an amendment effected by the filing of a document
that is incorporated by reference into the Registration Statement or
Prospectus (other than (A) a Current Report on Form 8-K containing
only information responsive to Item 5, Item 9, or Item 10 thereof and
any exhibits relating to such information or (B) an amendment to the
Company's annual report on Form 10-K filed solely pursuant to General
Instruction A to Form 11-K) and (iii) each time, if so indicated in
the applicable Terms Agreement or otherwise, the Company sells Notes
to you as principal.
(h) On the Closing Date and on any applicable date referred to in
Section 7(g)(ii) or (iii) hereof, as the case may be, you shall have
received a certificate, signed by the Chairman of the Board, the
President or any Vice
12
Presidentof the Company, it being understood that such certificate
shall relate to the Registration Statement and Prospectus as amended
or supplemented to the date of such certificate.
(i) All legal proceedings to be taken in connection with the
transactions contemplated by this Agreement shall have been
satisfactory to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP.
In case any of the conditions specified above in this Section 7
shall not have been fulfilled, this Agreement may be terminated by any of you,
as to yourself only, upon mailing or delivering written notice thereof to the
Company; provided, however, that it shall not be considered a failure to fulfill
the conditions specified in Sections 7(c), 7(d) or 7(h) above if the Company
temporarily suspends its obligations under such sections in accordance with
Section 7A below. Any termination pursuant to the preceding sentence shall be
without liability of the terminating party and the Company to each other, except
as otherwise provided in Sections 6(c), 9(e) and 10 hereof.
7A. Temporary Suspension of Certain Obligations. After the Closing
Date, if the Company shall determine that it does not intend to be in the market
with respect to the Notes during the three months after the date of filing of a
quarterly report on Form 10-Q, an annual report on Form 10-K, or an amendment
thereto, the Company may deliver to each of you a notice, which shall be dated
the date of delivery thereof to each of you, to such effect (a Notice of
Temporary Suspension), in which event the obligations of the Company pursuant to
Sections 7(c), 7(d) and 7(h) with respect to such filings shall be deemed
suspended until such time as the Company notifies each of you that it wishes to
re-enter the market with respect to the Notes (which could be earlier than three
months after the date of the Notice of Temporary Suspension) and delivers to
each of you the documents required by Sections 7(c), 7(d) and 7(h), but dated as
of the date the Company re-enters the market with respect to the Notes.
8. Additional Covenant of the Company. The Company agrees that each
acceptance by it of an offer for the purchase of Notes hereunder shall be deemed
to be an affirmation to you that the representations and warranties of the
Company contained in this Agreement are true and correct as of the date of such
acceptance as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct as of the date of
delivery to the purchaser or the purchaser's agent of the Note or Notes relating
to such acceptance and, in the case of your obligation to purchase Notes as
principal, as of the settlement date relating to such purchase pursuant to a
Terms Agreement or otherwise, as though made at and as of each such date (except
that such representations and warranties shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to each
such date).
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless you, your
officers and directors and each person who controls you within the
meaning of
13
Section 15 of the Securities Act or Section 20(a) of the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or
several, to which you or any of them may become subject under the
Securities Act, the Exchange Act or any other statute or common law
and to reimburse you and each of your officers, directors and
controlling persons for any legal or other expenses (including, to the
extent hereinafter provided, reasonable outside counsel fees) incurred
by you or them in connection with investigating or defending any such
losses, claims, damages, 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, in either such document
as originally filed or as amended or supplemented (if such amendments
or supplements thereto shall have been furnished pursuant to Section
2(a) hereof), 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 indemnity
agreement contained in this Section 9 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 in writing
to the Company by any of you or on behalf of any of you for use in the
Registration Statement or any amendment thereto, in the Prospectus or
in any supplement thereto. The indemnity agreement of the Company
contained in this Section 9(a) and the representations and warranties
of the Company contained in Section 2 hereof shall remain operative
and in full force and effect, regardless of any investigation made by
you or on behalf of you or any such controlling person, and shall
survive the delivery of the Notes.
(b) Each of you agree, severally and not jointly, to indemnify
and hold harmless the Company, its officers and directors and each
person who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20(a) of the 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 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 outside counsel fees) incurred by
them in connection with investigating or defending any such losses,
claims, damages or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus, as originally filed or
as amended or supplemented (if such amendments or supplements thereto
shall have been furnished pursuant to Section 6(a) hereof) 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 in writing to the Company by you or on your
behalf for use in the Registration Statement or the Prospectus or any
amendment
14
or supplement to either thereof. The indemnity agreement of each of you
contained in this Section 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 controlling person, and shall survive the delivery
of the Notes.
(c) Each of you and the Company agree 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 you, your officers, directors or any controlling person as
aforesaid, in respect of which indemnity may be sought on account of
any indemnity agreement contained herein, you or the Company, as the
case may be, 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 or parties otherwise than on account of such indemnity agreement.
In case such notice of any such action shall be so given, such
indemnifying party shall be entitled to participate at its own expense
in the defense or, if it so elects, to assume (in conjunction with any
other indemnifying parties) the defense of such action, in which event
such defense shall be conducted by counsel chosen by such indemnifying
party (or parties) and reasonably satisfactory to the indemnified party
or parties who shall be defendant or defendants in such action, and
such defendant or defendants shall bear the fees and expenses of any
additional outside counsel retained by them; provided that, if the
defendants (including impleaded parties) 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 and direct such different or
additional 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 outside 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 (in addition
to one local counsel), representing the indemnified parties under
Section 9(a) or 9(b), as the case may be, who are parties to such
action), (ii) the indemnifying party shall have elected not to assume
the defense of such action, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of the commencement of the action, or (iv) the indemnifying party has
authorized the employment of outside counsel for the indemnified party
at the expense of the indemnifying party. Notwithstanding the foregoing
sentence, an indemnifying party shall not be liable for any settlement
of any proceeding effected without its
15
written consent (such consent not to be unreasonably withheld), but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which indemnification
may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such a proceeding), by such indemnified
party, unless such settlement (x) includes an unconditional release of
such indemnified party from all liability on claims that are the
subject matter of such proceeding and (y) does not include a statement
as to or an admission of fault, culpability or failure to act by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party
under Section 9(a) or 9(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 to 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 any of you participating in the
transaction at issue, on the other, in connection with the statements
or omissions which 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 hand and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and each of you agree that it would not be just and equitable
if contribution pursuant to this Section 9(d) were determined by pro
rata allocation (even if all of you were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
Section 9(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 Section 9(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 obligations
of each of you under this Section 9(d) to contribute are several in
proportion to the respective purchases made by or through you to which
such loss, claim, damage or liability (or action in respect thereof)
relates and are not joint.
16
(e) The remedies provided for in this Section 9 are not exclusive
and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
10. 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 to this
Agreement shall remain operative and in full force and effect regardless of any
investigation made by you or on your behalf or on behalf of any controlling
person of you, or by or on behalf of the Company, and shall survive each
delivery of and payment for any of the Notes.
11. Status as Agent. In soliciting offers by others to purchase Notes
from the Company, you are acting solely as agent for the Company, and not as
principal. You will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has been accepted by
the Company, but you shall not have any liability to the Company in the event
such purchase is not consummated for any reason. If the Company shall default on
its obligation to deliver Notes to a purchaser whose offer it has accepted, the
Company shall hold you harmless against any loss, claim or damage arising from
or as a result of such default by the Company.
12. Termination. This Agreement may be terminated for any reason, at
any time by any of you as to the Company or by the Company as to any of you upon
the giving by the terminating party of five (5) business days' written notice of
such termination to the other parties hereto. Each of you may also terminate any
agreement by you to purchase Notes as principal, immediately upon notice to the
Company, at any time at or prior to the settlement date relating thereto if
during such period (a) there shall have occurred any material adverse change in
the financial markets in the United States or in the financial markets of the
country or countries of origin of any foreign currency or currencies in which
the Notes are denominated or payable or any outbreak or escalation of
hostilities or other national or international calamity or crisis the effect of
which is such as to make it, in the judgment of the relevant Agent (which shall
be the lead manager(s) in the case of a syndicated transaction) impracticable or
inadvisable to market the Notes or enforce contracts for the sale of Notes on
the terms and in the manner contemplated in the Prospectus, or (b) if trading in
any securities of the Company has been suspended by the Commission or a national
securities exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange shall have been suspended, or any
limitation on prices in such trading or any restrictions on the distribution of
securities are established by either of such exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium shall
have been declared either by federal or New York authorities or by the relevant
authorities in the country or countries of origin of any foreign currency or
currencies in which the Notes are denominated or payable, or (c) after the
acceptance by you of such agreement to purchase Notes as principal and at or
prior to the settlement date relating thereto, the Company shall have sustained
a substantial loss by fire, flood, accident or other calamity which in the
judgment of the relevant Agent (which shall be the lead manager(s) in the
17
case of a syndicated transaction) renders it inadvisable to consummate the sale
of the Notes and the delivery of the Notes upon the terms set forth in such
agreement, regardless of whether or not such loss shall have been insured, or
(d) there shall have occurred a downgrading in the rating accorded the Company's
unsecured debt securities 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) or such an organization shall have given
notice of any intended or potential downgrading or of any review for a possible
change with possible negative implications in its ratings of such securities.
In the event of any such termination, neither the terminating party nor
the terminated party shall have any liability to the other except as provided in
the third full paragraph of Section 3(a), Section 6(c), Section 9 and Section 10
and except that, if at the time of termination you shall own any of the Notes
with the intention of reselling them or an offer for the purchase of Notes shall
have been accepted by the Company but the time of delivery to the purchaser or
such purchaser's agent of the Note or Notes relating thereto shall not yet have
occurred, you shall comply with the Administrative Procedures, and the Company
shall also have the obligations provided in Sections 7(c) through (h) and
Section 8 hereof until such Notes have been resold or delivered, as the case may
be; provided, however, that the Company's obligation to comply with the
provisions of Sections 7(c) through (h) and Section 8 hereof as set forth in the
immediately preceding clause of this sentence 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, and (ii) at the Closing Date, except as
provided in Section 3(f) herein, an order or orders of the Virginia Commission
Act permitting the issuance and sale of the Notes substantially in accordance
with the terms and conditions hereof shall be in full force and effect and shall
contain no provision unacceptable to you or the Company (but all provisions of
such order or orders heretofore entered, copies of which have heretofore been
delivered to you, are deemed acceptable to you and the Company, and all
provisions of such order or orders hereafter entered shall be deemed acceptable
to you and the Company unless within 24 hours after receiving a copy of any such
order any party to this Agreement shall give notice to the other parties to the
effect that such order contains an unacceptable provision).
13. 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 your benefit, the benefit of the Company and, with respect to the
provisions of Section 9 hereof, each person who controls you and each of your
officers and directors and each controlling person and each officer and director
of the Company referred to in Section 9, and their respective successors,
assigns, executors and administrators. Nothing in this Agreement is intended or
shall be construed to give to any 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 of the purchasers, as such, of any of the Notes.
18
14. Notices. Except as otherwise specifically provided herein or in the
Administrative Procedures, all communications hereunder shall be in writing and,
if to you, shall be sent by facsimile transmission, registered mail or delivered
to the address set forth under your signature below and, if to the Company,
shall be sent by facsimile transmission, registered mail or delivered to it,
attention of Treasurer, Virginia Electric and Power Company, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇).
[the rest of this page is left blank intentionally]
19
Please sign and return to us a counterpart of this letter, whereupon
this letter will become a binding agreement between the Company and you in
accordance with its terms.
Very truly yours,
VIRGINIA ELECTRIC AND POWER COMPANY
By:_________________________________
Name: ______________________________
Title: _____________________________
[the rest of this page is left blank intentionally]
20
The foregoing agreement is
hereby confirmed and accepted,
as of the date first above written.
___________________________
By: ______________________________
Authorized Signatory
Name: ____________________________
Title: ___________________________
Addresses for Notices:
___________________________
___________________________
___________________________
___________________________
___________________________
___________________________
with a copy to:
___________________________
___________________________
___________________________
___________________________
___________________________
[the rest of this page is left blank intentionally]
21
The foregoing agreement is
hereby confirmed and accepted,
as of the date first above written.
___________________________________
By: _____________________________________
Authorized Signatory
Name: ___________________________________
Title: __________________________________
Addresses for Notices:
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
with a copy to:
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
[the rest of this page is left blank intentionally]
22
The foregoing agreement is
hereby confirmed and accepted,
as of the date first above written.
___________________________________
By: _____________________________________
Authorized Signatory
Name: ___________________________________
Title: __________________________________
Address for Notices:
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
[the rest of this page is left blank intentionally]
23
The foregoing agreement is
hereby confirmed and accepted,
as of the date first above written.
___________________________________
By: ______________________________________
Authorized Signatory
Name: ____________________________________
Title: ___________________________________
Address for Notices:
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
[the rest of this page is left blank intentionally]
24
The foregoing agreement is
hereby confirmed and accepted,
as of the date first above written.
___________________________________
By:_______________________________________
Authorized Signatory
Name: ____________________________________
Title: ___________________________________
Addresses for Notices:
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
[the rest of this page is left blank intentionally]
25
The foregoing agreement is
hereby confirmed and accepted,
as of the date first above written.
____________________________
By: ____________________________________
Authorized Signatory
Name: __________________________________
Title: _________________________________
Address for Notices:
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
[the rest of this page is left blank intentionally]
26
SCHEDULE A
The Company will pay each Agent a commission, at the time of settlement of
each sale of Notes by the Company as a result of a solicitation made by such
Agent, in an amount equal to the following percentage of the aggregate principal
amount of such Notes sold:
Percentage of Aggregate
Principal Amount
Maturity Ranges of Notes Sold
--------------- -----------------------
More than 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to 30 years .750%
More than 30 years As agreed
A-1
EXHIBIT A
VIRGINIA ELECTRIC AND POWER COMPANY
MEDIUM-TERM NOTES, SERIES __
FORM OF TERMS AGREEMENT
(Date)
Virginia Electric and Power Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Re: Distribution Agreement dated __________
The undersigned agrees to purchase the following principal amount of Notes,
subject to the following terms, where applicable:
$_______________
(or principal amount of foreign or composite currency)
Minimum Denomination:
Interest Rate or Formula:
If Fixed Rate Note,
Fixed Rate:
Interest Payment Dates:
If Floating Rate Note,
___ Regular Floating Rate Note
___ Inverse Floating Rate Note
___ Floating/Fixed Rate Note
Base Rate or formula:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Index Currency, if any:
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
A-1
If Redeemable at the Option of the Company,
Initial Redemption Date:
Initial Redemption Percentage: ____% of par
Annual Redemption Percentage Reduction:
Limitation Date:
Refunding Rate:
If Repayment at the Option of the Holder,
Repayment Date(s):
Repayment Rate(s):
Original Issue Date:
Stated Maturity:
Purchase Price: _____% of par
Specified Currency:
Settlement Date and Time:
Requirements pursuant to Section 6(i) of the Distribution Agreement, if
any:
Additional/Other Terms:
Requirements pursuant to Sections 7(h), (c) and (d) of the Distribution
Agreement (check any that apply):
___ Officer's Certificate
___ Legal Opinion
___ Comfort Letter
_______________________________________
[Name of Agent Purchasing as Principal]
By: ___________________________________
Name:__________________________________
Title:_________________________________
Accepted:
VIRGINIA ELECTRIC AND POWER COMPANY
By: _____________________________________
Name:____________________________________
Title:___________________________________
A-2
EXHIBIT B
PROPOSED FORM OF OPINION
OF
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
VIRGINIA ELECTRIC AND POWER COMPANY
U.S. $2,000,000,000 Medium-Term Notes, Series H
_____________
_______________ ________________
_______________ ________________
_______________ ________________
_______________ ________________
_______________ ________________
_______________ ________________
_______________ ________________
_______________ ________________
_______________ ________________
Dear 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.
$2,000,000,000 aggregate principal amount of its Medium-Term Notes, Series H due
9 months or more from the date of issue (the Notes) under and pursuant to the
Company's Indenture, dated as of June 1, 1998, between the Company and JPMorgan
Chase Bank, formerly The Chase Manhattan Bank, as Trustee (the Trustee), as
previously supplemented, and as further supplemented by a ______ Supplemental
Indenture, dated as of __________ (such Indenture, as supplemented, is referred
to herein as the Indenture), and the offering of the Notes by you pursuant to a
Distribution Agreement, dated __________, by and between you and the Company
(the Distribution Agreement). All terms not otherwise defined herein shall have
the meanings set forth in the Distribution Agreement.
We have examined originals, or copies certified to our satisfaction, of
such corporate records of the Company, indentures, agreements and other
instruments,
B-1
certificates of public officials, certificates of officers and representatives
of the Company and of the Trustee, and other documents, as we have deemed
necessary as a basis for the opinions hereinafter expressed. As to various
questions of fact material to such opinions, we have, when relevant facts were
not independently established, relied upon certifications by officers of the
Company, the Trustee and other appropriate persons and statements contained in
the Registration Statement hereinafter mentioned. All legal proceedings taken as
of the date hereof in connection with the transactions contemplated by the
Distribution Agreement have been satisfactory to us.
In addition, we attended the closing held today at the offices of
McGuireWoods LLP, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at which the Company
satisfied the conditions contained in Section 7 of the Distribution Agreement
which are required to be satisfied as of the Closing Date.
Based upon the foregoing, and having regard to legal considerations which
we deem relevant, as of the date hereof, we are of the opinion that:
A. The Company is a corporation duly incorporated and existing as a
corporation in good standing under the laws of Virginia and has the corporate
power to transact its business as described in the Prospectus.
B. An appropriate order of the Virginia Commission with respect to the sale
of the Notes has been issued, and such order remains in effect at this date and
constitutes valid and sufficient authorization for the sale of the Notes as
contemplated by the Distribution Agreement. No approval or consent by any public
regulatory body, other than such order and notification of effectiveness by the
Virginia Commission is legally required in connection with the sale of the Notes
as contemplated by the Distribution Agreement (except to the extent that
compliance with the provisions of securities or blue sky laws of certain states
may be required in connection with the sale of the Notes in such states) and the
carrying out of the provisions of the Distribution Agreement.
C. The Distribution Agreement has been duly authorized by all necessary
corporate action and has been duly executed and delivered by the Company.
D. The Indenture has been duly authorized, executed and delivered by the
Company and has been duly qualified under the Trust Indenture Act and
constitutes a valid and binding obligation of the Company, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles (regardless of whether enforcement is considered
in a proceeding in equity or at law), and except further as enforcement thereof
may be limited by requirements that a claim with respect to any debt securities
issued under the Indenture that are payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to limit,
delay or prohibit the making of payments outside the United States.
B-2
E. The 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 Indenture and delivered and paid for as provided in the Distribution
Agreement, will have been duly issued under the Indenture and will constitute
valid and binding obligations of the Company entitled to the benefits provided
by the Indenture, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and except further as enforcement thereof may be limited by requirements
that a claim with respect to any Notes payable in a foreign or composite
currency (or a foreign or composite currency judgment in respect of such claim)
be converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to limit,
delay or prohibit the making of payments outside the United States.
F. The Registration Statement with respect to the 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 Notes in the manner
therein specified.
G. The Registration Statement and the Prospectus (except that we express no
comment or belief with respect to any historical or pro forma financial
statements and schedules and other financial or statistical information
contained or incorporated by reference in the Registration Statement or
Prospectus) comply as to form in all material respects to the requirements of
the Securities Act, and to the applicable rules and regulations of the
Commission thereunder.
H. As to the statements relating to the Notes under DESCRIPTION OF DEBT
SECURITIES and ADDITIONAL TERMS OF SENIOR DEBT SECURITIES in the prospectus
initially filed as part of the Registration Statement, as supplemented by the
statements under DESCRIPTION OF THE NOTES in the prospectus supplement dated
__________ (the Prospectus Supplement), we are of the opinion that the
statements are accurate and do not omit any material fact required to be stated
therein or necessary to make such statements not misleading.
As to the statistical statements in the Registration Statement (which
includes statistical statements in the Incorporated Documents), we have relied
solely on the officers of the Company. We have not undertaken to determine
independently the accuracy or completeness of the statements contained or
incorporated by reference in the Registration Statement or in the Prospectus. We
accordingly assume no responsibility for the accuracy or completeness of the
statements made in the Registration Statement, except as stated above in the
preceding paragraph in regard to the captions set forth in such proceeding
paragraph. We note that the Incorporated Documents were prepared and filed by
the Company without our participation. We have, however, participated in
conferences with counsel for and representatives of the Company in connection
with the
B-3
preparation of the Registration Statement, the Prospectus as it was initially
issued and as has been supplemented or amended, and we have reviewed the
Incorporated Documents and such of the corporate records of the Company as we
deemed advisable. None of the foregoing disclosed to us any information that
gives us reason to believe that the Registration Statement contained on the date
the Registration Statement became effective, or the Prospectus contained on the
date it was issued or the date it was supplemented or amended, or that the
Registration Statement or the Prospectus (in all cases, excepting the financial
statements and schedules and other financial information contained or
incorporated therein by reference and any pro forma financial information (and
notes thereto) included or incorporated by reference therein, as to which we
express no belief) contains on the date hereof, any untrue statement of any
material fact or omitted or omits on the date hereof to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The foregoing assurance is provided 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 prior to the date of the Distribution
Agreement.
We do not purport to express an opinion on any laws other than those of the
Commonwealth of Virginia, the State of Delaware, the State of New York and the
United States of America. This opinion may not be relied upon by, nor may copies
be delivered to, any person without our prior written consent.
Very truly yours,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
B-4
EXHIBIT C
PROPOSED FORM OF OPINION
OF
MCGUIREWOODS LLP
VIRGINIA ELECTRIC AND POWER COMPANY
U.S. $2,000,000,000 Medium-Term Notes, Series h
_____________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
_______________ _______________
Dear Ladies and Gentlemen:
The arrangements for issuance of up to U.S. $2,000,000,000 aggregate
principal amount of Medium-Term Notes, Series H due 9 months or more from the
date of issue (the Notes) of Virginia Electric and Power Company (the Company)
under the Company's Indenture, dated as of June 1, 1998, between the Company and
JPMorgan Chase Bank, formerly The Chase Manhattan Bank, as Trustee (the
Trustee), as previously supplemented, and as further supplemented by a ______
Supplemental Indenture, dated as of __________ (such Indenture, as supplemented,
is referred to herein as the Indenture), pursuant to a Distribution Agreement,
dated __________, by and between you and the Company (the Distribution
Agreement), have been taken under our supervision as counsel for the Company.
Terms not otherwise defined herein have the meanings set forth in the
Distribution 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
C-1
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
Distribution Agreement have been satisfactory to us.
On this basis, as of the date hereof, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation under the laws of Virginia, and has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its obligations
under the Distribution Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or to be in good standing would not result in a Material
Adverse Effect.
2. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than an authorization by the Virginia
Commission and those required under the Securities Act and the Rules and
Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states) is necessary or required in
connection with the due authorization, execution and delivery of the
Distribution Agreement or the due execution, delivery or performance of the
Indenture by the Company or for the offering, issuance, sale or delivery of the
Notes.
3. The Distribution Agreement has been duly authorized by all necessary
corporate action and has been duly executed and delivered by the Company.
4. The Indenture has been duly authorized, executed and delivered by the
Company and has been duly qualified under the Trust Indenture Act and
constitutes a valid and binding obligation of the Company, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles (regardless of whether enforcement is considered
in a proceeding in equity or at law), and except further as enforcement thereof
may be limited by requirements that a claim with respect to any debt securities
issued under the Indenture that are payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to limit,
delay or prohibit the making of payments outside the United States.
C-2
5. The 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 Indenture and issued, delivered and paid for in accordance
with the Distribution Agreement, will have been duly issued under the Indenture
and will constitute valid and binding obligations of the Company entitled to the
benefits provided by the Indenture, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law), and except further as enforcement thereof may be limited by
requirements that a claim with respect to any Notes payable in a foreign or
composite currency (or a foreign or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of exchange prevailing on a
date determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
6. The Registration Statement with respect to the 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 Notes in the
manner therein specified.
7. The Registration Statement and the Prospectus (except the financial
statements, any pro forma information and schedules contained 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 to the applicable rules and regulations of the Commission
thereunder.
8. We are of the opinion that the statements relating to the Notes under
DESCRIPTION OF DEBT SECURITIES and ADDITIONAL TERMS OF SENIOR DEBT SECURITIES in
the prospectus initially filed as part of the Registration Statement, as all or
any of them have been supplemented by the statements under DESCRIPTION OF THE
NOTES in the prospectus supplement dated __________, are substantially accurate
and fair.
9. With regard to the discussion in the Prospectus Supplement under the
caption CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS, we are of the
opinion that under current United States federal income tax law, although the
discussion does not purport to discuss all possible United States federal income
tax consequences of the purchase, ownership and disposition of the Notes, such
discussion constitutes a fair and accurate summary of the matters discussed
therein in all material respects. In rendering the aforementioned tax opinion,
we have considered the current provisions of the Internal Revenue Code of 1986,
as amended, proposed and final Treasury regulations promulgated thereunder,
judicial decisions and Internal Revenue Service rulings, all of which are
subject to change, which changes may be retroactively applied. A change in the
authorities upon which our opinion is based could affect our conclusions. There
can be no assurance, moreover, that any of the opinions expressed herein will be
accepted by the Internal Revenue Service, or, if challenged, by a court.
C-3
10. There are no actions, suits or proceedings pending or, to the best of
our knowledge, threatened, to which the Company or one of its subsidiaries is a
party or to which any of the Company's or any of its subsidiaries' properties is
subject, other than any proceedings described in the Prospectus and proceedings
which we believe are not likely to have a material adverse effect on the power
or ability of the Company to perform its obligations under the Distribution
Agreement or to consummate the transactions contemplated thereby or by the
Prospectus.
We have participated in conferences with officers and other representatives
of the Company and your representatives at which the contents of the
Registration Statement and the Prospectus were discussed, and we have consulted
with officers and other employees of the Company to inform them of the
disclosure requirements of the Securities Act. We have examined various reports,
records, contracts and other documents of the Company and orders and instruments
of public officials, which our investigation led us to deem pertinent. In
addition, we attended the due diligence meetings with representatives of the
Company and the closing at which the Company satisfied the conditions contained
in Section 7 of the Distribution Agreement. We have not, however, undertaken to
make any independent review of other records of the Company which our
investigation did not lead us to deem pertinent. As to the statistical
statements in the Registration Statement (which includes the Incorporated
Documents), we have relied solely on the officers 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. Such conferences,
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 contained on the date the Registration Statement became
effective, or the Prospectus contained on the date it was issued, or that the
Registration Statement or the Prospectus (in each case, except with respect to
the financial statements and schedules and other financial information contained
or incorporated by reference in the Registration Statement or the Prospectus)
contains on the date hereof, any untrue statement of a material fact or omitted
on such date or omits on the date hereof to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
foregoing assurance is provided 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 prior to the date of the Purchase Agreement.
We do not purport to express an opinion on any laws other than those of the
Commonwealth of Virginia, the State of New York and the United States of
America. This opinion may not be relied upon by, nor may copies be delivered to,
any person without our prior written consent.
Yours very truly,
▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇-▇
▇▇▇▇▇▇▇ ▇
VIRGINIA ELECTRIC AND POWER COMPANY
ADMINISTRATIVE PROCEDURES
for Fixed Rate and Floating Rate Medium-Term Notes, Series H
(Dated as of __________)
Medium-Term Notes Due Nine Months or More From Date of Issue (the "Notes")
are to be offered on a continuous basis by VIRGINIA ELECTRIC AND POWER COMPANY,
a Virginia corporation (the "Company"), to or through ______________,
_____________, _____________, _____________, _____________, and _____________
(each, an "Agent" and, collectively, the "Agents") pursuant to a Distribution
Agreement, dated __________ (the "Distribution Agreement"), by and among the
Company and the Agents. The Distribution Agreement provides for the sale of
Notes by the Company to one or more of the Agents as principal for resale to
investors and other purchasers, for the sale of Notes by the Company through one
or more of the Agents who solicit offers to purchase the Notes and receive a
commission (as may from time to time be agreed to by the Company and the related
Agent or Agents) and for the sale of Notes by the Company directly to investors.
Unless otherwise agreed by the related Agent or Agents and the Company,
Notes will be purchased by the related Agent or Agents as principal. Such
purchases will be made in accordance with terms agreed upon by the related Agent
or Agents and the Company (which terms shall be agreed upon orally, with written
confirmation prepared by the related Agent or Agents and mailed to the Company).
If agreed upon by any Agent or Agents and the Company, the Agent or Agents,
acting solely as agent or agents for the Company and not as principal, will use
best efforts to solicit offers to purchase the Notes. Only those provisions in
these Administrative Procedures that are applicable to the particular role to be
performed by the related Agent or Agents shall apply to the offer and sale of
the relevant Notes.
The Notes will be issued as a series of debt securities under an Indenture,
dated as of June 1, 1998, between the Company and JPMorgan Chase Bank, formerly
The Chase Manhattan Bank, as trustee (together with any successor in such
capacity, the "Trustee") as previously supplemented and as further supplemented
by a ______ Supplemental Indenture, dated as of __________ (such Indenture as
supplemented is referred to herein as the "Indenture"). The Company has filed a
Registration Statement with the Securities and Exchange Commission (the
"Commission") registering, among other securities, debt securities (which
includes the Notes) (the "Registration Statement", which term shall include any
additional registration statements filed in connection with the Notes). The most
recent base prospectus deemed part of the Registration Statement, as
supplemented with respect to the Notes, is herein referred to as "Prospectus".
The most recent supplement to the Prospectus setting forth the purchase price,
interest rate or formula, maturity date and other terms of the Notes (as
applicable) is herein referred to as the "Pricing Supplement".
D-1
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes without coupons (each, a "Global Note")
delivered to the Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated form
(each, a "Certificated Note") delivered to the investor or other purchaser
thereof or a person designated by such investor or other purchaser.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book-entry form will be issued
in accordance with the procedures set forth in Part II hereof and Certificated
Notes will be issued in accordance with the procedures set forth in Part III
hereof. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date
of its authentication by the Trustee.
Each Note shall also bear an original
issue date (each, an "Original Issue
Date"). The Original Issue Date shall
remain the same for all Notes
subsequently issued upon transfer,
exchange or substitution of an original
Note regardless of their dates of
authentication.
Maturities: Each Note will mature on a date nine
months or more from its Original Issue
Date (the "Stated Maturity Date")
selected by the investor or other
purchaser and agreed to by the Company.
Registration: Unless otherwise provided in the
applicable Pricing Supplement, Notes
will be issued only in fully registered
form.
Denominations: Unless otherwise provided in the
applicable Pricing Supplement, the
Notes, except for Notes denominated in
a Specified Currency other than U.S.
dollars, shall be issued only in
denominations of $25 or $1,000, as
specified in the applicable Pricing
Supplement, and any integral multiple of
such denominations in excess thereof.
Notes denominated in a Specified
Currency other than U.S. dollars will be
issued in equivalent denominations, as
determined by reference to the Market
Exchange Rate on the Business Day
immediately preceding the date of
issuance unless otherwise specified in
the applicable Pricing Supplement.
D-2
Base Rates applicable
to Floating Rate
Notes: Unless otherwise provided in the
applicable Pricing Supplement, Floating
Rate Notes will bear interest at a rate
or rates determined by reference to the
CD Rate, the CMT Rate, the Commercial
Paper Rate, the Federal Funds Rate,
LIBOR, the Prime Rate, the Treasury
Rate, or such other Base Rate or formula
as may be set forth in applicable
Pricing Supplement, or by reference to
two or more such rates, as adjusted by
the Spread and/or Spread Multiplier, if
any, applicable to such Floating Rate
Notes.
Redemption/Repayment: The Notes will be subject to redemption
by the Company in accordance with the
terms of the Notes, which will be fixed
at the time of sale and set forth in the
applicable Pricing Supplement. If no
Initial Redemption Date is indicated
with respect to a Note, such Note will
not be redeemable prior to its Stated
Maturity Date.
The Notes will be subject to repayment
at the option of the Holders thereof in
accordance with the terms of the Notes,
which will be fixed at the time of sale
and set forth in the applicable Pricing
Supplement. If no Optional Repayment
Date is indicated with respect to a
Note, such Note will not be repayable at
the option of the Holder prior to its
Stated Maturity Date.
Calculation of
Interest: In case of Fixed Rate Notes, interest
(including payments for partial periods)
will be calculated and paid on the basis
of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate
Note will be calculated by reference to
the specified Base Rate(s) plus or minus
the applicable Spread, if any, and/or
multiplied by the applicable Spread
Multiplier, if any.
Unless otherwise provided in the
applicable Pricing Supplement, interest
on each Floating Rate Note will be
calculated by multiplying its principal
amount by an accrued interest factor.
Such accrued interest factor is computed
by adding the interest factor calculated
for each day in the period for which
accrued interest is being accrued.
Unless otherwise provided in the
applicable Pricing Supplement, the
interest factor for each such day is
computed by dividing the interest rate
applicable to such day by 360 if the CD
Rate, Commercial
D-3
Paper Rate, Federal Funds Rate, LIBOR
(except for LIBOR Notes denominated in
pounds sterling) or Prime Rate is an
applicable Base Rate, by 365 in the case
of LIBOR Notes denominated in pounds
sterling if LIBOR is the applicable Base
Rate, or by the actual number of days in
the year if the CMT Rate or Treasury
Rate is an applicable Base Rate. As
provided in the applicable Pricing
Supplement, the interest factor for
Notes for which the interest rate is
calculated with reference to two or more
Base Rates will be calculated in each
period in the same manner as if only the
lowest, highest or average of the
applicable Base Rates applied.
Interest: General. Each Note will bear interest
in accordance with its terms. Unless
otherwise provided in the applicable
Pricing Supplement, interest on each
Note will accrue from and including the
Original Issue Date of such Note for the
first interest period or from the most
recent Interest Payment Date (as defined
below) to which interest has been paid
or duly provided for all subsequent
interest periods to but excluding
applicable Interest Payment Date or the
Stated Maturity Date or date of earlier
redemption or repayment, as the case may
be (the Stated Maturity Date or date of
earlier redemption or repayment is
referred to herein as the "Maturity
Date" with respect to the principal
repayable on such date).
If an Interest Payment Date or the
Maturity Date with respect to any Fixed
Rate Note falls on a day that is not a
Business Day (as defined below), the
required payment to be made on such day
need not be made on such day, but may be
made on the next succeeding Business Day
with the same force and effect as if
made on such day, and no interest shall
accrue on such payment for the period
from and after such day to the next
succeeding Business Day. If an Interest
Payment Date other than the Maturity
Date with respect to any Floating Rate
Note would otherwise fall on a day that
is not a Business Day, such Interest
Payment Date will be postponed to the
next succeeding Business Day, except
that in the case of a Note for which
LIBOR is an applicable Base Rate, if
such Business Day falls in the next
succeeding calendar month, such Interest
Payment Date will be the immediately
preceding Business Day. If the Maturity
Date with respect to any Floating Rate
Note falls on a day that is not a
Business Day, the required payment to be
made on such day need not be made on
such day, but may be made on the next
succeeding Business Day with the same
force and effect as if made on such day,
and no interest shall accrue
D-4
on such payment for the period from and
after the Maturity Date to the next
succeeding Business Day.
Unless otherwise provided in the
applicable Pricing Supplement, "Business
Day" means with respect to any Note, any
day, other than a Saturday or Sunday,
that is neither (a) a legal holiday nor
(b) a day on which banking institutions
are authorized or required by law,
regulation or executive order to close
in New York City; provided, however,
that for Notes denominated in a
Specified Currency other than United
States dollars that day is also not a
day on which commercial banking
institutions are authorized or required
by law, regulation or executive order to
close in the Principal Financial Center
of the country issuing the Specified
Currency (or for Notes denominated in
euros, that day is also a day on which
the Trans-European Automated Real-time
Gross Settlement Express Transfer
System, commonly referred to as
"TARGET," is operating); provided,
further, that with respect to a LIBOR
Note, the day must also be a London
Business Day.
"London Business Day" means any day on
which commercial banks are open for
business (including for dealings in
deposits in the relevant Index Currency)
in London.
"Principal Financial Center" means as
applicable, the capital city of the
country issuing the Specified Currency;
or the capital city of the country to
which the Index Currency relates;
provided, however, that the Principal
Financial Center will be New York City
for United States dollars, Sydney for
Australian dollars, Toronto for Canadian
dollars, Johannesburg for South African
rand and Zurich for Swiss francs.
Regular Record Dates. Unless otherwise
provided in the applicable Pricing
Supplement, the "Regular Record Date"
for a Note shall be the close of
business on the fifteenth calendar day
(whether or not a Business Day)
preceding the applicable Interest
Payment Date.
Interest Payment Dates. Interest
payments will be made on each Interest
Payment Date commencing with the first
Interest Payment Date following the
Original Issue Date; provided, however,
the first payment of interest on any
Note originally issued between a Regular
Record Date and an Interest Payment Date
will occur on the Interest Payment Date
following the next succeeding Regular
Record Date.
D-5
Unless otherwise provided in the
applicable Pricing Supplement, interest
payments on Fixed Rate Notes will be
made semiannually in arrears on May 1
and November 1 of each year and on the
Maturity Date, while interest payments
on Floating Rate Notes will be made as
specified in the applicable Pricing
Supplement.
Acceptance and
Rejection of Offers
from Solicitation
as Agents: If agreed upon by any Agent and the
Company, then such Agent acting solely
as agent for the Company and not as
principal will solicit purchases of the
Notes. Each Agent will communicate to
the Company, orally or in writing, each
reasonable offer to purchase Notes
solicited by such Agent on an agency
basis, other than those offers rejected
by such Agent. Each Agent has the right,
in its discretion reasonably exercised,
to reject any proposed purchase of
Notes, as a whole or in part, and any
such rejection shall not be a breach of
such Agent's agreement contained in the
Distribution Agreement. The Company has
the sole right to accept or reject any
proposed purchase of Notes, in whole or
in part, and any such rejection shall
not a breach of the Company's agreement
contained in the Distribution Agreement.
Each Agent has agreed to make best
efforts to assist the Company in
obtaining performance by each purchaser
whose offer to purchase Notes has been
solicited by such Agent and accepted by
the Company.
Preparation of
Pricing Supplement: If any offer to purchase a Note is
accepted by the Company, the Company
will promptly prepare a Pricing
Supplement reflecting the terms of such
Note. Information to be included in the
Pricing Supplement shall include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement
and the date of the Prospectus to
which the Pricing Supplement
relates;
4. the name of the Offering Agent
(as defined below);
D-6
5. whether such Notes are being sold
to the Offering Agent as principal
or to an investor or other purchaser
through the Offering Agent acting as
agent for the Company;
6. with respect to Notes sold to the
Offering Agent as principal, whether
such Notes will be resold by the
Offering Agent to investors and
other purchasers at (i) a fixed
public offering price of a specified
percentage of their principal amount
or (ii) at varying prices related to
prevailing market prices at the time
of resale to be determined by the
Offering Agent;
7. with respect to Notes sold to an
investor or other purchaser through
the Offering Agent acting as agent
for the Company, whether such Notes
will be sold at (i) 100% of their
principal amount or (ii) a specified
percentage of their principal
amount;
8. the Offering Agent's discount or
commission;
9. the net proceeds to the Company;
10. the Principal Amount, Specified
Currency, Original Issue Date,
Stated Maturity Date, Interest
Payment Date(s), Authorized
Denomination, Initial Redemption
Date, if any, Initial Redemption
Percentage, if any, Annual
Redemption Percentage Reduction, if
any, Optional Repayment Date(s), if
any, Exchange Rate Agent, if any,
Default Rate, if any, and, in the
case of Fixed Rate Notes, the
Interest Rate, and whether such
Fixed Rate Note is an Original Issue
Discount Note (and, if so, the Issue
Price), and, in the case of Floating
Rate Notes, the Interest Category,
the Base Rate or Bases, the Day
Count Convention, Index Maturity (if
applicable), Initial Interest Rate,
if any, Maximum Interest Rate, if
any, Minimum Interest Rate, if any,
Initial Interest Reset Date,
Interest Reset Dates, Spread and/or
Spread Multiplier, if any, and
Calculation Agent; and
11. any other additional provisions of
the Notes material to investors or
other purchasers of the Notes not
otherwise specified in the
Prospectus.
The Company shall use its best efforts
to send such Pricing Supplement by
email, facsimile or overnight express
(for delivery by the close of business
on the applicable trade date, but in no
event later than 11:00 a.m. New York
City time, on
D-7
the Business Day following the
applicable trade date) to the Agent
which made or presented the offer to
purchase the applicable Note (in such
capacity, the "Offering Agent") and the
Trustee at the following applicable
address: if to:
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
D-8
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
and to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: F. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.,
Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
In each instance that a Pricing
Supplement is prepared, the Offering
Agent will provide a copy of such
Pricing Supplement to each investor or
purchaser of the relevant Notes or its
agent. Pursuant to Rule 434 ("Rule 434")
of the Securities Act of 1933, as
amended, the Pricing Supplement may be
delivered separately from the
Prospectus. Outdated Pricing Supplements
(other than those retained for files)
will be destroyed.
Settlement: The receipt of immediately available
funds by the Company in payment for a
Note and the authentication and delivery
of such Note shall, with respect to such
Note, constitute "settlement". Offers
accepted by the Company will be settled
in three Business Days, or at such time
as the purchaser, the applicable Agent
and the Company shall agree, pursuant to
the timetable for settlement set forth
in Parts II and III hereof under
"Settlement Procedure Timetable" with
respect to Global Notes and Certificated
Notes, respectively (each such date
fixed for settlement is hereinafter
referred to as a "Settlement Date"). If
procedures A and B of the applicable
Settlement Procedures
D-9
with respect to a particular offer are
not completed on or before the time set
forth under the applicable "Settlement
Procedures Timetable", such offer shall
not be settled until the Business Day
following the completion of settlement
procedures A and B or such later date as
the purchaser and the Company shall
agree.
The foregoing settlement procedures may
be modified with respect to any purchase
of Notes by an Agent as principal if so
agreed by the Company and such Agent.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to
change the interest rate or any other
variable term on any Notes being sold by
the Company, the Company will promptly
advise the Agents and the Trustee by
facsimile transmission and the Agents
will forthwith suspend solicitation of
offers to purchase such Notes. The
Agents will telephone: the Company with
recommendations as to the changed
interest rates or other variable terms.
At such time as the Company notifies the
Agents and the Trustee of the new
interest rates or other variable terms,
the Agents may resume solicitation of
offers to purchase such Notes. Until
such time, only "indications of
interest" may be recorded. Immediately
after acceptance by the Company of an
offer to purchase Notes at a new
interest rate or new variable term, the
Company, the Offering Agent and the
Trustee shall follow the procedures set
forth under the applicable "Settlement
Procedures".
Suspension of Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to
suspend solicitation of offers to
purchase Notes at any time. Upon receipt
of such instructions, the Agents will
forthwith suspend solicitation of offers
to purchase from the Company until such
time as the Company has advised the
Agents that solicitation of offers to
purchase may be resumed. If the Company
decides to amend or supplement the
Registration Statement or the Prospectus
(other than to establish or change
interest rates or formulas, maturities,
prices or other similar variable terms
with respect to the Notes), it will
promptly advise the Agents and will
furnish the Agents and their counsel
with copies of the proposed amendment or
supplement. Copies of such amendment or
supplement will be delivered or mailed
to the Agents, their
D-10
counsel and the Trustee in quantities
which such parties may reasonably
request at the following respective
addresses: if to
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D-11
_______________
_______________
_______________
_______________
and to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: F. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.,
Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
In the event that at the time the
solicitation of offers to purchase from
the Company is suspended (other than to
establish or change interest rates or
formulas, maturities, prices or other
similar variable terms with respect to
the Notes) there shall be any offers to
purchase Notes that have been accepted
by the Company which have not been
settled, the Company will promptly
advise the Offering Agent and the
Trustee whether such offers may be
settled and whether copies of the
Prospectus as theretofore amended and/or
supplemented as in effect at the time of
the suspension may be delivered in
connection with the settlement of such
offers. The Company will have the sole
responsibility for such decision and for
any arrangements which may be made in
the event that the Company determines
that such offers may not be settled or
that copies of such Prospectus may not
be so delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent Prospectus and
the applicable Pricing Supplement, which
pursuant to Rule 434 may be delivered
separately from the Prospectus, must
accompany or precede the earlier of (a)
the written confirmation of a sale sent
to an investor or other purchaser or its
agent and (b) the delivery of Notes to
an investor or other purchaser or its
agent.
Authenticity of
Signatures: The Agents will have no obligation or
liability to the Company or the Trustee
in respect of the authenticity of the
signature of any officer, employee or
agent of the Company or the Trustee on
any Note.
Documents Incorporated
D-12
by Reference: The Company shall supply the Agents with
an adequate supply of all documents
incorporated by reference in the
Registration Statement and the
Prospectus.
D-13
PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form
for eligibility in the book-entry system maintained by DTC, JPMorgan Chase Bank,
formerly The Chase Manhattan Bank ("JPMorgan Chase") will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations from the
Company and JPMorgan Chase to DTC, dated _______, 2002, and a Certificate
Agreement, dated May 26, 1989, between JPMorgan Chase and DTC, as amended (the
"Certificate Agreement"), and its obligations as a participant in DTC, including
DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-
entry form having the same Original
Issue Date, Specified Currency, Interest
Rate, Default Rate, Interest Payment
Dates, redemption and/or repayment
terms, if any, and Stated Maturity Date
(collectively, the "Fixed Rate Terms")
will be represented initially by a
single Global Note; and all Floating
Rate Notes issued in book-entry form
having the same Original Issue Date,
Specified Currency, Interest Category,
formula for the calculation of interest
(including the Base Rate or Bases, which
may be the CD Rate, the CMT Rate, the
Commercial Paper Rate, the Federal Funds
Rate, LIBOR, the Prime Rate or the
Treasury Rate or any other Base Rate or
formula, and Spread and/or Spread
Multiplier, if any), Day Count
Convention, Initial Interest Rate,
Default Rate, Index Maturity (if
applicable), Minimum Interest Rate, if
any, Maximum Interest Rate, if any,
redemption and/or repayment terms, if
any, Interest Payment Dates, Initial
Interest Reset Date, Interest Reset
Dates and Stated Maturity Date
(collectively, the "Floating Rate
Terms") will be represented initially by
a single Global Note.
For other variable terms with respect to
the Fixed Rate Notes and Floating Rate
Notes, see the Prospectus and the
applicable Pricing Supplement.
Owners of beneficial interests in Global
Notes will be entitled to physical
delivery of Certificated Notes equal in
principal amount to their respective
beneficial interests only upon certain
limited circumstances described in the
Prospectus.
Identification: The Company has arranged with the CUSIP
Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau")
for the reservation of one series of
CUSIP numbers, which series consists of
approximately 900 CUSIP numbers which
D-14
have been reserved for and relating to
Global Notes and the Company has
delivered to each of JPMorgan Chase and
DTC such list of such CUSIP numbers. The
Company will assign CUSIP numbers to
Global Notes as described below under
Settlement Procedure B. DTC will notify
the CUSIP Service Bureau periodically of
the CUSIP numbers that the Company has
assigned to Global Notes. JPMorgan Chase
will notify the Company at any time when
fewer than 100 of the reserved CUSIP
numbers remain unassigned to Global
Notes, and, if it deems necessary, the
Company will reserve and obtain
additional CUSIP numbers for assignment
to Global Notes. Upon obtaining such
additional CUSIP numbers, the Company
will deliver a list of such additional
numbers to JPMorgan Chase and DTC. Notes
issued in book-entry form in excess of
$400,000,000 (or the equivalent thereof
in one or more foreign or composite
currencies) aggregate principal amount
and otherwise required to be represented
by the same Global Note will instead be
represented by two or more Global Notes
which shall all be assigned the same
CUSIP number.
Registration: Unless otherwise specified by DTC, each
Global Note will be registered in the
name of Cede & Co., as nominee for DTC,
on the register maintained by JPMorgan
Chase under the Indenture. The
beneficial owner of a Note issued in
book-entry form (i.e., an owner of a
beneficial interest in a Global Note)
(or one or more indirect participants in
DTC designated by such owner) will
designate one or more participants in
DTC (with respect to such Note issued in
book-entry form, the "Participants") to
act as agent for such beneficial owner
in connection with the book-entry system
maintained by DTC, and DTC will record
in book-entry form, in accordance with
instructions provided by such
Participants, a credit balance with
respect to such Note issued in
book-entry form in the account of such
Participants. The ownership interest of
such beneficial owner in such Note
issued in book-entry form will be
recorded through the records of such
Participants or through the separate
records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of beneficial ownership
interests in a Global Note will be
accomplished by book entries made by DTC
and, in turn, by Participants (and in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferors and transferees
of such Global Note.
D-15
Exchanges: JPMorgan Chase may deliver to DTC and
the CUSIP Service Bureau at any time a
written notice specifying (a) the CUSIP
numbers of two or more Global Notes
outstanding on such date that represent
Global Notes having the same Fixed Rate
Terms or Floating Rate Terms, as the
case may be (other than Original Issue
Dates), and for which interest has been
paid to the same date; (b) a date,
occurring at least 30 days after such
written notice is delivered and at least
30 days before the next Interest Payment
Date for the related Notes issued in
book-entry form, on which such Global
Notes shall be exchanged for a single
replacement Global Note; and (c) a new
CUSIP number, obtained from the Company,
to be assigned to such replacement
Global Note. Upon receipt of such a
notice, DTC will send to its
Participants (including JPMorgan Chase)
a written reorganization notice to the
effect that such exchange will occur on
such date. Prior to the specified
exchange date, JPMorgan Chase will
deliver to the CUSIP Service Bureau
written notice setting forth such
exchange date and the new CUSIP number
and stating that, as of such exchange
date, the CUSIP numbers of the Global
Notes to be exchanged will no longer be
valid. On the specified exchange date,
JPMorgan Chase will exchange such Global
Notes for a single Global Note bearing
the new CUSIP number and the CUSIP
numbers of the exchanged Notes will, in
accordance with CUSIP Service Bureau
procedures, be canceled and not
immediately reassigned. Notwithstanding
the foregoing, if the Global Notes to be
exchanged exceed $400,000,000 (or the
equivalent thereof in one or more
foreign or composite currencies) in
aggregate principal amount, one
replacement Note will be authenticated
and issued to represent each
$400,000,000 (or the equivalent thereof
in one or more foreign or composite
currencies) in aggregate principal
amount of the exchanged Global Notes and
an additional Global Note or Notes will
be authenticated and issued to represent
any remaining principal amount of such
Global Notes (See "Denominations"
below).
Denominations: Unless otherwise provided in the
applicable Pricing Supplement, Notes
issued in book-entry form will be issued
in denominations of $25 or $1,000 and
integral multiples of such denominations
in excess thereof. Global Notes will not
be denominated in excess of $400,000,000
(or the equivalent thereof in one or
more foreign or composite currencies)
aggregate principal amount. If one or
more Notes are issued in book-entry form
in excess of $400,000,000 (or the
equivalent thereof in one or more
foreign or composite currencies)
aggregate principal amount and would,
but for the preceding
D-16
sentence, be represented by a single
Global Note, then one Global Note will
be issued to represent each $400,000,000
(or the equivalent thereof in one or
more foreign or composite currencies) in
aggregate principal amount of such Notes
issued in book-entry form and an
additional Global Note or Notes will be
issued to represent any remaining
aggregate principal amount of such Note
or Notes issued in book-entry form. In
such a case, each of the Global Notes
representing Notes issued in book-entry
form shall be assigned the same CUSIP
number.
Payments of Principal
and Interest: Payments of Interest Only. Promptly
after each Regular Record Date, JPMorgan
Chase will deliver to the Company and
DTC a written notice specifying by CUSIP
number the amount of interest to be paid
on each Global Note on the following
Interest Payment Date (other than an
Interest Payment Date coinciding with
the Maturity Date) and the total of such
amounts, to the extent then
ascertainable. DTC will confirm the
amount payable on each Global Note on
such Interest Payment Date by reference
to the daily bond reports published by
Standard & Poor's Corporation. On such
Interest Payment Date, the Company will
pay to JPMorgan Chase in immediately
available funds an amount sufficient to
pay the interest then due and owing on
the Global Notes, and upon receipt of
such funds from the Company, JPMorgan
Chase in turn will pay to DTC such total
amount of interest due on such Global
Notes (other than on the Maturity Date)
which is payable in U.S. dollars, at the
times and in the manner set forth below
under "Manner of Payment". JPMorgan
Chase shall make payment of that amount
of interest due and owing on any Global
Notes that Participants have elected to
receive in foreign or composite
currencies directly to such
Participants.
Notice of Interest Rates. Promptly after
each Interest Determination Date or
Calculation Date, as the case may be,
for Floating Rate Notes issued in
book-entry form, JPMorgan Chase will
notify each of ▇▇▇▇▇'▇ Investors
Service, Inc. and Standard & Poor's
Corporation of the interest rates
determined as of such Interest
Determination Date.
Payments at Maturity. On or about the
first Business Day of each month,
JPMorgan Chase will deliver to the
Company and DTC a written list of
principal, premium, if any, and interest
to be paid on each Global Note maturing
or otherwise becoming due in the
following month, to the extent then
ascertainable. JPMorgan Chase, the
Company and DTC will confirm the
D-17
amounts of such principal, premium, if
any, and interest payments with respect
to each such Global Note on or about the
fifth Business Day preceding the
Maturity Date of such Global Note. On
the Maturity Date, the Company will pay
to JPMorgan Chase in immediately
available funds an amount sufficient to
make the required payments, and upon
receipt of such funds JPMorgan Chase in
turn will pay to DTC the principal
amount of Global Notes, together with
premium, if any, and interest due on the
Maturity Date, which are payable in U.S.
dollars, at the times and in the manner
set forth below under "Manner of
Payment". JPMorgan Chase shall make
payment of the principal, premium, if
any, and interest to be paid on the
Maturity Date of each Global Note that
Participants have elected to receive in
foreign or composite currencies directly
to such Participants. Promptly after (i)
payment to DTC of the principal,
premium, if any, and interest due on the
Maturity Date of such Global Note which
are payable in U.S. dollars and (ii)
payment of the principal, premium, if
any, and interest due on the Maturity
Date of such Global Note to those
Participants who have elected to receive
such payments in foreign or composite
currencies, the Trustee will cancel such
Global Note and deliver it to the
Company with an appropriate debit
advice. On the first Business Day of
each month, the Trustee will deliver to
the Company a written statement
indicating the total principal amount of
outstanding Global Notes as of the close
of business on the immediately preceding
Business Day.
Manner of Payment. The total amount of
any principal, premium, if any, and
interest due on Global Notes on any
Interest Payment Date or the Maturity
Date, as the case may be, which is
payable in U.S. dollars shall be paid by
the Company to JPMorgan Chase in funds
available for use by JPMorgan Chase no
later than 10:00 a.m., New York City
time, on such date. The Company will
make such payment on such Global Notes
to an account specified by JPMorgan
Chase. Upon receipt of such funds,
JPMorgan Chase will pay by separate wire
transfer (using Fedwire message entry
instructions in a form previously
specified by DTC) to an account at the
Federal Reserve Bank of New York
previously specified by DTC, in funds
available for immediate use by DTC, each
payment in U.S. dollars of principal,
premium, if any, and interest due on
Global Notes on such date. Thereafter on
such date, DTC will pay, in accordance
with its SDFS operating procedures then
in effect, such amounts in funds
available for immediate use to the
respective Participants in whose names
D-18
the beneficial interests in such Global Notes are
recorded in the book-entry system maintained by DTC.
Neither the Company nor JPMorgan Chase shall have any
responsibility or liability for the payment in U.S.
dollars by DTC of the principal of, or premium, if any,
or interest on, the Global Notes. JPMorgan Chase shall
make all payments of principal, premium, if any, and
interest on each Global Note that Participants have
elected to receive in foreign or composite currencies
directly to such Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Global Note will be determined and withheld
by the Participant, indirect participant in DTC or other
Person responsible for forwarding payments and materials
directly to the beneficial owner of such Global Note.
Settlement Settlement Procedures with regard to each Note in
Procedures: book-entry form sold by an Agent, as agent of the
Company, or purchased by an Agent, as principal, will be
as follows:
A. The Offering Agent will advise the Company by
telephone:, confirmed by facsimile, of the
following settlement information:
1. Principal amount, Authorized Denomination,
and Specified Currency.
2. Exchange Rate Agent, if any.
3. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being
issued with Original Issue
Discount and, if so, the terms
thereof.
(b) Floating Rate Notes:
(i) Interest Category.
D-19
(ii) Base Rate(s).
(iii) Initial Interest Rate.
(iv) Spread and/or Spread Multiplier,
if any.
(v) Initial Interest Reset Date or
Interest Reset Dates.
(vi) Interest Payment Dates.
(vii) Index Maturity, if any.
(viii) Maximum and/or Minimum Interest
Rates, if any.
(ix) Day Count Convention.
(x) Calculation Agent.
4. Price to public, if any, of such Note (or
whether such Note is being offered at varying
prices relating to prevailing market prices
at time of resale as determined by the
Offering Agent).
5. Trade Date.
6. Settlement Date (Original Issue Date).
7. Stated Maturity Date.
8. Redemption provisions, if any.
9. Repayment provisions, if any.
10. Default Rate, if any.
11. Net proceeds to the Company.
12. The Offering Agent's discount or commission.
D-20
13. Whether such Note is being sold to the
Offering Agent as principal or to an investor
or other purchaser through the Offering Agent
acting as agent for the Company.
14. Such other information specified with respect
to such Note (whether by Addendum or
otherwise).
B. The Company will assign a CUSIP number to the
Global Note representing such Note and then advise
the Trustee by facsimile transmission or other
electronic transmission (promptly confirmed in
writing) of the above settlement information
received from the Offering Agent, such CUSIP number
and the name of the Offering Agent. The Company
will also advise the Offering Agent of the CUSIP
number assigned to the Global Note.
C. JPMorgan Chase will communicate to DTC and the
Offering Agent through DTC's Participant Terminal
System a pending deposit message specifying the
following settlement information:
1. The information set forth in the Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of
JPMorgan Chase and the Offering Agent.
3. Identification of the Global Note as a Fixed
Rate Global Note or Floating Rate Global
Note.
4. Initial Interest Payment Date for such Note,
number of days by which such date succeeds
the related record date for DTC purposes (or,
in the case of Floating Rate Notes which
reset daily or weekly, the date five calendar
days preceding the Interest Payment Date)
and, if then calculable, the amount of
interest payable on such Interest Payment
Date (which amount shall have been confirmed
by JPMorgan Chase).
5. CUSIP number of the Global Note representing
such Note.
D-21
6. Whether such Global Note represents any other
Notes issued or to be issued in book-entry
form.
DTC will arrange for each pending deposit
message described above to be transmitted to
Standard & Poor's Corporation, which will use the
information in the message to include certain terms
of the related Global Note in the appropriate daily
bond report published by Standard & Poor's
Corporation.
D. The Trustee will complete and authenticate the
Global Note representing such Note.
E. DTC will credit such Note to the participant
account of JPMorgan Chase maintained by DTC.
F. JPMorgan Chase will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to JPMorgan
Chase's participant account and credit such Note to
the participant account of the Offering Agent
maintained by DTC and (ii) to debit the settlement
account of the Offering Agent and credit the
settlement account of JPMorgan Chase maintained by
DTC, in an amount equal to the price of such Note
less such Offering Agent's discount or underwriting
commission, as applicable. Any entry of such a
deliver order shall be deemed to constitute a
representation and warranty by the Trustee to DTC
that (i) the Global Note representing such Note has
been issued and authenticated and (ii) JPMorgan
Chase is holding such Global Note pursuant to the
Certificate Agreement.
G. In the case of Notes in book-entry form sold
through the Offering Agent, as agent, the Offering
Agent will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC
(i) to debit such Note to the Offering Agent's
participant account and credit such Note to the
participant account of the Participants maintained
by DTC and (ii) to debit the settlement accounts of
such Participants and credit the settlement account
of the Offering Agent maintained by DTC in an
amount equal to the initial public offering price
of such Note.
D-22
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures F and G
will be settled in accordance with SDFS operating
procedures in effect on the Settlement Date.
I. Upon receipt, JPMorgan Chase will pay the Company,
by wire transfer of immediately available funds to
an account specified by the Company to JPMorgan
Chase from time to time, the amount transferred to
JPMorgan Chase in accordance with Settlement
Procedure F.
J. JPMorgan Chase will send a copy of the Global Note
by first class mail to the Company together with a
statement setting forth the principal amount of
Notes Outstanding as of the related Settlement Date
after giving effect to such transaction and all
other offers to purchase Notes of which the Company
has advised JPMorgan Chase but which have not yet
been settled.
K. If such Note was sold through the Offering Agent,
as agent, the Offering Agent will confirm the
purchase of such Note to the investor or other
purchaser either by transmitting to the Participant
with respect to such Note a confirmation order
through DTC's Participant Terminal System or by
mailing a written confirmation to such investor or
other purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the Company,
Settlement Procedures A through K set forth above shall
be completed as soon as possible following the trade but
not later than the respective times (New York City time)
set forth below:
Settlement
Procedure Time
A 11:00 a.m. on the trade date or within
one hour following the trade
B 12:00 noon on the trade date or within
one hour following the trade
C No later than the close of business on
the trade date
D-23
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on
Settlement Date
H 4:00 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Note issued in book-entry form is
rescheduled or canceled, JPMorgan Chase will deliver
to DTC, through DTC's Participant Terminal System, a
cancellation message to such effect by no later than
5:00 p.m., New York City time, on the Business Day
immediately preceding the scheduled Settlement Date.
Failure to Settle: If JPMorgan Chase fails to enter an SDFS deliver
order with respect to a Note issued in book-entry
form pursuant to Settlement Procedure F, JPMorgan
Chase may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a withdrawal
message instructing DTC to debit such Note to the
participant account of JPMorgan Chase maintained at
DTC. DTC will process the withdrawal message,
provided that such participant account contains a
principal amount of the Global Note representing
such Note that is at least equal to the principal
amount to be debited. If withdrawal messages are
processed with respect to all the Notes represented
by a Global Note, the Trustee will ▇▇▇▇ such Global
Note "canceled", make appropriate entries in its
records and send certification of cancellation of
such canceled Global Note to the Company. The CUSIP
number assigned to such Global Note shall, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If
withdrawal messages are processed with respect to a
portion of the Notes represented by a Global Note,
the Trustee will exchange such Global Note for two
Global Notes, one of which shall represent the
Global Notes for which withdrawal messages are
processed and shall be canceled immediately
D-24
after issuance and the other of which shall
represent the other Notes previously represented by
the surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note.
In the case of any Note in book-entry form sold
through the Offering Agent, as agent, if the
purchase price for any such Note is not timely paid
to the Participants with respect thereto by the
beneficial investor or other purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such investor or other
purchaser), such Participants and, in turn, the
related Offering Agent may enter SDFS deliver orders
through DTC's Participant Terminal System reversing
the orders entered pursuant to Settlement Procedures
F and G, respectively. Thereafter, the Trustee will
deliver the withdrawal message and take the related
actions described in the preceding paragraph. If
such failure shall have occurred for any reason
other than default by the applicable Offering Agent
to perform its obligations hereunder or under the
Distribution Agreement, the Company will reimburse
such Offering Agent on an equitable basis for its
reasonable loss of the use of funds during the
period when the funds were credited to the account
of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Note in book-entry form,
DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of
a failure to settle with respect to a Note that was
to have been represented by a Global Note also
representing other Notes, the Trustee will provide,
in accordance with Settlement Procedure D, for the
authentication and issuance of a Global Note
representing such remaining Notes and will make
appropriate entries in its records.
D-25
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the applicable
Pricing Supplement, the Certificated Notes will
be issued in denominations of $25 or $1,000 and
integral multiples of such denominations in
excess thereof.
Payments of Principal,
Premium, if any,
and Interest: Upon presentment and delivery of the
Certificated Note, the Trustee upon receipt of
immediately available funds from the Company
will pay the principal of, premium, if any, and
interest on, each Certificated Note on the
Maturity Date in immediately available funds.
All interest payments on a Certificated Note,
other than interest due on the Maturity Date,
will be made by check mailed to the address of
the person entitled thereto as such address
shall appear in the Security Register at the
applicable Regular Record Date; provided,
however, that Holders shall be entitled to
receive such interest payments by wire transfer
of immediately available funds if appropriate
wire transfer instructions have been received in
writing by the Trustee not less than 15 calendar
days prior to the applicable Interest Payment
Date.
The Trustee will provide monthly to the Company
a list of the principal, premium, if any, and
interest to be paid on Certificated Notes
maturing in the next succeeding month. The
Trustee will be responsible for withholding
taxes on interest paid as required by applicable
law.
Certificated Notes presented to the Trustee on
the Maturity Date for payment will be canceled
by the Trustee. All canceled Certificated Notes
held by the Trustee shall be disposed of in
accordance with its customary procedures, and
the Trustee shall furnish to the Company a
certificate with respect to such disposition.
Settlement
Procedures: Settlement Procedures with regard to each
Certificated Note purchased by an Agent, as
principal, or through an Agent, as agent, shall
be as follows:
D-26
A. The Offering Agent will advise the Company
by telephone of the following Settlement
information with regard to each
Certificated Note:
1. Exact name in which the Certificated
Note(s) is to be registered (the
"Registered Owner").
2. Exact address or addresses of the
Registered Owner for delivery,
notices and payments of principal,
premium, if any, and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount, Authorized
Denomination and Specified Currency.
5. Exchange Rate Agent, if any.
6. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is
being issued with
Original Issue Discount
and, if so, the terms
thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Base Rate or Bases.
(iii) Initial Interest Rate.
(iv) Spread and/or Spread
Multiplier, if any.
(v) Initial Interest Reset
Date and Interest Reset
Dates.
(vi) Interest Payment Dates.
D-27
(vii) Index Maturity, if
any.
(viii) Maximum and/or
Minimum Interest
Rates, if any.
(ix) Day Count Convention.
(x) Calculation Agent.
7. Price to public of such
Certificated Note (or whether such
Note is being offered at varying
prices relating to prevailing
market prices at time of resale as
determined by the Offering Agent).
8. Trade Date.
9. Settlement Date (Original Issue
Date).
10. Stated Maturity Date.
11. Redemption provisions, if any.
12. Repayment provisions, if any.
13. Default Rate, if any.
14. Net proceeds to the Company.
15. The Offering Agent's discount or
commission.
16. Whether such Note is being sold to
the Offering Agent as principal or
to an investor or other purchaser
through the Offering Agent acting
as agent for the Company.
17. Such other information specified
with respect to such Note (whether
by Addendum or otherwise).
B. After receiving such settlement
information from the Offering Agent, the
Company will advise the Trustee of the
above settlement information by
facsimile transmission confirmed by
telephone (and promptly confirmed in
writing as well). The Company will cause
the Trustee to issue, authenticate and
deliver the Certificated Note.
D-28
C. The Trustee will complete the
Certificated Note in the form approved
by the Company and the Offering Agent,
and will make three copies thereof
(herein called "Stub 1", "Stub 2" and
"Stub 3"):
1. Certificated Note with the
Offering Agent's confirmation, if
traded on a principal basis, or
the Offering Agent's customer
confirmation, if traded on an
agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each trade, the Trustee
will deliver the Certificated Note and
Stub 2 thereof to the Offering Agent at
the following applicable address: if to
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D-29
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and the Trustee will keep Stub 1. The
Offering Agent will acknowledge receipt
of the Certificated Note through a
broker's receipt and will keep Stub 2.
Delivery of the Certificated Note will
be made only against such acknowledgment
of receipt. Upon determination that the
Certificated Note has been authorized,
delivered and completed as
aforementioned, the Offering Agent will
wire the net proceeds of the
Certificated Note after deduction of its
applicable commission to the Company
pursuant to standard wire instructions
given by the Company.
E. In the case of a Certificated Note sold
through the Offering Agent, as agent,
the Offering Agent will deliver such
Certificated Note (with the
confirmation) to the purchaser against
payment in immediately available funds.
F. The Trustee will send Stub 3 to the
Company.
Settlement
Procedures
Timetable: For offers to purchase Certificated Notes
accepted by the Company, Settlement
Procedures A through F set forth above shall
be completed as soon as possible following
the trade but not later than the respective
times (New York City time) set forth below:
D-30
Settlement
Procedure Time
A 11:00 a.m. on the trade date or
within one hour following the
trade
B 12:00 noon on the trade date or
within one hour following the
trade
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
Failure to Settle: In the case of Certificated Notes sold
through the Offering Agent, as agent, if an
investor or other purchaser of a Certificated
Note from the Company shall either fail to
accept delivery of or make payment for such
Certificated Note on the date fixed for
settlement, the Offering Agent will forthwith
notify the Trustee and the Company by
telephone, confirmed in writing, and return
such Certificated Note to the Trustee.
The Trustee, upon receipt of such
Certificated Note from the Offering Agent,
will immediately advise the Company and the
Company will promptly arrange to credit the
account of the Offering Agent in an amount of
immediately available funds equal to the
amount previously paid to the Company by such
Offering Agent in settlement for such
Certificated Note. Such credits will be made
on the Settlement Date if possible, and in
any event not later than the Business Day
following the Settlement Date; provided that
the Company has received notice on the same
day. If such failure shall have occurred for
any reason other than failure by such
Offering Agent to perform its obligations
hereunder or under the Distribution
Agreement, the Company will reimburse such
Offering Agent on an equitable basis for its
reasonable loss of the use of funds during
the period when the funds were credited to
the account of the Company. Immediately upon
receipt of the Certificated Note in respect
of which the failure occurred, the Trustee
will cancel and dispose of such Certificated
Note in accordance with its customary
procedures, make appropriate entries in its
records to reflect the fact that such
Certificated Note was never issued, and
accordingly notify in writing the Company.
D-31