<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 1995.
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
VIRGINIA ELECTRIC AND POWER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER OR GOVERNING DOCUMENT)
VIRGINIA 54-0418825
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
VIRGINIA POWER CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER OR GOVERNING DOCUMENT)
DELAWARE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
ONE JAMES RIVER PLAZA, RICHMOND, VIRGINIA 23219-3932
(804) 771-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
J. KENNERLY DAVIS, JR., VICE PRESIDENT, TREASURER AND CORPORATE SECRETARY
PHILIP W. NICHOLS, CASH MANAGEMENT ADMINISTRATOR
VIRGINIA ELECTRIC AND POWER COMPANY
ONE JAMES RIVER PLAZA
RICHMOND, VIRGINIA 23219-3932
(804) 771-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
WITH A COPY TO:
JOHN J. BEARDSWORTH, JR. ROBERT L. BURRUS, JR.
HUNTON & WILLIAMS 951 EAST BYRD STREET MCGUIRE, WOODS, BATTLE & BOOTHE,
RICHMOND, VIRGINIA 23219-4074 L.L.P. ONE JAMES CENTER RICHMOND,
VIRGINIA 23219-4030
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES BEING OFFERING PRICE OFFERING PRICE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT (1) (1) FEE
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<S> <C> <C> <C> <C>
Virginia Power Capital
Trust I Preferred
Securities............ 5,400,000 100% $135,000,000 $46,552
- -------------------------------------------------------------------------------
Virginia Electric and
Power Company % Junior
Subordinated Notes,
Series A(2)...........
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Virginia Electric and
Power Company Preferred
Securities
Guarantee(2)..........
</TABLE>
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(1) Estimated solely for calculating the registration fee.
(2) No separate consideration is to be received for the Junior Subordinated
Notes or Preferred Securities Guarantee.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Preliminary Prospectus, dated July , 1995
PROSPECTUS
5,400,000 PREFERRED SECURITIES
VIRGINIA POWER CAPITAL TRUST I
% TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
VIRGINIA ELECTRIC AND POWER COMPANY
------------
The % Trust Preferred Securities (the Preferred Securities) offered hereby
evidence preferred undivided beneficial interests, representing 97% beneficial
ownership of the assets of Virginia Power Capital Trust I, a statutory business
trust formed under the laws of the State of Delaware (the Trust). Virginia
Electric and Power Company, a Virginia public service corporation (the
Company), will own all the common securities (the Common Securities and,
together with the Preferred Securities, the Trust Securities) representing the
remaining 3% beneficial ownership of the assets of the Trust. The Trust exists
for the sole purpose of issuing the Preferred Securities and Common Securities
and investing the proceeds thereof in an equivalent amount of the Company's
Series A % junior subordinated deferrable interest notes (the Junior
Subordinated Notes) due September 30, 2025; PROVIDED, HOWEVER, THAT THE COMPANY
MAY, SUBJECT TO COMPLIANCE WITH CERTAIN CONDITIONS, EXTEND THE MATURITY THEREOF
FOR UP TO AN ADDITIONAL TEN YEARS.
The Junior Subordinated Notes will be unsecured obligations of the Company
and will be subordinate and junior in right of payment to Senior Indebtedness
of the Company, as described herein. Holders of the Preferred Securities are
entitled to receive cumulative cash distributions at the rate of % per annum
(the Securities Rate), accruing from the date of original issuance and payable,
unless deferred, quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year commencing September 30, 1995 (each, a Distribution
Date).
(continued on next page)
------------
SEE "RISK FACTORS" AT PAGE 7 FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES
DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE PREFERRED SECURITIES
MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
OF SUCH DEFERRAL.
------------
Application has been made to list the Preferred Securities on the New York
Stock Exchange, Inc. (the NYSE). If approved, trading of the Preferred
Securities on the NYSE is expected to commence within a 30 day period after the
initial delivery of the Preferred Securities. See "Underwriting."
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
Price To Underwriting Proceeds to
Public(1) Discount(2)(3) Trust(2)(3)
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<S> <C> <C> <C>
Per Preferred Security. % % %
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Total.................. $ $ $
</TABLE>
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(1) Plus accrued distributions, if any, from the Issue Date.
(2) The Company and the Trust have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(3) Because the proceeds of the sale of the Preferred Securities will be
invested in Junior Subordinated Notes, the Company has agreed to pay to the
Underwriters as compensation (the Underwriters' Compensation) for their
arranging the investment therein of such proceeds, $ per Preferred
Security, except for Preferred Securities sold to certain institutions, for
which the Underwriters' Compensation will be $ per Preferred
Security. Therefore, to the extent that Preferred Securities are sold to
such institutions, the actual amount of Underwriters' Compensation will be
less than the aggregate amount specified above. See "Underwriting."
(4) Expenses of the offering to be paid by the Company are estimated to be
approximately $512,500.
------------
The Preferred Securities are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that
delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Company on or about August ,
1995 (the Issue Date).
------------
LEHMAN BROTHERS
August , 1995
<PAGE>
(continued from previous page)
The Securities Rate and the Distribution Dates for the Preferred Securities
will correspond to the interest rate and interest and other payment dates on
the Junior Subordinated Notes, which will be the sole assets of the Trust. As
a result, if principal or interest is not paid on the Junior Subordinated
Notes, no amounts will be paid on the Preferred Securities. THE COMPANY HAS
THE RIGHT TO DEFER PAYMENTS OF INTEREST ON THE JUNIOR SUBORDINATED NOTES BY
EXTENDING THE INTEREST PAYMENT PERIOD ON THE JUNIOR SUBORDINATED NOTES, AT ANY
TIME AND FROM TIME TO TIME, FOR UP TO 20 CONSECUTIVE QUARTERS (EACH, AN
EXTENSION PERIOD). If interest payments are so deferred, distributions on the
Preferred Securities also will be deferred. During any deferral period,
holders of Preferred Securities will continue to have income for United States
federal income tax purposes in advance of the receipt of the cash payments
attributable to such deferred interest. See "Description of the Junior
Subordinated Notes--Option to Extend Interest Payment Period," "Risk Factors--
Option to Extend Interest Payment Period" and "Certain Federal Income Tax
Considerations--Original Issue Discount" and "--Market Discount." Deferred
installments of interest on the Junior Subordinated Notes will bear interest,
compounded quarterly, at a rate equal to one-quarter of the Securities Rate.
The payment of such deferred interest, together with interest thereon, will be
distributed to the holders of the Preferred Securities as received at the end
of any Extension Period.
The Preferred Securities are subject to mandatory redemption upon repayment
of the Junior Subordinated Notes at maturity or their earlier redemption. The
Junior Subordinated Notes are redeemable at the option of the Company, (in
whole or in part), from time to time, on or after September 30, 2000, or at
any time in whole upon the occurrence of a Tax Event or Investment Company Act
Event (either, a Special Event). Upon the occurrence of a Special Event, the
Company will have the option to redeem the Junior Subordinated Notes (and the
Trust Securities will also be redeemed) or distribute the Junior Subordinated
Notes pro rata to the holders of the Trust Securities. If the Junior
Subordinated Notes are distributed to the holders of the Preferred Securities,
the Company will use its best efforts to have the Junior Subordinated Notes
listed on the NYSE or on such other exchange as the Preferred Securities are
then listed. See "Description of the Preferred Securities--Special Event
Redemption or Distribution" and "Description of the Junior Subordinated
Notes."
The payment of distributions on the Preferred Securities is guaranteed by
the Company, but only to the extent that the Trust has funds available
therefor (the Guarantee). If the Company fails to make required payments on
the Junior Subordinated Notes, the Trust will not have sufficient funds to pay
such distributions, and the Guarantee does not cover the payment of
distributions when the Trust does not have sufficient funds therefor. In such
event, the remedy of a holder of Preferred Securities is to enforce the rights
of the Trust as holder of the Junior Subordinated Notes. The Company's
obligations under the Guarantee are subordinate and junior in right of payment
to all of its other liabilities and will rank pari passu with the most senior
preferred stock of the Company. See "Description of the Guarantee."
In the event of the redemption of the Junior Subordinated Notes or the
voluntary or involuntary dissolution, winding up or termination of the Trust,
the holders of the Preferred Securities will be entitled to receive, for each
Preferred Security, a liquidation amount of $25 plus accrued and unpaid
distributions thereon (including interest thereon) to the date of payment (the
Redemption Price), unless in connection with such dissolution, the Junior
Subordinated Notes are distributed to the holders of the Preferred Securities.
See "Description of the Preferred Securities--Liquidation Distribution Upon
Dissolution."
The Preferred Securities initially will be represented by a global
certificate registered in the name of The Depository Trust Company (DTC) or
its nominee. Beneficial interests in the Preferred Securities will be shown
on, and transfers thereof will be effected only through, records maintained by
Participants in DTC. Except as described herein, Preferred Securities in
certificated form will not be issued in exchange for the global certificates.
See "Description of the Preferred Securities--Book-Entry Only Issuance--The
Depository Trust Company."
------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NYSE, IN THE OVER-THE-COUNTER
MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
2
<PAGE>
AVAILABLE INFORMATION
The Company and the Trust have filed with the Securities and Exchange
Commission (the Commission) a combined registration statement on Form S-3 (the
Registration Statement, which term encompasses any amendments thereof and
exhibits thereto) under the Securities Act of 1933, as amended (the 1933 Act).
As permitted by the rules and regulations of the Commission, this Prospectus
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto, to which reference is hereby made.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the 1934 Act), and in accordance therewith
files reports and other information with the Commission. Such reports and other
information can be inspected and copied at the public reference facilities of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can also be obtained at prescribed rates by
writing to the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. In addition, reports and other material
concerning the Company can be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, and the Chicago Stock
Exchange, 440 South LaSalle Street, Chicago, Illinois, 60605. Although the
Company is not required to send a copy of its latest Annual Report to
Shareholders to holders of the Preferred Securities, the Company will, upon
request, send to any holder of such securities a copy of its latest Annual
Report to Shareholders, as filed with the Commission, which contains financial
information that has been examined and reported upon, with an opinion
expressed, by independent certified public accountants.
No separate financial statements of the Trust are included herein. The
Company has determined that such statements would not be material to holders of
the Preferred Securities because the Trust has no independent operations and
exists for the sole purpose of investing the proceeds of the sale of the Trust
Securities in the Junior Subordinated Notes. The Trust is currently not subject
to the informational reporting requirements of the 1934 Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to the
1934 Act and are incorporated herein by reference and made a part of this
Prospectus:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995; and
(c) the Company's Current Reports on Form 8-K, dated February 21, 1995,
March 22, 1995 and April 17, 1995.
All documents filed by the Company or the Trust, as the case may be, with the
Commission pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of this
offering shall be deemed to be incorporated herein by reference and made a part
of this Prospectus from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all documents incorporated herein by reference (other than the
exhibits to such documents unless such exhibits are specifically incorporated
by reference). Such requests should be directed to Virginia Electric and Power
Company, One James River Plaza, Richmond, VA 23219-3932, Attention: Corporate
Secretary, Telephone: (804) 771-3000.
3
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Capitalized terms
not otherwise defined shall have the meanings assigned in the Glossary.
THE COMPANY............. The Company was incorporated in Virginia in 1909 and
has its principal office at One James River Plaza,
Richmond, Virginia 23219-3932, telephone (804) 771-
3000. The Company is a wholly-owned subsidiary of
Dominion Resources, Inc. (Dominion Resources).
The Company is a regulated public utility engaged in
the generation, purchase, transmission, distribution
and sale of electric energy within a 30,000 square
mile service area in Virginia and in northeastern
North Carolina. It transacts business under the name
Virginia Power in Virginia and under the name North
Carolina Power in North Carolina. Its Virginia
service area comprises about 65% of Virginia's total
land area but accounts for over 80% of its
population.
THE TRUST............... Virginia Power Capital Trust I, a statutory business
trust organized under Delaware law solely for the
purpose of holding the Company's Junior Subordinated
Notes and issuing Preferred Securities and Common
Securities evidencing the entire beneficial interest
therein (and engaging in activities necessary or
incidental thereto).
THE TRUSTEES............ Chemical Bank will act as property trustee (the
Property Trustee) of the Trust. Two employees of the
Company also will act as trustees (the Administrative
Trustees) of the Trust. Chemical Bank Delaware will
be an additional trustee (the Delaware Trustee) of
the Trust. Chemical Bank also will act as trustee
(the Indenture Trustee) under the Subordinated Note
Indenture pursuant to which the Junior Subordinated
Notes will be issued and will act as trustee under
the Guarantee (the Guarantee Trustee).
The Property Trustee, Delaware Trustee and
Administrative Trustees are sometimes referred to as
the Securities Trustees.
PREFERRED SECURITIES 5,400,000 units of Preferred Securities evidencing
OFFERED................ preferred undivided beneficial interests in the
assets of the Trust. Holders of the Preferred
Securities are entitled to receive cumulative cash
distributions at the Securities Rate, accruing from
the date of original issuance and payable quarterly
in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on September 30,
1995 (each, a Distribution Date). The Securities Rate
and the Distribution Dates for the Preferred
Securities will correspond to the interest rate and
payment dates on the Junior Subordinated Notes, which
will be the sole assets of the Trust. As a result, if
principal or interest is not paid on the Junior
Subordinated Notes, no amounts will be paid on the
Preferred Securities. See "Description of the
Preferred Securities" herein.
RECORD DATE............. The record date for each Distribution Date will be
the close of business on the 15th calendar day prior
to such Distribution Date.
JUNIOR SUBORDINATED The Trust will invest the proceeds from the issuance
NOTES.................. of the Preferred Securities and Common Securities in
an equivalent amount of Series A
4
<PAGE>
% junior subordinated deferrable interest notes due
September 30, 2025; provided, however, that the
Company may, subject to compliance with certain
conditions, extend the maturity for up to an
additional ten years. The conditions to extension are
that (i) the Company not be bankrupt or insolvent, or
otherwise in default on the Junior Subordinated
Notes, (ii) the Company has timely paid all amounts
due on the Junior Subordinated Notes for the
preceding six quarters without deferral, (iii) the
Trust is not in arrears on payments on the Trust
Securities and (iv) the Junior Subordinated Notes or
Preferred Securities are then rated in one of the
four highest rating categories by a nationally
recognized statistical rating organization. The
Junior Subordinated Notes will be subordinate and
junior in right of payment to all current
indebtedness for borrowed money and other obligations
of the Company included in the definition of Senior
Indebtedness, and will rank pari passu with trade
debt of the Company. See "Description of the Junior
Subordinated Notes--Subordination."
GUARANTEE............... The payment of distributions on the Preferred
Securities is guaranteed by the Company, but only to
the extent the Trust has funds available to make such
distributions. If the Company does not make principal
or interest payments on the Junior Subordinated
Notes, the Trust will not have sufficient funds to
make distributions on the Preferred Securities, in
which event the Guarantee will not apply to such
distributions until the Trust has sufficient funds
available therefor. The obligations of the Company
under the Guarantee will be subordinate and junior in
right of payment to all other liabilities of the
Company and will rank pari passu with the most senior
preferred stock issued by the Company. See "Risk
Factors--Ranking of and Rights Under Guarantee" and
"Description of the Guarantee" herein.
INTEREST DEFERRAL....... The Company has the right to defer payments of
interest on the Junior Subordinated Notes by
extending the interest payment period on the Junior
Subordinated Notes, at any time and from time to
time, for up to 20 consecutive quarters (each, an
Extension Period). The only restrictions on the
Company's ability to defer payments of interest are
that during the Extension Period the Company may not
(i) pay dividends on or redeem any of its capital
stock or (ii) pay principal or interest on any debt
securities ranking pari passu or subordinate to the
Junior Subordinated Notes. There could be multiple
Extension Periods of varying lengths throughout the
term of the Junior Subordinated Notes.
If interest payments on the Junior Subordinated Notes
are deferred, distributions on the Preferred
Securities will also be deferred. During an Extension
Period, holders of Preferred Securities will continue
to have income for federal income tax purposes in
advance of the receipt of the cash payments
attributable to such deferred interest. See
"Description of the Junior Subordinated Notes--Option
to Extend Interest Payment Period" and "Certain
Federal Income Tax Considerations--Original Issue
Discount" and "--Market Discount." Deferred interest
will bear interest, compounded quarterly, at a rate
equal to one quarter of the Securities Rate from the
date of deferral to the date of payment.
5
<PAGE>
REDEMPTION.............. The Preferred Securities are subject to mandatory
redemption upon repayment of the Junior Subordinated
Notes at maturity or their earlier redemption. The
Junior Subordinated Notes are redeemable by the
Company, (in whole or in part), from time to time on
or after September 30, 2000, or at any time in whole
upon the occurrence of a Special Event. Upon the
occurrence of a Special Event, the Company will have
the option to redeem the Junior Subordinated Notes
(and thus the Preferred Securities) or, subject to
certain conditions, distribute the Junior
Subordinated Notes pro rata to the holders of the
Trust Securities. If a partial redemption of the
Junior Subordinated Notes would result in the
delisting of the Preferred Securities, the Company
may only redeem the Junior Subordinated Notes in
whole. Any partial redemption of the Junior
Subordinated Notes will be effected by the redemption
of an equivalent amount of Trust Securities, to be
allocated approximately 97% to the Preferred
Securities and 3% to the Common Securities. The
Preferred Securities to be redeemed in connection
with any partial redemption will be selected by such
method as the Property Trustee shall deem fair and
appropriate. See "Description of the Preferred
Securities--Redemption."
Special Event..........
A Special Event means a Tax Event or an Investment
Company Act Event. A "Tax Event" means that the
Administrative Trustees and the Company shall have
received an opinion from independent tax counsel
experienced in such matters (which may be counsel to
the Company) to the effect that, as a result of (a)
any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations
thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or
(b) any amendment to, or change in, an interpretation
or application of such laws or regulations, there is
more than an insubstantial risk that (i) the Trust
would be subject to United States federal income tax
with respect to income accrued or received on the
Junior Subordinated Notes, (ii) interest payable to
the Trust on the Junior Subordinated Notes would not
be deductible by the Company for United States
federal income tax purposes or (iii) the Trust would
be subject to more than a de minimis amount of other
taxes, duties or other governmental charges, which
change or amendment becomes effective on or after the
date of this Prospectus. An "Investment Company Act
Event" means that the Administrative Trustees and the
Company shall have received an opinion of independent
counsel (which may be counsel to the Company) to the
effect that, as a result of a change in law or
regulation or a written change in interpretation or
application of law or regulation by any court,
governmental agency or regulatory authority after the
Issue Date, there is more than an insubstantial risk
that the Trust is or will be considered an investment
company under the Investment Company Act of 1940, as
amended (the 1940 Act).
Redemption Price....... In the event of the redemption of the Trust
Securities or other termination of the Trust without
distribution of the Junior Subordinated Notes, each
Preferred Security shall be entitled to receive a
liquidation amount of $25 plus accrued and unpaid
distributions thereon (including interest thereon) to
the date of payment.
6
<PAGE>
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus and should consider
particularly the following matters:
RANKING OF AND RIGHTS UNDER THE JUNIOR SUBORDINATED NOTES
No amounts will be available to make payments on the Preferred Securities
except from payments made on the Junior Subordinated Notes. The obligations of
the Company under the Junior Subordinated Notes are subordinate and junior in
right of payment to all present and future Senior Indebtedness of the Company.
At March 31, 1995, Senior Indebtedness of the Company aggregated $4.3 billion.
There are no terms in the Preferred Securities, the Junior Subordinated Notes
or the Preferred Securities Guarantee that limit the Company's ability to incur
additional indebtedness, including indebtedness that ranks senior to the Junior
Subordinated Notes. THE SUBORDINATED NOTE INDENTURE DOES NOT CONTAIN PROVISIONS
THAT AFFORD HOLDERS OF JUNIOR SUBORDINATED NOTES PROTECTION IN THE EVENT OF A
HIGHLY LEVERAGED TRANSACTION INVOLVING THE COMPANY. ANY SUCH TRANSACTION,
HOWEVER, WOULD REQUIRE REGULATORY APPROVAL, AND MANAGEMENT OF THE COMPANY
BELIEVES SUCH APPROVAL WOULD BE UNLIKELY FOR A TRANSACTION THAT WOULD RESULT IN
THE COMPANY HAVING A HIGHLY LEVERAGED CAPITAL STRUCTURE. See "Description of
the Guarantee" and "Description of the Junior Subordinated Notes--
Subordination."
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If (i) the Trust fails to pay distributions in full on the Preferred
Securities for more than 20 consecutive quarterly distribution periods, or (ii)
a Trust Agreement Event of Default occurs and is continuing, then the holders
of Preferred Securities would rely on the enforcement by the Property Trustee
of its rights against the Company as the holder of the Junior Subordinated
Notes. In addition, the holders of a majority in aggregate liquidation amount
of the Preferred Securities will have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Property
Trustee or to direct the exercise of any trust or power conferred upon the
Property Trustee under the Trust Agreement, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of the
Junior Subordinated Notes. If the Property Trustee fails to enforce its rights
under the Junior Subordinated Notes, a holder of Preferred Securities may,
after a period of 30 days has elapsed from such holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding against
the Company without first instituting any legal proceeding against the Property
Trustee or any other person or entity, including the Trust. Upon the occurrence
of any of the events described in clauses (i) or (ii) above, the holders of the
Preferred Securities also will be entitled, by majority vote, to appoint a
Substitute Property Trustee, who shall have the same rights, powers and
privileges as the Property Trustee. See "Description of the Preferred
Securities" and "Description of the Junior Subordinated Notes."
RANKING OF AND RIGHTS UNDER THE GUARANTEE
The Company's obligations under the Guarantee are subordinate and junior in
right of payment to all liabilities of the Company and will be pari passu with
the most senior preferred stock issued by the Company. IF THE COMPANY WERE TO
DEFAULT IN ITS OBLIGATION TO PAY AMOUNTS PAYABLE ON THE JUNIOR SUBORDINATED
NOTES, THE TRUST WOULD LACK AVAILABLE FUNDS FOR THE PAYMENT OF DISTRIBUTIONS OR
AMOUNTS PAYABLE ON REDEMPTION OF THE PREFERRED SECURITIES OR OTHERWISE, AND IN
SUCH EVENT HOLDERS OF THE PREFERRED SECURITIES WOULD NOT BE ABLE TO RELY UPON
THE GUARANTEE FOR PAYMENT OF SUCH AMOUNTS. The holders of a majority in
liquidation amount of the Preferred Securities will have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under the Guarantee. If the
Guarantee Trustee fails to enforce its rights under the Guarantee, a holder of
Preferred Securities may, after a period of 30 days has elapsed from such
holder's written request to the Guarantee Trustee to enforce such rights,
institute a legal proceeding against the Company without first instituting any
legal proceeding against the Guarantee Trustee or any other person or entity.
See "Description of the Guarantee."
7
<PAGE>
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Subordinated Note Indenture, at any time,
and from time to time, to defer payments of interest on the Junior Subordinated
Notes for a period of up to 20 consecutive quarters (each an Extension Period),
but not beyond the stated maturity of the Junior Subordinated Notes. Prior to
the termination of any Extension Period, the Company may further defer payments
of interest, provided that such Extension Period, together with all such
previous and further extensions thereof, may not exceed 20 consecutive
quarters. Upon the termination of any Extension Period and the payment of all
amounts then due, the Company may select a new Extension Period, subject to the
above requirements. There could be multiple Extension Periods of varying
lengths throughout the term of the Junior Subordinated Notes. Deferred
installments of interest on the Junior Subordinated Notes will bear interest,
compounded quarterly, at a rate equal to one-quarter of the Securities Rate.
The payment of such deferred interest, together with interest thereon, will be
passed through to the holders of the Preferred Securities as received at the
end of any Extension Period.
The only restrictions on the Company's ability to defer payments of interest
are that during any Extension Period the Company may not (i) pay dividends on
or redeem any of its capital stock or (ii) pay principal or interest on any
debt securities ranking pari passu or subordinate to the Junior Subordinated
Notes. The Company may elect to defer payment of interest at a time when
prevailing interest rates are higher or significantly higher than the
Securities Rate payable on the Preferred Securities. In that event, holders
would be denied the opportunity to invest funds they would otherwise receive at
the higher interest rates. See "Description of the Preferred Securities--
Distributions" and "Description of the Junior Subordinated Notes--Option to
Extend Interest Payment Period."
Should the Company exercise its rights to defer payments of interest, each
holder of Preferred Securities will continue to accrue income (as original
issue discount--OID) for United States federal income tax purposes in respect
of the deferred interest allocable to its Preferred Securities. As a result,
holders of Preferred Securities will recognize income for United States federal
income tax purposes in advance of the receipt of cash and will not receive the
cash from the Trust related to such income if such holders dispose of their
Preferred Securities prior to the record date for the date on which
distributions of such amounts are made. See "Certain Federal Income Tax
Considerations--Original Issue Discount." INVESTORS SHOULD CONSULT WITH THEIR
OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE
PREFERRED SECURITIES.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Notes. However, should the Company determine to exercise such
right in the future, the market price of the Preferred Securities is likely to
be affected. A holder that disposes of its Preferred Securities during an
Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Preferred Securities. In
addition, as a result of the existence of the Company's right to defer interest
payments, the market price of the Preferred Securities (which represent an
undivided beneficial interest in the Junior Subordinated Notes) may be more
volatile than other securities on which original issue discount accrues that do
not have such rights.
REDEMPTION
The Preferred Securities are subject to mandatory redemption upon repayment
of the Junior Subordinated Notes at maturity or their earlier redemption. The
Company has the option to redeem all or any part of the Junior Subordinated
Notes on September 30, 2000, or at any time thereafter without payment of any
premium. The Company may elect to redeem the Junior Subordinated Notes at a
time when prevailing interest rates are lower or significantly lower than the
Securities Rate payable on the Preferred Securities. In that event, holders
would be denied the opportunity to invest the funds received at a rate as high
as the Securities Rate.
8
<PAGE>
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If a Special Event shall occur and be continuing, the Company will have the
option either to redeem the Junior Subordinated Notes in cash (with the result
that the Preferred Securities shall be redeemed) or cause the dissolution of
the Trust, with the result that Junior Subordinated Notes with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Securities Rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Trust Securities
would be distributed to the holders of the Trust Securities, in liquidation of
such holders' interests in the Trust on a pro rata basis, within 90 days
following the occurrence of such Special Event; provided, however, that in the
case of the occurrence of a Tax Event, as a condition of such dissolution and
distribution, the Property Trustee shall have received an opinion from
independent tax counsel experienced in such matters (a No Recognition Opinion),
which opinion may rely on published revenue rulings of the Internal Revenue
Service, to the effect that the holders of the Trust Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of such dissolution and distribution of Junior Subordinated Notes; and,
provided, further, that, if at the time there is available to the Company or
the Trust the opportunity to eliminate, within such 90 day period, the Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure, which would have
no adverse effect on the Company or the Trust, the holders of the Trust
Securities, the Company or the Trust will pursue such measure in lieu of
redemption or dissolution.
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Notes that may be distributed in exchange
for Preferred Securities if a dissolution or liquidation of the Trust were to
occur. Accordingly, the Preferred Securities that an investor may purchase, or
the Junior Subordinated Notes that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby. Because
holders of Preferred Securities will be paid only from payments on the Junior
Subordinated Notes and may receive Junior Subordinated Notes upon the
occurrence of a Special Event, prospective purchasers of Preferred Securities
are making an investment decision with regard to the Junior Subordinated Notes
and should carefully review all the information regarding the Junior
Subordinated Notes contained herein. See "Description of the Preferred
Securities--Special Event Redemption or Distribution" and "Description of the
Junior Subordinated Notes."
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and, except
for the rights of holders of Preferred Securities to appoint a Substitute
Property Trustee upon the occurrence of certain events described herein, will
not be entitled to vote to appoint, remove or replace the Property Trustee,
which voting rights are vested exclusively in the holder of the Common
Securities.
TRADING CHARACTERISTICS OF PREFERRED SECURITIES
The Preferred Securities are expected to be listed on the NYSE, subject to
official notice of issuance. Accordingly, the Preferred Securities are expected
to trade at a price that takes into account the value, if any, of accrued but
unpaid distributions; thus, purchasers will not pay and sellers will not
receive accrued and unpaid interest with respect to the Preferred Securities
that is not included in the trading price thereof. Nonetheless, interest on the
Junior Subordinated Notes will be included in the gross income of U.S. holders
of Preferred Securities as it accrues rather than when it is paid. To the
extent the selling price is less than the holder's adjusted tax basis (which
will include, in the form of OID, all accrued but unpaid interest), a holder
generally will recognize a capital loss. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
federal income tax purposes. See "Certain Federal Income Tax Considerations--
Original Issue Discount" and "--Sale of Preferred Securities."
The trading price of the Preferred Securities is likely to be sensitive to
the level of interest rates generally. If interest rates rise in general, the
trading price of the Preferred Securities may decline to reflect the
9
<PAGE>
additional yield requirements of the purchasers. Conversely, a decline in
interest rates may increase the trading price of the Preferred Securities,
although any increase will be moderated by the Company's ability to call the
Junior Subordinated Notes at any time on or after September 30, 2000. In
addition, because payment of the Preferred Securities is dependent upon the
Company's ability to pay the Junior Subordinated Notes, negative developments
affecting the Company may adversely affect the trading price of the Preferred
Securities.
VIRGINIA POWER CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant to
the filing of a certificate of trust with the Delaware Secretary of State in
July 1995. The Trust's business is defined in a trust agreement, executed by
the Company, as Depositor, and the Delaware Trustee thereunder. This trust
agreement will be amended and restated in its entirety on the Issue Date
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part (the Trust Agreement). The Trust Agreement
will be qualified as an indenture under the Trust Indenture Act of 1939, as
amended (the 1939 Act). The Trust exists for the exclusive purposes of (i)
issuing the Trust Securities representing undivided beneficial interests in the
assets of the Trust, (ii) investing the gross proceeds of the Trust Securities
in the Junior Subordinated Notes and (iii) engaging in only those other
activities necessary or incidental thereto. The Trust has a term of
approximately 40 years, but may terminate earlier as provided in the Trust
Agreement.
Upon issuance of the Preferred Securities, the purchasers thereof will own
all of the Preferred Securities. The Company will acquire all of the Common
Securities, which will have an aggregate liquidation amount equal to
approximately 3% of the total capital of the Trust. The Common Securities will
rank pari passu, and payments will be made thereon pro rata, with the Preferred
Securities, except that upon the occurrence and continuance of a Trust
Agreement Event of Default, the rights of the holders of Common Securities to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the
Preferred Securities.
The Trust's business and affairs will be conducted by the Securities
Trustees, which shall be appointed by the Company as the holder of the Common
Securities. Two employees of the Company initially will serve as Administrative
Trustees. Chemical Bank will serve as Property Trustee and will hold the Junior
Subordinated Notes issued by the Company. Chemical Bank Delaware will serve as
Delaware Trustee to ensure compliance with the Delaware Business Trust Act. In
certain circumstances, the holders of a majority in liquidation amount of the
Preferred Securities will be entitled to appoint a Substitute Property Trustee.
See "Description of the Preferred Securities--Voting Rights."
The Property Trustee will hold title to the Junior Subordinated Notes for the
benefit of the holders of the Trust Securities and will have the power to
exercise all rights, powers and privileges under the Subordinated Note
Indenture as the holder of the Junior Subordinated Notes. In addition, the
Property Trustee will maintain exclusive control of a segregated non-interest
bearing bank account (the Payment Account) to hold all payments made in respect
of the Junior Subordinated Notes for the benefit of the holders of Trust
Securities. The Property Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Payment Account. Subject to the right of the
holders of the Preferred Securities to appoint a Substitute Property Trustee,
the Company, as the holder of all the Common Securities, will have the right to
appoint, remove or replace all the Securities Trustees. The Company will pay
all fees and expenses related to the Trust and the offering of the Trust
Securities. See "Description of the Junior Subordinated Notes--Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are as set forth in the Trust
Agreement, the Delaware Business Trust Act and the 1939 Act. See "Description
of the Preferred Securities."
10
<PAGE>
The Trust's registered office in the State of Delaware is c/o Chemical Bank
Delaware, 1201 Market Street, Wilmington, Delaware 19801. The principal place
of business of the Trust shall be c/o the Company Treasurer, One James River
Plaza, Richmond, Virginia 23219-3932, telephone (804) 771-3000, Attn: The
Administrative Trustees.
SELECTED FINANCIAL INFORMATION
The summary of financial information set forth below for the years 1990-1994
was derived from, and should be read in conjunction with, the audited financial
statements and the Selected Financial Data contained in the Company's most
recent Annual Report on Form 10-K. Information for the 12 months ended March
31, 1995, and as of such date is derived from financial statements that have
not been audited but which, in the opinion, of the Company's management,
contain all adjustments, consisting of only normal recurring accruals,
necessary to present fairly the Company's financial position and results of
operations and cash flows for such period, and should be read in conjunction
with the Company's most recent Quarterly Report on Form 10-Q. See
"Incorporation Of Certain Documents By Reference."
<TABLE>
<CAPTION>
12 MONTHS
ENDED YEARS
MARCH 31, ----------------------------------
1995 1994 1993 1992 1991 1990
--------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Operating revenues (millions)..... $4,145 $4,171 $4,187 $3,680 $3,688 $3,462
Operating income (millions)....... 716 731 813 762 817 806
Income before cumulative effect of
a change in accounting principle
(millions)....................... 429 447 509 456 487 450
Cumulative effect of a change in
accounting principle (millions).. 14
------ ------ ------ ------ ------ ------
Net income (millions)............. 429 447 509 470 487 450
====== ====== ====== ====== ====== ======
Ratio of earnings to combined
fixed charges and preferred stock
dividends........................ 2.54 2.65 2.81 2.53 2.44 2.21
</TABLE>
In the ratio of earnings to combined fixed charges and preferred stock
dividends, earnings are determined by adding taxes on income and fixed charges
to Net Income. Fixed charges consist of interest charges (without reduction for
Allowance for Funds Used During Construction) on long-term and short-term debt,
and such portion of rentals as is representative of the interest factor. These
earnings are then divided by the sum of total fixed charges and the preferred
stock dividend factor representative of pre-tax income required to pay total
preferred stock dividends for the applicable year.
11
<PAGE>
CAPITALIZATION
(UNAUDITED)
(MILLIONS)
<TABLE>
<CAPTION>
AS OF
MARCH 31, 1995
ACTUAL PRO FORMA(*)
-------------- ------------
<S> <C> <C>
Long-Term Debt..................................... $4,074 $4,074
Preferred Securities issued by affiliate subject to
mandatory redemption.............................. -- 135
Preferred Stock
Not Subject to Mandatory Redemption.............. 594 509
Subject to Mandatory Redemption.................. 221 180
------ ------
Total Preferred Stock.......................... 815 689
Common Stock Equity................................ 4,039 4,039
------ ------
Total Capitalization........................... $8,928 $8,937
====== ======
</TABLE>
- --------
(*) Reflects the following pro forma adjustments:
(i) Issuance of the Junior Subordinated Notes and Trust Securities.
(ii) The repurchase of certain of the Company's Preferred Stock with the
proceeds of this offering.
USE OF PROCEEDS
The proceeds of the sale of the Preferred Securities will be invested by the
Trust in the Junior Subordinated Notes of the Company. The Company will use the
net proceeds from the sale of such Junior Subordinated Notes to redeem
outstanding preferred stock of the Company and for other general corporate
purposes.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the Trust
Agreement. The Trust Agreement will be qualified as an indenture under the 1939
Act. The Property Trustee will act as the indenture trustee with respect to the
Trust, as well as the Guarantee for purposes of compliance with the provisions
of the 1939 Act. The terms of the Preferred Securities will include those
stated in the Trust Agreement and those made part of the Trust Agreement by the
1939 Act. The following summary of the principal terms and provisions of the
Preferred Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Trust Agreement, a copy of which
is filed as an exhibit to the Registration Statement, of which this Prospectus
is a part, as well as the 1939 Act.
GENERAL
The Trust Agreement authorizes the Administrative Trustees, on behalf of the
Trust, to issue the Preferred Securities, which represent preferred undivided
beneficial interests in the assets of the Trust, and the Common Securities,
which represent common undivided beneficial interests in the assets of the
Trust. All of the Common Securities will be owned by the Company. The Common
Securities rank pari passu, and payments will be made thereon on a pro rata
basis with, the Preferred Securities, except that upon the occurrence of a
Trust Agreement Event of Default, the rights of the holders of the Common
Securities to receive payment of periodic distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Preferred Securities. The Trust Agreement does not permit the
issuance by the Trust of any securities other than the Trust Securities or the
incurrence of any indebtedness by the Trust. Pursuant to the Trust Agreement,
the Property Trustee will own and hold the Junior Subordinated Notes for the
benefit of the holders of the Trust Securities. The payment of distributions
12
<PAGE>
out of money held by the Trust, and payments upon redemption of the Preferred
Securities or liquidation of the Trust, are guaranteed by the Company on a
subordinated basis as and to the extent described under "Description of the
Guarantee." The Guarantee does not cover payment of distributions on the
Preferred Securities when the Trust does not have sufficient available funds to
make such distributions. In such event, the remedy of a holder of Preferred
Securities is to direct the Property Trustee to enforce its rights under the
Junior Subordinated Notes. See "Description of the Preferred Securities--Voting
Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at the Securities
Rate and will accrue from the Issue Date and will be payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
commencing September 30, 1995. In the event that any date on which
distributions are to be made on the Preferred Securities is not a Business Day,
then payment of the distributions payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. A "Business Day" shall mean any day other than
Saturday, Sunday or any day on which banking institutions in New York City (or
in the jurisdiction in which the Indenture Trustee's or Property Trustee's
principal offices are located) are authorized or required by law to close.
Distributions payable on any Distribution Date will be payable to the holders
of record on the Record Date for such Distribution Date, which is the close of
business on the fifteenth calendar day preceding such Distribution Date.
Subject to any applicable laws and regulations and the provisions of the Trust
Agreement, each such payment will be made as described under "--Book-Entry Only
Issuance--The Depository Trust Company" below. The amount of distributions
payable for any period will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company has the right under the Subordinated Note Indenture to defer
payments of interest on the Junior Subordinated Notes by extending the interest
payment period from time to time on the Junior Subordinated Notes (each, an
Extension Period) which, if exercised, would defer quarterly distributions on
the Preferred Securities during any such extended interest payment period.
Deferred installments of interest on the Junior Subordinated Notes will bear
interest, compounded quarterly, at a rate equal to one quarter of the
Securities Rate. If distributions are deferred, the deferred distributions and
accrued interest thereon shall be paid, if funds are available therefor, to
holders of record of the Preferred Securities as they appear on the books and
records of the Trust on the Record Date next following the termination of such
Extension Period. See "Description of the Junior Subordinated Notes--Interest"
and "--Option to Extend Interest Payment Period."
Distributions on the Preferred Securities must be paid on the Distribution
Dates to the extent that the Trust has funds available for the payment of such
distributions in the Payment Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received under the Junior Subordinated Notes. See "Description of the
Junior Subordinated Notes."
REDEMPTION
The Preferred Securities are subject to mandatory redemption upon repayment
of the Junior Subordinated Notes at maturity or their earlier redemption. The
Junior Subordinated Notes will mature on September 30, 2025, subject to
extension, and may be redeemed, in whole or in part, at the option of the
Company, at any time on or after September 30, 2000, or at any time in whole in
certain circumstances upon the occurrence of a Special Event. Upon the
repayment of the Junior Subordinated Notes, whether at maturity or upon
redemption, the proceeds from such repayment or payment shall simultaneously be
applied to redeem a like amount of Trust Securities upon not less than 30 nor
more than 60 days notice, at the Redemption Price. See "Description of the
Junior Subordinated Notes--Optional Redemption." If a partial
13
<PAGE>
redemption of the Junior Subordinated Notes would result in the delisting of
the Preferred Securities, the Company may only redeem the Junior Subordinated
Notes in whole. In the event that fewer than all of the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be redeemed will be
selected by such method as the Property Trustee shall deem fair and appropriate
and which, based upon an opinion of counsel, may provide for the selection for
redemption of portions (equal to $25 or integral multiples thereof) of the
aggregate liquidation amount of Preferred Securities of a denomination larger
than $25.
The Redemption Price for each Preferred Security shall equal the stated
liquidation amount of $25 plus accrued and unpaid distributions thereon to the
date of payment.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event, the Company will have the option to
redeem the Junior Subordinated Notes (and thus the Preferred Securities) or,
subject to certain conditions, distribute the Junior Subordinated Notes pro
rata to the holders of the Trust Securities; provided, however, that, if at the
time there is available to the Company or the Trust the opportunity to
eliminate, within such 90 day period, the Special Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure, which would have no adverse effect on
the Trust, the Company or the holders of the Trust Securities, the Company or
the Trust will pursue such measure in lieu of redemption or dissolution. A
Special Event is either an Investment Company Act Event or a Tax Event.
An "Investment Company Act Event" means that the Administrative Trustees and
the Company shall have received an opinion of independent counsel (which may be
counsel to the Company) to the effect that, as a result of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any court, governmental agency or regulatory authority after the
Issue Date, there is more than an insubstantial risk that the Trust is or will
be considered an investment company under the 1940 Act.
"Tax Event" means that the Administrative Trustees and the Company shall have
received an opinion from independent tax counsel experienced in such matters
(which may be counsel to the Company) to the effect that, as a result of (a)
any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations, there
is more than an insubstantial risk that (i) the Trust would be subject to
United States federal income tax with respect to income accrued or received on
the Junior Subordinated Notes, (ii) interest payable to the Trust on the Junior
Subordinated Notes would not be deductible by the Company for United States
federal income tax purposes or (iii) the Trust would be subject to more than a
de minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after the date of this Prospectus.
Prior to the distribution of Junior Subordinated Notes in connection with the
occurrence of a Special Event, the Property Trustee shall have received an
opinion from independent tax counsel experienced in such matters (a No
Recognition Opinion), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the holders of the Trust
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of such dissolution and distribution of Junior
Subordinated Notes.
If Junior Subordinated Notes are distributed to the holders of the Preferred
Securities, the Company will use its best efforts to have the Junior
Subordinated Notes listed on the NYSE or on such other exchange as the
Preferred Securities are then listed. After the date for any distribution of
Junior Subordinated Notes upon dissolution of the Trust, (i) the Preferred
Securities and the Guarantee will no longer be deemed to be outstanding, (ii)
the depositary or its nominee, as the record holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Junior Subordinated Notes to be delivered upon
14
<PAGE>
such distribution and (iii) any certificates representing Preferred Securities
and the Guarantee not held by the depositary or its nominee will be deemed to
represent Junior Subordinated Notes having an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an interest rate identical
to the Securities Rate of, and accrued and unpaid interest equal to accrued and
unpaid distribution on, such Preferred Securities, until such certificates are
presented to the Company or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Notes that may be distributed in exchange
for the Preferred Securities if a dissolution and liquidation of the Trust were
to occur. Accordingly, the Preferred Securities that an investor may purchase,
or the Junior Subordinated Notes that the investor may receive on dissolution
and liquidation of the Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption. In the event that fewer than all of the Trust
Securities are to be redeemed, then the aggregate liquidation preference for
the Trust Securities to be redeemed shall be allocated 97% to the Preferred
Securities and 3% to the Common Securities.
If the Property Trustee gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable), then, by 2:00 P.M., New York
City time, on the redemption date, provided that the Company has paid to the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Junior Subordinated Notes, the Property Trustee
will irrevocably deposit with the depositary funds sufficient to pay the
applicable Redemption Price and will give the depositary irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Preferred Securities. See "--Book-Entry Only Issuance--The Depository Trust
Company." If notice of redemption shall have been given and funds deposited as
required, then immediately prior to the close of business on the date of such
deposit, distributions will cease to accrue and all rights of holders of such
Preferred Securities so called for redemption will cease, except the right of
the holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding Business
Day. In the event that payment of the Redemption Price in respect of Preferred
Securities is improperly withheld or refused and not paid either by the Trust
or by the Company pursuant to the Guarantee, distributions on such Preferred
Securities will continue to accrue, from the original redemption date to the
actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may, at any time and from time to time, purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company (DTC) will act as securities depositary for the
Preferred Securities. The Preferred Securities will be issued only as fully
registered securities registered in the name of Cede & Co., DTC's nominee. One
or more fully registered global Preferred Securities certificates will be
issued, representing in the aggregate the total number of Preferred Securities,
and will be deposited with DTC.
15
<PAGE>
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants (Participants) deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations (Direct Participants). DTC is
owned by a number of its Direct Participants and by the NYSE, the American
Stock Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
(Indirect Participants). The rules applicable to DTC and its Participants are
on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
Preferred Securities (Beneficial Owner) is in turn to be recorded on the Direct
and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or Indirect Participants
through which the Beneficial Owners purchased Preferred Securities. Transfers
of ownership interests in the Preferred Securities are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Preferred Securities, except in the event that use of
the book-entry system for the Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Preferred
Securities are being redeemed, DTC will reduce the amount of the interest of
each Direct Participant in the Preferred Securities in accordance with its
procedures.
Although voting with respect to the Preferred Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to Preferred Securities. Under its usual procedures, DTC
would mail an Omnibus Proxy to the Trust as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to
those Direct Participants to whose accounts the Preferred Securities are
credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Distribution payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment
date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payments on such payment
date. Payments by participants to Beneficial Owners will be governed by
standing instructions and customary practices, as in the case with securities
held for the account of customers registered in "street name," and
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will be the responsibility of such Participant and not of DTC, the Trust, any
trustee or the Company, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of distributions to DTC is the
responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
Except as provided herein, a Beneficial Owner in a global Preferred Security
will not be entitled to receive physical delivery of Preferred Securities.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Preferred Securities. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Preferred Security.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates will be printed
and delivered to the holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary) with respect to the Preferred Securities. In that event,
certificates for the Preferred Securities will be printed and delivered to the
holders of record.
The information in this section concerning DTC and DTC's book-entry system
have been obtained from sources that the Company and the Trust believe to be
reliable, but the Company and the Trust take no responsibility for the accuracy
thereof. The Trust has no responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Trust Agreement, the Trust shall terminate on September 30,
2035, or earlier upon (i) the bankruptcy, dissolution or insolvency of the
Company, or dissolution of the Trust, (ii) the occurrence of a Special Event
followed by the distribution of the Junior Subordinated Notes, or (iii) the
payment or redemption of all of the Trust Securities.
If an early termination occurs as described in clause (i) above, the Trust
shall be liquidated by the Securities Trustees as expeditiously as they shall
determine to be appropriate by causing the Property Trustee to distribute to
each holder of Preferred Securities and Common Securities a like amount of
Junior Subordinated Notes, unless such distribution is determined by the
Property Trustee not to be practical, in which event such holders will be
entitled to receive, out of the assets of the Trust available for distribution
to holders after satisfaction of liabilities to creditors, an amount equal to,
in the case of holders of Preferred Securities, the aggregate of the stated
liquidation preference of $25 per Preferred Security plus accrued and unpaid
distributions thereon to the date of payment (such amount being the "Liquidated
Distribution"). If such Liquidated Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the
aggregate Liquidated Distribution, then the amounts payable directly by the
Trust on the Preferred Securities shall be paid on a pro rata basis. The
holder(s) of the Common Securities will be entitled to receive distributions
upon any such dissolution pro rata with the holders of the Preferred
Securities, except that if a Trust Agreement Event of Default has occurred and
is continuing, the Preferred Securities shall have a preference over the Common
Securities.
EVENTS OF DEFAULT
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement (Trust Agreement Event of Default) with respect to the
Preferred Securities issued thereunder (whatever the reason for such Event of
Default, and whether it shall be voluntary or involuntary or be effected by
operation of law
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or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) the occurrence of an "Event of Default" as defined in Section 501 of
the Indenture (see "Description of Junior Subordinated Securities--Events
of Default"); or
(ii) default by the Property Trustee in the payment of any distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Preferred Security or Common Security when it becomes due and
payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in the Trust Agreement (other than
a covenant or warranty a default in the performance of which or the breach
of which is dealt with in clause (ii) or (iii) above), and continuation of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to such Trustee by the Holders of at least
10% in liquidation amount of the outstanding Preferred Securities a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" under the Trust
Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Securities Trustees.
Within five Business Days after the occurrence of any Trust Agreement Event
of Default, the Property Trustee shall transmit notice of any default actually
known to the Property Trustee to the holders of Preferred Securities and the
Company, unless such Event of Default shall have been cured or waived.
Unless a Trust Agreement Event of Default shall have occurred and be
continuing, the Securities Trustees may be removed at any time by act of the
holder of the Common Securities. If a Trust Agreement Event of Default has
occurred and is continuing, the Property Trustee may be removed at such time by
act of the holders of a majority in liquidation preference of the Preferred
Securities, delivered to the Property Trustee (in its individual capacity and
on behalf of the Trust). No resignation or removal of the Property Trustee and
no appointment by the successor shall be effective until the acceptance of
appointment by the successor Property Trustee in accordance with the provisions
of the Trust Agreement.
If a Trust Agreement Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
dissolution of the Trust as described above. See "--Liquidation Distribution
Upon Dissolution."
VOTING RIGHTS
Except as provided below and under "Description of the Guarantee--Amendments
and Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Preferred Securities will have no voting rights.
If any proposed amendment to the Trust Agreement provides for, or the
Securities Trustees otherwise propose to effect (i) any action that would
adversely affect the powers, preferences or special rights of the holders of
the Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise or (ii) the dissolution, winding up or termination of the Trust,
other than pursuant to the Trust Agreement, then the holders of outstanding
Preferred Securities will be entitled to vote as a class on such amendment or
proposal of the Securities Trustees, and such amendment or proposal shall not
be effective except with the approval of the holders of 66 2/3% in liquidation
preference of such outstanding Preferred Securities.
So long as any Junior Subordinated Notes are held by the Property Trustee,
the Property Trustee shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee (as
defined herein), or executing any trust or power conferred on the Indenture
Trustee
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with respect to the Junior Subordinated Notes, (ii) waive any past default
which is waivable under Section 513 of the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Junior
Subordinated Notes shall be due and payable or (iv) consent to any amendment,
modification or termination of the Subordinated Note Indenture or the Junior
Subordinated Notes, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of at least 66 2/3% in
liquidation preference of the outstanding Preferred Securities; provided,
however, that where a consent under the Subordinated Note Indenture would
require the consent of each holder of Junior Subordinated Notes affected
thereby, no such consent shall be given by the Securities Trustees without the
prior consent of each holder of Preferred Securities. The Securities Trustees
shall not revoke any action previously authorized or approved by a vote of the
Preferred Securities. The Property Trustee shall notify all holders of the
Preferred Securities of any notice of default received from the Indenture
Trustee. In addition to obtaining the foregoing approvals of the holders of the
Preferred Securities, prior to taking any of the foregoing actions, the
Property Trustee shall obtain an opinion of counsel experienced in such matters
to the effect that the Trust will not be classified as other than a grantor
trust for federal income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
separate meeting of holders of Preferred Securities convened for such purpose
or pursuant to written consent. The Administrative Trustees will cause a notice
of any meeting at which holders of Preferred Securities are entitled to vote,
or of any matter upon which action by written consent of such holders is to be
taken, to be given to each holder of record of Preferred Securities in the
manner set forth in the Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Company, the Securities Trustees or any
affiliate of the Company or any Securities Trustee, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
CO-PROPERTY TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless a Trust Agreement Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the 1939 Act or of any jurisdiction in which any part of the
Trust Property (as defined in the Trust Agreement) may at the time be located,
the Property Trustee shall have power to appoint, and upon the written request
of the Property Trustee, the Company, as Depositor, shall for such purpose join
with the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint one or more persons
approved by the Property Trustee either to act as co-property trustee, jointly
with the Property Trustee, of all or any part of such Trust Property, or to act
as separate trustee of any such property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such person or
persons in such capacity, any property, title, right or power deemed necessary
or desirable, subject to the provisions of the Trust Agreement. If the Company,
as Depositor, does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case an Event of Default under the
Subordinated Note Indenture has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
MODIFICATION OF THE TRUST AGREEMENT
The Trust Agreement may be amended or modified by the Company and the
Securities Trustees (i) to cure any ambiguity, provided that the amendment does
not adversely and materially affect any Holder, and (ii) to ensure that the
Trust will not be classified as other than a grantor trust for federal income
tax purposes. Except as provided in the succeeding paragraph, other amendments
to the Trust Agreement may be made upon approval of not less than 66 2/3% of
the Trust Securities then outstanding as long as such amendment will not affect
the Trust's status as a grantor trust or the Trust's exemption from the 1940
Act.
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Notwithstanding the foregoing, no amendment or modification may be made to
the Trust Agreement if such amendment or modification would (i) change the
amount or timing of any distribution on the Trust Securities (ii) restrict the
right of a Holder to institute suit for enforcement of any payment or (iii)
change the consent required to amend the Trust Agreement.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other body, except as described below. The Trust
may at the request of the Company, with the consent of the Property Trustee and
without the consent of the holders of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; provided, that (i) such successor entity either
(x) expressly assumes all of the obligations of the Trust with respect to the
Trust Securities or (y) substitutes for the Preferred Securities other
securities having substantially the same terms as the Trust Securities (the
Successor Securities) so long as the Successor Securities rank the same as the
Trust Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Company expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Junior Subordinated Notes, (iii) the
Preferred Securities or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed, (iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose identical to that of the Trust, (vii) prior
to such merger, consolidation, amalgamation or replacement, the Company has
received an opinion from independent counsel to the Trust experienced in such
matters to the effect that (A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect, and (B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor such successor entity will be required to
register as an investment company under the 1940 Act and (viii) the Company
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, the Trust shall not, except with the consent of holders of 100%
in liquidation amount of the Trust Securities, consolidate, amalgamate, merge
with or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or the
successor entity to be classified as other than a grantor trust for federal
income tax purposes.
Any corporation or other body into which any of the Property Trustee, the
Delaware Trustee or any Administrative Trustee that is not a natural person may
be merged or with which it may be consolidated, or any corporation or other
body resulting from any merger, conversion or consolidation to which any such
Securities Trustee shall be a party, or any corporation or other body
succeeding to all or substantially all the corporate trust business of any such
Securities Trustee, shall be the successor to such Securities Trustee under the
Trust Agreement, provided such corporation is otherwise qualified and eligible.
PAYMENT AND PAYING AGENT
Payments in respect of the Preferred Securities shall be made to DTC, which
is to credit the relevant accounts at DTC on the applicable Distribution Dates
or, if the Preferred Securities are not held by DTC, such payments shall be
made by check mailed to the address of the holder entitled thereto as such
address shall appear on the Register. The Paying Agent shall initially be the
Property Trustee. The Paying Agent
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shall be permitted to resign as Paying Agent upon 30 days written notice to the
Administrative Trustees and the Depositor. In such event, the Administrative
Trustees shall appoint a successor to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Company will act as initial registrar and transfer agent for the
Preferred Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Trust, but upon payment in respect of any tax or
other governmental charges which may be imposed in relation to it.
The Trust will not be required to register or cause to be registered any
transfer of Preferred Securities after they have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a Trust Agreement Event of
Default with respect to the Trust Securities, undertakes to perform only such
duties as are specifically set forth in the Trust Agreement and, after default,
shall exercise the same degree of care as a prudent individual would exercise
in the conduct of his or her own affairs. Subject to such provisions, the
Property Trustee is under no obligation to exercise any of the powers vested in
it by the Trust Agreement at the request of any holder of Preferred Securities,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The holders of Preferred
Securities will not be required to offer such indemnity in the event such
holders, by exercising their voting rights, direct the Property Trustee to take
any action following a Trust Agreement Event of Default.
Chemical Bank, the Property Trustee, also serves as Indenture Trustee and
Guarantee Trustee. The Company and certain of its affiliates maintain a deposit
account and a banking relationship with Chemical Bank. Chemical Bank serves as
trustee under other indentures pursuant to which debt securities of the Company
or an affiliate of the Company are outstanding.
GOVERNING LAW
The Trust Agreement and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Securities Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be deemed to be an "investment company"
required to be registered under the 1940 Act or characterized as other than a
grantor trust for federal income tax purposes. The Company is authorized and
directed to conduct its affairs so that the Junior Subordinated Notes will be
treated as indebtedness of the Company for federal income tax purposes. In this
connection, the Securities Trustees and the Company are authorized to take any
action, not inconsistent with applicable law, the Trust Agreement or the
articles of incorporation of the Company, that the Securities Trustees and the
Company determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially and adversely affect the
interests of the holders of the Preferred Securities.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by the Company for the benefit of the holders
from time to time of Preferred Securities. The Guarantee will be qualified as
an indenture under the 1939 Act. Chemical Bank will act as indenture trustee
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under the Guarantee (the Guarantee Trustee) for purposes of the 1939 Act. The
terms of the Guarantee will be those set forth therein and those made part
thereof by the 1939 Act. The following summary does not purport to be complete
and is subject in all respects to the provisions of, and is qualified in its
entirety by reference to the Guarantee, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the 1939 Act.
The Guarantee will be held by the Guarantee Trustee for the benefit of holders
of the Preferred Securities.
GENERAL
Pursuant to the Guarantee, the Company will irrevocably and unconditionally
agree, to the extent set forth therein, to pay in full, to the holders of the
Preferred Securities, the Guarantee Payments (without duplication), to the
extent not paid by, or on behalf of, the Trust, regardless of any defense,
right of set-off or counterclaim that the Company may have or assert against
the Trust. The following payments or distributions with respect to the
Preferred Securities to the extent not paid or made by, or on behalf of, the
Trust (the Guarantee Payments) will be subject to the Guarantee (without
duplication): (i) any accrued and unpaid distributions required to be paid on
the Preferred Securities to the extent that the Trust has funds available
therefor, (ii) the Redemption Price, with respect to any Preferred Securities
called for redemption by the Trust, to the extent the Trust has funds available
therefor, and (iii) upon a liquidation of the Trust (other than in connection
with the distribution of Junior Subordinated Notes to the holders of Trust
Securities or the redemption of all of the Preferred Securities), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Preferred Securities to the date of payment, to the extent
the Trust has funds available therefor, and (b) the amount of assets of the
Trust remaining available for distribution to holders of Preferred Securities
in liquidation of the Trust. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of Preferred Securities or by causing the Trust to pay
such amounts to such holders.
The Guarantee will be a full and unconditional guarantee of the Guarantee
Payments with respect to the Preferred Securities from the time of issuance of
the Preferred Securities, but will not apply to the payment of distributions
and other payments on the Preferred Securities when the Trust does not have
sufficient funds to make such distributions or other payments. IF THE COMPANY
DOES NOT MAKE INTEREST PAYMENTS ON THE JUNIOR SUBORDINATED NOTES HELD BY THE
PROPERTY TRUSTEE, THE TRUST WILL NOT MAKE DISTRIBUTIONS ON THE PREFERRED
SECURITIES.
SUBORDINATION
The Company's obligations under the Guarantee to make the Guarantee Payments
will constitute an unsecured obligation of the Company and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Company, including the Junior Subordinated Notes, except those obligations or
liabilities made pari passu or subordinate by their terms, and (ii) pari passu
with the most senior preferred stock now or hereafter issued by the Company and
with any guarantee now or hereafter entered into by the Company in respect of
any preferred securities of any affiliate of the Company. The terms of the
Preferred Securities provide that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of
the Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly
against the guarantor to enforce its rights under the guarantee without first
instituting a legal proceeding against any other person or entity).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially and adversely
affect the rights of holders of Preferred Securities (in which case no consent
will be required), the Guarantee may be amended only with the prior approval of
the holders of not less than 66 2/3% in liquidation amount of the outstanding
Preferred
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Securities. The manner of obtaining any such approval of holders of the
Preferred Securities is set forth under "Description of the Preferred
Securities--Voting Rights." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Preferred Securities then outstanding.
TERMINATION
The Guarantee will terminate and be of no further force and effect as to the
Preferred Securities upon full payment of the Redemption Price of all Preferred
Securities, or upon distribution of the Junior Subordinated Notes to the
holders of Preferred Securities, and will terminate completely upon full
payment of the amounts payable upon liquidation of the Trust. The Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of Preferred Securities must repay to the Trust or the
Company, or their respective successors, any sums paid to them under the
Preferred Securities or the Guarantee.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of a majority in liquidation amount of the Preferred Securities have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee in respect of the Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee. If the Guarantee Trustee fails to enforce the Guarantee,
any holder of Preferred Securities may institute a legal proceeding directly
against the Company to enforce the Guarantee Trustee's rights under such
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee or any other person or entity.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee, undertakes to perform only such duties as are specifically set
forth in such Guarantee and, after default, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of Preferred Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby.
Chemical Bank, the Guarantee Trustee, also serves as Property Trustee and as
Indenture Trustee. The Company and certain of its affiliates maintain a deposit
account and a banking relationship with Chemical Bank. Chemical Bank serves as
trustee under other indentures pursuant to which debt securities of the Company
or an affiliate of the Company are outstanding.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with, the
internal laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
Set forth below is a description of the terms of the Junior Subordinated
Notes. The following description does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Subordinated Note
Indenture, dated as of August 1, 1995, between the Company, and Chemical Bank,
as trustee (the Indenture Trustee), as supplemented by a First Supplemental
Indenture, dated as of August 1, 1995 (the Subordinated Note Indenture, as so
supplemented, is hereinafter referred to as the Subordinated Note Indenture),
the forms of which are filed as an exhibit to the Registration Statement of
which this
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Prospectus forms a part. The terms of the Junior Subordinated Notes will
include those stated in the Subordinated Note Indenture and those made a part
of the Subordinated Note Indenture by reference to the 1939 Act. Certain
capitalized terms used herein are defined in the Subordinated Note Indenture.
GENERAL
The Junior Subordinated Notes will be issued as unsecured junior subordinated
debt securities under the Subordinated Note Indenture. The Junior Subordinated
Notes will be limited in aggregate principal amount to approximately $140
million, such amount being the approximate amount of the purchase price of the
Preferred Securities and the Common Securities.
The Junior Subordinated Notes are not subject to a sinking fund provision.
The entire principal amount of the Junior Subordinated Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
including Additional Interest (as defined herein), if any, on September 30,
2025; provided, however, that the Company may, subject to compliance with
certain conditions, extend the maturity for up to an additional ten years. The
conditions to extension are that (i) the Company not be bankrupt or insolvent,
or otherwise in default on the Junior Subordinated Notes, (ii) the Company has
timely paid all amounts due on the Junior Subordinated Notes for the preceding
six quarters without deferral, (iii) the Trust is not in arrears on payments on
the Trust Securities and (iv) the Junior Subordinated Notes or Preferred
Securities are then rated in one of the four highest rating categories by a
nationally recognized statistical rating organization.
THE SUBORDINATED NOTE INDENTURE DOES NOT CONTAIN PROVISIONS THAT AFFORD
HOLDERS OF JUNIOR SUBORDINATED NOTES PROTECTION IN THE EVENT OF A HIGHLY
LEVERAGED TRANSACTION INVOLVING THE COMPANY. HOWEVER, ANY SUCH TRANSACTION
WOULD REQUIRE REGULATORY APPROVAL, AND MANAGEMENT OF THE COMPANY BELIEVES SUCH
APPROVAL WOULD BE UNLIKELY FOR A TRANSACTION THAT WOULD RESULT IN THE COMPANY
HAVING A HIGHLY LEVERAGED CAPITAL STRUCTURE.
SUBORDINATION
The Junior Subordinated Notes are subordinated and junior in right of payment
to all Senior Indebtedness of the Company. The Junior Subordinated Notes rank
pari passu with obligations to trade creditors of the Company. No payment of
principal of (including redemption payments), or interest on, the Junior
Subordinated Notes may be made if (a) any Senior Indebtedness is not paid when
due and any applicable grace period with respect to such default has ended with
such default not being cured or waived or ceasing to exist, or (b) the maturity
of any Senior Indebtedness has been accelerated because of a default. Upon any
distribution of assets of the Company to creditors upon any dissolution,
winding up, liquidation or reorganization, whether voluntary or involuntary, or
in bankruptcy, insolvency, receivership or other proceedings, all principal of,
premium, if any, and interest due or to become due on, all Senior Indebtedness
must be paid in full before the holders of Junior Subordinated Notes are
entitled to receive or retain any payment. Subject to the prior payment of all
Senior Indebtedness, the rights of the holders of the Junior Subordinated Notes
will be subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions applicable to such Senior Indebtedness until
all amounts owing on the Junior Subordinated Notes are paid in full.
The term "Senior Indebtedness" means, with respect to the Company, (i) any
payment in respect of (a) indebtedness of the Company for money borrowed
(including any financial derivative, hedging or futures contract or similar
instrument) and (b) indebtedness evidenced by securities, debentures, bonds,
notes or other similar instruments issued by the Company that, by their terms,
are senior or senior subordinated debt securities including, without
limitation, all obligations under its indentures with various trustees; (ii)
all capital lease obligations; (iii) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale obligations and all
obligations of the Company under any title retention agreements (but excluding
trade accounts payable arising in the ordinary course of business); (iv) all
obligations for the reimbursement of any letter of credit, banker's acceptance,
security purchase facility or similar credit
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transaction; (v) all obligations of the type referred to in clauses (i) through
(iv) above of other persons the payment of which the Company is responsible or
liable as obligor, guarantor or otherwise; and (vi) all obligations of the type
referred to in clauses (i) through (v) above of other persons secured by any
lien on any property or asset of the Company (whether or not such obligation is
assumed by the Company), except for (1) any such indebtedness that is by its
terms subordinated to or pari passu with the Junior Subordinated Notes and (2)
any unsecured indebtedness between or among the Company or its affiliates. Such
Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to
the benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
The Subordinated Note Indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued by the Company. As of March 31, 1995, Senior
Indebtedness of the Company aggregated $4.3 billion.
OPTIONAL REDEMPTION
The Company shall have the right to redeem the Junior Subordinated Notes, in
whole or in part, from time to time, on or after September 30, 2000, or at any
time in whole in certain circumstances upon the occurrence of a Special Event
as described under "Description of the Preferred Securities--Special Event
Redemption or Distribution," upon not less than 30 nor more than 60 days
notice, at a Redemption Price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest, including Additional Interest,
if any, to the Redemption Date. If a partial redemption of the Junior
Subordinated Notes would result in the delisting of the Preferred Securities,
the Company may only redeem the Junior Subordinated Notes in whole.
INTEREST
Each Junior Subordinated Note shall bear interest at the Securities Rate from
the Issue Date, payable quarterly in arrears on March 31, June 30, September 30
and December 31 of each year, commencing September 30, 1995, to the person in
whose name such Junior Subordinated Note is registered at the close of business
on the fifteenth calendar day prior to such payment date. The amount of
interest payable for any quarter will be computed on the basis of a 360-day
year of twelve 30-day months. The amount of interest payable for any period
shorter than a full quarterly period will be computed on the basis of the
actual number of days elapsed, assuming 30-day months. In the event that any
date on which interest is payable on the Junior Subordinated Notes is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company shall have the right at any time, and from time to time, to defer
payments of interest on the Junior Subordinated Notes by extending the interest
payment period for up to 20 consecutive quarters, but not beyond the maturity
date. At the end of an Extension Period, the Company shall pay all interest
then accrued and unpaid (including any Additional Interest) (together with
interest thereon at the rate specified for the Junior Subordinated Notes to the
extent permitted by applicable law); provided, that during any such Extension
Period, (a) the Company shall not declare or pay any dividend or make any
distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock, and (b) the Company shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company which rank pari passu with or junior to the Junior Subordinated Notes.
Prior to the termination of any Extension Period, the Company may further defer
payments of interest by extending the interest payment period, provided that
such Extension Period, together with all such previous and further extensions
thereof, may not exceed 20
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consecutive quarters. Upon the termination of any Extension Period and the
payment of all amounts then due, the Company may select a new Extension Period,
subject to the above requirements. The Company has no present intention of
exercising its rights to defer payments of interest by extending the interest
payment period on the Junior Subordinated Notes.
If the Property Trustee shall be the sole holder of the Junior Subordinated
Notes, the Company shall give the Property Trustee, Administrative Trustees and
Indenture Trustee notice of its selection of such Extension Period one Business
Day prior to the earlier of (i) the Record Date for the related Distribution
Date or (ii) the date the Administrative Trustees are required to give such
notice to the NYSE or other applicable self-regulatory organization or to
holders of the Preferred Securities. The Administrative Trustees shall give
notice of the Company's selection of such Extension Period to the holders of
the Preferred Securities. If the Property Trustee shall not be the sole holder
of the Junior Subordinated Notes, the Company shall give the holders of the
Junior Subordinated Notes notice of its selection of such Extension Period at
least 16 days prior to the earlier of (i) the date such interest payments are
due or (ii) the date the Company is required to give such notice to the NYSE or
other applicable self-regulatory organization or to holders of the Junior
Subordinated Notes.
ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in
any such case, the Company will pay as additional interest (Additional
Interest) such additional amounts as shall be required so that the net amounts
received and retained by the Trust after paying such taxes, duties, assessments
or other governmental charges will be not less than the amounts the Trust would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
CERTAIN COVENANTS
The Subordinated Note Indenture provides that if (i) there shall have
occurred any event that would constitute an Event of Default under the
Subordinated Note Indenture or (ii) the Company shall be in default with
respect to its payment of any obligations under the Guarantee, then (a) the
Company shall not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase or make a liquidation payment with respect to,
any of its capital stock, and (b) the Company shall not make any payment of
interest or principal on or repay, repurchase or redeem any debt securities
issued by the Company which rank pari passu with or junior to the Junior
Subordinated Notes.
For so long as the Trust Securities remain outstanding, the Company covenants
(i) to directly or indirectly maintain 100% ownership of the Common Securities
of the Trust; provided, however, that any permitted successor of the Company
under the Subordinated Note Indenture may succeed to the Company's ownership of
such Common Securities, and (ii) to use its reasonable efforts to cause the
Trust (a) to remain a statutory business trust, except in connection with the
distribution of Junior Subordinated Notes to the holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities of the
Trust, or certain mergers, consolidations or amalgamations, each as permitted
by the Trust Agreement, and (b) to otherwise continue to be classified as a
grantor trust for United States federal income tax purposes.
EVENTS OF DEFAULT
The Subordinated Note Indenture provides that any one or more of the
following described events, which has occurred and is continuing, constitutes
an "Event of Default" with respect to the Junior Subordinated Notes:
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(a) failure for 60 days to pay interest on the Junior Subordinated Notes,
including any Additional Interest in respect thereof, when due; provided,
however, that a valid extension of the interest payment period by the
Company shall not constitute a default in the payment of interest for this
purpose; or
(b) failure to pay principal or premium, if any, on the Junior
Subordinated Notes when due, whether at maturity or upon earlier
redemption; or
(c) failure to observe or perform any other covenant (other than those
specifically relating to another series of junior subordinated notes)
contained in the Subordinated Note Indenture for 90 days after written
notice to the Company from the Indenture Trustee or the holders of at least
25% in principal amount of the outstanding Junior Subordinated Notes; or
(d) certain events of bankruptcy, insolvency, or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Notes have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Indenture Trustee.
The Indenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Notes may declare the
principal due and payable immediately on default, but the holders of a majority
in aggregate outstanding principal amount may annul such declaration and waive
the default if the default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration and any applicable premium has been deposited with the Indenture
Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Notes affected thereby may, on behalf of the holders of all
the Junior Subordinated Notes, waive any past default, except (i) a default in
the payment of principal or interest (unless such default has been cured and a
sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration and any applicable premium has been deposited
with the Indenture Trustee) or (ii) a default in the covenant of the Company
not to declare or pay dividends on, or redeem, purchase or acquire any of its
capital stock during an Extension Period. A Subordinated Note Indenture Event
of Default also constitutes a Trust Agreement Event of Default. The holders of
Preferred Securities in certain circumstances have the right to direct the
Property Trustee to exercise its rights as the holder of the Junior
Subordinated Notes. See "Description of the Preferred Securities--Events of
Default" and "--Voting Rights."
A voluntary or involuntary dissolution of the Trust prior to redemption or
maturity of the Junior Subordinated Notes would not constitute an Event of
Default with respect to the Junior Subordinated Notes. If the Trust is
dissolved, an event the Company and the Trust consider to be remote, any of the
following could occur: (i) a distribution of the Junior Subordinated Notes to
the holders of the Preferred Securities, or (ii) a permitted redemption at par
of the Junior Subordinated Notes, and a consequent redemption of a like amount
of the Preferred Securities, at the option of the Company under the
circumstances described in "--Optional Redemption" or (iii) the rollover of the
Trust property into another entity with similar characteristics.
BOOK-ENTRY AND ISSUANCE
If distributed to holders of Preferred Securities in connection with the
voluntary or involuntary dissolution, winding up or liquidation of the Trust as
a result of the occurrence of a Special Event, the Junior Subordinated Notes
are expected to be issued in the form of one or more global certificates
registered in the name of the depositary or its nominee. In such event, the
procedures applicable to the transfer and payment of the Junior Subordinated
Notes are expected to be substantially similar to those described with respect
to the Preferred Securities in "Description of the Preferred Securities--Book-
Entry Only Issuance--The Depository Trust Company."
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Junior Subordinated Notes
during a period beginning at the opening of business 15
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days before any selection for redemption of Junior Subordinated Notes and
ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all holders of the Junior
Subordinated Notes and (ii) register the transfer of or exchange any Junior
Subordinated Notes so selected for redemption, in whole or in part, except the
unredeemed portion of any Junior Subordinated Notes being redeemed in part.
PAYMENT AND PAYING AGENT
Payment of principal of the Junior Subordinated Notes will be made only
against surrender to the Paying Agent of the Junior Subordinated Notes.
Principal of and interest on Junior Subordinated Notes will be payable, subject
to any applicable laws and regulations, at the office of such Paying Agent or
Paying Agents as the Company may designate from time to time, except that at
the option of the Company payment of any interest may be made by wire transfer
or by check mailed to the address of the person entitled thereto as such
address shall appear in the Note Register with respect to the Junior
Subordinated Notes. Payment of interest on Junior Subordinated Notes on any
interest payment date will be made to the person in whose name the Junior
Subordinated Notes (or predecessor security) is registered at the close of
business on the Record Date for such interest payment (the fifteenth calendar
day before such interest payment date).
The Company will act as Paying Agent with respect to the Junior Subordinated
Notes. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agents or approve a change in the office
through which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or interest on the Junior Subordinated Notes which remain
unclaimed at the end of two years after such principal or interest shall have
become due and payable will be repaid to the Company, and the holder of such
Junior Subordinated Notes will thereafter look only to the Company for payment
thereof.
MODIFICATION
The Subordinated Note Indenture contains provisions permitting the Company
and the Indenture Trustee, with the consent of the holders of not less than a
majority in principal amount of the Junior Subordinated Notes, to modify the
Subordinated Note Indenture or any supplemental indenture affecting that series
or the rights of the holders of the Junior Subordinated Notes; provided, that
no such modification may, without the consent of the holder of each outstanding
Junior Subordinated Note affected thereby, (i) extend the fixed maturity of the
Junior Subordinated Notes, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the holder
of Junior Subordinated Notes so affected or (ii) reduce the percentage of
Junior Subordinated Notes, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each Junior
Subordinated Note then outstanding and affected thereby.
In addition, the Company and the Indenture Trustee may execute, without the
consent of holders of the Junior Subordinated Notes, any supplemental indenture
for certain other usual purposes, including the creation of any new series of
junior subordinated notes.
CONSOLIDATION, MERGER AND SALE
The Subordinated Note Indenture does not contain any covenant which restricts
the Company's ability to merge or consolidate with or into any other
corporation, sell or convey all or substantially all of its assets to any
person, firm or corporation or otherwise engage in restructuring transactions.
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DEFEASANCE
Under the terms of the Subordinated Note Indenture, the Company will be
discharged from certain covenants in respect thereof if it deposits with the
Indenture Trustee, in trust, moneys or government obligations, in an amount
sufficient to pay all the principal of, and interest on, the Junior
Subordinated Notes on the dates such payments are due in accordance with the
terms of the Junior Subordinated Notes. The Company would, however, remain
liable to pay principal and interest on the Junior Subordinated Notes.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Subordinated Note Indenture and,
after default, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provision, the Indenture Trustee is under no obligation to exercise any of the
powers vested in it by the Subordinated Note Indenture at the request of any
holder of Junior Subordinated Notes, unless offered reasonable indemnity by
such holder against the costs, expenses and liabilities which might be incurred
thereby. The Indenture Trustee is not required to expand or risk its own funds
or otherwise incur personal financial liability in the performance of its
duties if the Indenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
Chemical Bank, the Indenture Trustee, also serves as Property Trustee and as
Guarantee Trustee. The Company and certain of its affiliates maintain a deposit
account and a banking relationship with Chemical Bank. Chemical Bank serves as
trustee under other indentures pursuant to which debt securities of the Company
or an affiliate of the Company are outstanding.
GOVERNING LAW
The Subordinated Note Indenture and the Junior Subordinated Notes will be
governed by, and construed in accordance with, the internal laws of the State
of New York.
MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Subordinated Note Indenture to a direct or indirect
wholly-owned subsidiary of the Company; provided, that, in the event of any
such assignment, the Company will remain liable for all of its obligations.
Subject to the foregoing, the Subordinated Note Indenture will be binding upon
and inure to the benefit of the parties thereto and their respective successors
and assigns. The Subordinated Note Indenture provides that it may not otherwise
be assigned by the parties thereto.
The Subordinated Note Indenture will also provide that the Company will pay
all fees and expenses related to (i) the offering of the Junior Subordinated
Notes, (ii) the organization, maintenance and dissolution of the Trust, (iii)
the retention of the Trustees and (iv) the enforcement by the Indenture Trustee
of the rights of holders of Preferred Securities.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
JUNIOR SUBORDINATED NOTES AND THE GUARANTEE
As long as payments of interest and other payments are made when due on the
Junior Subordinated Notes, such payments will be sufficient to cover
distributions and payments due on the Trust Securities primarily because (i)
the aggregate principal amount of Junior Subordinated Notes will be equal to
the sum of the aggregate stated liquidation amount of the Trust Securities;
(ii) the interest rate and interest and other payment dates on the Junior
Subordinated Notes will match the distribution rate and distribution and other
payment dates for the Preferred Securities; (iii) the Company shall pay for all
costs and expenses of the Trust;
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and (iv) the Trust Agreement provides that the Securities Trustees shall not
cause or permit the Trust to, among other things, engage in any activity that
is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor
are available) are guaranteed by the Company as and to the extent set forth
under "Description of the Guarantee." If the Company does not make interest
payments on the Junior Subordinated Notes, it is not expected that the Trust
will have sufficient funds to pay distributions on the Preferred Securities.
The Guarantee is a full and unconditional guarantee from the time of its
issuance, but does not apply to any payment of distributions unless and until
the Trust has sufficient funds for the payment of such distributions.
If the Company fails to make payments under the Guarantee, the Guarantee
provides a mechanism whereby the holders of the Preferred Securities may direct
the Guarantee Trustee to enforce its rights thereunder. If the Guarantee
Trustee fails to enforce the Guarantee, any holder of Preferred Securities may
institute a legal proceeding directly against the Company to enforce the
Guarantee Trustee's rights under the Guarantee without first instituting a
legal proceeding against the Guarantee Trustee or any other person or entity.
The Preferred Securities evidence the rights of the holders thereof to the
benefits of the Trust, a trust that exists for the sole purpose of issuing
Trust Securities and investing the proceeds thereof in debt securities of the
Company, while the Junior Subordinated Notes represent indebtedness of the
Company. A principal difference between the rights of a holder of a Preferred
Security and a holder of a Junior Subordinated Note is that a holder of a
Junior Subordinated Note will accrue, and (subject to the permissible extension
of the interest period) is entitled to receive, interest on the principal
amount of Junior Subordinated Notes held, while a holder of Preferred
Securities is only entitled to receive distributions if and to the extent the
Trust has funds legally available for the payment of such distributions.
Upon any voluntary or involuntary dissolution, winding up or termination of
the Trust, the holders of Preferred Securities will be entitled to receive, out
of assets, legally available for distribution to holders, the Liquidation
Distribution in cash. See "Description of the Preferred Securities--Liquidation
Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation
or bankruptcy of the Company, the Trust, as holder of the Junior Subordinated
Notes, would be a subordinated creditor of the Company, subordinated in right
of payment to all Senior Indebtedness, but entitled to receive payment in full
of principal and interest, before any stockholders of the Company receive
payments or distributions. Because the Company is guarantor under the Guarantee
and has agreed to pay for all costs, expenses and liabilities of the Trust
(other than United States withholding taxes and other than the Trust's
obligations to holders of the Preferred Security under the Preferred
Securities), the positions of a holder of Preferred Securities and a holder of
Junior Subordinated Notes relative to other creditors and to stockholders of
the Company in the event of liquidation or bankruptcy of the Company would be
substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Junior Subordinated Notes.
However, in the event of payment defaults under, or acceleration of, Senior
Indebtedness, the subordination provisions of the Junior Subordinated Notes
provide that no payments may be made in respect of the Junior Subordinated
Notes until such Senior Indebtedness has been paid in full or any payment
default thereunder has been cured or waived. Failure to make required payments
on the Junior Subordinated Notes would constitute an Event of Default under the
Subordinated Note Indenture.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States federal income tax
consequences of the ownership and disposition of the Preferred Securities is
based on the opinion of Hunton & Williams. This summary deals only with
Preferred Securities held as capital assets within the meaning of Section 1221
of the Internal Revenue Code of 1986, as amended to the date hereof (the Code),
by Holders (as defined herein). Moreover, it does not discuss all of the tax
consequences that may be relevant to a Holder in light of his particular
circumstances or to Holders subject to special rules, such as certain financial
institutions, insurance companies, dealers in securities, individual retirement
and certain tax deferred accounts, and persons who engage in a straddle or a
hedge relating to a Preferred Security. Prospective investors should consult
their own tax advisors with regard to the application of the tax considerations
discussed below to their particular situations as well as the application of
any state, local or other tax laws. This summary is based on laws, existing and
proposed regulations, and applicable judicial and administrative
determinations, all of which are subject to change at any time, and any such
changes may be retroactively applied in a manner that could adversely affect
Holders. As used herein, the term "Holder" means a beneficial owner of a
Preferred Security that for United States federal income tax purposes is (i) a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source. Thus, the following summary does not address any tax consequences that
apply specifically to nonresident aliens or foreign entities.
TREATMENT OF THE TRUST AND PREFERRED SECURITIES FOR FEDERAL INCOME TAX PURPOSES
The Trust is to be classified as a "grantor trust" and not as an association
taxable as a corporation. Thus, for federal income tax purposes, each Holder
will be treated as the beneficial owner of a pro rata undivided interest in the
Junior Subordinated Notes and, consequently, will be required to include in
income the Holder's pro rata share of the entire income from the Junior
Subordinated Notes. Each Holder generally will determine its net income or loss
with respect to the Trust in accordance with its own method of accounting,
although income arising from original issue discount (OID) must be taken into
account under the accrual method of accounting even if the Holder otherwise
would use the cash receipts and disbursements method.
ORIGINAL ISSUE DISCOUNT
The Junior Subordinated Notes will be issued with OID within the meaning of
Section 1273 of the Code. Because the Holders will be treated for federal
income tax purposes as the owners of the Junior Subordinated Notes, the Holders
will be required to include in income their pro rata shares of OID accruing on
the Junior Subordinated Notes in advance of the receipt of some or all of the
related cash payments on the Preferred Securities. Holders (including Holders
who are cash basis taxpayers) will include such OID in income currently as
interest as it accrues over the life of the Junior Subordinated Notes under a
formula based upon the quarterly compounding of interest at a rate that
provides for a constant yield to maturity. If (as expected) the issue price of
the Junior Subordinated Notes equals the stated principal amount of such Notes,
the amount of OID accruing during each quarterly interest period will be
approximately the same as the amount of interest accruing during such period.
The amount of OID on a Junior Subordinated Note will equal the excess of the
"stated redemption price at maturity" over the "issue price" of the Junior
Subordinated Note. The issue price of each Junior Subordinated Note is expected
to equal the stated principal amount of such Note. Because the terms of the
Junior Subordinated Notes permit the Company to suspend payments of interest on
the Notes for up to 20 consecutive quarters, the stated redemption price at
maturity of the Junior Subordinated Notes will equal the aggregate of all
payments due on the Junior Subordinated Notes, whether designated as principal
or interest. Accordingly, the quarterly interest payments on the Junior
Subordinated Notes will be included in the stated redemption price at maturity
for purposes of determining the amount of OID with which a Junior Subordinated
Note is issued, and if (as expected) the issue price equals the stated
principal amount of the
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Junior Subordinated Notes, the OID will equal the total amount of interest that
will be payable (assuming no redemption before maturity) on the Junior
Subordinated Notes.
In general, the amount of OID that must be included in a Holder's income for
a taxable year is the sum of the "daily portions" of OID on the Junior
Subordinated Notes for all days during the taxable year that the Holder owns a
Preferred Security. Such daily portions are determined by allocating to each
day in the accrual period a ratable portion of the OID allocable to that
accrual period. An accrual period is each successive quarterly period that ends
on an Interest Payment Date. In the case of an initial Holder, the amount of
OID allocable to each accrual period is determined by multiplying the "adjusted
issue price" of the related Junior Subordinated Notes by their yield to
maturity (based on compounding at the close of each accrual period and taking
into account the length of the accrual period). The adjusted issue price of a
Junior Subordinated Note at the beginning of any accrual period will be the sum
of its issue price and the amount of OID allocable to all prior accrual
periods, reduced by the amount of any payments made with respect to such Junior
Subordinated Note in all prior accrual periods (and thus will equal
approximately the stated principal amount if the issue price is the stated
principal amount and all accrued interest is paid on each Interest Payment
Date). A subsequent Holder also will be required to include in gross income its
pro rata daily portion of OID with respect to the Junior Subordinated Notes.
However, if a Holder acquires Preferred Securities for an amount greater than
the adjusted issue price of the Junior Subordinated Notes (i.e., at an
acquisition premium), such Holder's daily portions of OID with respect to the
Junior Subordinated Notes will be reduced by an allocable portion of the
acquisition premium.
MARKET DISCOUNT
A purchaser of a Preferred Security at a discount from the adjusted issue
price of such purchaser's pro rata share of the Junior Subordinated Notes
acquires such Preferred Security with "market discount." However, market
discount with respect to a Preferred Security will be considered to be zero if
it is minimal. Market discount will be minimal with respect to a Preferred
Security if it is less than the product of (i) 0.25% of the adjusted issue
price of the purchaser's pro rata share of the Junior Subordinated Notes
multiplied by (ii) the number of complete years to maturity of such Junior
Subordinated Notes after the date of purchase. The purchaser of a Preferred
Security with more than a minimal amount of market discount generally will be
required to treat any gain on the sale, exchange, redemption or other
disposition of all or part of the Preferred Securities (or related Junior
Subordinated Notes) as ordinary income to the extent of accrued (but not
previously taxable) market discount. Market discount generally will accrue
ratably during the period from the date of purchase of such Preferred Security
to the maturity date of the Junior Subordinated Notes, unless the Holder
irrevocably elects to accrue such market discount on the basis of a constant
interest rate.
A Holder who has acquired a Preferred Security at a market discount generally
will be required to defer any deductions of interest expense attributable to
any indebtedness incurred or continued to purchase or carry the Preferred
Security, to the extent such interest expense exceeds the related OID income.
Any such deferred interest expense generally will be allowable as a deduction
not later than the year in which the related market discount income is
recognized. As an alternative to the inclusion of market discount in income
upon disposition of all or a portion of a Preferred Security or the related
Junior Subordinated Notes (including redemptions thereof), a Holder may make an
election (which may not be revoked without the Internal Revenue Service's
consent) to include market discount in income as it accrues on all market
discount instruments acquired by the Holder during or after the taxable year
for which the election is made. In that case, the preceding deferral rule for
interest expense will not apply.
In lieu of the foregoing treatment of market discount and interest expense, a
Holder may elect to treat any market discount (including a minimal amount) as
OID and accrue such discount on a constant-yield basis in the same manner as
the Holder accrues OID.
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<PAGE>
SALE OF PREFERRED SECURITIES
Upon the sale, retirement (including redemption) or other taxable disposition
of all or part of a Preferred Security, a Holder will recognize gain or loss
equal to the difference between the amount realized on such sale, retirement or
other disposition and the Holder's adjusted tax basis in the Preferred Security
or part thereof. Any recognized gain or loss will be capital gain or loss,
except to the extent of any accrued market discount (see "Market Discount"
above), and such capital gain or loss will be long-term if the holding period
for the Preferred Security is more than one year at the time of sale,
retirement or other disposition. A Holder's adjusted tax basis in a Preferred
Security acquired by purchase will equal the cost of such Preferred Security to
the Holder, increased by the amount of any related accrued OID and market
discount included in taxable income by the Holder and reduced by any prior
payments on the Junior Subordinated Notes distributable on the Preferred
Security. The redemption of only part of a Preferred Security will require an
allocation of the Holder's pro rata share of the adjusted issue price of the
related Junior Subordinated Notes between the redeemed part and the part
retained by the Holder in order to determine gain or loss and future accruals
of OID.
RECEIPT OF JUNIOR SUBORDINATED NOTES UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under "Description of the Preferred
Securities--Special Event Redemption or Distribution," Junior Subordinated
Notes may be distributed to Holders in exchange for the Preferred Securities
and in liquidation of the Trust. Such a distribution would be treated as a non-
taxable event to each Holder and each Holder would receive an aggregate tax
basis in the Holder's Junior Subordinated Notes equal to the Holder's aggregate
tax basis in its Preferred Securities. A Holder's holding period with respect
to the Junior Subordinated Notes so received in liquidation of the Trust would
include the period for which the Preferred Securities were held by such Holder.
BACKUP WITHHOLDING
A Holder may be subject to "backup withholding" under certain circumstances.
Backup withholding applies to a Holder if the Holder, among other things, (i)
fails to furnish his social security number or other taxpayer identification
number (TIN) to the payor responsible for backup withholding (for example, the
Holder's securities broker), (ii) furnishes such payor an incorrect TIN, (iii)
fails to provide such payor with a certified statement, signed under penalties
of perjury, that the TIN provided to the payor is correct and that the Holder
is not subject to backup withholding, or (iv) fails to report properly interest
and dividends on his tax return. Backup withholding, however, does not apply to
payments made to certain exempt recipients, such as corporations and tax-exempt
organizations. The backup withholding rate is 31% of "reportable payments,"
which generally will include distributions of interest and principal payments
on the Junior Subordinated Notes.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE MAY NOT BE APPLICABLE TO A
HOLDER, DEPENDING UPON A HOLDER'S PARTICULAR SITUATION, AND THEREFORE EACH
HOLDER SHOULD CONSULT HIS TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF
THE OWNERSHIP AND DISPOSITION OF PREFERRED SECURITIES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAW.
33
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the Underwriting Agreement), the Trust has agreed to sell to the Underwriters
named below, and the Underwriters, for whom Lehman Brothers Inc. is acting as
representative (the Representative), have severally agreed to purchase the
number of Preferred Securities set forth opposite their respective names below.
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the Preferred
Securities offered hereby if any of the Preferred Securities are purchased.
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED
NAME SECURITIES
---- ----------
<S> <C>
Lehman Brothers Inc. ............................................
---------
Total........................................................ 5,400,000
=========
</TABLE>
The Underwriters have advised the Trust that they propose to offer the
Preferred Securities in part directly to the public at the price to the public,
as set forth on the cover page of this Prospectus, and in part to certain
securities dealers at such price less a concession not in excess of $ per
Preferred Security. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per Preferred Security to certain other
dealers. After the Preferred Securities are released for sale to the public,
the offering price and other selling terms may from time to time be varied by
the Underwriters.
The Preferred Securities are expected to be approved for listing on the NYSE,
subject to official notice of issuance. Trading of the Preferred Securities on
the NYSE is expected to commence within a 30 day period after the initial
delivery of the Preferred Securities. The Representative has advised the Trust
that it intends to make a market in the Preferred Securities prior to the
commencement of trading on the NYSE. The Representative will have no obligation
to make a market in the Preferred Securities, however, and may cease market
making activities, if commenced, at any time.
Prior to this offering, there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the NYSE, the Underwriters will undertake to sell lots of 100 or
more Preferred Securities to a minimum of 400 beneficial holders.
The Company and the Trust have agreed to indemnify the Underwriters against,
or contribute to payments that the Underwriters may be required to make in
respect of, certain liabilities, including liabilities under the 1933 Act.
The Underwriters engage in transactions with, and, from time to time, have
performed services for, the Company and its affiliates in the ordinary course
of business.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Trust by Potter Anderson &
Corroon, Wilmington, Delaware, special Delaware counsel to the Trust. The
validity of the Junior Subordinated Notes, the Guarantee and certain matters
relating thereto will be passed upon on behalf of the Company by Hunton &
Williams, Richmond, Virginia. Certain United States federal income taxation
matters will be passed upon for the Company and the Trust by Hunton & Williams.
Certain legal matters will be passed upon for the Underwriters by McGuire,
Woods, Battle &
34
<PAGE>
Boothe, L.L.P., Richmond, Virginia, which also performs certain legal services
for Dominion Resources and its affiliates on other matters.
EXPERTS
The financial statements incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended December 31, 1994
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report (which report expresses an unqualified opinion and includes an
explanatory paragraph referring to changes in accounting for postretirement
benefits other than pensions in 1993 and for accounting for income taxes in
1992), which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
35
<PAGE>
GLOSSARY
<TABLE>
<S> <C>
1933 ACT.................... The Securities Act of 1933, as amended.
1934 ACT.................... The Securities Exchange Act of 1934, as amended.
1939 ACT.................... The Trust Indenture Act of 1939, as amended.
1940 ACT.................... The Investment Company Act of 1940, as amended.
ADDITIONAL INTEREST......... Amounts payable by the Company to cover certain
governmental charges, as described in "Description
of the Junior Subordinated Note--Additional
Interest."
ADMINISTRATIVE TRUSTEES..... Initially, J. Kennerly Davis, Jr. and James P.
Carney.
CODE........................ The Internal Revenue Code of 1986, as amended.
COMMON SECURITIES........... The Trust Securities being sold to the Company.
COMPANY..................... Virginia Electric and Power Company.
DELAWARE TRUSTEE............ Chemical Bank Delaware.
DOMINION RESOURCES.......... Dominion Resources, Inc., the parent of the
Company.
DTC......................... The Depository Trust Company, a "clearing
corporation" that initially will hold (through its
agents) a global certificate evidencing the
Preferred Securities.
DISTRIBUTION DATES.......... March 31, June 30, September 30 and December 31 of
each year, commencing September 30, 1995.
EVENT OF DEFAULT............ As described under "Description of the Junior
Subordinated Notes--Subordinated Note Indenture
Events of Default."
EXTENSION PERIOD............ Any period during which interest is not paid on
the Junior Subordinated Notes (and, consequently,
on the Preferred Securities) at the election of
the Company to the extent permitted under the
terms of the Junior Subordinated Notes.
GUARANTEE................... The guarantee by the Company of the payments by
the Trust on the Preferred Securities from funds
available in the Trust.
GUARANTEE PAYMENTS.......... Payments required to be made pursuant to the
Guarantee as described in "Description of
Guarantee--General."
GUARANTEE TRUSTEE........... The trustee under the Guarantee; initially,
Chemical Bank.
INDENTURE TRUSTEE........... The trustee under the Subordinated Note Indenture;
initially, Chemical Bank.
ISSUE DATE.................. The date set forth on the cover page on which the
Junior Subordinated Notes and Preferred Securities
are scheduled to be issued.
INVESTMENT COMPANY ACT
EVENT...................... An event of the type described in "Description of
the Preferred Securities--Special Event Redemption
or Distribution."
JUNIOR SUBORDINATED NOTES... The fixed rate junior subordinated deferrable
interest notes of the Company due September 30,
2025.
</TABLE>
36
<PAGE>
<TABLE>
<S> <C>
NYSE........................ New York Stock Exchange.
PAYMENT ACCOUNT............. The account maintained by the Property Trustee to
which amounts paid on the Junior Subordinated
Notes are credited.
PREFERRED SECURITIES........ The Trust Securities being offered to investors
pursuant to this Prospectus.
PROPERTY TRUSTEE............ A trustee under the Trust designated to hold the
trust property; initially Chemical Bank.
RECORD DATE................. The close of business on the 15th calendar day
prior to a Distribution Date.
REDEMPTION PRICE............ The stated liquidation amount of $25 per Preferred
Security, plus accrued and unpaid distributions
thereon (and interest thereon) to the date of
payment.
SECURITIES RATE............. The per annum interest rate expressed as a
percentage of the stated liquidation amount of $25
per Preferred Security, and set forth on the cover
page.
SECURITIES TRUSTEES......... The Property Trustee, Administrative Trustees and
Delaware Trustee.
SENIOR INDEBTEDNESS......... Indebtedness of the Company described herein under
"Description of the Junior Subordinated Notes--
Subordination."
SPECIAL EVENT............... A Tax Event or Investment Company Act Event.
SUBORDINATED NOTE INDENTURE. The indenture pursuant to which the Company's
Junior Subordinated Notes will be issued to the
Trust.
TAX EVENT................... An event of the type described in "Description of
the Preferred Securities--Special Event Redemption
or Distribution."
TRUST....................... Virginia Power Capital Trust I, a Delaware
business trust that will issue the Trust
Securities.
TRUST AGREEMENT............. The agreement pursuant to which the Trust is
organized as it may be amended and restated from
time to time.
TRUST AGREEMENT EVENT OF
DEFAULT.................... As described under "Description of Preferred
Securities--Events of Default."
TRUST SECURITIES............ The Preferred Securities and the Common
Securities.
</TABLE>
37
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or in-
corporated by reference in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company, Virginia
Power Capital Trust I or the Underwriters. Neither the delivery of this Pro-
spectus nor any sale made hereunder shall under any circumstance create an im-
plication that there has been no change in the affairs of the Company or Vir-
ginia Power Capital Trust I, since the date hereof. This Prospectus does not
constitute an offer or solicitation by anyone in any state in which such offer
or solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information..................................................... 3
Incorporation of Certain Documents by Reference........................... 3
Prospectus Summary........................................................ 4
Risk Factors.............................................................. 7
Virginia Power Capital Trust I............................................ 10
Selected Financial Information............................................ 11
Use of Proceeds........................................................... 12
Description of the Preferred Securities................................... 12
Description of the Guarantee.............................................. 21
Description of the Junior Subordinated Notes.............................. 23
Relationship among the Preferred Securities, Junior Subordinated Notes and
the Guarantee............................................................ 29
Certain Federal Income Tax Considerations................................. 31
Underwriting.............................................................. 34
Legal Matters............................................................. 34
Experts................................................................... 35
Glossary.................................................................. 36
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
5,400,000
PREFERRED SECURITIES
VIRGINIA POWER CAPITAL TRUST I
% TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT
$25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET
FORTH HEREIN BY
VIRGINIA ELECTRIC AND POWER COMPANY
------------------
PROSPECTUS
August , 1995
------------------
LEHMAN BROTHERS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission Fee............................. $ 46,552
Fees and Expense of Trustees....................................... 40,000
Printing Expenses.................................................. 100,000
Counsel Fees....................................................... 125,000
Rating Agency Fees................................................. 80,000
Listing Fees....................................................... 49,200
Accountant's Fees.................................................. 35,000
Miscellaneous...................................................... 36,748
--------
Total.......................................................... $512,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VI of the Restated Articles of Incorporation, as amended, of the
registrant provides that the registrant shall indemnify its directors and
officers to the fullest extent permitted by law. Article 10, Chapter 9, Title
13.1 of the Code of Virginia of 1950, as amended, permits indemnification of
directors and officers, but does not permit indemnification against willful
misconduct or a knowing violation of the criminal law. The registrant maintains
director and officer liability insurance protecting the registrant's directors
and officers against certain claims resulting from their service in such
capacities, and the registrant from the liability assumed by it in accordance
with Article VI of its Restated Articles of Incorporation, as amended. The
current policy covers all occurrences during the period ending September 1,
1995, and is expected to be renewed in the ordinary course of business. In
general, the policy provides coverage for any misstatement, misleading
statement, act, omission, neglect or breach of duty committed or attempted by a
director or officer, but excludes, among other things, acts of deliberate
dishonesty, and acts for personal profit or advantage to which the director or
officer was not entitled.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
*1 Form of Underwriting Agreement for Preferred Securities.
*4(a) Form of Subordinated Note Indenture between Virginia Electric and Power
Company and Chemical Bank, as Trustee.
*4(b) Form of Supplemental Indenture between Virginia Electric and Power
Company and Chemical Bank, as Trustee.
*4(c) Trust Agreement of Virginia Power Capital Trust I.
*4(d) Form of Amended and Restated Trust Agreement.
4(e) Form of Preferred Security (included in Exhibit 4(d) above).
4(f) Form of Junior Subordinated Notes (included in Exhibit 4(b) above).
*4(g) Form of Guarantee with respect to Preferred Securities.
4(h) Certificate of Trust (included in Exhibit 4(d) above).
*5(a) Opinion and Consent of Hunton & Williams.
*5(b) Opinion and Consent of Potter Anderson & Corroon.
*8 Tax opinion of Hunton & Williams.
*12 Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends.
*23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Hunton & Williams is contained in Exhibits 5(a) and 8.
23(c) Consent of Potter Anderson & Corroon is contained in Exhibit 5(b).
24 Powers of Attorney with respect to the Company officers and directors
(included herein).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
*25(a) Statement of eligibility and qualification of Chemical Bank with
respect to the Subordinated Note Indenture.
*25(b) Statement of eligibility and qualification of Chemical Bank with
respect to the Guarantee.
*25(c) Statement of eligibility and qualification of Chemical Bank with
respect to the Trust.
</TABLE>
- --------
* Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant, Virginia Electric and Power Company, hereby
undertakes that, for purposes of determining any liability under the Securities
Act of 1933 (the Act), each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, each of the
Registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by either of
the Registrants of expenses incurred or paid by a director, officer or
controlling person of such Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each of the Registrants
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes each Agent for
Service named in the registration statement, as attorney-in-fact, to sign on
his behalf individually and in each capacity stated below and file all
amendments and post-effective amendments to the registration statement, and the
registrant hereby confers like authority to sign and file on its behalf.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, VIRGINIA ELECTRIC
AND POWER COMPANY CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, HEREUNTO
DULY AUTHORIZED, IN THE CITY OF RICHMOND, COMMONWEALTH OF VIRGINIA, ON THE 24TH
DAY OF JULY, 1995.
Virginia Electric and Power Company
John B. Adams, Jr.
By __________________________________
(JOHN B. ADAMS, JR. CHAIRMAN OF
THE BOARD OF DIRECTORS)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE 24TH DAY OF JULY, 1995.
SIGNATURES TITLE
John B. Adams, Jr. Chairman of the Board of Directors
- ------------------------------------- and Director
JOHN B. ADAMS, JR.
J.T. Rhodes President (Chief Executive Officer) and
- ------------------------------------- Director
J. T. RHODES
Director
- -------------------------------------
TYNDALL L. BAUCOM
James F. Betts Director
- -------------------------------------
JAMES F. BETTS
Benjamin J. Lambert, III Director
- -------------------------------------
BENJAMIN J. LAMBERT, III
Richard L. Leatherwood Director
- -------------------------------------
RICHARD L. LEATHERWOOD
Harvey L. Lindsay, Jr. Director
- -------------------------------------
HARVEY L. LINDSAY, JR.
William T. Roos Director
- -------------------------------------
WILLIAM T. ROOS
Director
- -------------------------------------
RICHARD L. SHARP
II-3
<PAGE>
SIGNATURES TITLE
Robert H. Spilman Director
- -------------------------------------
ROBERT H. SPILMAN
Director
- -------------------------------------
WILLIAM G. THOMAS
R.E. Rigsby Senior Vice President--Finance and
- ------------------------------------- Controller (Chief Financial Officer
R. E. RIGSBY and Principal Accounting Officer)
II-4
<PAGE>
Virginia Electric and Power Company reasonably believes that the security
rating to be assigned to the Securities registered hereunder will make the
Securities "investment grade securities" pursuant to Transaction Requirement
B.2 of Form S-3.
Pursuant to the requirements of the Securities Act of 1933, Virginia Power
Capital Trust I certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richmond, Commonwealth of Virginia, on July 24,
1995.
Virginia Power Capital Trust I
By: Virginia Electric and Power Company,
as Depositor
J. KENNERLY DAVIS, JR.
J. Kennerly Davis, Jr.
---------------------------------
Vice President, Treasurer and
Corporate Secretary
---------------------------------
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ----------
<C> <S> <C>
*1 Form of Underwriting Agreement for Preferred Securities.
*4(a) Form of Subordinated Note Indenture between Virginia
Electric and Power Company and Chemical Bank, as Trustee.
*4(b) Form of Supplemental Indenture between Virginia Electric
and Power Company and Chemical Bank, as Trustee.
*4(c) Trust Agreement of Virginia Power Capital Trust I.
*4(d) Form of Amended and Restated Trust Agreement.
4(e) Form of Preferred Security (included in Exhibit 4(d)
above).
4(f) Form of Junior Subordinated Notes (included in Exhibit
4(b) above).
*4(g) Form of Guarantee with respect to Preferred Securities.
4(h) Certificate of Trust (included in Exhibit 4(d) above).
*5(a) Opinion and Consent of Hunton & Williams.
*5(b) Opinion and Consent of Potter Anderson & Corroon.
*8 Tax opinion of Hunton & Williams.
*12 Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends.
*23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Hunton & Williams is contained in Exhibits
5(a) and 8.
23(c) Consent of Potter Anderson & Corroon is contained in
Exhibit 5(b).
24 Powers of Attorney with respect to the Company officers
and directors (included herein).
*25(a) Statement of eligibility and qualification of Chemical
Bank with respect to the Subordinated Note Indenture.
*25(b) Statement of eligibility and qualification of Chemical
Bank with respect to the Guarantee.
*25(c) Statement of eligibility and qualification of Chemical
Bank with respect to the Trust.
</TABLE>
- --------
* Filed herewith.
<PAGE>
EXHIBIT 1
_________________ Preferred Securities
VIRGINIA POWER CAPITAL TRUST I
(a Delaware Trust)
___% Trust Preferred Securities
(Liquidation Amount $25 Per Preferred Security)
UNDERWRITING AGREEMENT
_____________, 1995
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Virginia Power Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. (S)(S) 3801 et
seq.), and Virginia Electric and Power Company, a Virginia corporation (the
"Company" and, together with the Trust, the "Offerors") confirm their agreement
(the "Agreement") with you and each of the other Underwriters named in Schedule
I hereto (collectively, the "Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
you are acting as representative (in such capacity, you shall hereinafter be
referred to as the "Representative"), with respect to the sale by the Trust and
the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of ___% Trust Preferred Securities (liquidation amount $25
per preferred security) of the Trust ("Preferred Securities") set forth in
Schedule I. The Preferred Securities will be guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption and otherwise
(the "Guarantee") pursuant to the Preferred Securities Guarantee Agreement (the
"Guarantee Agreement"), dated as of ____________, 1995, between the Company and
Chemical Bank, as trustee (the "Guarantee Trustee"). The Preferred Securities
and the related Guarantee are referred to herein as the "Securities."
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-_____) and a related
preliminary prospectus for the registration under the Securities Act of 1933
(the "1933 Act") of (i) the Preferred Securities, (ii) the Guarantee, and (iii)
the
<PAGE>
Junior Subordinated Notes (as defined below) to be issued and sold to the Trust
by the Company, have filed such amendments thereto, if any, and such amended
preliminary prospectuses as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. Such registration statement (as amended) and the
prospectuses constituting a part thereof (including, in each case, all documents
incorporated or deemed to be incorporated by reference therein pursuant to item
12 of Form S-3 under the 1933 Act and the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations")), as from time to time amended
or supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934,
as amended (the "1934 Act"), the rules and regulations of the Commission under
the 1934 Act (the "1934 Act Regulations"), or otherwise, are hereinafter
referred to as the "Registration Statement" and the "Prospectus", respectively,
except that, if any revised prospectus shall be provided to the Underwriters by
the Offerors for use in connection with the offering of the Preferred Securities
which differs from the Prospectus on file at the Commission at the time the
Registration Statement became effective (whether or not such revised prospectus
is required to be filed by the Offerors pursuant to Rule 424(b) of the 1933 Act
Regulations), the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for such use. All
references in this Agreement to financial statements and schedules and other
information that is "contained," "included" or "stated" in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information that are or are deemed to be incorporated by reference in the
Registration Statement or the Prospectus (the "Incorporated Documents"), as the
case may be; and all references in this Agreement to amendments or supplements
to the Registration Statement or the Prospectus shall be deemed to mean and
include the filing of any document under the 1934 Act that is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered. The entire proceeds from the
sale of the Securities will be combined with the entire proceeds from the sale
by the Trust to the Company of its common securities (the "Common Securities")
and will be used by the Trust to purchase the $139,175,258 of ____% Junior
Subordinated Notes (the "Junior Subordinated Notes") to be issued by the
Company. The Preferred Securities and the Common Securities will be issued
pursuant to the Amended and Restated Trust Agreement, dated as of ___________,
1995 (the "Trust Agreement"), among the Company, as
2
<PAGE>
Depositor, J. Kennerly Davis, Jr. and James P. Carney (the "Administrative
Trustees"), Chemical Bank Delaware, a Delaware banking corporation (the
"Delaware Trustee") and Chemical Bank, a New York banking corporation
(the "Property Trustee" and, together with the Delaware Trustee and the
Administrative Trustees, the "Trustees"), as trustees, and the holders from time
to time of undivided beneficial interests in the assets of the Trust. The Junior
Subordinated Notes will be issued pursuant to an indenture, dated as of
___________, 1995 (the "Base Indenture"), between the Company and Chemical Bank,
as trustee (the "Debt Trustee"), and a first supplemental indenture to the Base
Indenture, dated as of _____________, 1995 (the "Supplemental Indenture," and
together with the Base Indenture and any other amendments or supplements
thereto, the "Indenture"), between the Company and the Debt Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Offerors jointly and
------------------------------
severally represent and warrant to each Underwriter as follows:
(a) The Registration Statement as heretofore filed with the
Commission, a copy of which as so filed has been delivered to the
Underwriters, has been declared effective. So long as the Underwriters are
required pursuant to the 1933 Act to deliver a prospectus to purchasers of
the Securities, the Offerors will not file any amendment or supplement to
the Registration Statement or the Prospectus unless the Underwriters shall
have been advised of the proposed amendment or supplement and the same
shall not have been disapproved as to substance by the Underwriters or as
to form by McGuire, Woods, Battle & Boothe, L.L.P., who are acting as
counsel for the Underwriters.
(b) No order suspending the effectiveness of the Registration
Statement or otherwise preventing or suspending the use of the Prospectus
has been issued by the Commission and is in effect and no proceedings for
that purpose are pending before or, to the knowledge of the Company,
threatened by, the Commission. The Registration Statement and the
Prospectus comply in all material respects, in form and in substance, with
the provisions of the 1933 Act, 1934 Act, the Trust Indenture Act of 1939
(the "1939 Act"), the 1933 Act Regulations, the 1934 Act Regulations, and
the rules and regulations under the 1939 Act (the "1939 Act Regulations"),
and neither the Registration Statement nor the Prospectus contains an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, that the foregoing representations and warranties
in this subsection (b) shall not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon
information furnished herein or in writing to the Offerors by the
Underwriters or on the Underwriters' behalf for use in the
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Registration Statement or Prospectus; and provided, further, that the
foregoing representations and warranties are given on the basis that any
statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of the Registration Statement or
Prospectus to the extent that the statement has been modified or superseded
by any statement in a subsequently filed Incorporated Document or in the
Registration Statement or Prospectus.
(c) With respect to the Registration Statement, the conditions for use
of Form S-3, as set forth in the General Instructions thereof, have been
satisfied.
(d) To the best of the Company's knowledge, Deloitte & Touche LLP, the
accountants who certified the financial statements and supporting schedules
included in the Registration Statement, are independent public accountants
as required by the 1933 Act and the 1933 Act Regulations.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, there has been no material adverse change in the condition of the
Company, financial or otherwise. The Company has no material contingent
financial obligation that is not disclosed in the Registration Statement
and Prospectus.
(f) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, there has not been any material adverse change or, to the best of
the Company's knowledge, any development involving a prospective material
adverse change in or affecting the general affairs, financial condition,
or results of operations of the Trust.
(g) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the Commonwealth of
Virginia with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, to enter into and perform its obligations
under this Agreement, the Trust Agreement, the Indenture and the Guarantee
and to purchase, own, and hold the Common Securities issued by the Trust;
and the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which the
character or location of its properties or the nature or the conduct of its
business requires such qualification, except for any failures to be so
qualified or in good standing which, taken as a whole, would not have a
material adverse effect on the Company.
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(h) The Trust has been duly created and is validly existing and in
good standing as a business trust under the Delaware Act with the power and
authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement and the Trust Agreement; the Trust is duly
qualified to transact business as a foreign company and is in good standing
in any other jurisdiction in which such qualification is necessary, except
to the extent that the failure to so qualify or be in good standing would
not have a material adverse effect on the Trust; the Trust is not a party
to or otherwise bound by any agreement other than those described in the
Prospectus; the Trust is and will be classified for United States federal
income tax purposes as a grantor trust and not as an association taxable as
a corporation; and the Trust is and will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting
principles.
(i) The Common Securities have been duly authorized by the Trust
Agreement and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
Prospectus, will be validly issued and (subject to the terms of the Trust
Agreement) fully paid and non-assessable undivided beneficial interests in
the Trust and will conform to all statements relating thereto contained in
the Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and, on the Closing Date, all of the
issued and outstanding Common Securities of the Trust will be directly
owned by the Company, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(j) This Agreement has been duly authorized, executed and delivered by
each of the Offerors.
(k) The Trust Agreement has been duly authorized by the Company and,
on the Closing Date, will have been duly executed and delivered by the
Company and the Administrative Trustees, and assuming due authorization,
execution and delivery of the Trust Agreement by the Delaware Trustee and
the Property Trustee, the Trust Agreement will, on the Closing Date, be a
valid and binding obligation of the Company and the Administrative
Trustees, enforceable against the Company and the Administrative Trustees
in accordance with its terms, except to the extent that enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity) (the
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"Bankruptcy Exceptions") and will conform to all statements relating
thereto in the Prospectus; and, on the Closing Date, the Trust Agreement
will have been duly qualified under the 1939 Act.
(l) The Guarantee Agreement has been duly authorized by the Company
and, on the Closing Date, will have been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery of the
Guarantee Agreement by the Guarantee Trustee, the Guarantee Agreement will,
on the Closing Date, constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, and each of the Guarantee and the Guarantee
Agreement will conform to all statements relating thereto contained in the
Prospectus; and, on the Closing Date, the Guarantee Agreement will have
been duly qualified under the 1939 Act.
(m) The Preferred Securities have been duly authorized by the Trust
Agreement and, when issued and delivered by the Trust pursuant to this
Agreement against payment of the consideration set forth herein, will be
validly issued and (subject to the terms of the Trust Agreement) fully paid
and non-assessable undivided beneficial interests in the Trust, will be
entitled to the benefits of the Trust Agreement and will conform to all
statements relating thereto contained in the Prospectus; the issuance of
the Preferred Securities is not subject to preemptive or other similar
rights; and (subject to the terms of the Trust Agreement) holders of
Preferred Securities will be entitled to the same limitation of personal
liability under Delaware law as extended to stockholders of private
corporations for profit.
(n) The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered by the Company,
and, assuming due authorization, execution and delivery of the Indenture by
the Debt Trustee, the Indenture will, on the Closing Date, constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture will
conform to all statements relating thereto contained in the Prospectus;
and, on the Closing Date, the Indenture will have been duly qualified under
the 1939 Act.
(o) The Junior Subordinated Notes have been duly authorized by the
Company and, on the Closing Date, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Indenture
and delivered against payment therefor as described in the Prospectus, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions, will
be
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in the form contemplated by, and entitled to the benefits of, the Indenture
and will conform to all statements relating thereto in the Prospectus.
(p) The Company's obligations under the Guarantee are subordinate and
junior in right of payment to all liabilities of the Company and are pari
----
passu with the preferred stock issued by the Company.
-----
(q) The Junior Subordinated Notes are subordinated and junior in right
of payment to all "senior indebtedness" (as defined in the Supplemental
Indenture) of the Company.
(r) The Preferred Securities, the Common Securities, the Trust
Agreement, the Guarantee Agreement and Junior Subordinated Notes 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 thereto.
(s) Each of the Administrative Trustees of the Trust is an employee of
the Company and has been duly authorized by the Company to execute and
deliver the Trust Agreement.
(t) None of the Offerors is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(u) The execution, delivery and performance by the Offerors of this
Agreement, the Trust Agreement, the Preferred Securities, the Common
Securities, the Indenture, the Junior Subordinated Notes, the Guarantee
Agreement and the Guarantee and the consummation by the Offerors of the
transactions contemplated herein and therein and compliance by the Offerors
with their respective obligations hereunder and thereunder shall have been
duly authorized by all necessary action (corporate or otherwise) on the
part of the Offerors and do not and will not result in any violation of the
Articles of Incorporation or Bylaws of the Company, or the Trust Agreement
or related Certificate of Trust and do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Trust or the Company
under (A) any contract, indenture, mortgage,
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loan agreement, note, lease or other agreement or instrument to which the
Trust or the Company is a party or by which either of them may be bound or
to which any of their properties may be subject (except for conflicts,
breaches or defaults which would not, individually or in the aggregate, be
materially adverse to the Trust or the Company or materially adverse to the
transactions contemplated by this Agreement), or (B) any existing
applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign, or
any regulatory body or administrative agency or other governmental body
having jurisdiction over the Trust or the Company, or any of their
respective properties.
(v) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale of the Common Securities or the offering of the Preferred
Securities, the Junior Subordinated Notes or the Guarantee hereunder,
except (A) such as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws; (B) the qualification of the Trust
Agreement, the Guarantee Agreement and the Indenture under the 1939 Act and
(C) the approval of the Virginia Commission.
(w) Each of the Offerors is in compliance with all provisions of
Section 1 of the Laws of Florida, Chapter 92-198, An Act Relating to
Disclosure of Doing Business With Cuba.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
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(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Trust agrees to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Trust, at the price per security
set forth in Schedule II hereto, the number of Preferred Securities set forth in
Schedule I opposite the name of such Underwriter, plus any additional number of
Preferred Securities that such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
The purchase price per security to be paid by the several Underwriters for
the Preferred Securities shall be an amount equal to the initial public offering
price set forth on Schedule II, which is a fixed price determined by agreement
between the Representative and the Offerors. As compensation to the
Underwriters for their commitments hereunder and in view of the fact that the
proceeds of the sale of the Preferred Securities will be used to purchase the
Junior Subordinated Notes of the
8
<PAGE>
Company, the Company hereby agrees to pay on the Closing Date (as defined below)
to the Representative, for the accounts of the several Underwriters, a
commission per Preferred Security as set forth on Schedule II for the Preferred
Securities to be delivered by the Trust hereunder on the Closing Date.
(b) Payment of the purchase price for, and delivery of certificates for,
the Preferred Securities shall be made at the offices of Hunton & Williams, 200
Park Ave., New York, New York or at such other place as shall be agreed upon by
the Representative and the Trust, at 10:00 A.M., New York time, on the fifth
business day (unless postponed in accordance with the provisions of Section 10)
after execution of this Agreement or such other time, place or date as shall be
agreed upon by the Representative, the Trust and the Company (such time and date
of payment and delivery being herein called the "Closing Date"). Payment shall
be made to the Trust by check or checks in New York Clearing House funds at the
Closing Date, against delivery to the Representative for the respective accounts
of the Underwriters of certificates for the Preferred Securities to be purchased
by them. Certificates for the Preferred Securities shall be in such
denominations and registered in such names as the Representative may request in
writing at least two business days before the Closing Date. It is understood
that each Underwriter has authorized the Representative, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Preferred Securities which it has agreed to purchase. The Representative,
individually and not as Representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Preferred Securities
to be purchased by any Underwriter whose check has not been received by the
Closing Date, but such payment shall not relieve such Underwriter from its
obligations hereunder.
The certificate(s) for the Preferred Securities will be made available for
examination and packaging by the Representative not later than 12:00 Noon, New
York time, on the last business day prior to the Closing Date.
On the Closing Date, the Company will pay, or cause to be paid, the
commission payable at such time to the Underwriters under Section 2 hereof by
check or checks payable to the Representative in New York Clearing House funds.
SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors jointly and
-------------------------
severally covenants with each Underwriter as follows:
(a) The Offerors, on or prior to the Closing Date, will deliver to the
Underwriters conformed copies of the Registration Statement as originally
filed and of all amendments thereto, heretofore or hereafter made,
including
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any post-effective amendment (in each case including all exhibits filed
therewith, and including unsigned copies of each consent and certificate
included therein or filed as an exhibit thereto, except exhibits
incorporated by reference unless specifically requested). As soon as the
Company is advised thereof, it will advise the Representative orally of the
issuance of any stop order under the 1933 Act with respect to the
Registration Statement, or the institution of any proceedings therefor, of
which the Company shall have received notice, and will use its best efforts
to prevent the issuance of any such stop order and to secure the prompt
removal thereof, if issued. The Offerors will deliver to the Underwriters
sufficient conformed copies of the Registration Statement and Prospectus
and of all amendments thereto (in each case without exhibits) for
distribution of one to each Underwriter and, from time to time, as many
copies of the Prospectus as the Underwriters may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act.
(b) The Offerors will furnish the Underwriters with copies of each
further amendment and supplement to the Prospectus relating to the offering
of the Preferred Securities in such quantities as the Underwriters may from
time to time reasonably request. If, during the period when the delivery
of a prospectus shall be required by law in connection with the sale of any
Preferred Securities by an Underwriter or dealer, any event relating to or
affecting the Company, or of which the Company shall be advised in writing
by the Underwriters, shall occur, which in the opinion of the Company or of
Underwriters' counsel should be set forth in a supplement to or an
amendment of the Prospectus in order to make the Prospectus not misleading
in the light of the circumstances when it is delivered, or if for any other
reason it shall be necessary during such period to amend or supplement the
Prospectus or to file under the 1934 Act any document incorporated by
reference in the Prospectus in order to comply with the 1933 Act or the
1934 Act, the Company forthwith will (i) notify the Underwriters to suspend
solicitation of purchases of the Preferred Securities and (ii) at its
expense, make any such filing or prepare and furnish to the Underwriters a
reasonable number of copies of a supplement or supplements or an amendment
or amendments to the Prospectus which will supplement or amend the
Prospectus so that, as supplemented or amended, it will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered, not misleading or which
will effect any other necessary compliance. In case any Underwriter is
required to deliver a prospectus in connection with the sale of any
Preferred
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Securities after the expiration of the period specified in the preceding
sentence, the Company, upon the request of such Underwriter, will furnish
to such Underwriter, at the expense of such Underwriter, a reasonable
quantity of a supplemented or amended prospectus, or supplements or
amendments to the Prospectus, complying with Section 10(a) of the 1933 Act.
During the period specified in the second sentence of this subsection, the
Company will continue to prepare and file with the Commission on a timely
basis all documents or amendments required under the 1934 Act and the 1934
Act Regulations; provided, that the Company shall not file such documents
or amendments without also furnishing copies thereof prior to such filing
to the Underwriters and McGuire, Woods, Battle & Boothe, L.L.P.
(c) The Offerors will endeavor, in cooperation with the Underwriters,
to qualify the Preferred Securities (and the Guarantee) and the Junior
Subordinated Notes for offering and sale under the applicable securities
laws of such states and the other jurisdictions of the United States as the
Representative may designate; provided, however, that neither of the
Offerors shall be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified.
(d) The Trust will make generally available to its security holders as
soon as practicable but not later than 45 days after the close of the
period covered thereby, an earnings statement of the Trust (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day of
the Trust's fiscal quarter next following the "effective date" (as defined
in Rule 158) of the Registration Statement.
(e) The Offerors will use best efforts to effect the listing of the
Preferred Securities (including the Guarantee with respect thereto) on the
New York Stock Exchange; if the Preferred Securities are exchanged for
Junior Subordinated Notes, the Company will use its best efforts to effect
the listing of the Junior Subordinated Notes on the exchange on which the
Preferred Securities were then listed.
(f) During a period of 30 days from the date of this Agreement,
neither the Trust nor the Company will, without the Representative's prior
written consent, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Preferred Securities,
any security convertible into or exchangeable into or exercisable for
Preferred Securities or the Junior Subordinated Notes or any debt
securities substantially similar to the Junior Subordinated Notes or equity
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securities substantially similar to the Preferred Securities (except for
the Junior Subordinated Notes and the Preferred Securities issued pursuant
to this Agreement).
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
-------------------
incident to the performance of each Offerors' obligations under this Agreement,
including but not limited to, the expenses of (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the preparation, issuance and delivery of the certificate(s) for the Preferred
Securities to the Underwriters, (iii) the fees and disbursements of the
Company's and the Trust's counsel and accountants, (iv) the qualification of the
Preferred Securities, the Guarantee and the Junior Subordinated Notes under
securities laws in accordance with the provisions of Section 3(c) hereof,
including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
any blue sky survey, (v) the printing and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment thereto,
of each preliminary prospectus, and of the Prospectus and any amendments or
supplements thereto, (vi) the printing and delivery to the Underwriters of
copies of any blue sky survey, (vii) the fee of the National Association of
Securities Dealers, Inc. in connection with its review of the offering
contemplated by this Agreement, if applicable, (viii) the fees and expenses of
the Debt Trustee, including the fees and disbursements of counsel for the Debt
Trustee in connection with the Indenture and the Junior Subordinated Notes, (ix)
the fees and expenses of the Delaware Trustee, and the Guarantee Trustee,
including the fees and disbursements of counsel for the Delaware Trustee in
connection with the Trust Agreement and the related Certificate of Trust, (x)
the fees and disbursements of Potter Anderson & Corroon as Delaware counsel to
the Trust, (xi) any fees payable in connection with the rating of the Preferred
Securities and Junior Subordinated Notes, (xii) the fees and expenses incurred
in connection with the listing of the Preferred Securities (and the related
Guarantee) and, if applicable, the Junior Subordinated Notes on the New York
Stock Exchange, and (xiii) the cost and charges of any transfer agent or
registrar and (xiv) the cost of qualifying the Preferred Securities with The
Depository Trust Company.
In addition, if this Agreement is terminated by the Representative in
accordance with the provisions of Section 5 or Section 9 hereof, the Company
shall reimburse the Underwriters for all of their reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
---------------------------------------
the Underwriters to purchase and pay for the Preferred Securities are subject to
the following conditions:
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(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or to the knowledge of the Company
threatened by, the Commission on such date. If filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, shall have been filed in the manner
and within the time period required by Rule 424(b). The Underwriters shall
have received, prior to payment for the Preferred Securities, a certificate
dated the Closing Date and signed by the President or any Vice President of
the Company to the effect that no such stop order is in effect and that no
proceedings for such purpose are pending before, or to the knowledge of the
Company threatened by, the Commission.
(b) An order or orders of the Virginia Commission permitting the
transactions contemplated hereby substantially in accordance with the terms
and conditions hereof shall be in full force and effect and shall contain
no provision unacceptable to the Underwriters or the Company (but all
provisions of such order or orders heretofore entered, copies of which have
heretofore been delivered to the Representative, are deemed acceptable to
the Underwriters and the Company and all provisions of such order or orders
hereafter entered shall be deemed acceptable to the Underwriters 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).
(c) On the Closing Date the Representative shall have received:
(1) The opinion, dated as of the Closing Date, of Hunton &
Williams, counsel for the Company, substantially in the form attached
hereto as Schedule III.
(2) The opinion, dated as of the Closing Date, of Potter Anderson
& Corroon, Delaware counsel to the Trust, substantially in the form
attached hereto as Schedule IV.
(3) The opinion, dated as of the Closing Date, of Richards,
Layton & Finger, Delaware counsel to Chemical Bank Delaware, as Delaware
Trustee under the Trust Agreement, substantially in the form attached
hereto as Schedule V.
(4) The opinion, dated as of the Closing Date, of Cravath, Swaine
& Moore, counsel to the Property Trustee, the Guarantee Trustee and the
Debt Trustee, substantially in the form attached hereto as Schedule VI.
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(5) The favorable opinion, dated as of the Closing Date, of
McGuire, Woods, Battle & Boothe, L.L.P., counsel for the Underwriters,
substantially in the form attached hereto as Schedule VII.
(6) At the Closing Date, there shall not have been, since the
date hereof or since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings or
business affairs of the Trust or the Company, whether or not arising in the
ordinary course of business, and the Representative shall have received a
certificate of the Chairman of the Board, the President or any Vice
President of the Company and a certificate of the Administrative Trustees
of the Trust, and dated as of the Closing Date, to the effect that (i)
there has been no such material adverse change, (ii) the representations
and warranties in Section 1 hereof are true and correct with the same force
and effect as though expressly made at and as of the Closing Date, (iii)
the Trust and the Company have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied on or prior to the
Closing Date, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
(7) On the Closing Date, the Representative shall have received
from Deloitte & Touche LLP a letter dated such date, in form and substance
satisfactory to the Representative.
(8) On the Closing Date, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Preferred Securities as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Offerors, in connection with the issuance and sale
of the Preferred Securities as herein contemplated shall be satisfactory in
form and substance to the Representative and McGuire, Woods, Battle &
Boothe, L.L.P., counsel for the Underwriters.
(9) On the Closing Date, there shall not have occurred any
decrease in the ratings of any of the debt securities of the Company or of
the Preferred Securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the 1933 Act).
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(10) On the Closing Date, the Preferred Securities shall have been
approved for listing on the New York Stock Exchange upon notice of
issuance.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representative by notice to the Offerors at any time
prior to the Closing Date, and such termination shall be without liability
of any party to any other party except as provided in Sections 4, 7 and
9(b) hereof.
SECTION 6. CONDITIONS OF THE OBLIGATION OF THE OFFERORS. The
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obligations of the Offerors shall be subject to the conditions set forth in the
first sentence of Section 5(a) and in Section 5(b). In case such conditions
shall not have been fulfilled, this Agreement may be terminated by the Company
by mailing or delivering written notice thereof to the Underwriters. Any such
termination shall be without liability of any party to any other party except as
otherwise provided in Sections 4, 7 and 9(b) hereof.
SECTION 7. INDEMNIFICATION.
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(a) The Offerors agree to jointly and severally indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 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 1933 Act, the 1934 Act or
any other statute or common law and to reimburse each such Underwriter and
controlling person for any legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred by them in connection
with investigating any such losses, claims, damages or liabilities, or in
connection with defending any actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus, or in either such document as amended or
supplemented (if any amendments or supplements thereto shall have been
furnished), or any preliminary prospectus (if and when used prior to the
effective date of the Registration Statement), or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that the
foregoing agreement, insofar as it relates to any preliminary prospectus, shall
not inure to the benefit of any Underwriter (or to the benefit of any person who
controls such Underwriter) on account of any losses, claims, damages or
liabilities arising out of the sale of any of the Preferred Securities by such
Underwriter to any person if a copy of the Prospectus (as supplemented or
amended, if the
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Offerors shall have made any supplements or amendments which have been furnished
to the Underwriters), which Prospectus cures any omission or misstatement upon
which such losses, claims, damages or liabilities are based, shall not have been
sent or given by or on behalf of such Underwriter to such person at or prior to
the written confirmation of the sale to such person; and provided, further,
however, that the indemnity agreement contained in this Section shall not apply
to any such losses, claims, damages, liabilities, expenses or actions arising
out of or based upon any such untrue statement or alleged untrue statement, or
any such omission or alleged omission, if such statement or omission was made in
reliance upon information furnished herein or otherwise in writing to the
Company by or on behalf of any Underwriter for use in the Registration Statement
or the Prospectus. The indemnity agreement of the Offerors contained in this
Section and the representations and warranties of the Offerors contained in
Section 1 hereof shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or any such
controlling person, and shall survive the delivery of the Preferred Securities.
(b) The Company agrees to indemnify the Trust against all loss, liability,
claim, damage and expense whatsoever, as due from the Trust under Section 7(a)
hereunder.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Offerors, their respective officers and directors, each other
Underwriter, and each person who controls any thereof within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 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 1933 Act, the 1934 Act, or any other
statute or common law and to reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided, reasonable counsel
fees) incurred by them in connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any actions, insofar as
such losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus, or in either
such document as amended or supplemented (if any amendments or supplements
thereof shall have been furnished), or any preliminary prospectus (if and when
used prior to the effective date of the Registration Statement), or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, if such
statement or omission was made in reliance upon information furnished herein or
in writing to the Company by or on behalf of such Underwriter for use in the
Registration Statement or the Prospectus or any amendment or supplement to
either thereof, or any preliminary prospectus. The indemnity
16
<PAGE>
agreement of the respective Underwriters contained in this Section shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Company, or any such other Underwriter or any such
controlling person, and shall survive the delivery of the Preferred Securities.
Each Underwriter represents and warrants that its commitment to buy the
Preferred Securities will not result in a violation of the financial
responsibility requirements of Rule 15c3-1 under the Securities Exchange Act.
(d) The Offerors and each of the Underwriters agree that, upon the receipt
of notice of the commencement of any action against either of the Offerors or
any of their respective officers or directors, or any person controlling either
of the Offerors, or against such Underwriter or controlling person as aforesaid,
in respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity shall be
sought hereunder, but the omission so to notify such indemnifying party or
parties of any such action shall not relieve such indemnifying party or parties
from any liability which it or they may have to the indemnified party otherwise
than on account of such indemnity agreement. In case such notice of any such
action shall be so given, such indemnifying party shall be entitled to
participate at its own expense in the defense or, if it so elects, to assume (in
conjunction with any other indemnifying parties) the defense of such action, in
which event such defense shall be conducted by counsel chosen by such
indemnifying party (or parties) and satisfactory to the indemnified party or
parties who shall be defendant or defendants in such action, and such defendant
or defendants shall bear the fees and expenses of any additional counsel
retained by them; provided that, if the defendants in any such action include
both the indemnified party and the indemnifying party (or parties) and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party (or parties),
the indemnified party shall have the right to select separate counsel to assert
such legal defenses and to participate otherwise in the defense of such action
on behalf of such indemnified party. The indemnifying party shall bear the
reasonable fees and expenses of counsel retained by the indemnified party if (i)
the indemnified party shall have retained such counsel in connection with the
assertion of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in addition to one
local counsel, if necessary, reasonably satisfactory to all parties),
representing the
17
<PAGE>
indemnified parties under (a) or (b), as the case may be, of this Section 7 who
are parties to such action), (ii) the indemnifying party shall have elected not
to assume the defense of such action, (iii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the commencement of
the action, or (iv) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
(e) If the indemnification provided for in this Section 7 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
Offerors, on the one hand, and of the Underwriters, on the other, in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations, including relative benefit. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by the Company
on the one hand or by the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this subsection (e) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(e). 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 subsection (e) 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 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
underwriting percentages determined by the ratio which the original purchase
obligation of any Underwriter (which is the number of Preferred Securities set
forth opposite their names in Schedule I hereto, or such amount increased as
18
<PAGE>
provided in Section 10 below) bears to the total number of Preferred Securities.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
-----------------------------------------------------
DELIVERY. All representations, warranties and agreements contained in this
- --------
Agreement, or contained in certificates of officers or Trustees of the Offerors
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Offerors and shall survive
delivery of the Preferred Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
------------------------
(a) The Representative may terminate this Agreement, by notice to the
Offerors, at any time at or prior to the Closing Date (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition, financial or otherwise, of the Trust or the Company, whether
or not arising in the ordinary course of business, (ii) if there has occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which is such as to make it, in the judgment of the
Representative, impracticable to market the Preferred Securities or to enforce
contracts for the sale of the Preferred Securities, (iii) if trading in the
securities of the Company or its affiliates or the Preferred Securities has been
suspended by the Commission, or if trading generally on the New York Stock
Exchange has been suspended, limited or restricted or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by said exchange or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal, New York or Delaware authorities or (iv) if there has been any decrease
in the ratings of any of the debt securities of the Company or of the Preferred
Securities by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act).
(b) If this Agreement shall be terminated by the Underwriters pursuant to
subsection (a) above or because of any failure or refusal on the part of the
Offerors to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Offerors shall be unable to perform their
obligations under this Agreement, then in any such case, the Company will
reimburse the Underwriters, severally, for all out-of-pocket expenses (in
addition to the fees and disbursements of their counsel as provided in Section
4) reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder and, upon such reimbursement, the
19
<PAGE>
Offerors shall be absolved from any further liability hereunder, except as
provided in Sections 4 and 7.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
------------------------------------------
of the Underwriters shall fail on Closing Date to purchase the Preferred
Securities that it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representative shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
Preferred Securities, each of the non-defaulting Underwriters shall be
obligated, severally and to jointly, to purchase the full amount thereof in
the proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the Preferred
Securities, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representative or the Offerors shall have the right
to postpone the Closing Date for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
SECTION 11. NOTICES. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at 3 World Financial
Center, New York, New York 10285, attention of _______________________; notices
to the Trust, and the Company shall be directed to them at One James River
Plaza, Richmond, Virginia 23219, attention of Treasurer.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and
-------
be binding upon the Underwriters and the Trust, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed
20
<PAGE>
to give any person, firm or corporation, other than the Underwriters and the
Trust and the Company and their respective successors and the controlling
persons and officers, directors and trustees referred to in Section 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Trust and the Company and
their respective successors, and said controlling persons and officers,
directors and trustees and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
----------------------
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Except as otherwise set
forth herein, specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by any one or
------------
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Trust and the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
VIRGINIA ELECTRIC AND POWER COMPANY
By:________________________________
Title:_____________________________
VIRGINIA POWER CAPITAL TRUST I
By: Virginia Electric and Power
Company, as Depositor
-----------------------------------
J. Kennerly Davis, Jr.
Vice President, Treasurer
and Corporate Secretary
21
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written
LEHMAN BROTHERS INC.
By:______________________________________
Authorized Signatory
For itself and as Representative of the other
Underwriters named in Schedule I hereto.
22
<PAGE>
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF SECURITIES
Lehman Brothers Inc.
TOTAL
<PAGE>
SCHEDULE II
Initial public offering price per
Preferred Security (and purchase
price per security to be paid by
the several Underwriters): $___________
Compensation per Preferred Security
to be paid by the Company to the
several Underwriters in respect of
their commitments: $__________ for any
Preferred Securities sold to certain
institutions; $__________ for Preferred
Securities sold to other purchasers
<PAGE>
SCHEDULE III
PROPOSED FORM OF OPINION
OF
HUNTON & WILLIAMS
Riverfront Plaza
951 East Byrd Street
Richmond, Virginia 23219
RE: VIRGINIA POWER CAPITAL TRUST I
___% Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
(Closing Date)
<PAGE>
Lehman Brothers Inc., as Representative
3 World Financial Center
New York, New York 10285
VIRGINIA POWER CAPITAL TRUST I
___% TRUST PREFERRED SECURITIES
Dear Sirs:
We have acted as counsel to Virginia Electric and Power Company (the Company)
in connection with (i) its formation of Virginia Power Capital Trust I (the
Trust), a Delaware statutory business trust, pursuant to the amended and
restated trust agreement dated as of __________ __, 1995 among the Company and
the trustees named therein (the Trust Agreement); (ii) the Trust's issuance and
sale of Preferred Securities evidencing approximately a 97% undivided interest
therein (the Preferred Securities); (iii) the Trust's issuance and sale of
Common Securities evidencing approximately a 3% undivided interest therein; (iv)
its issuance and sale to the Trust of approximately $140,000,000 of its __%
Junior Subordinated Notes (the Notes) pursuant to a Subordinated Note Indenture
dated as of _______ __, 1995, by and between the Company and Chemical Bank, as
trustee, as supplemented by the First Supplemental Indenture dated as of
__________ __,1995 (collectively, the Indenture); and (v) its issuance of a
guarantee (the Guarantee) of the Trust Securities pursuant to a guarantee
agreement dated as of ________ __, 1995 (the Guarantee Agreement) between the
Company and Chemical Bank, as trustee. The Preferred Securities are being sold
to you today pursuant to the terms of an Underwriting Agreement dated _________
__, 1995, between the Company, the Trust and you, as Representative of the
Underwriters (the "Underwriting Agreement"). This Opinion is being delivered to
you as Representative pursuant to Section 5(c)(1) thereof.
<PAGE>
In rendering the opinions expressed below, we have examined the following
documents:
1. The registration statement on Form S-3 (No. 33-_____) pertaining to the
Preferred Securities (the Registration Statement, which includes exhibits
thereto and documents incorporated by reference), filed under the Securities Act
of 1933, as amended (the Act), and the prospectus dated _________ __, 1995 filed
with the Securities and Exchange Commission on ______ __, 1995 (the Prospectus),
pursuant to which the Preferred Securities were offered and sold;
2. the Trust Agreement;
3. the Indenture;
4. the Guarantee Agreement;
5. the form of certificates evidencing the Preferred Securities and the form
of the Notes; and
6. the Underwriting Agreement.
The Trust Agreement, Indenture, Guarantee Agreement and the Underwriting
Agreement are herein referred to as the Agreements.
For purposes of the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted as certified or photostatic copies
and the authenticity of the originals of such copies, (iii) the genuineness of
signatures not witnessed by us, (iv) the legal capacity of natural persons, and
(v) the due authorization, execution and delivery of all documents by all
parties and the validity and binding effect thereof (other than the
authorization, execution and delivery of documents by the Company and the
Administrative Trustees, and the validity and binding effect upon the Company
and the Administrative Trustees.)
As to factual matters, we have relied upon representations included in the
Agreements, in documents delivered at the closing, and upon certificates of
officers of the Company, and upon certificates of public officials. Whenever
the phrases "to our knowledge" or "known to us" are used herein, it refers to
the actual knowledge
<PAGE>
of the attorneys of this firm involved in the representation of the Company.
The enforceability of the documents and instruments is subject to the
provisions of bankruptcy, insolvency, reorganization, fraudulent conveyance or
moratorium laws or laws relating to or affecting the rights of creditors
generally and principles of equity, whether considered at law or in equity.
I.
Based upon, and subject to, the foregoing and such other documents and
information as we have considered necessary for the purposes hereof, we are of
the opinion that:
1. The Company is a corporation duly organized and existing under the laws of
Virginia and is duly qualified as a foreign corporation in West Virginia and
North Carolina. Neither the nature of the Company's business nor the properties
it owns or holds under lease makes necessary qualification as a foreign
corporation in any state where it is not now so qualified.
2. The Company has the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and to enter into and perform its obligations under the Agreements.
3. The execution, delivery and performance by the Company of the Underwriting
Agreement have been duly authorized by all necessary corporate action, and the
Underwriting Agreement has been duly executed and delivered by the Company.
4. No authorization, approval, consent or order of any court or governmental
authority or agency is required in connection with the offering, issuance or
sale of the Notes, the Guarantee or the Preferred Securities, except (a) such as
may be required under the Act, (b) the qualification of the Indenture, Guarantee
Agreement and Trust Agreement under the Trust Indenture Act of 1939; (c) the
approval of the State Corporation Commission of Virginia, which approval has
been obtained and is sufficient to permit the Company to enter into the
transactions contemplated by the Agreements; and (d) such as may be required
under state securities or "Blue Sky" laws.
<PAGE>
5. Each of the Indenture, the Guarantee Agreement and the Trust Agreement has
been duly authorized, executed and delivered by the Company, and, assuming each
such agreement were, contrary to the intention stated therein, governed by
Virginia law, would constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its respective terms.
6. The Notes have been duly authorized and executed by the Company and, when
authenticated by the Trustee in the manner provided in the Indenture and
delivered against payment therefor, and assuming the Notes were, contrary to the
intention stated therein, governed by Virginia law, would constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms.
7. The Registration Statement is effective under the Act and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statements has been issued and not withdrawn, and no proceedings for that
purpose have been instituted or are pending or contemplated under the Act.
8. Each of the Indenture, the Guarantee Agreement and the Trust Agreement has
been duly qualified under the Trust Indenture Act of 1939, as amended.
9. Neither the Company nor the Trust is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
10. The statements and and legal conclusions contained in the Prospectus
under the caption "Certain Federal Income Tax Consisderations" are correct in
all material respects.
II.
We have participated in various conferences with the officers and directors of
the Company and its independent certified public accountants. In some
conferences you and your counsel also participated. At those conferences, the
contents of the Registration Statement and Prospectus were discussed and
revised. Since the dates of those conferences, we have inquired of certain
<PAGE>
officers whether there has been any material change in the affairs of the
Company.
Because of the inherent limitations in the independent verification of factual
matters and the character of determinations involved in the preparation of
registration statements under the Act, we are not passing upon, do not assume
any responsibility for and make no representation that we have independently
verified the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus, except as set forth in Paragraph
10 above. Also, we do not express any opinion or belief as to the financial
statements or other financial or statistical information contained in the
Registration Statement. However, subject to the foregoing, on the basis of our
participation in the conferences referenced above and our examination of the
documents referenced herein, we advise you that: (a) in our opinion, the
Registration Statement, when it became effective, and the Prospectus, as of its
date and as of the date hereof (other than the financial statements, schedules
and other financial data included therein or excluded therefrom, as to which we
express no opinion), comply as to form in all material respects with the
requirements of the Act and the rules and regulations promulgated thereunder;
(b) we do not know of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or required to be filed as
exhibits to the Registration Statement that are not described or filed as
required; and (c) except as set forth in the Registration Statement, we do not
know of any legal, administrative or judicial proceedings with respect to the
Company that are required to be described therein. Further, nothing has come to
our attention that leads us to believe that the Registration Statement, when it
became effective, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading; or that the Prospectus, as of its date
and as of the date hereof, contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements, in light of the
circumstances under which they were made, not misleading; except that we make no
statement with respect to the financial statements or other financial or
statistical data included therein or excluded therefrom. The foregoing assumes
that any statement contained in a document incorporated by reference shall be
deemed not to be contained in the Registration Statement or Prospectus if the
<PAGE>
statement has been modified or superseded by any statement in a subsequently
filed document incorporated by reference or in the Registration Statement or
Prospectus.
We do not purport to express an opinion on any laws other than those of the
Commonwealth of Virginia and the United States of America. This opinion letter
may not be relied upon by, nor may copies be delivered to, any person without
our prior written consent.
Yours very truly,
HUNTON & WILLIAMS
<PAGE>
SCHEDULE IV
PROPOSED FORM OF OPINION
OF
POTTER ANDERSON & CORROON
Delaware Trust Building
Wilmington, Delaware 19899
RE: VIRGINIA POWER CAPITAL TRUST I
___% Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
(Closing Date)
[name and address of
representative]
Ladies and Gentlemen:
We have acted as special Delaware counsel for Virginia Power Capital Trust
I (the Trust) in connection with the issuance by the Trust of $5,400,000
___% Trust Preferred Securities (liquidation amount $25 per preferred security)
of the Trust ("Preferred Securities") and the purchase and sale of the Preferred
Securities pursuant to the Underwriting Agreement dated _________, 1995 between
you, acting individually and as representative of the several Underwriters named
in Schedule II thereto, the Company and the Trust. The Preferred Securities will
be guaranteed by the Company with respect to the distributions and payments upon
liquidation, redemption and otherwise pursuant to the Preferred Securities
Guarantee Agreement, dated as of _________, 1995 between the Company and the
Guarantee Trustee. The entire proceeds from the sale of the
<PAGE>
Preferred Securities will be combined with the entire proceeds from the sale by
the Trust to the Company of its common securities and will be used by the Trust
to purchase $139,175,258 of ____% Junior Subordinated Notes issued by the
Company, pursuant to an indenture, dated as of ___________, 1995 (the "Base
Indenture"), as supplemented by a first supplemental indenture, dated as of
___________, 1995 (the Base Indenture, as supplemented, being referred to as the
"Indenture") between the Company and the Debt Trustee.
All capitalized terms not otherwise defined herein shall have the meanings
set forth in the Underwriting Agreement.
We have examined originals, or copies certified to our satisfaction, of
such corporate records of the Company, records of the Trust, indentures,
agreements and other instruments, certificates of public officials, certificates
of officers and representatives of the Company, the Delaware Trustee, the
Guarantee Trustee and the Debt 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 Delaware Trustee, the Guarantee Trustee, the Debt Trustee
and other appropriate persons and statements contained in the Registration
Statement.
Based upon the foregoing and subject to the assumptions, qualifications and
limitations set forth herein, we are of the opinion that:
(i) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act; all
filings required under the laws of the State of Delaware with respect
to the formation and valid existence of the Trust as a business trust
have been made; the Trust has all necessary power and authority to own
property and to conduct its business as described in the Registration
Statement and the Prospectus and to enter into and perform its
obligations under the Underwriting Agreement, the Preferred Securities
and the Common Securities; and the Trust is not a party to or
otherwise bound by any agreement other than those which are exhibits
(or included in exhibits) to the Registration.
-2-
<PAGE>
(ii) Assuming that the Trust Agreement has been duly
authorized, executed and delivered by the Company and the Trustees,
the Trust Agreement is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
as enforcement thereof may be limited by the Bankruptcy Exceptions.
(iii) The Common Securities have been duly authorized by the
Trust Agreement and, when issued and delivered by the Trust to the
Company against payment therefor as described in the Registration
Statement and the Prospectus, will be validly issued and (subject to
the terms of the Trust Agreement) fully paid and non-assessable
beneficial interests in the assets of the Trust, and the issuance of
the Common Securities is not subject to preemptive or other similar
rights.
(iv) The Preferred Securities have been duly authorized by
the Trust Agreement and (subject to the terms of the Trust Agreement),
when delivered to and paid for by the Underwriters pursuant to the
Underwriting Agreement, will be validly issued, fully paid and non-
assessable beneficial interests in the assets of the Trust; the
holders of the Preferred Securities will (subject to the terms of the
Trust Agreement) be entitled to the same limitation of personal
liability under Delaware law as is extended to stockholders of private
corporations for profit organized under the general corporation law of
the State of Delaware; and the issuance of the Preferred Securities is
not subject to preemptive or other similar rights.
(v) To the best of our knowledge, all of the issued and
outstanding Common Securities of the Trust are directly owned by the
Company, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equitable right.
(vi) The Underwriting Agreement has been duly authorized,
executed and delivered by the Trust.
(vii) The execution, delivery and performance of the
Underwriting Agreement, the Trust Agreement, the Preferred Securities
and the Common Securities; the consummation of the transactions
contemplated therein; and the compliance by the Trust with its
obligations thereunder do not and will not result in any violation of
the Trust Agreement or related Certificate of Trust, and do not and
will not conflict with, or result in, a breach of any of the terms or
provisions of, or
-3-
<PAGE>
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Trust under (A) any contract, indenture, mortgage, loan agreement,
note, lease or any other agreement or instrument known to us to which
the Trust is a party or by which it may be bound or to which any of
its properties may be subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or otherwise), of
the Trust, (B) any existing applicable law, rule or regulation of the
State of Delaware (other than the securities or blue sky laws of the
State of Delaware, as to which we express no opinion) or (C) any
judgment, order or decree known to us of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body
or administrative agency or other governmental body having
jurisdiction over the Trust or any of its properties.
The foregoing opinions are subject to the following assumptions,
exceptions and qualifications:
A. The foregoing opinions are limited to the laws of the State of Delaware
(other than the securities laws and blue sky laws of the State of Delaware)
presently in effect, and we have not considered, and we express no opinion on,
the laws of any other jurisdiction, including federal laws and rules and
regulations relating thereto.
B. We have assumed that all signatures on documents and instruments
examined by us are genuine, that all documents and instruments submitted to us
as originals are authentic, and that all documents and instruments submitted to
us as copies conform with the originals, which facts we have not independently
verified.
This opinion is rendered solely for your benefit and may not be furnished
or quoted to or relied upon by any other person or entity without our prior
written consent, except that the law firms of Hunton & Williams and McGuire,
Woods, Battle & Boothe may rely on this opinion in connection with the rendering
by such firms of their opinions in connection with the rendering by such firms
of their opinions of even date herewith with respect to the captioned matter.
Very truly yours,
POTTER ANDERSON & CORROON
-4-
<PAGE>
SCHEDULE V
PROPOSED FORM OF OPINION
OF
RICHARDS, LAYTON & FINGER
(Address)
RE: VIRGINIA POWER CAPITAL TRUST I
___% Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
(Closing Date)
Lehman Brothers Inc.,
as Representative
3 World Trade Center
New York, New York 10285
Dear Sirs:
We have acted as counsel to Chemical Bank Delaware (the "Bank") in
connection with the Amended and Restated Trust Agreement, dated as of August
___, 1995 (the "Trust Agreement") among Virginia Electric and Power Company and
the Trustees named therein.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, records and other
instruments as we have deemed necessary or appropriate for the purpose of this
opinion, including copies of the Trust Agreement and certain resolutions adopted
by the Board of Directors of the Bank.
<PAGE>
Lehman Brothers Inc.
________, 1995
Page 2
Based upon the foregoing, we are of the opinion that:
i) the Bank has been duly incorporated and is validly existing as a
banking corporation in good standing under the laws of the State of
Delaware;
ii) the Bank has the corporate trust power and authority to execute,
deliver and perform its duties under the Trust Agreement, has duly executed
and delivered the Trust Agreement, and, insofar as the laws governing the
trust powers of the Bank are concerned and assuming due authorization,
execution and delivery thereof by the Company and the trustees other than
the Bank, the Trust Agreement constitutes a legal, valid and binding
agreement of the Bank, enforceable against the Bank in accordance with its
terms (subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject, as to enforceability, to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law).
iii) the execution, delivery and performance by the Bank of the Trust
Agreement do not conflict with or constitute a breach of the charter or
bylaws of the Bank.
iv) no approval, authorization or other action by, or filing with, any
governmental authority of the United States of America or the State of
Delaware having jurisdiction over the trust powers of the Bank is required
in connection with the execution and delivery by the Bank of the Trust
Agreement or the performance by the Bank of its duties thereunder, except
such as have been obtained, taken or made.
<PAGE>
Lehman Brothers Inc.
________, 1995
Page 3
We are admitted to practice in the State of Delaware, and we express no
opinion as to matters governed by any laws other than the laws of the State of
Delaware and the Federal law of the United States of America. We are furnishing
this opinion to you solely for your benefit. This opinion is not to be used,
circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER
<PAGE>
SCHEDULE VI
PROPOSED FORM OF OPINION
OF
CRAVATH, SWAINE & MOORE
Worldwide Plaza
825 8th Avenue
New York, New York 10019
RE: VIRGINIA POWER CAPITAL TRUST I
___% Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
(Closing Date)
Lehman Brothers Inc.,
as Representative
3 World Trade Center
New York, New York 10285
Dear Sirs:
We have acted as counsel to Chemical Bank (the "Bank") in connection with
(a) the Subordinated Note Indenture, dated as of August ___, 1995 (the "Original
Indenture"), between Virginia Electric and Power Company (the "Company") and the
Bank, as Trustee, (b) the First Supplemental Indenture dated as of August ___,
1995 (together with the Original Indenture, herein called the "Indenture"),
between the Company and the Bank, as Trustee, (c) the Guarantee Agreement dated
as of August ___, 1995 (the "Guarantee Agreement"), between the Company, as
Guarantor and the Bank, as Trustee, and (d) the Amended and Restated Trust
Agreement, dated as of August ___, 1995 (the "Trust Agreement") among the
Company, the Bank, as Property Trustee, Chemical Bank Delaware, as Delaware
Trustee, and J. Kennerly Davis, Jr. and James P. Carney, as Administrative
Trustees.
<PAGE>
Lehman Brothers Inc.
________, 1995
Page 2
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, records and other
instruments as we have deemed necessary or appropriate for the purpose of this
opinion, including copies of the Indenture, the Trust Agreement, the Guarantee
Agreement and certain resolutions adopted by the Board of Directors of the Bank.
Based upon the foregoing, we are of the opinion that:
i) the Bank has been duly incorporated and is validly existing as a
banking corporation in good standing under the laws of the State of New
York;
ii) the Bank has the corporate trust power and authority to execute,
deliver and perform its duties under the Indenture, the Trust Agreement and
the Guarantee Agreement, has duly executed and delivered the Indenture, the
Trust Agreement and the Guarantee Agreement, and, insofar as the laws
governing the trust powers of the Bank are concerned and assuming due
authorization, execution and delivery thereof by the Company, each of the
Indenture, the Trust Agreement and the Guarantee Agreement constitutes a
legal, valid and binding agreement of the Bank, enforceable against the
Bank in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
subject, as to enforceability, to general principles of equity, regardless
of whether such enforceability is considered in a proceeding in equity or
at law).
iii) the execution, delivery and performance by the Bank of the
Indenture, the Trust Agreement and the Guarantee Agreement do not conflict
with or constitute a breach of the charter or bylaws of the Bank.
iv) no approval, authorization or other action by, or filing with, any
governmental authority of the United States of America or the State of New
York having jurisdiction over the trust powers of the Bank is required in
connection with the execution and delivery by the Bank of the Indenture,
the Trust Agreement or the Guarantee Agreement or the performance by the
Bank of its duties thereunder, except such as have been obtained, taken or
made.
<PAGE>
Lehman Brothers Inc.
________, 1995
Page 3
We are admitted to practice in the State of New York, and we express no
opinion as to matters governed by any laws other than the laws of the State of
New York and the Federal law of the United States of America. We are furnishing
this opinion to you solely for your benefit. This opinion is not to be used,
circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
CRAVATH, SWAINE & MOORE
<PAGE>
SCHEDULE VII
PROPOSED FORM OF OPINION
OF
MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
One James Center
Richmond, Virginia 23219
RE: VIRGINIA POWER CAPITAL TRUST I
___% Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
(Closing Date)
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285-1600
Ladies and Gentlemen:
We have acted as counsel for the several underwriters (the "Underwriters")
named in the Underwriting Agreement dated ________, 1995 (the "Underwriting
Agreement") with Virginia Electric and Power Company (the "Company") and
Virginia Power Capital Trust I (the "Trust"), in connection with the purchase by
the several Underwriters of 5,400,000 units of preferred undivided beneficial
interest in the Trust (the "Preferred Securities") and related undivided
interests in the Preferred Securities Guarantee and the Junior Subordinated
Notes, all of which have been registered pursuant to the Company's registration
statement on Form S-3 (No. _______ ). All terms not otherwise defined herein
shall have the meanings set forth in the Underwriting Agreement.
<PAGE>
Lehman Brothers Inc.
__________, 1995
Page 2
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials, certificates of officers and representatives of the Company and of
the Property Trustee, the Delaware Trustee, the Guarantee Trustee, the Debt
Trustee and the Administrative Trustees (collectively, the "Trustees"), and
other instruments as we deemed necessary or advisable for the purpose of
rendering this opinion. 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 Trustees and other
appropriate persons and statements contained in the Registration Statement
hereinafter mentioned.
We have also participated in the preparation of the Company's registration
statement on Form S-3 (No. _______) (other than the documents incorporated by
reference in the prospectus included therein (the "Incorporated Documents")),
filed by the Company with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the "Act").
Although we did not participate in the preparation of the Incorporated
Documents, we have reviewed such documents. In addition, we have reviewed the
order of the Commission that declared the Registration Statement effective under
the Act on ______, 1995. The registration statement (including the Incorporated
Documents and the information deemed to be part of the registration statement at
that time pursuant to Rule 430A of the Commission's rules and regulations under
the Act), is hereinafter referred to as the "Registration Statement," and the
final prospectus dated ______, 1995 in the form filed with the Commission
pursuant to Rule 424(b) of its rules and regulations under the Act is
hereinafter referred to as the "Prospectus."
On the basis of the foregoing, we are of the opinion that:
A. The Company is a corporation duly incorporated and existing under the
laws of Virginia and is duly qualified as a foreign corporation in West Virginia
and North Carolina, and has corporate power to transact its business as
described in the Prospectus.
B. The Trust is a statutory business trust duly created and existing
under the laws of Delaware.
C. The Underwriting Agreement has been duly authorized by all necessary
corporate action and has been duly executed and delivered by the Company.
<PAGE>
Lehman Brothers Inc.
__________, 1995
Page 3
D. The Indenture has been duly authorized, executed and delivered by, and,
assuming such Indenture were, contrary to the intention stated therein, governed
by Virginia law, would constitute a valid and binding obligation of, the Company
and has been duly qualified under the 1939 Act, except that we express no
opinion as to the validity or enforceability of any covenant to pay interest on
defaulted interest and except that the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally from time to time in force and general
principles of equity.
E. The Trust Agreement has been duly authorized, executed and delivered by,
and, assuming such agreement were, contrary to the intention stated therein,
governed by Virginia law, would constitute a valid and binding obligation of,
the Company and has been duly qualified under the 1939 Act, except that the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally from time
to time in force and general principles of equity.
F. The Guarantee Agreement has been duly authorized, executed and delivered
by, and, assuming such agreement were, contrary to the intention stated therein,
governed by Virginia law, woudl constitute a valid and binding obligation of,
the Company and has been duly qualified under the 1939 Act, except that the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally from time
to time in force and general principles of equity.
G. The Junior Subordinated Notes have been duly authorized by the Company
and, when executed by the Company and completed and authenticated by the Debt
Trustee in accordance with the Indenture and delivered and paid for as described
in the Prospectus, 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 that the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally from time to time in force and general
principles of equity.
H. The Preferred Securities have been duly authorized by the Trust
Agreement and, when issued and delivered by the Trust against payment of the
consideration set forth in the Underwriting Agreement will have been duly
issued.
I. The Registration Statement has become effective and remains in effect
at this date, and the Prospectus in the form filed as part of the Registration
Statement, including all Incorporated Documents constituting a part thereof, may
lawfully be used for the purposes specified in the Securities Act in
<PAGE>
Lehman Brothers Inc.
__________, 1995
Page 4
connection with the offer for sale and the sale of Notes in the manner therein
specified.
The Registration Statement and the Prospectus (except the financial
statements incorporated by reference therein, as to which we express no opinion)
appear on their face to 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.
We have participated in conferences with counsel for and representatives of
the Company in connection with the preparation of the Registration Statement and
the Prospectus, and we have reviewed all Incorporated Documents and such of the
corporate records of the Company as we deemed advisable. As to the statistical
statements in the Registration Statement (which includes the Incorporated
Documents), we have relied solely on the officers of the Company. As to other
matters, we have not undertaken to determine independently the accuracy or
completeness of the statements contained or incorporated by reference in the
Registration Statement or in the Prospectus. None of the foregoing disclosed to
us any information which gives us reason to believe that the Registration
Statement or the Prospectus contained (except the financial statements
incorporated by reference therein, as to which we express no opinion) on the
date the Registration Statement became effective or now contains any untrue
statement of a material fact or omitted on said date or now omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The foregoing opinion is given on the basis that any
statement contained in an Incorporated Document shall be deemed not to be
contained in the Registration Statement or Prospectus if the statement has been
modified or superseded by any statement in a subsequently filed Incorporated
Document or in the Registration Statement or Prospectus.
J. An appropriate order of the Virginia Commission with respect to the
transactions contemplated by the Underwriting Agreement has been issued, and
said order remains in effect at this date and constitutes valid and sufficient
authorization for the sale of the Preferred Securities as contemplated by the
Underwriting Agreement.
We are members of the Bar of the Commonwealth of Virginia only and we
express no opinion as to any matters governed by any law other than the law of
the Commonwealth of Virginia and the federal law of the United States of
America. To the extent that
<PAGE>
Lehman Brothers Inc.
__________, 1995
Page 5
the foregoing opinions involve matters governed by the laws of (i) Delaware and
(ii) North Carolina and West Virginia, we have relied upon the opinions of
Messrs. Potter, Anderson & Corroon and Messrs. Hunton & Williams, respectively,
concurrently delivered to you and we believe that you are justified in relying
thereon.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Very truly yours,
MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
<PAGE>
Exhibit 4(a)
------------
============================================================================
VIRGINIA ELECTRIC AND POWER COMPANY
TO
CHEMICAL BANK
Trustee
-------------------
SUBORDINATED NOTE INDENTURE
Dated as of ________ ___, 1995
-------------------
============================================================================
<PAGE>
VIRGINIA ELECTRIC AND POWER COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
SUBORDINATED NOTE INDENTURE, DATED AS OF ______ ___, 1995
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(S) 310(a)(1)............................................. 609
(a)(2)............................................. 609
(a)(3)............................................. Not Applicable
(a)(4)............................................. Not Applicable
(b)................................................ 608
610
(S) 311(b)(4)............................................. 613(a)
(b)(6)............................................. 613(b)
(S) 312(a)................................................ 701
702(a)
(c)................................................ 702(b)
(S) 313(a)................................................ 703(a)
(b)................................................ 703(b)
(c)................................................ 703(c)
704
(d)................................................ 703(c)
(S) 314(a)................................................ 704
(b)................................................ Not Applicable
(c)(1)............................................. 102
(c)(2)............................................. 102
(c)(3)............................................. Not Applicable
(d)................................................ Not Applicable
(e)................................................ 102
(S) 315(a)................................................ 601(a)
(b)................................................ 602
(c)................................................ 601(b)
(d)................................................ 601(c)
(d)(1)............................................. 601(a)(1)
(d)(2)............................................. 601(c)(2)
(d)(3)............................................. 601(c)(3)
(e)................................................ 514
(S) 316(a)................................................ 101
(a)(1)(A).......................................... 502
512
(a)(1)(B).......................................... 513
(a)(2)............................................. Not Applicable
(b)................................................ 508
(S) 317(a)(1)............................................. 503
(a)(2)............................................. 504
(b)................................................ 1003
(S) 318(a)................................................ 108
<PAGE>
TABLE OF CONTENTS
----------
PAGE
Parties.................................................................. 1
Recitals of the Company.................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions................................................ 2
Act....................................................... 2
Additional Interest....................................... 2
Affiliate................................................. 2
Authenticating Agent...................................... 3
Board of Directors........................................ 3
Board Resolution.......................................... 3
Business Day.............................................. 3
Certificate of a Firm of Independent Public Accountants... 3
Commission................................................ 3
Company................................................... 3
Company Request........................................... 3
Corporate Trust Office.................................... 3
corporation............................................... 3
Defaulted Interest........................................ 3
Depositary................................................ 3
Event of Default.......................................... 3
Global Security........................................... 4
Government Obligations.................................... 4
Guarantee................................................. 4
Holder.................................................... 4
Indenture................................................. 4
Interest Payment Date..................................... 4
Junior Subordinated Note.................................. 4
Maturity.................................................. 4
Officers' Certificate..................................... 4
Opinion of Counsel........................................ 4
Outstanding............................................... 4
Paying Agent.............................................. 5
Person.................................................... 5
Predecessor Security...................................... 5
Property Trustee.......................................... 5
Redemption Date........................................... 5
Redemption Price.......................................... 5
Responsible Officer....................................... 6
Securities Trust.......................................... 6
Security Register......................................... 6
Senior Indebtedness....................................... 6
i
<PAGE>
PAGE
Special Record Date...................................... 6
Stated Maturity.......................................... 6
Trust Agreement.......................................... 6
Trust Indenture Act...................................... 6
Trust Securities......................................... 7
Trustee.................................................. 7
Vice President........................................... 7
Section 102. Compliance Certificates and Opinions...................... 7
Section 103. Form of Documents Delivered to Trustee.................... 7
Section 104. Acts of Holders........................................... 8
Section 105. Notices, Etc., to Trustee and Company..................... 9
Section 106. Notice to Holders of Junior Subordinated Notes; Waiver.... 9
Section 107. Language of Notices, etc.................................. 9
Section 108. Conflict with Trust Indenture Act......................... 9
Section 109. Effect of Headings and Table of Contents.................. 9
Section 110. Successors and Assigns.................................... 10
Section 111. Separability Clause....................................... 10
Section 112. Benefits of Indenture..................................... 10
Section 113. Governing Law............................................. 10
Section 114. Legal Holidays............................................ 10
Section 115. Appointment of Agent for Service.......................... 10
ARTICLE TWO
FORMS OF JUNIOR SUBORDINATED NOTES
Section 201. Forms Generally........................................... 12
Section 202. Form of Trustee's Certificate of Authentication........... 12
Section 203. Junior Subordinated Notes Issuable in the Form of a Global
Security.................................................. 12
ARTICLE THREE
THE JUNIOR SUBORDINATED NOTES
Section 301. Amount Unlimited; Issuable in Series...................... 14
Section 302. Execution, Authentication, Delivery and Dating............ 15
Section 303. Registration, Registration of Transfer and Exchange....... 17
Section 304. Mutilated, Destroyed, Lost and Stolen Junior Subordinated
Notes..................................................... 18
Section 305. Payment of Interest; Interest Rights Preserved............ 18
Section 306. Persons Deemed Owners..................................... 19
Section 307. Cancellation.............................................. 19
Section 308. Computation of Interest................................... 20
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture................... 21
Section 402. Application of Trust Money................................ 22
ii
<PAGE>
PAGE
ARTICLE FIVE
REMEDIES
Section 501. Events of Default......................................... 23
Section 502. Acceleration of Maturity; Rescission and Annulment........ 24
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee................................................... 25
Section 504. Trustee May File Proofs of Claim.......................... 25
Section 505. Trustee May Enforce Claims Without Possession of Junior
Subordinated Notes........................................ 26
Section 506. Application of Money Collected............................ 26
Section 507. Limitation on Suits....................................... 27
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest...................................... 27
Section 509. Restoration of Rights and Remedies........................ 27
Section 510. Rights and Remedies Cumulative............................ 28
Section 511. Delay or Omission Not Waiver.............................. 28
Section 512. Control by Holders of Junior Subordinated Notes........... 28
Section 513. Waiver of Past Defaults................................... 28
Section 514. Undertaking for Costs..................................... 29
Section 515. Waiver of Stay or Extension Laws.......................... 29
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities....................... 30
Section 602. Notice of Defaults........................................ 31
Section 603. Certain Rights of Trustee................................. 31
Section 604. Not Responsible for Recitals of Issuance of Junior
Subordinated Notes........................................ 32
Section 605. May Hold Junior Subordinated Notes........................ 32
Section 606. Money Held in Trust....................................... 32
Section 607. Compensation and Reimbursement............................ 32
Section 608. Disqualification; Conflicting Interests................... 33
Section 609. Corporate Trustee Required; Eligibility................... 33
Section 610. Resignation and Removal; Appointment of Successor......... 33
Section 611. Acceptance of Appointment by Successor.................... 35
Section 612. Merger, Conversion, Consolidation or Succession to
Business.................................................. 35
Section 613. Preferential Collection of Claims Against Company......... 36
Section 614. Appointment of Authenticating Agent....................... 36
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders. 38
Section 702. Preservation of Information; Communications to Holders.... 38
Section 703. Reports by Trustee........................................ 38
Section 704. Reports by Company........................................ 39
iii
<PAGE>
PAGE
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms...... 40
Section 802. Successor Corporation Substituted......................... 40
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders........ 41
Section 902. Supplemental Indentures with Consent of Holders........... 42
Section 903. General Provisions Regarding Supplemental Indenture....... 42
Section 904. Execution of Supplemental Indentures...................... 43
Section 905. Effect of Supplemental Indentures......................... 43
Section 906. Conformity with Trust Indenture Act....................... 43
Section 907. Reference in Junior Subordinated Notes to Supplemental
Indentures................................................ 43
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal and Interest......................... 44
Section 1002. Maintenance of Office or Agency........................... 44
Section 1003. Money for Junior Subordinated Notes Payments to Be Held
in Trust.................................................. 44
Section 1004. Additional Amounts........................................ 45
Section 1005. Corporate Existence....................................... 46
Section 1006. Limitations on Dividend and Certain Other Payments........ 46
Section 1007. Statement as to Compliance................................ 46
Section 1008. Waiver of Certain Covenants............................... 47
Section 1009. Defeasance of Certain Obligations......................... 47
ARTICLE ELEVEN
REDEMPTION OF JUNIOR SUBORDINATED NOTES
Section 1101. Applicability of Article.................................. 49
Section 1102. Election to Redeem; Notice to Trustee..................... 49
Section 1103. Selection by Trustee of Junior Subordinated Notes to Be
Redeemed.................................................. 49
Section 1104. Notice of Redemption...................................... 49
Section 1105. Deposit of Redemption Price............................... 50
Section 1106. Junior Subordinated Notes Payable on Redemption Date...... 50
Section 1107. Junior Subordinated Notes Redeemed in Part................ 51
iv
<PAGE>
PAGE
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.................................. 52
Section 1202. Satisfaction of Sinking Fund Payments with Junior
Subordinated Notes........................................ 52
Section 1203. Redemption of Junior Subordinated Notes for Sinking Fund.. 52
ARTICLE THIRTEEN
SUBORDINATION
Section 1301. Junior Subordinated Notes Subordinate to Senior
Indebtedness.............................................. 53
Section 1302. Payment of Proceeds Upon Dissolution, Etc................. 53
Section 1303. No Payment When Senior Indebtedness In Default............ 54
Section 1304. Payment Permitted If No Default........................... 54
Section 1305. Subrogation To Rights of Holders of Senior Indebtedness... 54
Section 1306. Provisions Solely To Define Relative Rights............... 55
Section 1307. Trustee To Effectuate Subordination....................... 55
Section 1308. No Waiver of Subordination Provisions..................... 55
Section 1309. Trust Moneys Not Subordinated............................. 56
Section 1310. Notice to the Trustee..................................... 56
Section 1311. Reliance On Judicial Order or Certificate of Liquidating
Agent..................................................... 56
Section 1312. Trustee Not Fiduciary For Holders of Senior Indebtedness.. 57
Section 1313. Rights of Trustee As Holder of Senior Indebtedness;
Preservation Of Trustee's Rights.......................... 57
Section 1314. Article Applicable To Paying Agents....................... 57
Section 1315. Reliance by Holders of Senior Indebtedness on
Subordination Provisions.................................. 57
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
Section 1401. No Recourse Against Others................................ 58
Section 1402. Set-Off................................................... 58
Section 1403. Assignment; Binding Effect................................ 58
Section 1404. Additional Interest....................................... 58
v
<PAGE>
SUBORDINATED NOTE INDENTURE, dated as of _____ ___, 1995, between VIRGINIA
ELECTRIC AND POWER COMPANY, a public service corporation duly organized and
existing under the laws of the Commonwealth of Virginia (herein called the
"Company"), having its principal office at One James River Plaza, Richmond,
Virginia 23219, and CHEMICAL BANK, a banking corporation duly organized and
existing under the laws of the State of New York, having its principal corporate
trust office at 450 West 33rd Street, New York, New York 10001, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Subordinated Note Indenture to provide for the issuance from time to time of its
unsecured subordinated debentures, notes or other evidences of indebtedness
(herein called the Junior Subordinated Notes), to be issued in one or more
series as in this Subordinated Note Indenture provided.
All things necessary to make this Subordinated Note Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS SUBORDINATED NOTE INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Junior
Subordinated Notes by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Junior
Subordinated Notes or of series thereof, as follows:
1
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Subordinated Note Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United States
of America at the date of such computation;
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Subordinated Note Indenture as a whole and not
to any particular Article, Section or other subdivision; and
(5) Trust Securities related to a particular series of Junior
Subordinated Notes means the common and preferred securities issued by a
Securities Trust that is the purchaser of the series of Junior Subordinated
Notes. Trust Securities related to a particular series of Junior
Subordinated Notes means the series of Trust Securities the proceeds of the
sale of which were loaned to the Company in exchange for such series of
Junior Subordinated Notes, and the guarantee related to such series of
Trust Securities means the guarantee pursuant to which the Company has
guaranteed, to the extent stated therein, the payment of distributions and
certain other amounts with respect to such series of Trust Securities.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder of a Junior Subordinated Note,
has the meaning specified in Section 104.
"Additional Interest" means (i) such additional amounts as may be required
so that the net amounts received and retained by the Holder (if the Holder is a
Securities Trust) after paying taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States or any other taxing authority will not be less than the amounts the
Holder would have received had no such taxes, duties, assessments, or other
governmental charges been imposed; and (ii) Deferred Interest, as the same may
be defined in a supplemental indenture relating to a series of Junior
Subordinated Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
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and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. Notwithstanding the foregoing, any Securities Trust organized by the
Company shall not be deemed to be an Affiliate of the Company.
"Authenticating Agent" means any Person or Persons authorized by the
Trustee to act on behalf of the Trustee to authenticate one or more series of
Junior Subordinated Notes.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of the officers and/or directors of the Company
appointed by that board.
"Board Resolution" means a copy of a resolution certified by the Corporate
Secretary or an Assistant Corporate Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, and delivered to the Trustee.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a
day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Trustee's Corporate
Trust Office or Property Trustee's principal corporate trust office is closed
for business.
"Certificate of a Firm of Independent Public Accountants" means a
certificate signed by an independent public accountant or a firm of independent
public accountants who may be the independent public accountants regularly
retained by the Company or who may be other independent public accountants.
Such accountant or firm shall be entitled to rely upon an Opinion of Counsel as
to the interpretation of any legal matters relating to such certificate.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Subordinated Note Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller,
an Assistant Controller, its Corporate Secretary or an Assistant Corporate
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in the Borough of
Manhattan, New York City, at which at any particular time its corporate trust
business shall be principally administered, which office at the date of
execution of this Subordinated Note Indenture is located at 450 West 33rd
Street, New York, New York 10001.
"corporation" includes corporations, associations, companies and business
trusts.
"Defaulted Interest" has the meaning specified in Section 305.
"Depositary" means, unless otherwise specified by the Company pursuant to
either Section 203 or 301, with respect to Junior Subordinated Notes of any
series issuable or issued as a Global Security, The Depository Trust Company,
New York, New York, or any successor thereto registered as a clearing agency
under the Securities and Exchange Act of 1934, as amended, or other applicable
statute or regulation.
"Event of Default" has the meaning specified in Section 501.
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"Global Security" means with respect to any series of Junior Subordinated
Notes issued hereunder, a Junior Subordinated Note that is executed by the
Company and authenticated and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with Section 203 of
this Indenture and any indenture supplemental hereto.
"Government Obligations" means securities that are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of or other amount with respect to any such Government Obligation
held by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of such Government
Obligation or the specific payment of interest on or principal of or other
amount with respect to such Government Obligation evidenced by such depository
receipt.
"Guarantee" means a Guarantee Agreement, if any, executed and delivered by
the Company for the benefit of the holders from time to time of all or a portion
of the Trust Securities of a Securities Trust.
"Holder", when used with respect to any Junior Subordinated Note, means the
Person in whose name the Junior Subordinated Note is registered in the Security
Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of particular series of Junior Subordinated Notes established
as contemplated by Section 301.
"Interest Payment Date", when used with respect to any series of Junior
Subordinated Notes, means the dates established for the payment of interest
thereon, as provided in the supplemental indenture for such series.
"Junior Subordinated Note" has the meaning stated in the first recital of
this Indenture and more particularly means any Junior Subordinated Notes
authenticated and delivered under this Indenture.
"Maturity", when used with respect to any Junior Subordinated Note, means
the date on which the principal of such Junior Subordinated Note or an
installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Corporate Secretary or
an Assistant Corporate Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Junior Subordinated Notes, means,
as of the date of determination, all Junior Subordinated Notes theretofore
authenticated and delivered under this Indenture, except:
(i) Junior Subordinated Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
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(ii) Junior Subordinated Notes for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company or pursuant to a defeasance in
accordance with Section 1009) in trust or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Junior Subordinated Notes; provided that if such Junior
Subordinated Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
(iii) Junior Subordinated Notes that have been paid or in exchange for
or in lieu of which other Junior Subordinated Notes have been authenticated
and delivered pursuant to this Indenture, other than any such Junior
Subordinated Notes in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Junior Subordinated Notes
are held by a bona fide purchaser in whose hands such Junior Subordinated
Notes are valid obligations of the Company; and
(iv) Junior Subordinated Notes, or portions thereof, converted into or
exchanged for another security if the terms of such Junior Subordinated
Notes provide for such conversion or exchange;
provided, however, that in determining, during any period in which any Junior
Subordinated Notes of a series are owned by any Person other than the Company or
any Affiliate thereof, whether the Holders of the requisite principal amount of
Outstanding Junior Subordinated Notes of such series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Junior
Subordinated Notes of such series owned by the Company or any Affiliate thereof
shall be disregarded and deemed not to be Outstanding. In determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Junior Subordinated
Notes that the Trustee knows to be so owned by the Company or an Affiliate of
the Company in the above circumstances shall be so disregarded. Junior
Subordinated Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Junior Subordinated Notes and
that the pledgee is not the Company or any Affiliate of the Company.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Junior Subordinated Notes
on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Junior Subordinated Note means
every previous Junior Subordinated Note evidencing all or a portion of the same
debt as that evidenced by such particular Junior Subordinated Note; and, for the
purposes of this definition, any Junior Subordinated Note authenticated and
delivered under Section 304 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Junior Subordinated Note shall be deemed to evidence
the same debt as the mutilated, destroyed, lost or stolen Junior Subordinated
Note.
"Property Trustee", when used with respect to the Junior Subordinated Notes
of any series, means the Person designated as such in the related Trust
Agreement.
"Redemption Date", when used with respect to any Junior Subordinated Note
to be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Junior Subordinated Note
to be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
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"Regular Record Date" for the interest payable on any Interest Payment Date
on the Junior Subordinated Notes of any series means the date specified for that
purpose as contemplated by Section 301, whether or not a Business Day.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any senior trust officer, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Securities Trust" means any statutory business trust formed by the Company
or an Affiliate to issue Trust Securities, the proceeds of which will be used to
purchase Junior Subordinated Notes of one or more series.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 304.
"Senior Indebtedness" means, with respect to the Company, (i) any payment
due in respect of (a) indebtedness of the Company for money borrowed (including
any financial derivative, hedging or futures contract or similar instrument) and
(b) indebtedness evidenced by securities, debentures, bonds, notes or other
similar instruments issued by the Company which, by their terms, are senior or
senior subordinated debt securities including, without limitation, all
obligations under its indentures with various trustees; (ii) all capital lease
obligations; (iii) all obligations issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations of the
Company under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business and long-term purchase
obligations); (iv) all obligations for the reimbursement of any letter of
credit, banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the type referred to in clauses (i) through
(iv) above of other persons the payment of which the Company is responsible or
liable as obligor, guarantor or otherwise; and (vi) all obligations of the type
referred to in clauses (i) through (v) above of other persons secured by any
lien on any property or asset of the Company (whether or not such obligation is
assumed by the Company), except for (1) any such indebtedness that is by its
terms subordinated to or pari passu with the Junior Subordinated Notes and (2)
any unsecured indebtedness between or among the Company or its Affiliates. Such
Senior Indebtedness shall continue to be entitled to the benefits of the
subordination provisions contained in Article Thirteen irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
"Special Record Date" for the payment of any Defaulted Interest on the
Junior Subordinated Notes of any series means a date fixed by the Trustee
pursuant to Section 305.
"Stated Maturity", when used with respect to any Junior Subordinated Note,
means the date specified in such Junior Subordinated Note as the final date on
which the principal of such Junior Subordinated Note is due and payable.
"Trust Agreement", when used with respect to a Securities Trust, means the
agreement or instrument that governs the affairs of such Securities Trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Trust Indenture Act or provision, as the case may be, as
amended or replaced from time to time.
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"Trust Securities" means the securities issued by a Securities Trust
evidencing the entire beneficial interest therein.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such with respect to
one or more series of Junior Subordinated Notes pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Junior Subordinated
Notes of any series shall mean the Trustee with respect to Junior Subordinated
Notes of that series.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent, shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
(c) The principal amount and serial numbers of Junior Subordinated Notes
held by any Person, and the date of holding the same, shall be proved by the
Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Junior Subordinated Note
shall bind every future Holder of the same Junior Subordinated Note and the
Holder of every Junior Subordinated Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Junior Subordinated Note.
(e) The fact and date of execution of any such instrument or writing and
the authority of the Person executing the same may also be proved in any other
manner which the Trustee deems sufficient; and the Trustee may in any instance
require further proof with respect to any of the matters referred to in this
Section.
(f) If the Company shall solicit from the Holders of Junior Subordinated
Notes of any series any Act, the Company may, at its option, by Board
Resolution, fix in advance a record date for the determination of Holders of
Junior Subordinated Notes entitled to take such Act, but the Company shall have
no obligation to do so. Any such record date shall be fixed at the Company's
discretion. If such a record date is fixed, such Act may be sought or given
before or after the record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders of Junior
Subordinated Notes for the purpose of determining whether Holders of the
requisite proportion of Junior Subordinated Notes of such series Outstanding
have authorized or agreed or consented
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to such Act, and for that purpose the Junior Subordinated Notes of such
series Outstanding shall be computed as of such record date.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, election,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder of a Junior Subordinated Note or by the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trustee Administration Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to the attention of its Corporate Secretary, at One James River
Plaza, Richmond, Virginia 23219, or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS OF JUNIOR SUBORDINATED NOTES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Junior Subordinated Notes of any event, such
notice shall be sufficiently given if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at his address as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such Notice.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder. In any case where notice
to Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Junior Subordinated Notes shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 107. LANGUAGE OF NOTICES, ETC.
Any request, demand, authorization, direction, notice, consent, election or
waiver required or permitted under this Indenture shall be in the English
language.
SECTION 108. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required to be a part of and govern this
Indenture, such required provision shall control.
SECTION 109. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
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SECTION 110. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 111. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Junior Subordinated
Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 112. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Junior Subordinated Notes, express or
implied, shall give to any Person, other than the parties hereto, their
successors hereunder and the Holders of Junior Subordinated Notes and, to
the extent provided in Section 1403, the holders of Senior Indebtedness or
Trust Securities, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 113. GOVERNING LAW.
This Indenture and the Junior Subordinated Notes shall be governed by,
and construed in accordance with, the internal laws of the State of New
York.
SECTION 114. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Junior Subordinated Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Junior
Subordinated Notes) payment of interest or principal (and premium, if any)
need not be made on such date, but may be made on the next succeeding
Business Day, except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity,
provided that no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
SECTION 115. APPOINTMENT OF AGENT FOR SERVICE.
By the execution and delivery of this Indenture, the Company hereby
appoints the Trustee as its agent upon which process may be served in any
legal action or proceeding which may be instituted in any Federal or State
court in the Borough of Manhattan, New York City, arising out of or
relating to the Junior Subordinated Notes or this Indenture. Service of
process upon such agent at the office of such agent at 450 W. 33rd Street,
New York, New York 10001, Attention: Corporate Trustee Administration
Department (or such other address in the Borough of Manhattan, New York
City, as may be the Corporate Trust Office of the Trustee), and written
notice of such service to the Company by the Person serving the same
addressed as provided in Section 105, shall be deemed in every respect
effective service of process upon the Company in any such legal action or
proceeding, and the Company hereby submits to the jurisdiction of any such
court in which any such legal action or proceeding is so instituted. Such
appointment shall be irrevocable so long as the Holders of Junior
Subordinated Notes shall have any rights pursuant to the terms thereof or
of this Indenture until the appointment of a successor by the Company with
the consent of the Trustee and such successor's acceptance of such
appointment. The Company further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and
appointment of such agent or successor.
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By the execution and delivery of this Indenture, the Trustee hereby
agrees to act as such agent and undertakes promptly to notify the Company
of receipt by it of service of process in accordance with this Section.
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ARTICLE TWO
FORMS OF JUNIOR SUBORDINATED NOTES
SECTION 201. FORMS GENERALLY.
The Junior Subordinated Notes of each series shall be in substantially the
form appended to the supplemental indenture authorizing such series, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Junior Subordinated Notes, as evidenced by their
execution of the Junior Subordinated Notes.
The Junior Subordinated Notes of each series shall be issuable in
registered form without coupons.
The definitive Junior Subordinated Notes may be printed, typewritten,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers executing such Junior
Subordinated Notes, as evidenced by their execution of such Junior
Subordinated Notes.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The form of the Trustee's Certificate of Authentication for a series of
Junior Subordinated Notes shall be in substantially the form appended to the
Supplemental Indenture authorizing such series.
SECTION 203. JUNIOR SUBORDINATED NOTES ISSUABLE IN THE FORM OF A GLOBAL
SECURITY.
(a) If the Company shall establish pursuant to Section 301 that the
Junior Subordinated Notes of a particular series are to be issued in whole
or in part in the form of one or more Global Securities, then the Company
shall execute and the Trustee shall, in accordance with Section 302 and the
Company Order delivered to the Trustee thereunder, authenticate and deliver
such Global Security or Securities, which (i) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of the
Outstanding Junior Subordinated Notes of such series to be represented by
such Global Security or Securities, (ii) may provide that the aggregate
amount of Outstanding Junior Subordinated Notes represented thereby may
from time to time be increased or reduced to reflect exchanges, (iii) shall
be registered in the name of the Depositary for such Global Security or
Securities or its nominee, (iv) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (v) shall bear a
legend in accordance with the requirements of the Depositary.
(b) Notwithstanding any other provision of this Section 203 or of
Section 303, subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be
exchanged in whole or in part for individual Junior Subordinated Notes, a
Global Security may be transferred, in whole but not in part and in the
manner provided in Section 303, only to a nominee of the Depositary for
such Global Security, or to the Depositary, or to a successor Depositary
for such Global Security selected or approved by the Company, or to a
nominee of such successor Depositary.
(c) (1) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary for
such Global Security or if at any time the Depositary for the Junior
Subordinated Notes for such series shall no longer be eligible or in good
standing under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, the Company shall appoint a successor
Depositary with respect to such Global Security. If a successor Depositary
for such Global Security is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such
ineligibility, the
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Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of individual Junior Subordinated Notes of
such series in exchange for such Global Security, will authenticate and
deliver individual Junior Subordinated Notes of such series of like tenor
and terms in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global
Security.
(2) The Company may at any time and in its sole discretion
determine that the Junior Subordinated Notes of any series issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the
Company will execute, and the Trustee, upon receipt of a Company Request
for the authentication and delivery of individual Junior Subordinated Notes
of such series in exchange in whole or in part for such Global Security,
will authenticate and deliver individual Junior Subordinated Notes of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Security or Securities
representing such series in exchange for such Global Security or
Securities.
(3) If specified by the Company pursuant to Section 301 with
respect to Junior Subordinated Notes issued or issuable in the form of a
Global Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for individual Junior
Subordinated Notes of such series of like tenor and terms in definitive
form on such terms as are acceptable to the Company and such Depositary.
Thereupon the Company shall execute, and the Trustee shall authenticate and
deliver, without service charge, (A) to each Person specified by such
Depositary a new Junior Subordinated Note or Notes of the same series or
like tenor and terms and of any authorized denomination as requested by
such Person in aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security; and (B) to such
Depositary a new Global Security of like tenor and terms and in an
authorized denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the aggregate
principal amount of Junior Subordinated Notes delivered to Holders thereof.
(4) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate and
deliver individual Junior Subordinated Notes in definitive form in
authorized denominations. Upon the exchange of the entire principal amount
of a Global Security for individual Junior Subordinated Notes, such Global
Security shall be canceled by the Trustee. Except as provided in the
preceding subparagraph, Junior Subordinated Notes issued in exchange for a
Global Security pursuant to this Section shall be registered in such names
and in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. Provided that the Company and
the Trustee have so agreed, the Trustee shall deliver such Junior
Subordinated Notes to the persons in whose names the Junior Subordinated
Notes are registered.
(5) Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, or changes in the rights of Holders, of
Outstanding Junior Subordinated Notes represented thereby shall be made in such
manner and by such Person or Persons as shall be specified therein or in the
Company Order to be delivered pursuant to Section 302 with respect thereto.
Subject to the provisions of Section 302, the Trustee shall deliver and
redeliver any such Global Security in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 302 has been, or simultaneously is, delivered,
any instructions by the Company with respect to such Global Security shall be in
writing but need not be accompanied by or contained in an Officers' Certificate
and need not be accompanied by an Opinion of Counsel.
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ARTICLE THREE
THE JUNIOR SUBORDINATED NOTES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Junior Subordinated Notes which may
be authenticated and delivered under this Indenture is unlimited.
The Junior Subordinated Notes may be issued in one or more series.
There may be established, pursuant to one or more indentures supplemental
hereto, additional series of Junior Subordinated Notes of any series,
(1) the title of the Junior Subordinated Notes of the series (which
shall distinguish the Junior Subordinated Notes of the series from Junior
Subordinated Notes of all other series);
(2) any limit upon the aggregate principal amount of the Junior
Subordinated Notes of the series which may be authenticated and delivered
under this Indenture (except for Junior Subordinated Notes authenticated
and delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Junior Subordinated Notes of the series pursuant to Sections
203, 303, 304, 907 or 1107);
(3) the Person to whom interest on a Junior Subordinated Note of the
series shall be payable if other than the Person in whose name that Junior
Subordinated Note (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Junior
Subordinated Notes of the series is payable, and the right, if any, to
extend the Stated Maturity of the Junior Subordinated Notes and the
conditions to such extension;
(5) the rate or rates at which the Junior Subordinated Notes of the
series shall bear interest, if any, or any method by which such rate or
rates shall be determined, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be payable,
the Regular Record Date for the interest payable on Junior Subordinated
Notes on any Interest Payment Date and the basis upon which interest shall
be calculated if other than that of a 360-day year consisting of twelve 30-
day months;
(6) the place or places where the principal of (and premium, if any)
and interest, if any, on Junior Subordinated Notes of the series shall be
payable;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Junior Subordinated Notes of the
series may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Junior Subordinated Notes of the series pursuant to any sinking fund or
analogous provision or at the option of a Holder thereof and the period or
periods within which, the price or prices at which ,and the terms and
conditions upon which, Junior Subordinated Notes of the series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;
(9) the denominations in which Junior Subordinated Notes of the
series shall be issuable;
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(10) if the amount of payments of principal of (and premium, if any)
or interest (including Additional Interest) on the Junior Subordinated
Notes of the series may be determined with reference to an index or
formula, the manner in which such amounts shall be determined;
(11) if other than the principal amount thereof, the portion of the
principal amount of Junior Subordinated Notes of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;
(12) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company as provided herein pertaining to the
Junior Subordinated Notes of the series, and any change in the rights of
the Trustee or Holders of such series pursuant to Section 901 or 902.
(13) any additions to the definitions currently set forth in this
Indenture with respect to such series;
(14) whether the Junior Subordinated Notes of the series shall be
issued in whole or in part in the form of a Global Security or Securities;
the terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for certificated Junior
Subordinated Notes of such series and of like tenor of any authorized
denomination and the circumstances under which such exchange may occur, if
other than in the manner provided for in Section 203; the Depositary for
such Global Security or Securities; and the form of any legend or legends
to be borne by any such Global Security in addition to or in lieu of the
legend referred to in Section 203;
(15) the right, if any, of the Company to extend the interest payment
periods of such series of Junior Subordinated Notes, including the maximum
duration of any such extension or extensions, the Additional Interest, if
any, payable on such Junior Subordinated Notes during any extension of the
interest payment period and any notice (which shall include notice to the
Trustee) that must be given upon the exercise of such right to extend
interest payment periods;
(16) the applicability, if any, of Section 1009 to the Junior
Subordinated Notes of such series and any provisions in modification of, in
addition to or in lieu of any of the provisions of Section 1009;
(17) any restriction or condition on the transferability of such
Junior Subordinated Notes; and
(18) any other terms of the series.
All Junior Subordinated Notes of any one series shall be substantially
identical except as to the date or dates from which interest, if any, shall
accrue and denomination and except as may otherwise be provided in the terms of
such Junior Subordinated Notes determined or established as provided above. All
Junior Subordinated Notes of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened for issuances of
additional Junior Subordinated Notes of such series.
SECTION 302. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Junior Subordinated Notes shall be executed on behalf of the Company by
its Chairman of the Board, its President or one of its Vice Presidents, under
its corporate seal reproduced thereon attested by its Corporate Secretary or one
of its Assistant Corporate Secretaries. The signature of any of these officers
on the Junior Subordinated Notes may be manual or facsimile.
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Junior Subordinated Notes bearing the manual or facsimile signatures of
individuals who were at the time relevant to the authorization thereof the
proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Junior Subordinated Notes or did not hold
such offices at the date of such Junior Subordinated Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Junior Subordinated Notes of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Junior Subordinated
Notes, and the Trustee, in accordance with the Company Order, shall authenticate
and deliver such Junior Subordinated Notes. If all of the Junior Subordinated
Notes of any series are not to be issued at one time and if the supplemental
indenture establishing such series shall so permit, such Company Order may set
forth procedures acceptable to the Trustee for the issuance of such Junior
Subordinated Notes and determining the terms of particular Junior Subordinated
Notes of such series, such as interest rate, maturity date, date of issuance and
date from which interest shall accrue. In authenticating Junior Subordinated
Notes hereunder, and accepting the additional responsibilities under this
Indenture in relation to such Junior Subordinated Notes, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon:
(1) an Opinion of Counsel, to the effect that:
(a) the form and terms of such Junior Subordinated Notes or the
manner of determining such terms have been established in conformity with
the provisions of this Indenture; and
(b) that such Junior Subordinated Notes, when authenticated and
delivered by the Trustee and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting the enforcement of creditors' rights
and to general equity principles; and
(2) an Officers' Certificate stating, to the best knowledge of each
signer of such certificate, that no event which is, or after notice or
lapse of time would become, an Event of Default with respect to any of the
Junior Subordinated Notes shall have occurred and be continuing.
The Trustee shall not be required to authenticate such Junior Subordinated Notes
if the issue of such Junior Subordinated Notes pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Junior
Subordinated Notes and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
If all the Junior Subordinated Notes of any series are not to be issued at
one time, it shall not be necessary to deliver an Opinion of Counsel and
Officers' Certificate at the time of issuance of each such Junior Subordinated
Note, but such opinion and certificate shall be delivered at or before the time
of issuance of the first Junior Subordinated Note of such series to be issued.
Each Junior Subordinated Note shall be dated the date of its
authentication.
No Junior Subordinated Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Junior Subordinated Note a certificate of authentication substantially in the
form provided for herein executed by the Trustee by manual signature, and such
certificate upon any Junior Subordinated Note shall be conclusive evidence, and
the only evidence, that such Junior Subordinated Note has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
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SECTION 303. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the office of the Security Registrar
designated pursuant to this Section 303 or Section 1002 a register (referred to
as the "Security Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Junior
Subordinated Notes and of transfers of Junior Subordinated Notes. The Trustee
is hereby initially appointed as Security Registrar for the purpose of
registering Junior Subordinated Notes and transfers of Junior Subordinated Notes
as herein provided.
Subject to Section 203, upon surrender for registration of transfer of any
Junior Subordinated Note of any series at the office or agency maintained for
such purpose for such series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Junior Subordinated Notes of the same series,
Stated Maturity and original issue date, of any authorized denominations and of
like tenor and aggregate principal amount.
Subject to Section 203, Junior Subordinated Notes of any series may be
exchanged, at the option of the Holder, for Junior Subordinated Notes of the
same series, Stated Maturity and original issue date, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Junior Subordinated Notes to be exchanged at any such office or agency.
Whenever any Junior Subordinated Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Junior Subordinated Notes that the Holder making the exchange is entitled to
receive.
All Junior Subordinated Notes issued upon any registration of transfer or
exchange of Junior Subordinated Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Junior Subordinated Notes surrendered upon such registration
of transfer or exchange.
Every Junior Subordinated Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Junior Subordinated Notes, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Junior
Subordinated Notes, other than exchanges pursuant to Section 304, 907 or 1107
not involving any transfer.
The Company shall not be required (i) to issue, to register the transfer of
or to exchange Junior Subordinated Notes of any series during a period of 15
days immediately preceding the date notice is given identifying the serial
numbers of the Junior Subordinated Notes of that series called for redemption,
or (ii) to issue, to register the transfer of or to exchange any Junior
Subordinated Notes so selected for redemption in whole or in part, except the
unredeemed portion of any Junior Subordinated Note being redeemed in part.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
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SECTION 304. MUTILATED, DESTROYED, LOST AND STOLEN JUNIOR SUBORDINATED NOTES.
If any mutilated Junior Subordinated Note is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Junior Subordinated Note of the same series, Stated
Maturity and original issue date, and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Junior Subordinated
Note and (ii) such security or indemnity as may be required by them to save each
of them and any agent of either of them harmless, then, in the absence of notice
to the Company or the Trustee that such Junior Subordinated Note has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Junior Subordinated Note, a new Junior Subordinated
Note of the same series, Stated Maturity and original issue date, and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Junior Subordinated
Note has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Junior Subordinated Note, pay such
Junior Subordinated Note.
Upon the issuance of any new Junior Subordinated Note under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Junior Subordinated Note of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Junior Subordinated Note shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Junior Subordinated Note shall be at any
time enforceable by anyone, and any such new Junior Subordinated Note shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Junior Subordinated Notes of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Junior Subordinated Notes.
SECTION 305. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Junior Subordinated Notes, interest (including Additional
Interest) on any Junior Subordinated Note that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Junior Subordinated Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest (including Additional Interest) on any Junior Subordinated
Note of any series which is payable, but is not punctually paid, duly provided
for on any Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in Clause (1) or (2)
below:
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(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Junior Subordinated Notes of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Junior Subordinated Note of such series and the date of
the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Junior Subordinated Notes of such series at the address
of such Holder as it appears in the Security Register, not less than 10
days prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Junior Subordinated Notes of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest (including
Additional Interest, if any) on the Junior Subordinated Notes of any series
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which such Junior Subordinated Notes may be listed,
and upon such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Junior
Subordinated Note delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Junior Subordinated Note shall
carry the rights to interest accrued (including Additional Interest, if any) and
unpaid, and to accrue (including Additional Interest, if any), which were
carried by such other Junior Subordinated Note.
SECTION 306. PERSONS DEEMED OWNERS.
Prior to due presentment of a Junior Subordinated Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Junior Subordinated Note is registered
as the absolute owner of such Junior Subordinated Note for the purpose of
receiving payment of principal of (and premium, if any) and (subject to Section
305) interest (including Additional Interest, if any) on such Junior
Subordinated Note and for all other purposes whatsoever, whether or not such
Junior Subordinated Note be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 307. CANCELLATION.
All Junior Subordinated Notes surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly canceled by the Trustee. The Company may
at any time deliver to the Trustee for cancellation any Junior Subordinated
Notes previously authenticated and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Junior Subordinated Notes so
delivered shall
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be promptly canceled by the Trustee. No Junior Subordinated Notes shall be
authenticated in lieu of or in exchange for any Junior Subordinated Notes
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Junior Subordinated Notes held by the Trustee shall be
disposed of in accordance with a Company Order and the Trustee shall promptly
deliver a certificate of disposition to the Company.
SECTION 308. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for Junior
Subordinated Notes of any series, interest on the Junior Subordinated Notes of
each series shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall, upon Company Request, cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Junior Subordinated Notes herein expressly provided for) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Junior Subordinated Notes theretofore authenticated and
delivered (other than (i) all Junior Subordinated Notes that have been
destroyed, lost or stolen and that have been replaced as provided for
in Section 304 and (ii) Junior Subordinated Notes for whose payment
money has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Junior Subordinated Notes not theretofore delivered
to the Trustee for cancellation have become due and payable, or have
been called for redemption,
and the Company, in either case, has deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose an
amount sufficient to pay and discharge the entire indebtedness on such
Junior Subordinated Notes not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest to the
date of the Stated Maturity or Redemption Date, as the case may be, or
if the later, the date of payment;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
In the event there are Junior Subordinated Notes of two or more series
hereunder, the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Junior Subordinated Notes of all series as to which it is Trustee and
if the other conditions thereto are met. In the event there are two or more
Trustees hereunder, then the effectiveness of any such instrument shall be
conditioned upon receipt of such instruments from all Trustees hereunder.
If, subsequent to the date a discharge is effected pursuant to this Section
401, Additional Interest (in excess of that established as of the date such
discharge is effected) becomes payable in respect of the series of Junior
Subordinated Notes discharged, in order to preserve the benefits of the
discharge established hereunder, the Company shall irrevocably deposit or cause
to be irrevocably deposited in accordance with the provisions of this Section
401, within ten Business Days prior to the date the first payment in respect of
any portion of such excess Additional Interest becomes due, such additional
funds as are necessary to satisfy the provisions of this Section 401 as if a
discharge were being effected as of the date of such subsequent deposit.
Failure to comply with the requirements of this paragraph shall result in the
termination of the benefits of the discharge established by this Section 401.
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 or Section 1009 shall be held
in trust and applied by it, in accordance with the provisions of the Junior
Subordinated Notes, and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee.
The Company shall pay and shall indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against Government Obligations deposited
pursuant to Section 401 or Section 1009 or the interest and principal received
in respect of such obligations other than any payable by or on behalf of
Holders.
The Trustee shall deliver or pay to the Company from time to time upon
Company Request any Government Obligations or money held by it as provided in
Section 401 or Section 1009 which, as expressed in a Certificate of a Firm of
Independent Public Accountants delivered to the Trustee, are then in excess of
the amount thereof which then would have been required to be deposited for the
purpose for which such obligations or money were deposited or received.
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ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Junior
Subordinated Notes of any series, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body or occasioned by the operation of Article
Thirteen):
(1) default in the payment of any interest upon any Junior
Subordinated Note of that series when it becomes due and payable, including
Additional Interest in respect thereof, and continuance of such default for
a period of 60 days; provided, however, that (i) a valid extension of the
interest payment period by the Company pursuant to the terms of a
supplemental indenture authorizing the Junior Subordinated Notes of that
series shall not constitute a default in the payment of interest for this
purpose and (ii) no such default shall be deemed to exist if, on or prior
to the date on which such interest became due, the Company shall have made
a payment sufficient to pay such interest pursuant to the Guarantee related
to the Trust Securities of the Securities Trust owning such series of
Junior Subordinated Notes, and shall have delivered a notice to the Trustee
to that effect; or
(2) default in the payment of the principal of (or premium, if any,
on) any Junior Subordinated Note of that series at its Maturity; provided
however, that no such default in the payment of principal (or premium, if
any) shall be deemed to exist if, on or prior to the date such principal
(and premium, if any) became due, the Company shall have made a payment
sufficient to pay such principal (and premium, if any) pursuant to the
Guarantee related to the Trust Securities of the Securities Trust owning
such series of Junior Subordinated Notes, and shall have delivered a notice
to the Trustee to that effect; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Junior Subordinated Note of that series and
continuance of such default for a period of 3 Business Days; or
(4) default in the performance or breach of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Junior
Subordinated Notes other than that series), and continuance of such default
or breach for a period of 90 days after there has been given, by registered
or certified mail, to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Junior Subordinated Notes of that series, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
by one or more Persons other than the Company seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official for the Company or for any substantial part of its
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property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 90 consecutive days; or
(6) the commencement by the Company of a case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree or order for
relief in respect of the Company in a case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable federal or
state law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or of
any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action; or
(7) any other Event of Default provided with respect to Junior
Subordinated Notes of that series in the supplemental indenture authorizing
such series.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Junior Subordinated Notes of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Junior Subordinated Notes of that series may declare the principal
amount of all of the Junior Subordinated Notes of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to Junior
Subordinated Notes of any series has been made and before a judgment or decree
for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Junior Subordinated Notes of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Additional Interest) on
all Junior Subordinated Notes of that series,
(B) the principal of (and premium, if any, on) any Junior
Subordinated Notes of that series which have become due otherwise than
by such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Junior Subordinated Notes,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest (including any Additional Interest) at
the rate or rates prescribed therefor in such Junior Subordinated
Notes, and
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(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due to the
Trustee under Section 607; and
(2) all Events of Default with respect to Junior Subordinated Notes of
that series, other than the non-payment of the principal of Junior
Subordinated Notes of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest (including any
Additional Interest) on any Junior Subordinated Note when such interest
becomes due and payable and such default continues for a period of 60 days,
or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Junior Subordinated Note at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Junior Subordinated Notes, the whole amount then due and payable
on such Junior Subordinated Notes for principal (and premium, if any) and
interest (including Additional Interest, if any) and, to the extent that payment
of such interest shall be legally enforceable, interest on any overdue principal
(and premium, if any) and on any overdue interest (including Additional
Interest, if any), at the rate or rates prescribed therefor in such Junior
Subordinated Notes, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due to the Trustee under Section
607.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Junior Subordinated Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Junior
Subordinated Notes, wherever situated.
If an Event of Default with respect to Junior Subordinated Notes of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Junior
Subordinated Notes of such series by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Junior
Subordinated Notes or the property of the Company or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Junior Subordinated Notes shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any
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demand on the Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Junior
Subordinated Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due to the Trustee under Section 607) and of the Holders of
Junior Subordinated Notes allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Junior Subordinated Notes to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Junior Subordinated Notes, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Junior
Subordinated Note any plan of reorganization, arrangement, adjustment or
composition affecting the Junior Subordinated Notes or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of a Junior Subordinated Note in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF JUNIOR
SUBORDINATED NOTES.
All rights of action and claims under this Indenture or the Junior
Subordinated Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Junior Subordinated Notes or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Junior
Subordinated Notes in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Junior Subordinated Notes, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
607; and
Second: Subject to Article Thirteen, to the payment of the amounts
then due and unpaid for principal of (and premium, if any) and interest
(including Additional Interest, if any) on the Junior Subordinated Notes in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Junior Subordinated Notes for principal
(and premium, if any) and interest (including Additional Interest, if any),
respectively; and
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Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Junior Subordinated Note of any series shall have any
right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Junior Subordinated Notes
of that series;
(2) the Holders of not less than a majority in principal amount of the
Outstanding Junior Subordinated Notes of that series shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Junior Subordinated Notes of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture but subject to
Article Thirteen, the Holder of any Junior Subordinated Notes shall have the
right, which is absolute and unconditional, to receive payment of the principal
of (and premium, if any) and (subject to Section 305) interest (including any
Additional Interest) on such Junior Subordinated Note on the Stated Maturity or
Maturities expressed in such Junior Subordinated Note (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Junior Subordinated Note has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Junior Subordinated Notes shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
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SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Junior Subordinated Notes in the last
paragraph of Section 304, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Junior Subordinated Notes is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Junior
Subordinated Note to exercise any right or remedy upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders of Junior Subordinated Notes
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders of Junior Subordinated Notes.
SECTION 512. CONTROL BY HOLDERS OF JUNIOR SUBORDINATED NOTES.
The Holders of a majority in principal amount of the Outstanding Junior
Subordinated Notes of any series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to the
Junior Subordinated Notes of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and could not involve the Trustee in personal
liability in circumstances where reasonable indemnity would not be
adequate, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Junior Subordinated Notes of any series may, on behalf of the
Holders of all the Junior Subordinated Notes of such series, waive any past
default hereunder with respect to such series and its consequences, except a
default
(1) in the payment of the principal of (or premium, if any) or
interest on any Junior Subordinated Note of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Junior Subordinated Note of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
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SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Junior
Subordinated Note by his acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Junior Subordinated Notes of any series, or to any
suit instituted by any Holder of any Junior Subordinated Note for the
enforcement of the payment of the principal of (or premium, if any) or interest
(including Additional Interest) on any Junior Subordinated Note on or after the
Stated Maturity or Maturities expressed in such Junior Subordinated Note (or, in
the case of redemption, on or after the Redemption Date).
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default with respect to
Junior Subordinated Notes of any series,
(1) the Trustee undertakes to perform, with respect to Junior
Subordinated Notes of such series, such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may, with
respect to Junior Subordinated Notes of such series, conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture.
(b) In case an Event of Default with respect to Junior Subordinated Notes
of any series has occurred and is continuing, the Trustee shall exercise, with
respect to Junior Subordinated Notes of such series, such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding Junior
Subordinated Notes of any series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Junior Subordinated Notes of such series; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
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SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any default hereunder with respect
to the Junior Subordinated Notes of any series, the Trustee shall transmit by
mail to all Holders of Junior Subordinated Notes of such series entitled to
receive reports pursuant to Section 313(c) of the Trust Indenture Act, notice of
all defaults hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest (including
Additional Interest) on any Junior Subordinated Note of such series or in the
payment of any sinking fund installment with respect to Junior Subordinated
Notes of such series, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of directors or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders
of Junior Subordinated Notes of such series; and provided, further, that in the
case of any default of the character specified in Section 501(4) with respect to
Junior Subordinated Notes of such series, no such notice to Holders shall be
given until at least 45 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to Junior
Subordinated Notes of such series.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Junior Subordinated Notes of any series pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney.
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be charged with knowledge of any Event of
Default with respect to the Junior Subordinated Notes of any series for
which it is acting as Trustee unless either (1) a Responsible Officer of
the Trustee assigned to the Corporate Trustee Administration Department and
agency group of the Trustee (or any successor division or department of the
Trustee) shall have actual knowledge of the Event of Default or (2) written
notice of such Event of Default shall have been given to the Trustee by the
Company, and other obligor on such Junior Subordinated Notes or by any
Holder of such Junior Subordinated Notes.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OF ISSUANCE OF JUNIOR SUBORDINATED
NOTES.
The recitals contained herein and in the Junior Subordinated Notes (except
the Trustee's certificates of authentication) shall be taken as the statements
of the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Junior Subordinated
Notes. The Trustee or any Authenticating Agent shall not be accountable for the
use or application by the Company of Junior Subordinated Notes or the proceeds
thereof.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Trust Securities and shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of a Trust
Security to establish that such Person is such a holder. The Trustee may
conclusively rely on an Officers' Certificate as evidence that the holders of
the necessary percentage of liquidation preference of Trust Securities have
taken any action contemplated hereunder and shall have no duty to investigate
the truth or accuracy of any statement contained therein.
SECTION 605. MAY HOLD JUNIOR SUBORDINATED NOTES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Junior Subordinated Notes and,
subject to Sections 608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
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(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, willful
misconduct or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, willful misconduct
or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including
the costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Junior Subordinated
Notes upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, premium, if any, or
interest, if any, on particular Junior Subordinated Notes.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire any conflicting interest, within the
meaning of the Trust Indenture Act, it shall, within 90 days after ascertaining
that it has such conflicting interest, either eliminate such conflicting
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by federal or
state authority and qualified and eligible under this Article and otherwise
permitted by the Trust Indenture Act to act as Trustee under an Indenture
qualified under the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Junior
Subordinated Notes of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Junior Subordinated Notes of such series.
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(c) The Trustee may be removed at any time with respect to the Junior
Subordinated Notes of any series by Act of the Holders of a majority in
principal amount of the Outstanding Junior Subordinated Notes of such series
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder of a Junior Subordinated
Note who has been a Holder of a Junior Subordinated Note for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Junior Subordinated Notes, or (ii) subject to
Section 514, any Holder of a Junior Subordinated Note who has been a bona fide
Holder of a Junior Subordinated Note for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Junior
Subordinated Notes and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Junior Subordinated Notes of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Junior Subordinated Notes of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the Junior
Subordinated Notes of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Junior Subordinated Notes of
any particular series) and shall comply with the applicable requirements of
Section 611. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Junior Subordinated Notes of any series shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding Junior
Subordinated Notes of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Junior Subordinated Notes
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Junior Subordinated
Notes of any series shall have been so appointed by the Company or the Holders
of Junior Subordinated Notes and accepted appointment in the manner required by
Section 611, any Holder of a Junior Subordinated Note who has been a bona fide
Holder of a Junior Subordinated Note of such series for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Junior Subordinated Notes of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Junior Subordinated Notes of any series and each
appointment of a successor Trustee with respect to the Junior Subordinated Notes
of any series by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders of such series of Junior Subordinated Notes as
their names and addresses appear in the Security Register.
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SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Junior Subordinated Notes, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Junior Subordinated Notes of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with respect to the
Junior Subordinated Notes of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Junior Subordinated Notes of that or those series to which the appointment
of such successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Junior Subordinated Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Junior
Subordinated Notes of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Junior Subordinated Notes
of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to the
Junior Subordinated Notes of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Junior Subordinated Notes shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication
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and deliver the Junior Subordinated Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Junior Subordinated
Notes.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Junior Subordinated Notes), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor). For purposes of Section
311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange, acceptance
or obligation which is made, drawn, negotiated or incurred by the Company (or
any such obligor) for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company (or any such obligor)
arising from the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
At any time when any of the Junior Subordinated Notes remain Outstanding
the Trustee may appoint an Authenticating Agent or Agents with respect to one or
more series of Junior Subordinated Notes that shall be authorized to act on
behalf of the Trustee to authenticate Junior Subordinated Notes of such series
issued upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 304, and Junior Subordinated Notes so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Junior
Subordinated Notes by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Junior
Subordinated Notes, if any, of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
The provisions of Sections 306, 604 and 605 shall be applicable to each
Authenticating Agent.
If an appointment with respect to one or more series is made pursuant to
this Section, the Junior Subordinated Notes of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Junior Subordinated Notes of the series
designated therein referred to in the within-mentioned Indenture.
______________________________
As Trustee
By____________________________
As Authenticating Agent
By____________________________
Authorized Signatory
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than June 1 and December 1, in each
year, a list, in such form as the Trustee may reasonably require,
containing all the information in the possession or control of the Company,
or any of its Paying Agents other than the Trustee, as to the names and
addresses of the Holders of Junior Subordinated Notes as of the preceding
May 15 or November 15, as the case may be, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of the most recent Regular Record Date;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall comply with the obligations imposed on it pursuant to
Section 312 of the Trust Indenture Act.
(b) Every Holder of Junior Subordinated Notes, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders of Junior Subordinated Notes in accordance with Section 312(b) of the
Trust Indenture Act, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 312(b) of the Trust
Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Junior Subordinated Notes pursuant to this
Indenture, if required by Section 313(a) of the Trust Indenture Act, the Trustee
shall transmit a brief report dated as of such May 15 with respect to any of the
events specified in such Section 313(a) that may have occurred since the later
of the immediately preceding May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section 313(b) of
the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in the manner and
to the Persons required by Sections 313(c) and (d) of the Trust Indenture Act.
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SECTION 704. REPORTS BY COMPANY.
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended; or, if the Company is not
required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, in respect of a security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations;
(3) transmit, within 30 days after the filing thereof with the
Trustee, to the Holders of Junior Subordinated Notes, in the manner and to
the extent provided in Section 313(c) of the Trust Indenture Act, such
summaries of any information, documents and reports required to be filed by
the Company pursuant to paragraphs (1) and (2) of this Section 704 as may
be required by rules and regulations prescribed from time to time by the
Commission;
(4) notify the Trustee when and as the Junior Subordinated Notes of
any series become admitted to trading on any national securities exchange;
and
(5) furnish to the Trustee by May 1 of each year the compliance
certificate required by Section 314 of the Trust Indenture Act in the form
and in the manner required by such Section.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless
(1) in case the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest (including Additional
Interest) on all the Junior Subordinated Notes and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transactions, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease complies with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by the Company into
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Junior Subordinated
Notes.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders of Junior Subordinated Notes, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Junior Subordinated Notes; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Junior Subordinated Notes (and if such
covenants are to be for the benefit of less than all series of Junior
Subordinated Notes, stating that such covenants are expressly being
included solely for the benefit of such series) or to surrender any right
or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture, to
change or eliminate any restrictions on the payment of principal (or
premium, if any) on Junior Subordinated Notes or to permit the issuance of
Junior Subordinated Notes in uncertificated form, provided any such action
shall not adversely affect the interests of the Holders of Junior
Subordinated Notes of any series in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture
with respect to any series of Junior Subordinated Notes theretofore
unissued; or
(6) to secure the Junior Subordinated Notes; or
(7) to establish the form or terms of Junior Subordinated Notes of any
series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Junior Subordinated
Notes of one or more series and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, provided such action shall not adversely affect the
interests of the Holders of Junior Subordinated Notes of any series or
holders of outstanding Trust Securities in any material respect; or
(10) subject to Section 903(a), to make any change in Article Thirteen
that would limit or terminate the benefits available to any holder of
Senior Indebtedness under such Article; or
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(11) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act or under any similar federal
statute hereafter enacted, and to add to this Indenture such other
provisions as may be expressly required by the Trust Indenture Act.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Junior Subordinated Notes of each series affected by
such supplemental indenture, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Junior Subordinated Notes of such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Junior Subordinated Note affected
thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Junior Subordinated Note, or reduce the
principal amount thereof or the rate of interest (including Additional
Interest) thereon or any premium payable upon the redemption thereof, or
change the method of calculating the rate of interest thereon, or impair
the right to institute suit for the enforcement of any payment of principal
of, primium if any, or interest (including Additional Interest) on the
Junior Subordinated Notes on or after the same becomes due and payable, or
(2) reduce the percentage in principal amount of the Outstanding
Junior Subordinated Notes of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section 902, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Junior Subordinated
Note affected thereby, provided, however, that this clause shall not be
deemed to require the consent of any Holder of a Junior Subordinated Note
with respect to changes in the references to "the Trustee" and concomitant
changes in this Section and Section 1008, or the deletion of this proviso,
in accordance with the requirements of Sections 611(b) and 901(8), or
(4) modify the provisions of this Indenture with respect to the
subordination of the Junior Subordinated Notes in a manner adverse to such
Holder.
SECTION 903. GENERAL PROVISIONS REGARDING SUPPLEMENTAL INDENTURE.
(a) A supplemental indenture entered into pursuant to Section 901 or
Section 902 may not make any change that adversely affects the rights under
Article Thirteen of any holder of Senior Indebtedness then outstanding unless
the holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
(b) A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Junior Subordinated Notes, or
which modifies the rights of the Holders of Junior Subordinated Notes of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Junior Subordinated
Notes of any other series.
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(c) It shall not be necessary for any Act of Holders of Junior Subordinated
Notes under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act or action shall
approve the substance thereof.
SECTION 904. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 905. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Junior Subordinated Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 906. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 907. REFERENCE IN JUNIOR SUBORDINATED NOTES TO SUPPLEMENTAL
INDENTURES.
Junior Subordinated Notes of any series authenticated and delivered after
the execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Junior Subordinated Notes of any series so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding Junior
Subordinated Notes of such series.
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ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of each series of Junior
Subordinated Notes that it will duly and punctually pay the principal of (and
premium, if any) and interest, including Additional Interest (subject to the
right of the Company to extend an interest payment period pursuant to the terms
of a supplemental indenture authorizing the Junior Subordinated Notes of that
series), on the Junior Subordinated Notes of that series in accordance with the
terms of the Junior Subordinated Notes and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain an office or agency where Junior Subordinated
Notes of that series may be presented or surrendered for payment, where Junior
Subordinated Notes of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Junior Subordinated Notes of that series and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency in
respect of any series of Junior Subordinated Notes or shall fail to furnish the
Trustee with the address thereof, such presentations and surrenders of Junior
Subordinated Notes of that series may be made and notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive such respective
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Junior Subordinated Notes of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
SECTION 1003. MONEY FOR JUNIOR SUBORDINATED NOTES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Junior Subordinated Notes, it will, on or before each due date
of the principal of (and premium, if any) or interest (including Additional
Interest, if any) on any of the Junior Subordinated Notes of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest (including
Additional Interest, if any) so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Junior Subordinated Notes, it will, prior to each due date of the principal of
(and premium, if any) or interest (including Additional Interest, if any) on any
Junior Subordinated Notes of that series, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest (including
Additional Interest, if any) so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest
(including Additional Interest, if any), and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of Junior
Subordinated Notes other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will:
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(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest (including Additional Interest, if any) on
Junior Subordinated Notes of that series in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Junior Subordinated Notes of that series) in the
making of any payment of principal of (and premium, if any) or interest
(including Additional Interest, if any) on the Junior Subordinated Notes of
that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge or defeasance of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest (including Additional Interest, if any) on any Junior Subordinated
Note of any series and remaining unclaimed for two years after such principal
(and premium, if any) or interest (including Additional Interest, if any) has
become due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Junior Subordinated Note shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper of general circulation in New York City notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 1004. ADDITIONAL INTEREST.
If the Junior Subordinated Notes of a series provide for the payment of
Additional Interest to the Holders of such Junior Subordinated Notes, then the
Company shall pay to each Holder of such Securities the Additional Interest as
provided therein.
Except as otherwise provided in or pursuant to this Indenture, if the
Junior Subordinated Notes of a series provide for the payment of Additional
Interest, at least 10 days prior to the first Interest Payment Date with respect
to that series of Junior Subordinated Notes upon which such Additional Interest
shall be payable (or, if the Junior Subordinated Notes of that series shall not
bear interest prior to Maturity, the first day on which a payment of principal
and any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officer's Certificate, the
Company will furnish the Trustee and the Company's Paying Agent or Paying
Agents, if other than the Trustee or the Company, with an Officers' Certificate
stating the amount of the Additional Interest payable per minimum authorized
denomination of such Junior Subordinated Notes (and, if such Additional Interest
are payable only with respect to particular Junior Subordinated Notes, then the
names of the Holders of such Junior Subordinated Notes).
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SECTION 1005. CORPORATE EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory) and franchises of the Company;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company, and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1006. LIMITATIONS ON DIVIDEND AND CERTAIN OTHER PAYMENTS.
The Company covenants, for the benefit of the Holders of each series of
Junior Subordinated Notes, that, subject to the next succeeding sentence, (a)
the Company shall not declare or pay any dividend or make any distributions with
respect to, or redeem, purchase or make a liquidation payment with respect to,
any of its capital stock, and (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company which rank pari
passu with or junior to the Junior Subordinated Notes, if at such time (a) the
Company shall have given notice of its election to extend an interest payment
period for such series of Junior Subordinated Notes in accordance with the terms
of such Junior Subordinated Notes and such extension shall be continuing, (b)
the Company shall be in default with respect to its payment or other obligations
under the Guarantee with respect to the series of Trust Securities, if any,
related to such series of Junior Subordinated Notes, or (c) an Event of Default
hereunder with respect to such series of Junior Subordinated Notes shall have
occurred and be continuing. The preceding sentence, however, shall not restrict
(i) any of the actions described in the preceding sentence resulting from any
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, (ii) the declaration and payment of a dividend
or distribution or similar share purchase rights in the future, or (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged. The Company covenants that it shall take
all actions necessary to ensure the compliance of its Subsidiaries with this
Section 1006.
SECTION 1007. STATEMENT AS TO COMPLIANCE.
(a) The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year, a written statement, which need not comply with Section
102, signed by the principal executive officer, the principal financial officer
or the principal accounting officer of the Company, as to his or her knowledge
of the Company's compliance with all conditions and covenants under this
Indenture. For purposes of this Section 1007, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(b) The Company shall deliver to the Trustee, no later than the Business
Day on which the event occurs, written notice of the liquidation, dissolution or
winding-up of a Securities Trust if such liquidation, dissolution or winding-up
would occur earlier than the Stated Maturity of the Junior Subordinated Notes
owned by such Securities Trust.
(c) The Company shall deliver to the Trustee, within five days after the
occurrence thereof, written notice of any event which after notice or lapse of
time or both would become an Event of Default pursuant to Section 501.
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SECTION 1008. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1005 and 1006 with respect to the
Junior Subordinated Notes of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding Junior
Subordinated Notes of such series shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
SECTION 1009. DEFEASANCE OF CERTAIN OBLIGATIONS.
The Company may omit to comply with any term, provision or condition set
forth in Sections 1005 (with respect to the preservation of the Company's rights
and franchises) and 1006 and any additional covenants not currently included in
this Indenture specified as applicable to the Junior Subordinated Notes of such
series, and subject to defeasance pursuant to this Section 1009, as contemplated
by Section 301, if
(a) the Company has irrevocably deposited or caused to be irrevocably
deposited (except as provided in Section 402) with the Trustee, as trust
funds and/or obligations in trust, specifically pledged as securities for,
and dedicated solely to, the benefit of the Holders of the Junior
Subordinated Notes of that series, (i) money in an amount, or (ii)
Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms, without consideration of
any reinvestment thereof, will provide not later than one day before the
due date of any payment referred to in clause (A) or (B) of this subsection
(a) money in an amount, or (iii) a combination thereof, sufficient, as
expressed in a Certificate of a Firm of Independent Public Accountants
delivered to the Trustee, to pay and discharge (A) the principal of (and
premium, if any) and interest (including any Additional Interest) (and
without any deferral of interest that may be permitted by the supplemental
indenture creating such series) on the Outstanding Junior Subordinated
Notes of that series due to the dates on which such payments of principal,
premium, if any, and interest are due and payable and (B) any mandatory
sinking fund payments or analogous payments applicable to Junior
Subordinated Notes of such series on the day on which such payments are due
and payable in accordance with the terms of this Indenture and of such
Junior Subordinated Notes;
(b) such deposit shall not cause the Trustee with respect to the
Junior Subordinated Notes of that series to have a conflicting interest for
purposes of the Trust Indenture Act with respect to the Junior Subordinated
Notes of any series;
(c) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture;
(d) no Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to Junior Subordinated
Notes of that series shall have occurred and be continuing on the date of
such deposit;
(e) if the Junior Subordinated Notes of such series are to be
redeemed, either notice of such redemption shall have been given or the
Company shall have given the Trustee irrevocable direction to give notice
of such redemption in the name and at the expense of the Company, under
arrangements satisfactory to the Trustee; and
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(f) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the defeasance contemplated by this Section have
been complied with.
If, subsequent to the date a defeasance is effected pursuant to this
Section 1009, Additional Interest (in excess of that established as of the date
such defeasance is effected) becomes payable in respect of the series of Junior
Subordinated Notes defeased, in order to preserve the benefits of the defeasance
established hereunder, the Company shall irrevocably deposit or cause to be
irrevocably deposited in accordance with the provisions of Section 1009, within
ten Business Days prior to the date the first payment in respect of any portion
of such excess Additional Interest becomes due, such additional funds as are
necessary to satisfy the provisions of Section 1009 as if a defeasance were
being effected as of the date of such subsequent deposit. Failure to comply with
the requirements of this paragraph shall result in the termination of the
benefits of the defeasance established by Section 1009.
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ARTICLE ELEVEN
REDEMPTION OF JUNIOR SUBORDINATED NOTES
SECTION 1101. APPLICABILITY OF ARTICLE.
Junior Subordinated Notes of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 301 for Junior Subordinated
Notes of any series) in accordance with this Article.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Junior Subordinated Notes shall
be evidenced by a Board Resolution. In case of any redemption at the election
of the Company of all of the Junior Subordinated Notes of any series, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date. In case of any redemption at
the election of the Company of less than all the Junior Subordinated Notes of
any series, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing of such Redemption Date and of the
principal amount of Junior Subordinated Notes of such series to be redeemed. In
the case of any redemption of Junior Subordinated Notes (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Junior Subordinated Notes or elsewhere in this Indenture, or (ii) pursuant to an
election of the Company which is subject to a condition specified in the terms
of such Junior Subordinated Notes, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction or condition.
SECTION 1103. SELECTION BY TRUSTEE OF JUNIOR SUBORDINATED NOTES TO BE REDEEMED.
If the Junior Subordinated Notes are registered in the name of only one
Holder, any partial redemptions shall be pro rata. If the Junior Subordinated
Notes are held in definitive form by more than one Holder and if less than all
the Junior Subordinated Notes of any series are to be redeemed, the particular
Junior Subordinated Notes to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Junior
Subordinated Notes of such series not previously called for redemption, by lot
or other such method as the Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Junior Subordinated Notes of that series or any
integral multiple thereof) of the principal amount of Junior Subordinated Notes
of such series of a denomination larger than the minimum authorized denomination
for Junior Subordinated Notes of that series.
The Trustee shall promptly notify the Company in writing of the Junior
Subordinated Notes selected for redemption and, in the case of any Junior
Subordinated Notes selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Junior Subordinated Notes shall
relate, in the case of any Junior Subordinated Notes redeemed or to be redeemed
only in part, to the portion of the principal amount of such Junior Subordinated
Notes which has been or is to be redeemed.
SECTION 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section 106
to the Holders of Junior Subordinated Notes to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date.
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All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Junior Subordinated Notes of any
series are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Junior Subordinated
Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Junior Subordinated Note to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said
date,
(5) the place or places where such Junior Subordinated Notes, maturing
after the Redemption Date, are to be surrendered for payment of the
Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Junior Subordinated Notes to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.
Except as otherwise provided in a supplemental indenture pursuant to
Section 301, prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of all the Junior Subordinated
Notes which are to be redeemed on that date.
SECTION 1106. JUNIOR SUBORDINATED NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Junior
Subordinated Notes so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified together with any accrued
interest (including any Additional Interest) thereon, and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and accrued interest) such Junior Subordinated Notes shall cease to bear
interest. Except as otherwise provided in a supplemental indenture pursuant to
Section 301, upon surrender of any such Junior Subordinated Note for redemption
in accordance with such notice, such Junior Subordinated Note shall be paid by
the Company at the Redemption Price.
If any Junior Subordinated Note called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Junior Subordinated Note.
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SECTION 1107. JUNIOR SUBORDINATED NOTES REDEEMED IN PART.
Any Junior Subordinated Note that is to be redeemed only in part shall
be surrendered at an agency of the Company therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Junior Subordinated Note without service charge, a new Junior Subordinated Notes
of the same series, Stated Maturity and original issue date of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Junior
Subordinated Note so surrendered.
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ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Junior Subordinated Notes of a series except as otherwise
specified as contemplated by Section 301 for Junior Subordinated Notes of such
series.
The minimum amount of any sinking fund payment provided for by the
terms of Junior Subordinated Notes of any series is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Junior Subordinated Notes of any series is
herein referred to as an "optional sinking fund payment". If provided for by
the terms of Junior Subordinated Notes of any series, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Junior
Subordinated Notes of any series as provided for by the terms of Junior
Subordinated Notes of such series.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH JUNIOR SUBORDINATED
NOTES.
The Company (1) may deliver Outstanding Junior Subordinated Notes of a
series (other than any previously called for redemption), and (2) may apply as a
credit Junior Subordinated Notes of a series which have been redeemed either at
the election of the Company pursuant to the terms of such Junior Subordinated
Notes or through the application of permitted optional sinking fund payments
pursuant to the terms of such Junior Subordinated Notes, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Junior Subordinated Notes of such series required to be made pursuant to the
terms of such Junior Subordinated Notes as provided for by the terms of such
series; provided that such Junior Subordinated Notes have not been previously so
credited. Such Junior Subordinated Notes shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Junior
Subordinated Notes for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. REDEMPTION OF JUNIOR SUBORDINATED NOTES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for any
series of Junior Subordinated Notes, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Junior
Subordinated Notes of that series pursuant to Section 1202 and stating the basis
for such credit and that such Junior Subordinated Notes have not previously been
so credited and will also deliver to the Trustee any Junior Subordinated Notes
to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Junior Subordinated Notes to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Junior Subordinated Notes shall be made upon
the terms and in the manner stated in Sections 1106 and 1107.
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ARTICLE THIRTEEN
SUBORDINATION
SECTION 1301. JUNIOR SUBORDINATED NOTES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder of a Junior
Subordinated Note, by his acceptance thereof, likewise covenants and agrees,
that, to the extent and in the manner hereinafter set forth in this Article
(subject to Article Four and Section 1009), the payment of the principal of,
premium, if any, and interest (including Additional Interest) on each and all of
the Junior Subordinated Notes are hereby expressly made subordinate and subject
in right of payment to the prior payment in full in cash of all Senior
Indebtedness.
SECTION 1302. PAYMENT OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any payment or distribution of assets of the Company to creditors
upon any liquidation, dissolution, winding-up, reorganization, assignment for
the benefit of creditors, marshalling of assets or liabilities or any
bankruptcy, insolvency or similar proceedings of the Company (each such event,
if any, referred to as a Proceeding), the holders of Senior Indebtedness shall
be entitled to receive payment in full of all amounts due on or to become due on
or in respect of all Senior Indebtedness (including any interest accruing
thereon after the commencement of any such Proceeding, whether or not allowed as
a claim against the Company in such Proceeding), before the Holders of the
Junior Subordinated Notes are entitled to receive any payment or distribution
(excluding any payment described in Section 1309), on account of the principal
of, premium, if any, or interest (including Additional Interest, if any) on the
Junior Subordinated Notes or on account of any purchase, redemption or other
acquisition of Junior Subordinated Notes by the Company (all such payments,
distributions, purchases, redemptions and acquisitions, whether or not in
connection with a Proceeding, herein referred to, individually and collectively,
as a "Payment").
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee or the Holders of the Junior Subordinated Notes before all Senior
Indebtedness is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or to the trustee or trustees under any indenture pursuant to which
any instruments evidencing any such Senior Indebtedness may have been issued, as
their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.
For purposes of this Article "assets of the Company" shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least to
the extent provided in this Article with respect to the Junior Subordinated
Notes to the payment of all Senior Indebtedness that may at the time be
outstanding, provided, however, that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Eight hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 1302 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
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Eight hereof. Nothing in Section 1303 or in this Section 1302 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 607.
SECTION 1303. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
No payment of any principal, including redemption payments if any (premium,
if any), or interest on (including Additional Interest) the Junior Subordinated
Notes shall be made if
(i) any Senior Indebtedness is not paid when due whether at the stated
maturity of any such payment or by call for redemption and any applicable
grace period with respect to such default has ended, with such default
remaining uncured and such default has not been waived or otherwise ceased
to exist;
(ii) the maturity of any Senior Indebtedness has been accelerated
because of a default; or
(iii) notice has been given of the exercise of an option to require
repayment, mandatory payment or prepayment or otherwise.
In the event that, notwithstanding the foregoing, the Company shall make
any Payment to the Trustee or any Holder prohibited by the foregoing provisions
of this Section, then in such event such Payment shall be held in trust and paid
over and delivered forthwith to the holders of the Senior Indebtedness.
The provisions of this Section shall not apply to any Payment with respect
to which Section 1302 hereof would be applicable.
SECTION 1304. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Junior Subordinated Notes shall prevent the Company, at any time except
during the pendency of any Proceeding referred to in Section 1302 hereof or
under the conditions described in Section 1303 hereof, from making Payments.
Nothing in this Article shall have any effect on the right of the Holders or the
Trustee to accelerate the maturity of the Junior Subordinated Notes upon the
occurrence of an Event of Default, but, in that event, no payment may be made in
violation of the provisions of this Article with respect to the Junior
Subordinated Notes. If payment of the Junior Subordinated Notes is accelerated
because of an Event of Default, the Company shall promptly notify the holders of
the Senior Indebtedness (or their representatives) of such acceleration.
SECTION 1305. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
The rights of the Holders of the Junior Subordinated Notes shall be
subrogated to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of, premium, if any, and interest
(including Additional Interest) on the Junior Subordinated Notes shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Junior Subordinated Notes or the Trustee would be entitled
except for the provisions of this Article, and no payments pursuant to the
provisions of this Article to the holders of Senior Indebtedness by Holders of
the Junior Subordinated Notes or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Junior Subordinated Notes, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
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<PAGE>
SECTION 1306. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders on the one hand and the holders
of Senior Indebtedness on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Junior Subordinated Notes is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Junior Subordinated Notes, the
obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Indebtedness,
is intended to rank equally with all other general obligations of the Company),
to pay to the Holders of the Junior Subordinated Notes the principal of,
premium, if any, and interest (including Additional Interest) on the Junior
Subordinated Notes as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Junior Subordinated Notes and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Junior Subordinated Note from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness to receive cash, property and securities otherwise payable
or deliverable to the Trustee or such Holder or, under the conditions specified
in Section 1303, to prevent any payment prohibited by such Section or enforce
their rights pursuant to the penultimate paragraph in Section 1303.
SECTION 1307. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Junior Subordinated Note by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee his attorney-in-fact for any and all such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company, whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved.
SECTION 1308. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness to
enforce the subordination provisions provided herein shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or any failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Junior
Subordinated Notes, without incurring responsibility to the Holders of the
Junior Subordinated Notes and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of the
Junior Subordinated Notes to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness, or
otherwise amend or supplement in any manner Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) permit the Company to borrow, repay and then reborrow any
or all of the Senior Indebtedness; (iii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iv) release any Person liable in any manner for the collection of
Senior Indebtedness; (v) exercise or refrain from exercising any rights against
the Company and any other Person; (vi) apply any sums received by them to Senior
Indebtedness.
55
<PAGE>
SECTION 1309. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of Government Obligations held in trust by the Trustee
under Article Four or under Section 1009 for the payment of the principal of,
premium, if any, and interest (including Additional Interest) on any series of
Junior Subordinated Notes shall not be subordinated to the prior payment of any
Senior Indebtedness or subject to the restrictions set forth in this Article and
no Holder of such Junior Subordinated Notes nor the Trustee shall be obligated
to pay over such amount to the Company, any holder of Senior Indebtedness (or a
designated representative of such holder) or any other creditor of the Company.
SECTION 1310. NOTICE TO THE TRUSTEE.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Junior Subordinated
Notes pursuant to the provision of this Article. Notwithstanding the provisions
of this Article or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the Junior
Subordinated Notes pursuant to the provisions of this Article unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 601, shall be entitled to all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 1310 at least two Business Days prior to the date
upon which, by the terms hereof, any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Junior Subordinated Note), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 601, shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee on behalf of any such holder or holders. In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article, and if
such evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 1311. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 601 hereof, and
the Holders of the Junior Subordinated Notes shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Junior Subordinated Notes, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article, provided that the foregoing shall apply only if such court has
been apprised of the provisions of this Article.
56
<PAGE>
SECTION 1312. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the provisions of Section 601, the Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be
liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Junior Subordinated Notes or to the Company or to any
other Person cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 1313. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION
OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607 hereof.
SECTION 1314. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee (or the Company
or an Affiliate of the Company) shall have been appointed by the Company and be
then acting hereunder, the term "Trustee" as used in this Article shall in such
case (unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intends and
purposes as if such Paying Agent were named in this Article in addition to or in
place of the Trustee.
SECTION 1315. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON SUBORDINATION
PROVISIONS.
Each Holder by accepting a Junior Subordinated Note acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Junior Subordinated Notes, to acquire and continue to hold, or
to continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or to continue to hold, such
Senior Indebtedness.
57
<PAGE>
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
SECTION 1401. NO RECOURSE AGAINST OTHERS.
An incorporator or any past, present or future director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Junior Subordinated Notes or this Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Junior Subordinated Note, each Holder shall
waive and release all such liability. Such waiver and release shall be part of
the consideration for the issue of the Junior Subordinated Notes.
SECTION 1402. SET-OFF.
Notwithstanding anything to the contrary in this Indenture or in any Junior
Subordinated Note of any series, prior to the dissolution of any Securities
Trust that has issued Trust Securities related to a series of Junior
Subordinated Notes, the Company shall have the right to set-off and apply
against any payment it is otherwise required to make hereunder or thereunder
with respect to the principal of or interest (including any Additional Interest)
on the Junior Subordinated Notes of such series with and to the extent the
Company has theretofore made, or is concurrently on the date of such payment
making, a payment with respect to the Trust Securities of the series related to
such series of Junior Subordinated Notes under the applicable Guarantee.
Contemporaneously with, or as promptly as practicable after, any such payment
under such Guarantee, the Company shall deliver to the Trustee an Officers'
Certificate (upon which the Trustee shall be entitled to rely conclusively
without any requirement to investigate the facts contained therein) to the
effect that such payment has been made and that, as a result of such payment,
the corresponding payment under the related series of Junior Subordinated Notes
has been set-off in accordance with this Section 1402.
SECTION 1403. ASSIGNMENT; BINDING EFFECT.
The Company shall have the right at all times to assign any of its rights
or obligations under this Indenture to a direct or indirect wholly-owned
subsidiary of the Company, provided that, in the event of any such assignment,
the Company shall remain primarily liable for the performance of all such
obligations. This Indenture may also be assigned by the Company in connection
with a transaction described in Article Eight. This Indenture shall be binding
upon and inure to the benefit of the Company, the Trustee, the Holders, any
Security Registrar, Paying Agent, and Authenticating Agent and, to the extent
specifically set forth herein, the holders of Senior Indebtedness and their
respective successors and assigns. The provisions of Section 1006 are for the
benefit of the holders of the series of Trust Securities referred to therein
and, prior to the dissolution of the related Securities Trust, may be enforced
by such holders. A holder of a Trust Preferred Security shall not have the
right, as such a holder, to enforce any other provision of this Indenture.
SECTION 1404. ADDITIONAL INTEREST.
Whenever there is mentioned in this Indenture, in any context, the payment
of the principal of, premium, if any, or interest on, or in respect of, any
Junior Subordinated Note of any series, such mention shall be deemed to include
mention of the payment of Additional Interest provided for by the terms of such
series of Junior Subordinated Notes to the extent that, in such context,
Additional Interest is, were or would be payable in respect thereof pursuant to
such terms, and express mention of the payment of Additional Interest in any
provisions hereof shall not be construed as excluding Additional Interest in
those provisions hereof where such express mention is not made.
--------------------
58
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
VIRGINIA ELECTRIC AND POWER COMPANY
By
-----------------------------------
J. Kennerly Davis, Jr.
Vice President, Treasurer
and Corporate Secretary
Attest:
- -----------------------------
James P. Carney
Assistant Corporate Secretary
CHEMICAL BANK
Trustee
By
-----------------------------------
Vice President
Attest:
- ----------------------------------
Senior Trust Officer
59
<PAGE>
STATE OF VIRGINIA )
) SS.:
CITY OF RICHMOND )
On the ______ day of _______________, 1995, before me personally came
J. Kennerly Davis, Jr., to me known, who, being by me duly sworn, did depose and
say that he is a Vice President and the Treasurer and Corporate Secretary of
Virginia Electric and Power Company, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
_________________________________
Notary Public
STATE OF NEW YORK )
) SS.:
CITY OF NEW YORK )
On the ______ day of _______________, 1995, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of Chemical Bank, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
____________________________________
Notary Public
60
<PAGE>
EXHIBIT 4(b)
===============================================================
VIRGINIA ELECTRIC AND POWER COMPANY
TO
CHEMICAL BANK
TRUSTEE.
-------------------
FIRST SUPPLEMENTAL INDENTURE
DATED ________ 1, 1995
-------------------
$139,175,250
SERIES A __% JUNIOR SUBORDINATED NOTES
DUE SEPTEMBER 30, 2025
SUBJECT TO EXTENSION
===============================================================
<PAGE>
TABLE OF CONTENTS/1/
PAGE
----
ARTICLE 1
Series A Junior Subordinated Notes
Section 101. Establishment. ........................................ 1
Section 102. Definitions. .......................................... 2
Section 103. Payment of Principal and Interest. .................... 3
Section 104. Deferral of Maturity Date. ............................ 4
Section 105. Deferral of Interest Payments. ........................ 4
Section 106. Denominations ........................................ 5
Section 107. Global Securities .................................... 5
Section 108. Transfer .............................................. 6
Section 109. Redemption. ........................................... 6
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Company.................................... 7
Section 202. Ratification and Incorporation of Original Indenture... 7
Section 203. Date of First Supplemental Indenture................... 7
Section 204. Executed in Counterparts............................... 7
/1/ This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.
i
<PAGE>
FIRST SUPPLEMENTAL INDENTURE dated the 1st day of ________, 1995, by and
between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia public service
corporation, One James River Plaza, Richmond Virginia 23219 (the Company), and
CHEMICAL BANK, a New York banking corporation, 450 West 33rd Street, New York,
New York, 10001 (the Trustee).
The Company has heretofore entered into a Subordinated Note Indenture dated
[August 1, 1995] (the Original Indenture) with Chemical Bank.
The Original Indenture is incorporated herein by this reference and the
Original Indenture as supplemented by this First Supplemental Indenture is
herein called the Indenture.
Under the Original Indenture, a new series of Junior Subordinated Notes may
at any time be established by the Board of Directors of the Company in
accordance with the provisions of the Original Indenture and the terms of such
series may be described by a supplemental indenture executed by the Company and
the Trustee.
The Company proposes to create under the Indenture, a new series of Junior
Subordinated Notes.
Additional Junior Subordinated Notes of other series hereafter established,
except as may be limited in the Subordinated Note Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified.
All conditions necessary to authorize the execution, delivery and recording
of this First Supplemental Indenture and to make it a valid and binding
obligation of the Company have been done or performed.
NOW, THEREFORE, THIS INDENTURE WITNESSETH,
ARTICLE 1
Series A Junior Subordinated Notes
SECTION 101. Establishment. There is hereby established a new series of
Junior Subordinated Notes to be issued under the Indenture, to be designated as
the Company's Series A ___% Junior Subordinated Notes, due September 30, 2025,
subject to extension (the Series A Notes).
There are to be authenticated and delivered $139,175,250 principal amount
of Series A Notes, and no further Series A Notes shall be authenticated and
delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the
Original Indenture. The Series A Notes shall be issued in definitive fully
registered form.
<PAGE>
The Series A Notes shall be in substantially the form set out in Exhibit A
hereto. The entire principal amount of the Series A Notes shall initially be
evidenced by one certificate issued to the Property Trustee of Virginia Power
Capital Trust I.
Each Series A Note shall be dated the date of authentication thereof and
shall bear interest from the date of original issuance thereof or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for.
SECTION 102. Definitions.
"Deferred Interest" means each installment of interest not paid during any
Extension Period, and interest thereon. Deferred installments of interest shall
bear interest at the rate of ___% per annum from the applicable Interest Payment
Date to the date of payment, compounded quarterly.
"Extension Period" means any period during which the Company has elected to
defer payments of interest, which deferral may be for a period of up to twenty
consecutive quarters.
"Interest Payment Dates" means March 31, June 30, September 30 and December
31, commencing ______________, 1995.
"Investment Company Act Event" means that the Company shall have received
an Opinion of Counsel to the effect that, as a result of the occurrence of a
change in law or regulation or a written change in interpretation or application
of law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the
Securities Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act of 1940, as amended
which change becomes effective on or after the Issue Date.
"Issue Date" means _______________ __, 1995.
"Regular Record Date" means, with respect to each Interest Payment Date,
the close of business on the 15th calendar day preceding such Interest Payment
Date.
"Securities Trust" means Virginia Power Capital Trust I, a statutory
business trust formed by the Company under Delaware law to issue Trust
Securities, the proceeds of which will be used to purchase Series A Notes.
"Special Event" means an Investment Company Act Event or Tax Event.
"Stated Maturity" means September 30, 2025, subject to extension as
provided herein.
- 2 -
<PAGE>
"Tax Event" means that the Company shall have received an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, laws
(or any regulation thereunder) of the United States or any political subdivision
or taxing authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or regulations, there is more than an
insubstantial risk that (i) the Securities Trust would be subject to United
States federal income tax with respect to income accrued or received on the
Series A Notes, (ii) interest payable to the Securities Trust on the Series A
Notes would not be deductible by the Company for United States federal income
tax purposes or (iii) the Securities Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after Issue Date.
SECTION 103. Payment of Principal and Interest. The unpaid principal
amount of the Series A Notes shall bear interest at the rate of _____% per annum
until paid or duly provided for. Interest shall be paid quarterly in arrears on
each Interest Payment Date to the Person in whose name the Series A Notes are
registered on the Regular Record Date for such Interest Payment Date, provided
that interest payable at the Stated Maturity of principal or on a Redemption
Date as provided herein will be paid to the person to whom principal is payable.
Any such interest that is not (i) so punctually paid or duly provided for, or
(ii) subject to an Extension Period, will forthwith cease to be payable to the
Holders on such Regular Record Date and may either be paid to the Person or
Persons in whose name the Series A Notes are registered at the close of business
on a Special Record Date for the payment of such defaulted interest to be fixed
by the Trustee, notice whereof shall be given to Holders of the Series A Notes
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Series A Notes shall be listed, and
upon such notice as may be required by any such exchange, all as more fully
provided in the Original Indenture.
Payments of interest on the Series A Notes will include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Series A Notes shall be computed and paid on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable
on the Series A Notes is not a Business Day, then a payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day, except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on the date the payment was
originally payable.
Payment of the principal of and interest (including Additional Interest, if
any) due at the Stated Maturity or earlier redemption of the Series A Notes
shall be made upon surrender of the Series A Notes at the Corporate Trust Office
of the Trustee, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Payment of interest (including interest on any Interest Payment Date) will be
made, subject to such surrender where applicable, at the option of the Company,
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer at such
place and to such account at a banking institution in the
- 3 -
<PAGE>
United States as may be designated in writing to the Trustee at least 16 days
prior to the date for payment by the Person entitled thereto.
SECTION 104. Deferral of Maturity Date. The Company has the right to
extend the Stated Maturity of the Series A Notes for an additional ten years, to
September 30, 2035 upon providing notice to the Trustee and the Holders at least
30 calendar days prior to September 30, 2025; provided that (i) the Company
shall not then be bankrupt or insolvent or otherwise in default with respect to
the Series A Notes, (ii) the Company shall have timely paid all amounts due on
the Series A Notes for the preceding six quarters without deferral, (iii) if the
Securities Trust is the beneficial owner of the Series A Notes, the Securities
Trust has paid all distributions theretofore required to be paid on the Trust
Securities; (iv) the Series A Notes are then rated (or if the Securities Trust
is the beneficial owner of the Series A Notes, the Trust Preferred Securities
are then rated) in one of the four highest rating categories by a nationally
recognized statistical rating organization (as used in Rule 15c3-1(c)(2)(vi)(F)
under the Securities Exchange Act of 1934, as amended); and (v) the Company
shall have given the Trustee an Officers' Certificate and an Opinion of Counsel
to the effect that all conditions precedent to such extension provided for
herein have been complied with.
The Company shall pay, as additional interest on the Series A Notes, when
the same shall be due to the United States or any other taxing authority, the
amounts set forth in clause (i) of the definition of Additional Interest.
SECTION 105. Deferral of Interest Payments. The Company has the right at
any time and from time to time to extend the interest payment period of the
Series A Notes for up to 20 consecutive quarters (each, an Extension Period),
but not beyond the Stated Maturity. Notwithstanding the foregoing, the Company
has no right to extend its obligation to pay such amounts as are defined in
clause (i) of the definition of Additional Interest. Prior to the termination
of any such Extension Period, the Company may further extend the interest
payment period, provided that such Extension Period, together with all such
previous and further extensions of that Extension Period, shall not exceed 20
consecutive quarters. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due, the Company may select a new Extension Period, subject to the above
limitations and requirements.
Upon the termination of any Extension Period, which termination shall be on
an Interest Payment Date, the Company shall pay all Deferred Interest on the
next succeeding Interest Payment Date to the Person in whose name the Series A
Notes are registered on the Regular Record Date for such Interest Payment Date,
provided that Deferred Interest payable at Stated Maturity or on any Redemption
Date will be paid to the Person to whom principal is payable.
During any Extension Period, the Company shall not (i) declare or pay any
dividend or distribution on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock, or make any guarantee
payments with respect to the foregoing or (ii) make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any
- 4 -
<PAGE>
debt securities issued by the Company that rank pari passu with or junior to the
Series A Notes.
The Company shall give the Holder or Holders of the Series A Notes and the
Trustee notice, as provided in Sections 105 and 106, respectively, of the
Original Indenture, of its selection or extension of an Extension Period at
least one Business Day prior to the earlier of (i) the Regular Record Date
relating to the Interest Payment Date on which the Extension Period is to
commence or relating to the Interest Payment Date on which an Extension Period
that is being extended would otherwise terminate, or (ii) the date the Company
or Securities Trust is required to give notice to the New York Stock Exchange or
other applicable self-regulatory organization of the record date or the date
such distributions are payable.
SECTION 106. Denominations. The Series A Notes may be issued in the
denominations of $25, or any integral multiple thereof.
SECTION 107. Global Securities. If the Series A Notes are distributed to
holders of the Trust Securities of the Securities Trust in liquidation of such
holders' interests therein, the Series A Notes will be issued in the form of one
or more Global Securities registered in the name of the Depositary (which shall
be The Depository Trust Company) or its nominee. Except under the limited
circumstances described below, Series A Notes represented by the Global Security
will not be exchangeable for, and will not otherwise be issuable as, Series A
Notes in definitive form. The Global Securities described above may not be
transferred except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or to a successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series A Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.
A Global Security shall be exchangeable for Series A Notes registered in
the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security and no successor Depositary shall have been
appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, at a time when
the Depositary is required to be so registered to act as such Depositary and no
successor Depositary shall have been appointed, (ii) the Company in its sole
discretion determines that such Global Security shall be so exchangeable or
(iii) there shall have occurred an Event of Default with respect to the Series A
Notes. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Series A Notes registered in such names as
the Depositary shall direct.
- 5 -
<PAGE>
SECTION 108. Transfer. No service charge will be made for any transfer
or exchange of Series A Notes, but payment will be required of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.
The Company shall not be required (a) to issue, transfer or exchange any
Series A Notes during a period beginning at the opening of business 15 days
before the day of the mailing of a notice identifying the serial numbers of the
Series A Notes to be called for redemption, and ending at the close of business
on the day of the mailing, or (b) to transfer or exchange any Series A Notes
theretofore selected for redemption in whole or in part, except the unredeemed
portion of any Series A Note redeemed in part.
SECTION 109. Redemption. The Series A Notes shall be subject to
redemption at the option of the Company, in whole or in part, without premium or
penalty, at any time or from time to time on or after September 30, 2000, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest, including Additional Interest, if any, to the
Redemption Date; provided, however, that no redemption in part shall be
permitted if it would result in the delisting of the Trust Preferred Securities.
In addition, upon occurrence of a Special Event, the Company may, within 90 days
following the occurrence thereof, elect to redeem the Series A Notes, in whole,
at a price equal to 100% of the principal amount to be redeemed plus any accrued
but unpaid interest (including Additional Interest) to the Redemption Date,
within 90 days following the occurrence of a Special Event; provided, however,
that if at the time of the occurrence of the Special Event, there is available
to the Company or the Securities Trust the opportunity to eliminate, within such
90-day period, the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure, which would have no adverse effect on the Securities Trust, the Company
or the holders of Trust Securities, the Company or the Securities Trust, as the
case may be, will pursue such measure in lieu of redemption.
In the event of redemption of the Series A Notes in part only, a new Series
A Note or Notes for the unredeemed portion will be issued in the name or names
of the Holders thereof upon the surrender thereof.
The Series A Notes will not have a sinking fund.
Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.
Any redemption of less than all of the Series A Notes shall be divisible by
$25.
ARTICLE 2
Miscellaneous Provisions
- 6 -
<PAGE>
SECTION 201. Recitals by Company. The recitals in this First
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of Series A Notes and of this First Supplemental Indenture
as fully and with like effect as if set forth herein in full.
SECTION 202. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture, as heretofore supplemented and modified,
and this First Supplemental Indenture shall be read, taken and construed as one
and the same instrument.
SECTION 203. Date of First Supplemental Indenture. Although this First
Supplemental Indenture is dated for convenience and for the purpose of reference
__________ ___, 1995, the actual dates of execution by the Company and by the
Trustee are indicated by their respective acknowledgements hereto annexed.
SECTION 204. Executed in Counterparts. This First Supplemental Indenture
may be simultaneously executed in several counterparts, each of which shall be
deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
- 7 -
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officers, all as of the day
and year first above written.
VIRGINIA ELECTRIC AND POWER COMPANY
_______________________________
Vice President
Attest:______________________________
Assistant Corporate Secretary
CHEMICAL BANK
_____________________________
Vice President
Attest:______________________________
Assistant Secretary
- 8 -
<PAGE>
EXHIBIT A
---------
REGISTERED REGISTERED
NO. CUSIP NO.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO VIRGINIA ELECTRIC
AND POWER COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]/2/
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE
INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN
FULL OF ALL SENIOR INDEBTEDNESS AND THIS SECURITY IS ISSUED SUBJECT TO THE
PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.
VIRGINIA ELECTRIC AND POWER COMPANY
SERIES A [ %] JUNIOR SUBORDINATED NOTE
DUE SEPTEMBER 30, 2025
SUBJECT TO EXTENSION
Principal Amount: Regular Record Date: 15th calendar
day prior to
Original Issue Date: Interest
Payment Date
Stated Maturity: September 30, 2025,
subject to extension
for up to ten years Interest Payment Dates: March 31
June 30
Interest Rate: September 30
December 31
Authorized Initial Redemption Date: September 30,
Denomination: $25 2000
- ------------------
/2/The bracketed language would apply to and appear on only a Global Security.
Exhibit A - Page 1
<PAGE>
Virginia Electric and Power Company, a public service corporation duly
organized and existing under the laws of the Commonwealth of Virginia (the
Company, which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to
or registered assigns, the principal sum of
on the Stated Maturity shown above (or upon earlier redemption), and to pay
interest thereon from the Original Issue Date shown above, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, quarterly in arrears on each Interest Payment Date as specified above,
commencing on the Interest Payment Date next succeeding the Original Issue Date
shown above and on the Stated Maturity (or upon earlier redemption) at the rate
per annum shown above until the principal hereof is paid or made available for
payment and on any overdue principal and on any overdue installment of interest.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date (other than an Interest Payment Date that is the Stated
Maturity or on a Redemption Date) will, as provided in such Indenture, be paid
to the Person in whose name this Note (the Note) is registered at the close of
business on the Regular Record Date as specified above next preceding such
Interest Payment Date, provided that any interest payable at Stated Maturity or
on any Redemption Date will be paid to the Person to whom principal is payable.
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Note is registered at the close of business on a Special Record Date
for the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Notes of this series not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange, if
any, on which the Notes of this series shall be listed, and upon such notice as
may be required by any such exchange, all as more fully provided in the
Indenture.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this
Note shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Note is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day, except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust
Exhibit A - Page 2
<PAGE>
Office of the Trustee or the principal corporate trust office of the Property
Trustee of the Securities Trust are closed for business.
The Company has the right to extend the Stated Maturity of the Series A
Notes for an additional ten years, to September 30, 2035, upon providing notice
to the Trustee and the Holders at least 30 calendar days prior to September 30,
2025; provided that (i) the Company shall not then be bankrupt or insolvent or
otherwise in default with respect to the Series A Notes, (ii) the Company shall
have timely paid all amounts due on the Series A Notes for the preceding six
quarters without deferral, (iii) if the Securities Trust is the beneficial owner
of the Series A Notes, the Securities Trust has paid all distributions
theretofore required to be paid on the Trust Securities; (iv) the Series A Notes
are then rated (or if the Securities Trust is the beneficial owner of the Series
A Notes, the Trust Preferred Securities are then rated) in one of the four
highest rating categories by a nationally recognized statistical rating
organization (as used in Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange
Act of 1934, as amended); and (v) the Company shall have given the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that all
conditions precedent to such extension provided for herein have been complied
with.
The Company shall have the right at any time and from time to time during
the term of this Note to extend the interest payment period of such Note for up
to 20 consecutive quarters but not beyond the Stated Maturity of this Note
(each, an Extension Period), during which periods unpaid interest (together with
interest thereon) will compound quarterly at the Interest Rate (Deferred
Interest). Upon the termination of each Extension Period, which shall be an
Interest Payment Date, the Company shall pay all Deferred Interest on the next
succeeding Interest Payment Date to the Person in whose name this Note is
registered at the close of business on the Regular Record Date for such Interest
Payment Date, provided that any Deferred Interest payable at Stated Maturity or
on any Redemption Date will be paid to the Person to whom principal is payable.
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that such Extension Period together
with all such previous and further extensions thereof shall not exceed 20
consecutive quarters. Upon the termination of any such Extension Period, and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due, the Company may select a new Extension Period, subject to the above
requirements. During any such Extension Period, the Company shall not (i)
declare or pay any dividend or distribution on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock, or make
any guarantee payments with respect to the foregoing or (ii) make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to
this Note. The Company shall give the Holder of this Note and the Trustee
notice of its selection or extension of an Extension Period at least one
Business Day prior to the earlier of (i) the Regular Record Date relating to the
Interest Payment Date on which the Extension Period is to commence or relating
to the Interest Payment Date on which an Extension Period that is being extended
would otherwise terminate or (ii) the date the Company or Securities Trust is
required to give notice to the New York Stock Exchange or other applicable self-
regulatory organization of the record date or the date distributions are
payable.
Exhibit A - Page 3
<PAGE>
The Company also shall be obligated to pay when due and without extension
all additional amounts as may be required so that the net amount received and
retained by the Holder (if the Holder is a Securities Trust) after paying taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other taxing authority
will not be less than the amounts such Holder would have received had no such
taxes, duties, assessments, or other governmental charges been imposed.
Payment of the principal of and interest (including Additional Interest, if
any) due at the Stated Maturity or earlier redemption of the Series A Notes
shall be made upon surrender of the Series A Notes at the Corporate Trust Office
of the Trustee, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Payment of interest (including interest on any Interest Payment Date) will be
made, subject to such surrender where applicable, at the option of the Company,
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer at such
place and to such account at a banking institution in the United States as may
be designated in writing to the Trustee at least 16 days prior to the date for
payment by the Person entitled thereto.
The indebtedness evidenced by this Note is, to the extent provided in the
Indenture, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness (as defined in the Indenture), and this Note is
issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes. Each Holder hereof, by his acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
[REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.]
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
Exhibit A - Page 4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ______________ ___, 1995
VIRGINIA ELECTRIC AND POWER COMPANY
By:
--------------------------------------------------
[President/Vice President]
Attest:
By:
--------------------------------------------------
[Corporate Secretary/Assistant Corporate Secretary]
[Seal of VIRGINIA ELECTRIC AND POWER COMPANY appears here]
Exhibit A - Page 5
<PAGE>
[VIRGINIA ELECTRIC AND POWER COMPANY
SERIES A [ %] JUNIOR SUBORDINATED NOTE
Reverse of Note, if applicable]
This Note is one of a duly authorized issue of Junior Subordinated
Notes of the Company, issued and issuable in one or more series under a
Subordinated Note Indenture, dated as of ___________ ___, 1995, as supplemented
(the Indenture), between the Company and Chemical Bank, as Trustee (the Trustee,
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Notes issued
thereunder and of the terms upon which said Notes are, and are to be,
authenticated and delivered. This Note is one of the series designated [on the
face hereof] as Series A [ %] Junior Subordinated Notes, due September 30,
2025, subject to extension (the Notes) in aggregate principal amount of up to $[
].
The Company shall have the right, subject to the terms and conditions
of the Indenture, to redeem this Note at any time on or after September 30, 2000
at the option of the Company, without premium or penalty, in whole or in part,
at a Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest, including any Additional Interest, if any, to the
Redemption Date. Upon the occurrence of a Special Event (as defined below), the
Company may, within 90 days following the occurrence thereof and subject to the
terms and conditions of the Indenture, redeem this Note without premium or
penalty, in whole, at a Redemption Price equal to 100% of the principal amount
thereof plus accrued but unpaid interest, including any Additional Interest, if
any, to the Redemption Date provided, however, that if at the time of the
occurrence of the Special Event, there is available to the Company or the
related Securities Trust the opportunity to eliminate, within such 90-day
period, the Special Event by taking some ministerial action or some other
similar reasonable measure which would have no adverse effect on the Securities
Trust, the Company or the holders of Trust Securities, the Company or the
Securities Trust, as the case may be, will pursue such measure in lieu of
redemption. A Special Event may be a Tax Event or an Investment Company Act
Event. "Tax Event" means that the Company shall have received an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, laws
(or any regulation thereunder) of the United States or any political subdivision
or taxing authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or regulations, there is more than an
insubstantial risk that (i) the related Securities Trust would be subject to
United States federal income tax with respect to income accrued or received on
the Notes, (ii) interest payable to the related Securities Trust would not be
deductible by the Company for United States federal income tax purposes or (iii)
the related Securities Trust would be subject to more than a de minimis amount
of other taxes, duties or other governmental charges, which change or amendment
becomes effective on or after the Original Issue Date. "Investment Company Act
Event" means that the Company shall have received an Opinion of Counsel to the
effect that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority, there is
more than an insubstantial risk that the related Securities
Exhibit A - Page 6
<PAGE>
Trust is or will be considered an "investment company" which is required to be
registered under the Investment Company Act of 1940, as amended, which change
becomes effective on or after the Original Issue Date.
In the event of redemption of this Note in part only, a new Note or
Notes for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the surrender hereof. The Notes will not have a sinking fund.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in principal amount of the Notes at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company for such purpose, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and of like tenor and for the same aggregate principal amount,
will be issued to the designated transferee or transferees. No service charge
shall be made for any such registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Exhibit A - Page 7
<PAGE>
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Notes are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same upon
surrender of the Note or Notes to be exchanged at the office or agency of the
Company.
This Note shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
Exhibit A - Page 8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT--_________
TEN ENT -- as tenants by the entireties (Cust)
JT TEN -- as joint tenants with rights of Custodian __________
survivorship and not as tenants (Minor)
in common
Under Uniform Gifts to Minors
Act __________________________
(State)
Additional abbreviations may also be used though not on the above list.
_____________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), and transfer(s) unto
(Please insert social security or other identifying number of
assignee)
______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
_____________________________________________________________________________
_____________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
_____________________________________________________________________________
_____________________________________________________________________________
agent to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:______________________ ________________________________________
________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within instrument in every particular,
without alteration or enlargement, or any change
whatever.
Exhibit A - Page 9
<PAGE>
Exhibit B
This is one of the Series A Notes of the series designated therein referred to
in the within-mentioned Indenture.
CHEMICAL BANK
By___________________
Authorized Officer
Exhibit A - Page 10
<PAGE>
Exhibit 4(c)
TRUST AGREEMENT
THIS TRUST AGREEMENT, dated as of July __, 1995, between Virginia Electric
and Power Company, a Virginia corporation, as Depositor (the "Depositor"), and
Chemical Bank Delaware, duly organized and existing in the State of Delaware, as
Trustee (the "Trustee"). The Depositor and the Trustee hereby agree as follows:
1. The trust created hereby shall be known as "Virginia Power Capital
Trust I", in which name the Trustee, or the Depositor to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trustee the sum of $10. The Trustee hereby acknowledges receipt of such amount
in trust from the Depositor, which amount shall constitute the initial trust
estate. The Trustee hereby declares that it will hold the trust estate in trust
for the Depositor. It is the intention of the parties hereto that the Trust
created hereby constitute a business trust under Chapter 38 of title 12 of the
Delaware code, 12 Dec. C. (S)3801 set seq. (the "Business Trust Act"), and that
this document constitute the governing instrument of the Trust. The Trustee is
hereby authorized and directed to execute and file a certificate of trust with
the Delaware Secretary of State substantially in the form attached hereto or in
such other form as the Trustee may approve.
3. The Depositor and the Trustee will enter into an amended and restated
Trust Agreement satisfactory to each such party and substantially in the form
included as Exhibit 4(d) to the Registration Statement on Form S-3, (the "1933
Act Registration Statement") referred to below, or in such other form as the
Trustee and the Depositor may approve, to provide for the contemplated operation
of the Trust created hereby and the issuance of the Preferred Securities and
Common Securities referred to therein. Prior to the execution and delivery of
such amended and restated Trust Agreement, the Trustee shall not have any duty
or obligation hereunder or with respect of the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise. However, notwithstanding the foregoing, the Trustee
may take all actions deemed proper as are necessary to effect the transactions
contemplated herein.
<PAGE>
4. The Depositor and the Trustee hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the 1933 Act Registration Statement including pre-effective or
post-effective amendments to such Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and (b) a Registration Statement on Form 8-A (the "1934
Act Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust under Section 12(b) of the Securities Exchange Act of 1934, as
amended; (ii) to file with the New York Stock Exchange and execute on behalf of
the Trust a listing application and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Preferred Securities to be listed on the New York Stock
Exchange; and (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or "Blue Sky" laws of such jurisdictions as the Depositor, on behalf of the
Trust, may deem necessary or desirable. The Trustee further hereby ratifies and
approves all actions having previously been taken with respect to the foregoing.
In the event that any filing referred to in clauses (i)-(iii) above is required
by the rules and regulations of the Commission, the New York Stock Exchange or
state securities or Blue Sky laws, to be executed on behalf of the Trust by the
Trustee, Chemical Bank Delaware in its capacity as Trustee of the Trust, is
hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that
Chemical Bank Delaware in its capacity as Trustee of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the New
York Stock Exchange or state securities or Blue Sky laws.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be one (1) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Depositor which may increase or decrease the
number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. Any Trustee may resign upon thirty days prior notice to
the Depositor.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
VIRGINIA ELECTRIC AND POWER COMPANY,
as Depositor
By:
_____________________________
Name:
Title: Corporate Secretary
CHEMICAL BANK DELAWARE, as Trustee
By:
_____________________________
Name:
Title: Senior Trust Officer
3
<PAGE>
Exhibit 4(d)
VIRGINIA POWER CAPITAL TRUST I
AMENDED AND RESTATED
TRUST AGREEMENT
among
VIRGINIA ELECTRIC AND POWER COMPANY, as Depositor,
CHEMICAL BANK, as Property Trustee,
CHEMICAL BANK DELAWARE, as Delaware Trustee
and
J. KENNERLY DAVIS, JR. and JAMES P. CARNEY, as Administrative
Trustees
Dated as of ______ __, 1995
<PAGE>
VIRGINIA POWER CAPITAL TRUST I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
Section 310(a)(1)......................................8.07
(a)(2)...........................................8.07
(a)(3)...........................................8.09
(a)(4)......................................Not Applicable
(b)..............................................8.08
Section 311(a).........................................8.13
(b)..............................................8.13
Section 312(a).........................................5.07
(b)..............................................5.07
(c)..............................................5.07
Section 313(a)......................................8.14(a)
(a)(4)........................................8.14(b)
(b)...........................................8.14(b)
(c)...........................................8.14(a)
(d)..................................8.14(a), 8.14(b)
Section 314(a).........................................8.15
(b).........................................Not Applicable
(c)(1).....................................8.15, 8.16
(c)(2)...........................................8.16
(c)(3)...........................................8.16
(d).........................................Not Applicable
(e)..............................................8.16
Section 315(a).........................................8.01
(b).....................................8.02, 8.14(b)
(c)...........................................8.01(a)
(d)........................................8.01, 8.03
(e)........................................ Not Applicable
Section 316(a)....................................Not Applicable
(a)(1)(A)...................................Not Applicable
(a)(1)(B)...................................Not Applicable
(a)(2)......................................Not Applicable
(b).........................................Not Applicable
(c).........................................Not Applicable
Section 317(a)(1).................................Not Applicable
(a)(2)......................................Not Applicable
(b)..............................................5.09
Section 318(a)........................................10.10
______________________________
Note: This Cross-Reference Table does not constitute part of
the Trust Agreement and shall not affect the interpretation of
any of its terms or provisions.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Defined Terms
Section 1.01 Definitions................................ 1
ARTICLE II
Establishment of the Trust
Section 2.01 Name...................................... 7
Section 2.02 Office of the Delaware Trustee;
Principal Place of Business............... 7
Section 2.03 Initial Contribution of Trust Property;
Organizational Expenses................... 8
Section 2.04 Issuance of the Preferred Securities...... 8
Section 2.05 Subscription and Purchase of Junior
Subordinated Notes; Issuance of the
Common Securities......................... 8
Section 2.06 Declaration of Trust...................... 8
Section 2.07 Authorization to Enter into Certain
Transactions.............................. 8
Section 2.07 Assets of Trust........................... 11
Section 2.08 Title to Trust Property................... 11
ARTICLE III
Payment Account
Section 3.01 Payment Account........................... 11
ARTICLE IV
Distributions; Redemption
Section 4.01 Distributions............................. 11
Section 4.02 Redemption................................ 12
Section 4.03 Subordination of Common Securities........ 13
Section 4.04 Payment Procedures........................ 14
Section 4.05 Tax Returns and Reports................... 14
ARTICLE V
Trust Securities Certificates
Section 5.01 Initial Ownership......................... 14
Section 5.02 The Trust Securities Certificates......... 14
Section 5.03 Authentication of Trust Securities
Certificates.............................. 15
Section 5.04 Registration of Transfer and Exchange of
Preferred Securities Certificates......... 15
Section 5.05 Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates............. 15
Section 5.06 Persons Deemed Securityholders............ 16
Section 5.07 Access to List of Securityholders' Names
and Addresses............................. 16
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Section 5.08 Maintenance of Office or Agency........... 16
Section 5.09 Appointment of Paying Agent............... 16
Section 5.10 Ownership of Common Securities by
Depositor................................. 17
Section 5.11 Book-Entry Preferred Securities
Certificates; Common Securities
Certificate............................... 17
Section 5.12 Notices to Clearing Agency................ 17
Section 5.13 Definitive Preferred Securities
Certificates.............................. 18
Section 5.14 Rights of Securityholders................. 18
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01 Limitations on Voting Rights.............. 18
Section 6.02 Notice of Meetings........................ 19
Section 6.03 Meetings of Preferred Securityholders..... 19
Section 6.04 Voting Rights............................. 19
Section 6.05 Proxies, etc.............................. 20
Section 6.06 Securityholder Action by Written
Consent................................... 20
Section 6.07 Record Date for Voting and Other
Purposes.................................. 20
Section 6.08 Acts of Securityholders................... 20
Section 6.09 Inspection of Records..................... 21
ARTICLE VII
Representations and Warranties of the Trustees...... 21
ARTICLE VIII
The Trustees
Section 8.01 Certain Duties and Responsibilities....... 22
Section 8.02 Notice of Defaults........................ 22
Section 8.03 Certain Rights of Property Trustee........ 23
Section 8.04 Not Responsible for Recitals or Issuance
of Securities............................. 24
Section 8.05 May Hold Securities....................... 24
Section 8.06 Compensation; Fees; Indemnity............. 24
Section 8.07 Corporate Property Trustee Required;
Eligibility............................... 24
Section 8.08 Conflicting Interests..................... 25
Section 8.09 Co-Trustees and Separate Trustee.......... 25
Section 8.10 Resignation and Removal; Appointment of
Successor................................. 26
Section 8.11 Acceptance of Appointment by Successor.... 27
Section 8.12 Merger, Conversion, Consolidation or
Succession to Business.................... 27
Section 8.13 Preferential Collection of Claims
Against Depositor or Trust................ 27
Section 8.14 Reports by Property Trustee............... 28
Section 8.15 Reports to the Property Trustee........... 28
Section 8.16 Evidence of Compliance with Conditions
Precedent................................. 28
Section 8.17 Number of Trustees........................ 28
Section 8.18 Delegation of Power....................... 29
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ARTICLE IX
Termination and Liquidation
Section 9.01 Termination Upon Expiration Date.......... 29
Section 9.02 Early Termination......................... 29
Section 9.03 Termination............................... 29
Section 9.04 Liquidation............................... 29
Section 9.05 Bankruptcy................................ 30
ARTICLE X
Miscellaneous Provisions
Section 10.01 Guarantee by the Depositor................ 31
Section 10.02 Limitation of Rights of Securityholders... 31
Section 10.03 Amendment................................. 31
Section 10.04 Separability.............................. 32
Section 10.05 Governing Law............................. 32
Section 10.06 Successors................................ 32
Section 10.07 Headings.................................. 32
Section 10.08 Notice and Demand......................... 32
Section 10.09 Agreement Not to Petition................. 32
Section 10.10 Conflict with Trust Indenture Act......... 33
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
iii
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of ________ __,
1995, among (i) Virginia Electric and Power Company, a Virginia
public service corporation (the Depositor or the Company),
(ii) Chemical Bank, a banking corporation duly organized and
existing under the laws of New York, as trustee (the Property
Trustee and, in its separate corporate capacity and not in its
capacity as Trustee, the Bank), (iii) Chemical Bank Delaware, a
banking corporation duly organized under the laws of Delaware, as
Delaware trustee (the Delaware Trustee, and in its separate
corporate capacity and not in its capacity as Delaware Trustee, the
Delaware Bank), and (iv) J. Kennerly Davis, Jr., an individual, and
James P. Carney, an individual, as administrative trustees (each an
Administrative Trustee and together the Administrative Trustees)
(the Property Trustee, the Delaware Trustee and the Administrative
Trustees referred to collectively as the Trustees) and (v) the
several Holders, as hereinafter defined.
WITNESSETH:
WHEREAS, the Depositor and the Delaware Trustee have
heretofore duly declared and established a business trust pursuant
to the Delaware Business Trust Act by the entering into of that
certain Trust Agreement, dated as of July __, 1995 (the Original
Trust Agreement), and by the execution and filing by the Delaware
Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, dated July 20, 1995; and
WHEREAS, the parties hereto desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the addition of the Bank, J.
Kennerly David, Jr. and James P. Carney as trustees of the Trust,
(ii) the acquisition by the Trust from the Depositor of all of the
right, title and interest in the Junior Subordinated Notes, (iii)
the issuance of the Common Securities by the Trust to the Depositor
and (iv) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement;
NOW THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged,
each party, for the benefit of the other party and for the benefit
of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
ARTICLE I
Defined Terms
Section 1.01 Definitions. For all purposes of this Trust
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or a Section, as
the case may be, of this Trust Agreement; and
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(d) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of
a given Liquidation Amount and/or a given period, the amount of
Additional Interest (as defined in the Subordinated Indenture) paid
by the Depositor on a Like Amount of Junior Subordinated Notes for
such period.
"Administrative Trustee" means each of the individuals
identified as an "Administrative Trustee" in the preamble to this
Trust Agreement solely in their capacities as Administrative
Trustees of the Trust formed hereunder and not in their individual
capacities, or such trustees' successor in interest in such
capacity, or any successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the
purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or
in respect of such Person under federal bankruptcy law or any
other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee sequestrator or other
similar official of such Person or of any substantial part of
its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or of the consent by it
to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under federal
bankruptcy law or any other applicable federal or state law,
or the consent by it to the filing of such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as
they become due, or the taking of action by such Person in
furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.09.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have
been duly adopted by the Depositor's Board of Directors or a duly
authorized committee thereof and to be in full force and effect on
the date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a
beneficial interest in the Preferred Securities Certificates,
ownership and transfers of which shall be made through book entries
by a Clearing Agency as described in Section 5.11.
2
<PAGE>
"Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banks in New York, New York are
authorized or obligated by law or executive order to remain closed
or (iii) a day on which the Corporate Trust Office or the Indenture
Trustee's principal corporate trust office is closed for business.
"Certificate Depository Agreement" means the agreement among
the Trust, the Depositor and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, relating to
the Trust Certificates, substantially in the form attached as
Exhibit B, as the same may be amended and supplemented from time to
- ---------
time.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository Trust Company
will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to
time a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities
Exchange Act of 1934, or, if at any time after the execution of
this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Security" means an ownership interest in the Trust
having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached
as Exhibit C.
---------
"Corporate Trust Office" means the office of the Property
Trustee located in New York, New York at which its corporate trust
business shall be principally administered.
"Definitive Preferred Securities Certificates" means either or
both (as the context requires) of (i) Preferred Securities
Certificates issued in certificated, fully registered form as
provided in Section 5.11(a) and (ii) Preferred Securities
Certificates issued in certificated, fully registered form as
provided in Section 5.13.
"Delaware Bank" has the meaning specified in the preamble to
this Trust Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be
amended from time to time.
"Delaware Trustee" means the commercial bank or trust company
identified as the Delaware Trustee and has the meaning specified in
the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust formed and continued hereunder and
not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein
provided.
"Depositor" means Virginia Electric and Power Company,
including its status as holder of the Common Securities.
"Distribution Date" has the meaning specified in Section
4.01(a).
3
<PAGE>
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body):
(i) the occurrence of an Indenture Event of Default; or
(ii) default by the Property Trustee in the payment of
any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days; or
(iii) default by the Property Trustee in the payment
of any Redemption Price of any Trust Security when it becomes
due and payable; or
(iv) default in the performance, or breach, of any
covenant or warranty of the Trustees in this Trust Agreement
(other than a covenant or warranty a default in whose
performance or breach is dealt with in clause (ii) or (iii),
above) and continuation of such default or breach for a period
of 60 days after there has been given, by registered or
certified mail, to the Trustees by the Holders of at least 10%
in Liquidation Amount of the Outstanding Preferred Securities
a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(v) the occurrence of a Bankruptcy Event with respect to
the Trustees.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Company and the Trust, substantially in the
form attached as Exhibit D, as amended from time to time.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Guarantee" means the Guarantee Agreement executed and
delivered by the Company and Chemical Bank, as Guarantee Trustee,
contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the Preferred Securityholders, as
amended from time to time.
"Indenture Event of Default" means an "Event of Default" as
defined in the Subordinated Indenture.
"Indenture Redemption Date" means "Redemption Date," as
defined in the Subordinated Indenture.
"Indenture Trustee" means the trustee under the Subordinated
Indenture.
"Issue Date" means the date of execution and delivery of this
Trust Agreement.
"Junior Subordinated Notes" means the $139,175,250 aggregate
principal amount of the Depositor's ___% junior subordinated notes,
due September 30, 2025 (subject to extension), issued pursuant to
the Subordinated Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation,
assignment, security interest or preference, priority or other
security agreement or preferential arrangement of any kind or
nature whatsoever.
"Like Amount" means (i) Trust Securities having a Liquidation
Amount equal to the principal amount of Junior Subordinated Notes
to be contemporaneously redeemed in accordance with the
Subordinated Indenture and the proceeds of which will be used to
pay the Redemption Price of such Trust Securities and (ii) Junior
Subordinated
4
<PAGE>
Notes having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Junior Subordinated Notes
are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Junior Subordinated
Notes are to be distributed to Holders of Trust Securities in
connection with a dissolution and liquidation of the Trust pursuant
to Section 9.04.
"Liquidation Distribution" has the meaning specified in
Section 9.04(d).
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Depositor, and
delivered to the appropriate Trustee. One of the officers signing
an Officers' Certificate given pursuant to Section 8.16 shall be
the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as is necessary, in such
officer's opinion, to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Trust, the Trustees or the Depositor, but
not an employee of the Trust or the Trustees, and who shall be
reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities
theretofore authenticated and delivered under this Trust Agreement,
except:
(i) Preferred Securities theretofore cancelled by the
Administrative Trustees or delivered to the Administrative
Trustees for cancellation;
(ii) Preferred Securities for whose payment or redemption
money in the necessary amount has been theretofore deposited
with the Property Trustee or any Paying Agent for the Holders
of such Preferred Securities; provided that if such Preferred
Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Trust Agreement; and
(iii) Preferred Securities which have been paid
pursuant to Section 5.05 or in exchange for or in lieu of
which other Preferred Securities have been authenticated and
delivered pursuant to this Trust Agreement;
5
<PAGE>
provided, however, that in determining whether the Holders of the
requisite Liquidation Amount of the Outstanding Preferred
Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Preferred
Securities owned by the Depositor, any Trustee or any Affiliate of
the Depositor or any Trustee shall be disregarded and deemed not to
be Outstanding, except that (a) in determining whether any Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred
Securities which such Trustee knows to be so owned shall be so
disregarded and (b) the foregoing shall not apply at any time when
all of the outstanding Preferred Securities are owned by the
Depositor, one or more Trustees and/or any such Affiliate.
Preferred Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so
to act with respect to such Preferred Securities and that the
pledgee is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a
Book Entry Preferred Securities Certificate as reflected in the
records of the Clearing Agency or, if a Clearing Agency Participant
is not the Owner, then as reflected in the records of a Person
maintaining an account with such Clearing Agency (directly or
indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.09 and shall initially be the
Property Trustee.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee for the
benefit of the Securityholders in which all amounts paid in respect
of the Junior Subordinated Notes will be held and from which the
Trustee shall make payments to the Securityholders in accordance
with Section 4.01.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation,
unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Security" means an ownership interest in the Trust
having a Liquidation Amount of $25 and having rights provided
therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate
evidencing ownership of Preferred Securities, substantially in the
form attached as Exhibit E.
---------
"Property Trustee" means the commercial bank or trust company
identified as the Property Trustee in the preamble to this Trust
Agreement solely in its capacity as Property Trustee of the Trust
formed and continued hereunder and not in its individual capacity,
or its successor in interest in such capacity, or any successor
trustee as herein provided.
"Redemption Date" means, with respect to any Security to be
redeemed, the date fixed for such redemption by or pursuant to this
Trust Agreement; provided that each Indenture Redemption Date shall
be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any date fixed for
redemption of any Trust Security, the Liquidation Amount of such
Trust Security, plus accumulated and unpaid Distributions to such
date.
"Relevant Trustee" shall have the meaning specified in Section
8.10.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.04.
6
<PAGE>
"Securityholder" or "Holder" means a Person in whose name a
Trust Security or Securities is registered in the Securities
Register; any such Person shall be deemed to be a beneficial owner
within the meaning of the Delaware Business Trust Act.
"Subordinated Indenture" means the Indenture, dated as of
August 1, 1995, between the Depositor and the Indenture Trustee, as
supplemented by the Supplemental Indenture, dated as of August 1,
1995, by and between the Depositor and the Indenture Trustee.
"Trust" means the Delaware business trust created hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof, including all
exhibits hereto, including, for all purposes of this Amended and
Restated Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Amended and Restated Trust
Agreement and any such modification, amendment or supplement,
respectively.
"Trustees" means the Persons identified as Trustees in the
preamble to this Trust Agreement solely in their capacities as
Trustees of the Trust formed hereunder and not in their individual
capacities, or their successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to
the extent required by any such amendment, the Trust Indenture Act
of 1939 as so amended.
"Trust Property" means (i) the Junior Subordinated Notes, (ii)
any cash on deposit in, or owing to, the Payment Account and (iii)
all proceeds and rights in respect of the foregoing and any other
property and assets for the time being held or deemed to be held by
the Trustees pursuant to the trusts of this Trust Agreement.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates,
and "Trust Securities" means all of the Common Securities and Trust
Securities.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Underwriting Agreement" means the Underwriting Agreement,
dated as of _______ __, 1995, among the Trust, the Depositor and
the underwriters named therein.
ARTICLE II
Establishment of the Trust
Section 2.01 Name. The Trust continued hereby shall be
known as "Virginia Power Capital Trust I", in which name the
Trustees may conduct the business of the Trust, make and execute
contracts and other instruments on behalf of the Trust and sue and
be sued. The Administrative Trustees may change the name of the
Trust from time to time following written notice to the Holders.
Section 2.02 Office of the Delaware Trustee; Principal Place
of Business. The address of the Property Trustee is Chemical Bank,
450 West 33rd Street, New York, New York 10001, or at such other
address in New York as the Property Trustee may designate by
written notice to the Securityholders and the Depositor. The
principal place of business of the Delaware Trustee is 1201 Market
Street, Wilmington, Delaware, 19801, or at such
7
<PAGE>
other address in Delaware as the Delaware Trustee may designate by
notice to the Depositor. The principal place of business of the Trust
is c/o Virginia Electric and Power Company, One James River Plaza,
Richmond, Virginia 23219-3932. The Depositor may change the principal
place of business of the Trust at any time by giving notice thereof to
the Trustees.
Section 2.03 Initial Contribution of Trust Property;
Organizational Expenses. The Property Trustee acknowledges receipt
in trust from the Depositor in connection with the Original Trust
Agreement of the sum of $10, which constituted the initial Trust
Property. The Depositor shall pay organizational expenses of the
Trust as they arise or shall, upon request of the Trustees,
promptly reimburse the Trustees for any such expenses paid by the
Trustees. The Depositor shall make no claim upon the Trust
Property for the payment of such expenses.
Section 2.04 Issuance of the Preferred Securities. On
_______ __, 1995 the Depositor executed and delivered the
Underwriting Agreement on behalf of the Trust. Contemporaneously
with the execution and delivery of this Trust Agreement, the
Administrative Trustees, on behalf of the Trust, shall execute and
deliver to the underwriters named therein Preferred Securities
Certificates, registered in the name of the nominee of the initial
Clearing Agency, in an aggregate amount of 5,400,000 Preferred
Securities having an aggregate Liquidation Amount of $135,000,000,
against receipt of the aggregate purchase price of such Preferred
Securities of $135,000,000, which amount the Administrative
Trustees shall promptly deliver to the Property Trustee.
Section 2.05 Subscription and Purchase of Junior
Subordinated Notes; Issuance of the Common Securities.
Contemporaneously with the execution and delivery of this Trust
Agreement, the Administrative Trustees, on behalf of the Trust,
shall subscribe to and purchase from the Depositor Junior
Subordinated Notes, registered in the name of the Trust and having
an aggregate principal amount equal to $139,175,250, and, in
satisfaction of the purchase price for such Junior Subordinated
Notes, the Administrative Trustees, on behalf of the Trust, shall
(i) execute and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an
aggregate amount of 167,010 Common Securities having an aggregate
Liquidation Amount of $4,175,250, and (ii) cause the Property
Trustee to deliver to the Depositor the sum of $139,175,250 in
payments for the Junior Subordinated Notes.
Section 2.06 Declaration of Trust. The exclusive purposes
and functions of the Trust are (i) to issue and sell the Trust
Securities and use the proceeds from such sale to acquire the
Junior Subordinated Notes, and (ii) to engage in those activities
necessary, incidental or convenient thereto. The Depositor hereby
appoints each of the Bank, the Delaware Bank, J. Kennerly Davis,
Jr. and James P. Carney as trustees of the Trust, to have all the
rights, powers and duties to the extent set forth herein. The
Property Trustee hereby declares that it will hold the Trust
Property in trust upon and subject to the conditions set forth
herein for the benefit of the Securityholders. The Trustees shall
have all rights, powers and duties set forth herein and in
accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled
to exercise any powers, nor shall the Delaware Trustee have any of
the duties and responsibilities of the Property Trustee or the
Administrative Trustees set forth herein, except that the Delaware
Trustee is hereby authorized and directed, together with the
Property Trustee and Administrative Trustees, to execute and cause
the Restated Certificate (in the form of Exhibit A attached) to be
filed with the Office of the Secretary of State of Delaware. The
Delaware Trustee shall be one of the Trustees for the sole and
limited purpose of fulfilling the requirements of the Delaware
Business Trust Act.
Section 2.07 Authorization to Enter into Certain
Transactions. The Trustees shall conduct the affairs of the Trust
in accordance with the terms of this Trust Agreement. Subject to
the limitations set forth in paragraph (C) of this Section, and in
accordance with the following provisions (A) and (B), the Trustees
shall have the authority to enter into all transactions and
agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to
the Trustees under this Trust Agreement, and to perform all acts
in furtherance thereof, including without limitation, the
following:
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A. As among the Trustees, the Administrative Trustees
shall have the power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(i) the issuance and sale of the Trust Securities;
(ii) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, the
Expense Agreement and the Certificate Depository
Agreement and such other agreements as may be necessary
or desirable in connection with the consummation hereof;
(iii) assisting in the registration of the
Preferred Securities under the Securities Act of 1933, as
amended, and under state securities or blue sky laws, and
the qualification of the Trust Agreement as a trust
indenture under the Trust Indenture Act;
(iv) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges as
shall be determined by the Depositor and the registration
of the Preferred Securities under the Securities Exchange
Act of 1934, as amended, and the preparation and filing
of all periodic and other reports and other documents
pursuant to the foregoing;
(v) the sending of notices (other than notices of
default) and other information regarding the Trust
Securities and the Junior Subordinated Notes to the
Securityholders in accordance with this Trust Agreement;
(vi) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in
accordance with this Trust Agreement;
(vii) registering transfers of the Trust
Securities in accordance with this Trust Agreement;
(viii) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
termination of the Trust and the preparation, execution
and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(ix) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time to
time determine is necessary or advisable to protect and
conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
B. As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(i) the establishment of the Payment Account;
(ii) the receipt of the Junior Subordinated Notes;
(iii) the execution of the Certificate
Depository Agreement;
(iv) the collection of interest, principal and any
other payments made in respect of the Junior Subordinated
Notes in the Payment Account;
(v) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities;
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(vi) the sending of notices of default and other
information regarding the Trust Securities and the Junior
Subordinated Notes to the Securityholders in accordance
with this Trust Agreement;
(vii) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(viii) as provided in this Trust Agreement, the
winding up of the affairs of and termination of the Trust
and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State
of Delaware; and
(ix) the taking of any action incidental to the
foregoing as the Property Trustee may from time to time
determine is necessary or advisable to protect and
conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
C. So long as this Trust Agreement remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not
undertake any business, activities or transaction except as
expressly provided herein or contemplated hereby. In particular,
the Trustees shall not (i) acquire any investments or engage in any
activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take
any action that would cause the Trust to fail or cease to qualify
as other than a grantor trust for United States federal income tax
purposes, (iv) incur any indebtedness for borrowed money, (v) take
or consent to any action that would result in the placement of a
Lien on any of the Trust Property or (vi) have any power to, or
agree to any action by the Depositor that would, vary the
investment (within the meaning of Treasury Regulation Section
301.7701-4(c)) of the Trust or of the Securityholders. The
Trustees shall defend all claims and demands of all Persons at any
time claiming any Lien on any of the Trust Property adverse to the
interest of the Trust or the Securityholders in their capacity as
Securityholders.
D. In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility
to assist the Trust with respect to, or effect on behalf of the
Trust, the following (and any actions taken by the Depositor in
furtherance of the following prior to the date of this Trust
Agreement are hereby ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in
relation to the Preferred Securities, including any
amendments thereto;
(ii) to determine the States in which to take
appropriate action to qualify or register for sale all or
part of the Preferred Securities and to do any and all
such acts, other than actions which must be taken by or
on behalf of the Trust, and advise the Trustees of
actions they must take on behalf of the Trust, and
prepare for execution and filing any documents to be
executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in
order to comply with the applicable laws of any such
States;
(iii) to prepare for filing by the Trust an
application to the New York Stock Exchange or any other
national stock exchange or the NASDAQ National Market for
listing upon notice of issuance of any Preferred
Securities;
(iv) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating
to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act, including any
amendments thereto;
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(v) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Preferred
Securities; and
(vi) any other actions necessary or desirable to
carry out any of the foregoing activities.
E. Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the
affairs of the Trust and to operate the Trust so that the Trust
will not be deemed to be an "investment company" required to be
registered under the Investment Company Act of 1940, as amended, or
taxed as other than a grantor trust for United States federal
income tax purposes and so that the Junior Subordinated Notes will
be treated as indebtedness of the Depositor for United States
federal income tax purposes. In this connection, the Depositor and
the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the Certificate of Trust or this
Trust Agreement, that each of the Depositor and the Administrative
Trustees determines in its discretion to be necessary or desirable
for such purposes, as long as such action does not adversely affect
the interests of the holders of the Preferred Securities.
Section 2.07 Assets of Trust. The assets of the Trust shall
consist of the Trust Property.
Section 2.08 Title to Trust Property. Legal title to all
Trust Property shall be vested at all times in the Property Trustee
(in its capacity as such) and shall be held and administered by the
Property Trustee for the benefit of the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
Payment Account
Section 3.01 Payment Account.
(a) On or prior to the Issue Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent
of the Property Trustee shall have exclusive control and sole right
of withdrawal with respect to the Payment Account for the purpose
of making deposits in and withdrawals from the Payment Account in
accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account
shall be held by the Property Trustee in the Payment Account for
the exclusive benefit of the Securityholders and for distribution
as herein provided, including (and subject to) any priority of
payments provided for herein.
(b) The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal or
interest on, and any other payments or proceeds with respect to,
the Junior Subordinated Notes. Amounts held in the Payment Account
shall not be invested by the Property Trustee pending distribution
thereof.
ARTICLE IV
Distributions; Redemption
Section 4.01 Distributions.
(a) Distributions on the Trust Securities shall be
cumulative, and will accumulate whether or not there are funds of
the Trust available for the payment of Distributions.
Distributions shall accrue from the Issue Date and, except in the
event that the Depositor exercises its right to extend the interest
payment period for the Junior Subordinated Notes pursuant to
Section 105 of the Supplemental Indenture, shall be payable
quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on September 30, 1995. If any
date
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on which Distributions are otherwise payable on the Trust Securities
is not a Business Day, then the payment of such Distribution shall be
made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year,
payment of such distribution shall be made on the immediately
preceding Business Day, in each case, with the same force and effect
as if made on such date (each such date, a "Distribution Date").
(b) Distributions payable on the Trust Securities shall be
fixed at a rate of __% per annum of the Liquidation Amount of the
Trust Securities. The amount of Distributions payable for any full
quarterly period shall be computed on the basis of twelve 30-day
months and a 360-day year. If the interest payment period for the
Junior Subordinated Notes is extended pursuant to Section ____ of
the Supplemental Indenture, then the rate per annum at which
Distributions on the Trust Securities accumulate shall be increased
by an amount such that the aggregate amount of Distributions that
accumulate on all Trust Securities during any such extended
interest payment period is equal to the aggregate amount of
interest (including interest payable on unpaid interest at the
percentage rate per annum set forth above, compounded quarterly)
that accrues during any such extended interest payment period on
the Junior Subordinated Notes. The amount of Distributions payable
for any period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and
shall be deemed payable on each Distribution Date only to the
extent that the Trust has funds available in the Payment Account
for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the
relevant record date, which shall be the close of business on the
fifteenth calendar day prior to the relevant Distribution Date.
Section 4.02 Redemption. (a) On each Indenture Redemption
Date, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less than
30 nor more than 60 days prior to the Redemption Date to each
Holder of Trust Securities to be redeemed, at such Holder's address
appearing in the Security Register. All notices of redemption or
liquidation shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities
are to be redeemed, the total Liquidation Amount of the Trust
Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price
will become due and payable upon each such Trust Security to
be redeemed and that interest thereon will cease to accrue on
and after such date.
(c) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the proceeds from
the contemporaneous redemption of Junior Subordinated Notes.
Redemptions of the Trust Securities shall be made and the
Redemption Price shall be deemed payable on each Redemption Date
only to the extent that the Trust has funds immediately available
in the Payment Account for the payment of such Redemption Price.
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(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 2:00 p.m., New York
time, on the Redemption Date, subject to Section 4.02(c), the
Property Trustee will, so long as the Preferred Securities are in
book-entry only form, irrevocably deposit with the Clearing Agency
for the Preferred Securities funds sufficient to pay the applicable
Redemption Price and, at the direction of the Depositor, shall give
such Clearing Agency irrevocable instructions and authority to pay
the Redemption Price to the holders thereof. If the Preferred
Securities are no longer in book-entry only form, the Property
Trustee, subject to Section 4.02(c), shall irrevocably deposit with
the Paying Agent funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent irrevocable instructions to
pay the Redemption Price to the holders thereof upon surrender of
their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the redemption date
for any Trust Securities called for redemption shall be payable to
the Holders of such Trust Securities as they appear on the Register
for the Trust Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of
such deposit, all rights of Securityholders holding Trust
Securities so called for redemption will cease, except the right of
such Securityholders to receive the Redemption Price, but without
interest, and such Securities will cease to be outstanding. In the
event that any date on which any Redemption Price is payable is not
a Business Day, then payment of the Redemption Price payable on
such date shall be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next
succeeding calendar year, payment of such distribution shall be
made on the immediately preceding Business Day, in each case, with
the same force and effect as if made on such date. In the event
that payment of the Redemption Price in respect of any Trust
Securities called for redemption is improperly withheld or refused
and not paid either by the Trust or by the Depositor pursuant to
the Guarantee, Distributions on such Trust Securities will continue
to accrue, at the then applicable rate, from the Redemption Date
originally established by the Trust for such Trust Securities to
the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities
shall be made to the recordholders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record
date, which shall be the close of business on the fifteenth
calendar day prior to the Redemption Date.
(f) If less than all the Outstanding Trust Securities are to
be redeemed on a Redemption Date, then the aggregate Liquidation
Amount of Trust Securities to be redeemed shall be allocated 3% to
the Common Securities and 97% to the Preferred Securities, in each
case divisible by $25. The particular Preferred Securities to be
redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding
Preferred Securities not previously called for redemption, by such
method as the Property Trustee shall deem fair and appropriate and
which may provide for the selection for a redemption of portions
(equal to $25 or integral multiple thereof) of the Liquidation
Amount of Preferred Securities of a denomination larger than $25
provided, however, that before undertaking redemption of the
Preferred Securities on other than a pro rata basis, the Property
Trustee shall have received an Opinion of Counsel that the status
of the Trust as a grantor trust for federal income tax purposes
would not be adversely affected. The Property Trustee shall
promptly notify the Security Registrar in writing of the Preferred
Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall
relate, in the case of any Preferred Securities redeemed or to be
redeemed only in part, to the portion of the Liquidation Amount of
Preferred Securities which has been or is to be redeemed.
Section 4.03 Subordination of Common Securities. (a)
Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities,
as applicable, shall be made pro rata based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date an Indenture Event of Default
shall have occurred and be continuing, no payment of any
Distribution (including Additional Amounts, if applicable) on, or
Redemption Price of, any Common Security, and no other payment on
account of the redemption, liquidation or other acquisition of
Common Securities, shall be
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made unless payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all distribution periods
terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all
Outstanding Preferred Securities, shall have been made or provided
for, and all funds immediately available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions
(including Additional Amounts, if applicable) on, or Redemption Price
of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Indenture Event of
Default, the Holder of Common Securities will be deemed to have
waived any such Event of Default under the Trust Agreement until
the effect of all such Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Events of Default under the Trust
Agreement with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Property Trustee shall
act solely on behalf of the Holders of the Preferred Securities and
not the Holder of the Common Securities, and only the Holders of
the Preferred Securities will have the right to direct the Property
Trustee to act on their behalf.
Section 4.04 Payment Procedures. Payments in respect of the
Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the
Securities Register or, if the Preferred Securities are held by a
Clearing Agency, such Distributions shall be made to the Clearing
Agency, which shall credit the relevant Persons' accounts at such
Clearing Agency on the applicable distribution dates. Payments in
respect of the Common Securities shall be made in such manner as
shall be mutually agreed between the Property Trustee and the
Common Securityholder.
Section 4.05 Tax Returns and Reports. The Administrative
Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and
local tax and information returns and reports required to be filed
by or in respect of the Trust. In this regard, the Administrative
Trustees shall (a) prepare and file (or cause to be prepared or
filed) the Internal Revenue Service Form 1041 (or any successor
form) required to be filed in respect of the Trust in each taxable
year of the Trust and (b) prepare and furnish (or cause to be
prepared and furnished) to each Securityholder the related Internal
Revenue Service Schedule K-1 (Form 1041), Beneficiary's Share of
Income, Deductions, Credits, Etc. (or other appropriate form), or
any successor form or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns, reports
and schedules promptly after such filing or furnishing. The
Trustees shall comply with United States federal withholding and
backup withholding tax laws and information reporting requirements
with respect to any payments to Securityholders under the Trust
Securities.
ARTICLE V
Trust Securities Certificates
Section 5.01 Initial Ownership. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.03
and until the issuance of the Trust Securities, and at any time
during which no Trust Securities are outstanding, the Depositor
shall be the sole owner of the Trust.
Section 5.02 The Trust Securities Certificates. Each of the
Preferred and Common Securities Certificates shall be issued in
minimum denominations of $25 and integral multiples in excess
thereof. The Trust Securities Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of at least
one Administrative Trustee. Trust Securities Certificates bearing
the manual or facsimile signatures of individuals who were, at the
time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled
to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized
prior to the authentication and delivery of such Trust Securities
Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Securities Certificates.
A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to
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the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate
in such transferee's name pursuant to Section 5.04.
Section 5.03 Authentication of Trust Securities
Certificates. On the Issue Date, the Administrative Trustees shall
cause Trust Securities Certificates, in an aggregate Liquidation
Amount as provided in Sections 2.04 and 2.05, to be executed on
behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor signed by its chairman of the board,
its president or any vice president, without further corporate
action by the Depositor, in authorized denominations. No Trust
Securities Certificate shall entitle its holder to any benefit
under this Trust Agreement, or shall be valid for any purpose,
unless there shall appear on such Trust Securities Certificate a
certificate of authentication substantially in the form set forth
in Exhibit E or Exhibit C, as applicable, executed by at least one
Administrative Trustee by manual signature; such authentication
shall constitute conclusive evidence that such Trust Securities
Certificate shall have been duly authenticated and delivered
hereunder. All Trust Securities Certificates shall be dated the
date of their authentication.
Section 5.04 Registration of Transfer and Exchange of
Preferred Securities Certificates. The Securities Registrar shall
keep or cause to be kept, at the office or agency maintained
pursuant to Section 5.08, a Securities Register in which, subject
to such reasonable regulations as it may prescribe, the Securities
Registrar shall provide for the registration of Preferred
Securities Certificates and the Common Securities Certificates
(subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The
Administrative Trustees, acting together, shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant
to Section 5.08, the Administrative Trustees shall execute,
authenticate and deliver in the name of the designated transferee
or transferees, one or more new Preferred Securities Certificates
in authorized denominations of a like aggregate Liquidation Amount
dated the date of authentication by the Administrative Trustee or
Trustees. The Securities Registrar shall not be required to
register the transfer of any Preferred Securities that have been
called for redemption. At the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender of
the Preferred Securities Certificates to be exchanged at the office
or agency maintained pursuant to Section 5.08.
Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form
satisfactory to the Trustees and the Securities Registrar duly
executed by the Holder or his attorney duly authorized in writing.
Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently
disposed of by the Security Registrar in accordance with its
customary practice.
No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the
Securities Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Preferred Securities
Certificates.
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates. If (a) any mutilated Trust Securities
Certificate shall be surrendered to the Securities Registrar, or if
the Securities Registrar shall receive evidence to its satisfaction
of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or
indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Trust Securities
Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees or any one of them on behalf of the Trust
shall execute and authenticate and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Securities Certificate, a new Trust Securities
Certificate of like class, tenor and denomination. In connection
with the issuance of any new Trust Securities Certificate under
this Section, the
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Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate
Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Trust Securities Certificate shall be found at any time.
Section 5.06 Persons Deemed Securityholders. Prior to due
presentation of a Trust Securities Certificate for registration of
transfer, the Trustees or the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be
registered in the Securities Register as the owner of such Trust
Securities Certificate for the purpose of receiving distributions
and for all other purposes whatsoever, and neither the Trustees nor
the Securities Registrar shall be bound by any notice to the
contrary.
Section 5.07 Access to List of Securityholders' Names and
Addresses. The Administrative Trustees shall furnish or cause to
be furnished to (i) the Depositor and the Property Trustee semi-annually, not
later than June 1 and December 1 in each year and (ii) the Depositor or the
Property Trustee, as the case may be, within 15 days after receipt by any
Administrative Trustee of a request therefor from the Depositor or the Property
Trustee, in writing, a list, in such form as the Depositor or the Property
Trustee, may reasonably require, of the names and addresses of the
Securityholders as of the most recent Record Date. If three or more
Securityholders or one or more Holders of Trust Securities Certificates
evidencing not less than 25% of the outstanding Liquidation Amount apply in
writing to the Administrative Trustees, and such application states that the
applicants desire to communicate with other Securityholders with respect to
their rights under this Trust Agreement or under the Trust Securities
Certificates and such application is accompanied by a copy of the communication
that such applicants propose to transmit, then the Administrative Trustees
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Securityholders. Each Holder, by receiving and holding a Trust Securities
Certificate, shall be deemed to have agreed not to hold either the Depositor or
the Administrative Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
Section 5.08 Maintenance of Office or Agency. The
Administrative Trustees shall maintain in the Borough of Manhattan,
New York, an office or offices or agency or agencies where
Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands
to or upon the Trustees in respect of the Trust Securities
Certificates may be served. The Administrative Trustees initially
designate Chemical Bank, 450 West 33rd Street, New York, New York
10001, as its principal agency for such purposes. The
Administrative Trustees shall give prompt written notice to the
Depositor and to the Securityholders of any change in the location
of the Securities Register or any such office or agency.
Section 5.09 Appointment of Paying Agent. The Paying Agent
shall make distributions to Securityholders from the Payment
Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent
shall have the revocable power to withdraw funds from the Payment
Account for the purpose of making the distributions referred to
above. The Administrative Trustees may revoke such power and
remove the Paying Agent if such Trustees determine in their sole
discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The
Paying Agent shall initially be the Property Trustee, and it may
choose any co-paying agent that is acceptable to the Administrative
Trustees and the Depositor. The Property Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice to
the Administrative Trustees and the Depositor. In the event that
the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor that is
acceptable to the Depositor to act as Paying Agent (which shall be
a bank or trust company). The Administrative Trustees shall cause
such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to
the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as
Paying Agent, such successor Paying Agent or additional Paying
Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders
entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds
to the Property Trustee and upon removal of a Paying Agent such
Paying Agent shall also return all funds in its possession
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to the Property Trustee. The provisions of Sections 8.01, 8.03 and
8.06 shall apply to the Property Trustee also in its role as Paying
Agent, for so long as the Property Trustee shall act as Paying Agent
and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Section 5.10 Ownership of Common Securities by Depositor.
On the Issue Date, the Depositor shall acquire, and thereafter
retain, beneficial and record ownership of the Common Securities.
Any attempted transfer of the Common Securities shall be void. The
Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating
"THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 5.11 Book-Entry Preferred Securities Certificates;
Common Securities Certificate. (a) The Preferred Securities
Certificates, upon original issuance, will be issued in the form of
a typewritten Preferred Securities Certificate or Certificates
representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Preferred Securities
Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no beneficial owner will receive a
definitive Preferred Securities Certificate representing such
beneficial owner's interest in such Preferred Securities, except as
provided in Section 5.13. Unless and until Definitive Preferred
Securities Certificates have been issued to beneficial owners
pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in
full force and effect;
(ii) the Securities Registrar and the Trustees shall be
entitled to deal with the Clearing Agency for all purposes of
this Trust Agreement relating to the Book-Entry Preferred
Securities Certificates (including the payment of principal of
and interest on the Book-Entry Preferred Securities and the
giving of instructions or directions to Owners of Book-Entry
Preferred Securities) as the sole Holder of Book-Entry
Preferred Securities and shall have no obligations to the
Owners thereof;
(iii) to the extent that the provisions of this
Section conflict with any other provisions of this Trust
Agreement, the provisions of this Section shall control;
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the
Clearing Agency and shall be limited to those established by
law and agreements between such Owners and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive
Preferred Securities Certificates are issued pursuant to
Section 5.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive
and transmit payments on the Preferred Securities to such
Clearing Agency Participants; and
(v) whenever this Trust Agreement requires or permits
actions to be taken based upon instructions or directions of
Holders of Trust Certificates evidencing a specified
percentage of the aggregate Liquidation Amount, the Clearing
Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect
from Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the
beneficial interest in the applicable class of Trust
Certificates and has delivered such instructions to the
Trustees.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of
a definitive Common Securities Certificate.
Section 5.12 Notices to Clearing Agency. To the extent a
notice or other communication to the Owners is required under this
Trust Agreement, unless and until Definitive Preferred Securities
Certificates shall have been
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issued to Owners pursuant to Section 5.13, the Trustees shall give all
such notices and communications specified herein to be given to Owners
to the Clearing Agency, and shall have no obligations to the Owners.
Section 5.13 Definitive Preferred Securities Certificates.
If (i) the Depositor advises the Trustees in writing that the
Clearing Agency is no longer willing or able to properly discharge
its responsibilities with respect to the Preferred Securities
Certificates, and the Depositor is unable to locate a qualified
successor, or (ii) the Depositor at its option advises the Trustees
in writing that it elects to terminate the book-entry system
through the Clearing Agency, then the Administrative Trustees shall
notify the Clearing Agency. Upon surrender to the Administrative
Trustees of the typewritten Preferred Securities Certificate or
Certificates representing the Book Entry Preferred Securities
Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees or any one of them shall
execute and authenticate the Definitive Preferred Securities
Certificates in accordance with the instructions of the Clearing
Agency. Neither the Securities Registrar nor the Trustees shall be
liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the Holders of the
Definitive Preferred Securities Certificates as Securityholders.
The Definitive Preferred Securities Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as
is reasonably acceptable to the Administrative Trustees, as
evidenced by the execution thereof by the Administrative Trustees
or any one of them.
Section 5.14 Rights of Securityholders. The legal title to
the Trust Property is vested exclusively in the Property Trustee
(in its capacity as such) in accordance with Section 2.09, and the
Securityholders shall not have any right or title therein other
than the ownership interest in the Trust conferred by their Trust
Securities and they shall have no right to call for any partition
or division of property, profits or rights of the Trust except as
described below. The Trust Securities shall be personal property
giving only the rights specifically set forth therein and in this
Trust Agreement. The Trust Securities shall have no preemptive
rights and when issued and delivered to Securityholders against
payment of the purchase price therefor will be fully paid and
nonassessable by the Trust. Except as otherwise provided in the
Expense Agreement and Section 10.01 hereof, the Holders of the
Trust Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State
of Delaware.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01 Limitations on Voting Rights. (a) Except as
provided in this Section, in Section 10.03, in the Subordinated
Indenture, and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust
or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the Securityholders
from time to time as partners or members of an association.
(b) So long as any Junior Subordinated Notes are held by the
Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or executing any trust or power
conferred on the Indenture Trustee with respect to such Junior
Subordinated Notes, (ii) waive any past default which is waivable
under Section 513 of the Subordinated Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all
the Junior Subordinated Notes shall be due and payable or (iv)
consent to any amendment, modification or termination of the
Subordinated Indenture or the Junior Subordinated Notes, where such
consent shall be required, or to any other action, as holder of the
Junior Subordinated Notes, under the Subordinated Indenture,
without, in each case, obtaining the prior approval of the Holders
of at least 66 2/3% in Liquidation Amount of the Preferred
Securities; provided, however, that where a consent under the
Subordinated Indenture would require the consent of each holder of
Junior Subordinated Notes
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affected thereby, no such consent shall be given by the Trustees
without the prior written consent of each holder of Preferred
Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Preferred Securities, except
pursuant to a subsequent vote of the Preferred Securities. The
Property Trustee shall notify all Holders of the Preferred Securities
of any notice of default received from the Indenture Trustee with
respect to the Junior Subordinated Notes. In addition to obtaining the
foregoing approvals of the Holders of the Preferred Securities, prior
to taking any of the foregoing actions, the Trustees shall, at the
expense of the Depositor, obtain an Opinion of Counsel experienced in
such matters to the effect that the Trust will not be classified as
other than a grantor trust for United States federal income tax
purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action
that would adversely affect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to
the Trust Agreement or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than pursuant to the
terms of this Trust Agreement, then the Holders of outstanding
Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least 66
2/3% in Liquidation Amount of the outstanding Preferred Securities.
In addition to obtaining the foregoing approvals of the Holders of
the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor,
obtain an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes on
account of such action.
Section 6.02 Notice of Meetings. Notice of all meetings of
the Preferred Securityholders, stating the time, place and purpose
of the meeting, shall be given by the Administrative Trustees
pursuant to Section 10.08 to each Preferred Securityholder of
record, at his registered address, at least 15 days and not more
than 90 days before the meeting. At any such meeting, any business
properly before the meeting may be so considered whether or not
stated in the notice of the meeting. Any adjourned meeting may be
held as adjourned without further notice.
Any and all notice to which any Preferred Securityholder
hereunder may be entitled and any and all communications shall be
deemed duly served or given if mailed, postage prepaid, addressed
to any Preferred Securityholders of record at his last known
address as recorded on the Security Register.
Section 6.03 Meetings of Preferred Securityholders. No
annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of
Securityholders to vote on any matter upon the written request of
the Preferred Securityholders of record of 25% of the Preferred
Securities (based upon their Liquidation Amount) and the
Administrative Trustees or the Property Trustee may, at any time in
their discretion, call a meeting of Preferred Securityholders to
vote on any matters as to the which Preferred Securityholders are
entitled to vote.
Preferred Securityholders of record of 50% of the Preferred
Securities (based upon their Liquidation Amount), present in person
or by proxy, shall constitute a quorum at any meeting of
Securityholders.
If a quorum is present at a meeting, an affirmative vote by
the Preferred Securityholders of record present, in person or by
proxy, holding more than 66 2/3% of the Preferred Securities (based
upon their Liquidation Amount) held by the Preferred
Securityholders of record present, either in person or by proxy, at
such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of
affirmative votes.
Section 6.04 Voting Rights. Securityholders shall be
entitled to one vote for each $25 of Liquidation Amount represented
by their Trust Securities in respect of any matter as to which such
Securityholders are entitled to vote.
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Section 6.05 Proxies, etc. At any meeting of
Securityholders, any Securityholder entitled to vote may vote by
proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Administrative Trustees,
or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a resolution
of the Property Trustee, proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote.
When Trust Securities are held jointly by several persons, any one
of them may vote at any meeting in person or by proxy in respect of
such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint
owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust
Securities. A proxy purporting to be executed by or on behalf of
a Securityholder shall be deemed valid unless challenged at or
prior to its exercise, and the burden of proving invalidity shall
rest on the challenger.
Section 6.06 Securityholder Action by Written Consent. Any
action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding at least 66 2/3%
of all outstanding Trust Securities entitled to vote in respect of
such action (or such other proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to
the action in writing (based upon their Liquidation Amount).
Section 6.07 Record Date for Voting and Other Purposes. For
the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to
participate in any distribution on the Trust Securities in respect
of which a record date is not otherwise provided for in this Trust
Agreement, or for the purpose of any other action, the
Administrative Trustees may from time to time fix a date, not more
than 90 days prior to the date of any meeting of Securityholders or
the payment of distribution or other action, as the case may be, as
a record date for the determination of the identity of the
Securityholders of record for such purposes.
Section 6.08 Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action
provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such
Securityholders in person or by an agent duly appointed in writing;
and, except as otherwise expressly provided herein, such action
shall become effective when such instrument or instruments are
delivered to the Administrative Trustees. Such instrument or
instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the
Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Trust
Agreement and (subject to Section 8.01) conclusive in favor of the
Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgements of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other
manner which the Trustees deems sufficient.
The ownership of Preferred Securities shall be proved by the
Securities Register.
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Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust
Security shall bind every future Securityholder of the same Trust
Security and the Securityholder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustees or the Trust in reliance thereon, whether or
not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any
particular Trust Security may do so with regard to all or any part
of the Liquidation Amount of such Trust Security or by one or more
duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such liquidation
amount.
If any dispute shall arise between the Securityholders of
Trust Securities and the Administrative Trustees or among such
Securityholders or Trustees with respect to the authenticity,
validity or binding nature of any request, demand, authorization,
direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such
matter by the Property Trustee shall be conclusive with respect to
such matter.
Section 6.09 Inspection of Records. Upon reasonable notice
to the Trustees, the records of the Trust shall be open to
inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
Representations and Warranties of the Trustees
The Bank, the Delaware Bank, the Property Trustee and the
Delaware Trustee, each on behalf of and as to itself, hereby
represents and warrants for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a banking corporation or trust company duly
organized, validly existing and in good standing under the laws of
the State of New York, and the Delaware Trustee is a banking
corporation or trust company duly organized, validly existing and
in good standing under the laws of the State of Delaware;
(b) each of the Bank and the Delaware Bank has full corporate
power, authority and legal right to execute, deliver and perform
their obligations under this Trust Agreement and has taken all
necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed
and delivered by each of the Bank and the Delaware Bank and
constitutes the valid and legally binding agreement of each of the
Bank and the Delaware Bank, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(d) the execution, delivery and performance by each of the
Bank and the Delaware Bank of this Trust Agreement have been duly
authorized by all necessary corporate action on the part of the
Bank, Property Trustee, the Delaware Bank and the Delaware Trustee
and do not require any approval of stockholders of the Bank or the
Delaware Bank and such execution, delivery and performance will not
(i) violate the Bank's or the Delaware Bank's Charter or By-laws,
or (ii) violate any law, governmental rule or regulation of the
United States or the State of New York or Delaware, as the case may
be, governing the banking or trust powers of the Bank and the
Property Trustee or the Delaware Bank and the Delaware Trustee, or
any order, judgment or decree applicable to the Bank, the Property
Trustee, the Delaware Bank or the Delaware Trustee; and
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(e) neither the authorization, execution or delivery by the
Bank or the Delaware Bank of this Trust Agreement, nor the
consummation of any of the transactions by the Bank, the Property
Trustee, the Delaware Bank or the Delaware Trustee (as appropriate
in context) contemplated herein or therein, nor the issuance of the
Trust Securities Certificates pursuant to this Trust Agreement
require the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect to
any governmental authority or agency under any existing federal,
New York or Delaware law governing the banking or trust powers of
the Bank or the Delaware Bank.
ARTICLE VIII
The Trustees
Section 8.01 Certain Duties and Responsibilities.
(a) The rights, duties and responsibilities of the Trustees
shall be as provided by this Trust Agreement and, in the case of
the Property Trustee, the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Trust Agreement shall require the
Trustees to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties
hereunder, or in the exercise of any of their rights or powers, if
they shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is
not reasonably assured to them. Whether or not therein expressly
so provided, every provision of this Trust Agreement relating to
the conduct or affecting the liability of or affording protection
to the Trustees shall be subject to the provisions of this Section.
(b) All payments made by the Property Trustee in respect of
the Trust Securities shall be made only from the income and
proceeds from the Trust Property and only to the extent that there
shall be sufficient income or proceeds from the Trust Property to
enable the Property Trustee to make payments in accordance with the
terms hereof. Each Securityholder, by its acceptance of a Trust
Security, agrees that it will look solely to the income and
proceeds from the Trust Property to the extent available for
distribution to it as herein provided and that the Trustees are not
personally liable to it for any amount distributable in respect of
any Trust Security or for any other liability in respect of any
Trust Security. This Section 8.01(b) does not limit the liability
of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
Section 8.02 Notice of Defaults. Within five Business Days
after the occurrence of any Event of Default, the Property Trustee
shall transmit, in the manner and to the extent provided in Section
10.08, notice of any default known to the Property Trustee to the
Securityholders, the Administrative Trustees and the Depositor,
unless such default shall have been cured or waived. For the
purpose of this Section, the term "default" means any event which
is, or after notice or lapse of time or both would become, an Event
of Default.
Section 8.03 Certain Rights of Property Trustee. Subject to
the provisions of Section 8.01 and except as provided by law:
(i) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any
resolution, Opinion of Counsel, certificate, written
representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the
proper party or parties;
(ii) if (A) in performing its duties under this Trust
Agreement the Property Trustee is required to decide
between alternative courses of action or (B) in
construing any of the provisions in this Trust Agreement
the Property Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein
or (C) the Property Trustee is unsure of the application
of any
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provision of this Trust Agreement, then, except as
to any matter as to which the Preferred Securityholders
are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to
the Depositor requesting written instructions of the
Depositor as to the course of action to be taken. The
Property Trustee shall take such action, or refrain from
taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking,
by the Depositor; provided, however, that if the Property
Trustee does not receive such instructions of the
Depositor within ten Business Days after it has delivered
such notice, or such reasonably shorter period of time
set forth in such notice (which to the extent practicable
shall not be less than two Business Days), it may, but
shall be under no duty to, take or refrain from taking
such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee
shall have no liability except for its own bad faith,
negligence or willful misconduct;
(iii) the Property Trustee may consult with counsel of
its selection and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance
thereon;
(iv) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Trust Agreement at the request or direction of any of the
Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property
Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction;
(v) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond
or other paper or document, unless requested in writing
to do so by one or more Securityholders;
(vi) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through its agents or attorneys,
provided that the Property Trustee shall be responsible
for its own negligence or recklessness with respect to
selection of any agent or attorney appointed by it
hereunder.
Section 8.04 Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Trust
Securities Certificates shall be taken as the statements of the
Trust, and the Trustees do not assume any responsibility for their
correctness. The Trustees shall not be accountable for the use or
application by the Trust of the proceeds of the Trust Securities in
accordance with Section 2.05.
Section 8.05 May Hold Securities. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or
any other agent of the Trustees or the Trust, in its individual or
any other capacity, may become the owner or pledgee of Trust
Securities and may otherwise deal with the Trust with the same
rights it would have if it were not a Trustee or such other agent.
Section 8.06 Compensation; Fees; Indemnity.
The Depositor agrees:
(1) to pay to the Trustees from time to time reasonable
compensation for all services rendered by the Trustees hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
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(2) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including
the reasonable compensation and the expenses and disbursements of
their agents and counsel), except any such expense, disbursement or
advance as may be attributable to their negligence or bad faith;
and
(3) to indemnify the Trustees for, and to hold the Trustees
harmless against, any and all loss, damage, claims, liability or
expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of this Trust Agreement, including the costs and
expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
The provisions of this Section 8.06 shall survive the
termination of this Agreement.
Section 8.07 Corporate Trustee Required; Eligibility.
(a) There shall at all times be a Property Trustee hereunder
with respect to the Trust Securities. The Property Trustee shall
be a Person that has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time the
Property Trustee with respect to the Trust Securities shall cease
to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each
Administrative Trustee shall be either a natural person who is at
least 21 years of age or a legal entity that shall act through one
or more persons authorized to bind such entity.
(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall either
be (i) a natural person who is at least 21 years of age and a
resident of the State of Delaware or (ii) a legal entity authorized
to conduct a trust business and with its principal place of
business in the State of Delaware that shall act through one or
more persons authorized to bind such entity.
Section 8.08 Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the
Property Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
Section 8.09 Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the
time be located, the Holder of the Common Securities and the
Property Trustee shall have power to appoint, and upon the written
request of the Property Trustee, the Depositor shall for such
purpose join with the Property Trustee in the execution, delivery
and performance of all instruments and agreements necessary or
proper to appoint one or more Persons approved by the Property
Trustee either to act as co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as
separate trustee of any such Trust Property, in either case with
such powers as may be provided in the instrument of appointment,
and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable,
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subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case an Event of Default under
the Subordinated Indenture has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment.
Any co-trustee or separate trustee appointed pursuant to this
Section shall satisfy the requirements of Section 8.07.
Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully
confirming to such co-trustee or separate trustee such property,
title, right, or power, any and all such instruments shall, on
request, be executed, acknowledged, and delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to
the following terms, namely:
(i) The Trust Securities shall be executed,
authenticated and delivered and all rights, powers, duties,
and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees
hereunder, shall be exercised, solely by the Trustees.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of
any property covered by such appointment shall be conferred or
imposed upon and exercised or performed by the Property
Trustee or by the Property Trustee and such co-trustee or
separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee,
except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such
Act, in which event such rights, powers, duties, and
obligations shall be exercised and performed by such
co-trustee or separate trustee.
(iii) The Property Trustee at any time, by an
instrument in writing executed by it, with the written
concurrence of the Depositor, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this
Section, and, in case an Event of Default under the
Subordinated Indenture has occurred and is continuing, the
Property Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of
the Property Trustee, the Depositor shall join with the
Property Trustee in the execution, delivery, and performance
of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the
Property Trustee, or any other such trustee hereunder.
(v) The Trustees shall not be liable by reason of any
act of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee
and separate trustee.
Section 8.10 Resignation and Removal; Appointment of
Successor. No resignation or removal of any Trustee (the "Relevant
Trustee") and no appointment of a successor Relevant Trustee
pursuant to this Article shall become effective until the
acceptance of appointment by the successor Relevant Trustee in
accordance with the applicable requirements of Section 8.11.
The Relevant Trustee may resign at any time by giving written
notice thereof to the Securityholders. If the instrument of
acceptance by a successor Relevant Trustee required by Section 8.11
shall not have been delivered
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<PAGE>
to the Relevant Trustee within 30 days after the giving of such notice
of resignation, the resigning Relevant Trustee may petition any court
of competent jurisdiction for the appointment of a successor Relevant
Trustee.
Unless an Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at any time by Act
of the Common Securityholder. If an Event of Default shall have
occurred and be continuing, the Relevant Trustee may be removed at
such time by Act of the Securityholders of a majority in
Liquidation Amount of the Preferred Securities Certificates,
delivered to the Relevant Trustee (in its individual capacity and
on behalf of the Trust).
If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as Trustee at a time when no Event
of Default shall have occurred and be continuing, the Common
Securityholder, by Act of the Common Securityholder delivered to
the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees, and the retiring Relevant Trustee
shall comply with the applicable requirements of Section 8.11. If
the Relevant Trustee shall resign, be removed or become incapable
of continuing to act as the Relevant Trustee at a time when an
Event of Default shall have occurred and be continuing, the
Preferred Securityholders, by Act of the Securityholders of a
majority in Liquidation Amount of the Preferred Securities then
outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and the
Relevant Trustee shall comply with the applicable requirements of
Section 8.11. If no successor Relevant Trustee shall have been so
appointed by the Common Securityholders or the Securityholders and
accepted appointment in the manner required by Section 8.11, any
Securityholder who has been a Securityholder of Trust Securities
for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Relevant Trustee.
The retiring Relevant Trustee shall give notice of each
resignation and each removal of the Relevant Trustee, and each
appointment of a successor Trustee to all Securityholders in the
manner provided in Section 10.08 and shall give notice to the
Depositor. Each notice shall include the name of the successor
Relevant Trustee and the address of its Corporate Trust Office.
Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event of any Administrative Trustee or a
Delaware Trustee who is a natural person dies or becomes
incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (i) the act of the
remaining Administrative Trustee or (ii) otherwise by the Depositor
(with the successor in each case being an individual who satisfies
the eligibility requirement for Administrative Trustees set forth
in Section 8.07). Additionally, notwithstanding the foregoing or
any other provision of this Trust Agreement, in the event the
Depositor believes that any Administrative Trustee has become
incompetent or incapacitated, the Depositor, by notice to the
remaining Trustees, may terminate the status of such Person as an
Administrative Trustee (in which case the vacancy so created will
be filled in accordance with the preceding sentence).
Section 8.11 Acceptance of Appointment by Successor. In
case of the appointment hereunder of a successor Relevant Trustee,
every such successor Relevant Trustee so appointed shall execute,
acknowledge and deliver to the Trust and to the retiring Relevant
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Relevant Trustee shall
become effective and such successor Relevant Trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Relevant Trustee;
but, on the request of the Depositor or the successor Relevant
Trustee, such retiring Relevant Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such
successor Relevant Trustee all the rights, powers and trusts of the
retiring Relevant Trustee and shall duly assign, transfer and
deliver to such successor Relevant Trustee all property and money
held by such retiring Relevant Trustee hereunder.
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Upon request of any such successor Relevant Trustee, the Trust
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Relevant Trustee all
such rights, powers and trusts referred to in the first or second
preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment
unless at the time of such acceptance such successor Relevant
Trustee shall be qualified and eligible under this Article.
Section 8.12 Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Property Trustee,
Delaware Trustee or any Administrative Trustee which is not a
natural person may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Relevant Trustee shall be
a party, or any corporation succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the
successor of such Relevant Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
Section 8.13 Preferential Collection of Claims Against
Depositor or Trust. If and when the Property Trustee or the
Delaware Trustee shall be or become a creditor of the Depositor or
the Trust (or any other obligor upon the Junior Subordinated Notes
or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against
the Depositor or Trust (or any such other obligor). For purposes
of Section 311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon
demand; and
(b) "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated
or incurred by the Company (or any such obligor) for the purpose of
financing the purchase, processing, manufacturing, shipment,
storage or sale of goods, wares or merchandise and which is secured
by documents evidencing title to, possession of, or a lien upon,
the goods, wares or merchandise or the receivables or proceeds
arising from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by the
Trustee simultaneously with the creation of the creditor
relationship with the Company (or any such obligor) arising from
the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
Section 8.14 Reports by Property Trustee. (a) Within 60
days after May 15 of each year commencing with May 15, 1996, if
required by Section 313(a), the Property Trustee shall transmit a
brief report dated as of such May 15 with respect to any of the
events specified in such Section 313(a) that may have occurred
since the later of the date of this Agreement or the preceding May
15.
(b) The Property Trustee shall transmit to Securityholders
the reports required by Section 313(b) of the Trust Indenture Act
at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in
the manner and to the persons required by Sections 313(c) and (d)
of the Trust Indenture Act.
Section 8.15 Reports to the Property Trustee. The Depositor
and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and
information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trustee Indenture Act in
the form, in the manner and at the times required by Section 314 of
the Trust Indenture Act.
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Section 8.16 Evidence of Compliance with Conditions
Precedent. Each of the Depositor and the Administrative Trustees
on behalf of the Trust shall provide to the Property Trustee such
evidence of compliance with any conditions precedent, if any,
provided for in this Trust Agreement that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given pursuant to Section
314(c)(1) of the Trust Indenture Act shall comply with Section
314(e) of the Trust Indenture Act.
Section 8.17 Number of Trustees.
(a) The number of Trustees shall initially be four, provided
that Depositor, by written instrument may increase or decrease the
number of Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to
Section 8.17(a), or if the number of Trustees is increased pursuant
to Section 8.17(a), a vacancy shall occur. The vacancy shall be
filled with a Trustee appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number
of Administrative Trustees shall occur, until such vacancy is
filled by the appointment of an Administrative Trustee in
accordance with Section 8.10, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to
the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
Section 8.18 Delegation of Power.
(a) Any Administrative Trustee, may, by power of attorney
consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 2.07(A), including
any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number the doing of such things
and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as
the Administrative Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
ARTICLE IX
Termination and Liquidation
Section 9.01 Termination Upon Expiration Date. The Trust
shall automatically terminate on December 31, 2035 (the "Expiration
Date") or earlier pursuant to Section 9.02.
Section 9.02 Early Termination. Upon the first to occur of
any of the following events (such first occurrence, an "Early
Termination Event"), the Trust shall be dissolved and terminated
in accordance with the terms hereof:
(i) the occurrence of a Bankruptcy Event, dissolution or
liquidation of, in respect of, the Depositor, or the
dissolution of the Trust pursuant to judicial decree;
(ii) the occurrence of a Special Event (as defined in the
Supplemental Indenture); provided, however, that if at the
time there is available to the Trust the opportunity to
eliminate the Special Event within 90 days after the
occurrence thereof by taking some ministerial action, such as
filing a form or
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<PAGE>
making an election, or using some other reasonable measure, which
would have no adverse effect on the Trust, the Depositor or the
Holders, the Trust (through the Administrative Trustees) will
pursue such measure in lieu of redemption or dissolution, and the
election of the Depositor to distribute the Junior Subordinated
Notes to the Preferred Securityholders; and
(iii) the payment at maturity or redemption of all of
the Junior Subordinated Notes, and the consequent payment of
the Preferred Securities.
Section 9.03 Termination. The respective obligations and
responsibilities of the Trust and the Trustees created hereby shall
terminate upon the latest to occur of the following: (a) the
distribution by the Property Trustee to Securityholders upon the
liquidation of the Trust or upon the redemption of all of the Trust
Securities pursuant to Section 4.02, of all amounts required to be
distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and
(c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax
reporting obligations with respect to the Trust or the
Securityholders.
Section 9.04 Liquidation. (a) If an Early Termination
Event specified in clause (ii) of Section 9.02 occurs, the Junior
Subordinated Notes shall not be distributed unless prior thereto,
the Property Trustee shall have received an Opinion of Counsel
experienced in such matters to the effect that the Holders will not
recognize any gain or loss for United States federal income tax
purposes as a result of such dissolution and distribution of Junior
Subordinated Notes, which Opinion of Counsel may rely on published
ruling of the Internal Revenue Service.
(b) In connection with a distribution of the Junior
Subordinated Notes, each Holder of Trust Securities shall be
entitled to receive a Like Amount of Junior Subordinated Notes.
Notice of liquidation shall be given by the Trustees by first-class
mail, postage prepaid, mailed not later than 30 nor more than 60
days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Security
Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be outstanding
and any Trust Securities Certificates not surrendered for
exchange will be deemed to represent a Like Amount of Junior
Subordinated Notes; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Junior Subordinated Notes.
(c) In order to effect the liquidation of the Trust and
distribution of the Junior Subordinated Notes to Securityholders,
the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the
Liquidation Date) and, either itself acting as exchange agent or
through the appointment of a separate exchange agent, shall
establish such procedures as it shall deem appropriate to affect
the distribution of Junior Subordinated Notes in exchange for the
Outstanding Trust Securities Certificates.
(d) After the Liquidation Date, (i) the Trust Securities will
no longer be deemed to be Outstanding, (ii) certificates
representing a Like Amount of Junior Subordinated Notes will be
issued to Holders of Trust Securities Certificates, upon surrender
of such certificates to the Administrative Trustees or their agent
for exchange, (iii) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like Amount
of Junior Subordinated Notes, accruing interest at the rate
provided for in the Junior Subordinated Notes from the last
Distribution Date on which a Distribution was made on such Trust
Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments or interest or
principal will be made to Holders of Trust Securities Certificates
with respect to such Junior Subordinated Notes) and (iv) all rights
of
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<PAGE>
Securityholders holding Trust Securities will cease, except the
right of such Securityholders to receive Junior Subordinated Notes
upon surrender of Trust Securities Certificates.
(e) The Depositor will use its best efforts to have the
Junior Subordinated Notes that are distributed in exchange for the
Preferred Securities to be listed on such securities exchange as
the Preferred Securities are then listed. The Depositor may elect
to have the Junior Subordinated Notes issued in book-entry form to
the Clearing Agency or its nominee pursuant to a Certificate
Depository Agreement substantially in the form of Exhibit B.
Section 9.05 Bankruptcy. If an early termination event
specified in clause (i) of Section 9.02 has occurred, the Trust
shall be liquidated. The Property Trustee shall distribute the
Junior Subordinated Notes to the Securityholders as provided in
Section 9.04, unless such distribution is determined not to be
practical, in which event the Holders will be entitled to receive
out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors, an
amount equal to the Liquidation Amount per Trust Security plus
accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If, upon any
such dissolution, winding up or termination, the Liquidation
Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holder of the Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if an Event of Default has
occurred and is continuing, the Preferred Securities shall have a
priority over the Common Securities.
ARTICLE X
Miscellaneous Provisions
Section 10.01 Guarantee by the Depositor. Subject to the
terms and conditions hereof, the Depositor irrevocably and
unconditionally guarantees to each person or entity to whom the
Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As
used herein, "Obligations" means any indebtedness, expenses or
liabilities of the Trust, other than obligations of the Trust to
pay to holders of any Preferred Securities or other similar
interests in the Trust the amounts due such holders pursuant to the
terms of the Preferred Securities or such other similar interests,
as the case may be. This guarantee is intended to be for the
benefit, of, and to be enforceable by, all such Beneficiaries,
whether or not such Beneficiaries have received notice hereof.
Section 10.02 Limitation of Rights of Securityholders. The
death or incapacity of any person having an interest, beneficial or
otherwise, in a Trust Security shall not operate to terminate this
Trust Agreement, nor entitle the legal representatives or heirs of
such person or any Securityholder for such person, to claim an
accounting, take any action or bring any proceeding in any court
for a partition or winding up of the arrangements contemplated
hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 10.03 Amendment. (a) This Trust Agreement may be
amended from time to time by the Trustees and the Depositor,
without the consent of any Securityholders, (i) to cure any
ambiguity, correct or supplement any provision herein or therein
which may be inconsistent with any other provision herein or
therein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, which shall not be
inconsistent with the other provisions of this Trust Agreement,
provided, however, that any such amendment shall not adversely
affect in any material respect the interests of any Securityholder
or (ii) to modify, eliminate or add to any provisions of this Trust
Agreement to such extent as shall be necessary to ensure that the
Trust will not be classified as other than a grantor trust for
United States federal income tax purposes at any time that any
Trust Securities are outstanding; provided, however, that, except
in the case of clause (ii), such action shall not adversely
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<PAGE>
affect in any material respect the interests of any Securityholder
and, in the case of clause (i), any amendments of this Trust Agreement
shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 10.03(c) hereof, any
provision of this Trust Agreement may be amended by the Trust or
the Trustees with (i) the consent of Trust Securityholders
representing not less than 66-2/3%(based upon Liquidation Amounts)
of the Trust Securities then Outstanding and (ii) receipt by the
Trustees of an Opinion of Counsel to the effect that such amendment
or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor
trust for United States federal income tax purposes or the Trust's
exemption from status of an "investment company" under the
Investment Company Act of 1940, as amended.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected
Securityholder (such consent being obtained in accordance with
Section 6.03 or 6.06 hereof), this Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on
the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust
Securities as of a specified date, (ii) restrict the right of a
Securityholder to institute suit for the enforcement of any such
payment on or after such date, or (iii) change the consent required
pursuant to Section 10.03.
(d) Notwithstanding any other provisions of this Trust
Agreement, the Trustees shall not enter into or consent to any
amendment to this Trust Agreement which would cause the Trust to
fail or cease to qualify for the exemption from status of an
"investment company" under the Investment Company Act of 1940, as
amended, afforded by Rule 3a-5 thereunder.
(e) Without the consent of the Depositor, this Trust
Agreement may not be amended in a manner which imposes any
additional obligation on the Depositor. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties, immunities or
liabilities under this Indenture or otherwise.
(f) In the event that any amendment to this Trust Agreement
is made, the Administrative Trustees shall promptly provide to the
Depositor a copy of such amendment.
Section 10.04 Separability. In case any provision in this
Trust Agreement or in the Trust Securities Certificates shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 10.05 Governing Law. THIS TRUST AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST
AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST
SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE; PROVIDED THAT THE IMMUNITIES AND
STANDARD OF CARE OF THE PROPERTY TRUSTEE SHALL BE GOVERNED BY NEW
YORK LAW.
Section 10.06 Successors. This Trust Agreement shall be
binding upon and shall inure to the benefit of any successor to
both the Trust and the Trustees, including any successor by
operation of law.
Section 10.07 Headings. The Article and Section headings are
for convenience only and shall not affect the construction of this
Trust Agreement.
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Section 10.08 Notice and Demand. Any notice, demand or other
communication which by any provision of this Trust Agreement is
required or permitted to be given or served to or upon any
Securityholder or the Depositor may be given or served in writing
by deposit thereof, postage prepaid, in the United States mail,
hand delivery or facsimile transmission, in each case, addressed,
(i) in the case of a Preferred Securityholder, to such Preferred
Securityholder as such Securityholder's name and address may appear
on the Register and (ii) in the case of the Common Securityholder
or the Depositor, to Virginia Electric and Power Company, One James
River Plaza, Richmond, Virginia 23219-3932, Attention: Treasurer,
facsimile no. 804-771-4066, with a copy to the Secretary, facsimile
no. 804-771-4458. Such notice, demand or other communication to or
upon a Securityholder shall be deemed to have been sufficiently
given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be
given or served to or upon the Trust or the Trustees shall be given
in writing addressed (until another address is published by the
Trust) as follows: (i) with respect to the Property Trustee and
the Delaware Trustee, Chemical Bank, 450 West 33rd Street, New
York, New York, 10001, Attention: Corporate Trustee Administration
Department; Chemical Bank Delaware, 1201 Market Street, Wilmington,
Delaware 19801, Attention: Corporate Trust Department, as the case
may be; and (ii) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked
Attention: Administrative Trustees of Virginia Power Capital Trust
I c/o Treasurer. Such notice, demand or other communication to or
upon the Trust or the Trustees shall be deemed to have been
sufficiently given or made only upon actual receipt of the writing
by the applicable Trustee.
Section 10.09 Agreement Not to Petition. Each of the
Trustees and the Depositor agrees for the benefit of the
Securityholders that, until at least one year and one day after the
Trust has been terminated in accordance with Article IX, it shall
not file, or join in the filing of, a petition against the Trust
under any bankruptcy, reorganization, arrangement, insolvency,
liquidation or other similar law (including, without limitation,
the United States Bankruptcy Code) (collectively, "Bankruptcy
Laws") or otherwise join in the commencement of any proceeding
against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.09, the
Property Trustee agrees, for the benefit of Securityholders, that
it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor
against the Trust or the commencement of such action and raise the
defense that the Depositor has agreed in writing not to take such
action and should be stopped and precluded therefrom and such other
defenses, if any, as counsel for the Trustees or the Trust may
assert. The provisions of this Section 10.09 shall survive the
termination of this Trust Agreement.
Section 10.10 Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Trustee
Agreement and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is
a Trustee for the purposes of the Trustee Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required to be included in
this Trust Agreement by any of the provisions of the Trust
Indenture Act, such required provision shall control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as
equity securities representing interests in the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL
OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT,
SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
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BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH
OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
VIRGINIA ELECTRIC AND POWER COMPANY
By:
--------------------------------
Title:
-----------------------------
CHEMICAL BANK,
as Property Trustee
By:
--------------------------------
Title:
-----------------------------
CHEMICAL BANK DELAWARE,
as Delaware Trustee
By:
--------------------------------
Title:
-----------------------------
JAMES P. CARNEY,
as Administrative Trustee
By:
--------------------------------
Title:
-----------------------------
J. KENNERLY DAVIS, Jr.,
as Administrative Trustee
33
<PAGE>
By:
--------------------------------
Title:
-----------------------------
34
<PAGE>
EXHIBIT A
RESTATED CERTIFICATE OF TRUST
OF
VIRGINIA POWER CAPITAL TRUST I
THIS RESTATED CERTIFICATE OF TRUST of Virginia Power Capital
Trust I (the "Trust"), a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801 et seq.), dated July __, 1995,
is being duly executed and filed by the undersigned, as trustees of
the Trust, to amend and restate the original Certificate of Trust
of the Trust.
1. Name. The name of the business trust being formed hereby
is Virginia Power Capital Trust I.
2. Original Certificate. The original Certificate of the
Trust was filed on July __, 1995.
3. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the
State of Delaware is Chemical Bank Delaware, 1201 Market Street,
Wilmington, Delaware 19801.
IN WITNESS WHEREOF, the undersigned, being the trustee of the
Trust meeting the requirements of 12 Del. C (S) 3807, has executed
this Certificate of Trust as of the date first above written.
CHEMICAL BANK DELAWARE,
as Trustee
By:
--------------------------------
Name:
Title:
CHEMICAL BANK,
as Trustee
By:
--------------------------------
Name:
Title:
JAMES P. CARNEY,
as Trustee
By:
--------------------------------
Name:
Title:
J. KENNERLY DAVIS, JR.
Exhibit A - Page 1
<PAGE>
as Trustee
By:
--------------------------------
Name:
Title:
Exhibit A - Page 2
<PAGE>
EXHIBIT B
_______________, 1995
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: General Counsel's Office
Re: Virginia Power Capital Trust I
____% Trust Preferred Securities
Ladies and Gentleman:
The purpose of this letter is to set out certain matters
relating to the above-referenced Preferred Securities (CUSIP No.
__________) (the "Securities") of Virginia Power Capital Trust I,
a Delaware statutory business trust (the "Trust"). The Securities
are guaranteed to the extent set forth in the Prospectus relating
to the Securities dated _______________, 1995 by Virginia Electric
and Power Company, a Virginia public service corporation. The
Trust is selling the Securities to certain underwriters (the
"Underwriters") pursuant to an Underwriting Agreement dated
_______________, 1995, and the Underwriters wish to take delivery
of the Securities through The Depository Trust Company ("DTC").
The Trust is acting as transfer agent and registrar with respect to
the Securities. Chemical Bank, in its capacity as Property Trustee
of the Trust, will act as paying agent in relation to the
Securities (the "Property Trustee").
To induce DTC to accept the Securities as eligible for deposit
at DTC, and to act in accordance with its rules with respect to the
Securities, the Trust and the Property Trustee severally, as set
forth below each make the following representations to DTC.
1. Before the closing of the sale of the Securities to the
Underwriters, which is expected to occur on or about
_______________, 1995 there shall be deposited with DTC one or more
global certificates (the "Global Certificate") registered in the
name of DTC's nominee, Cede & Co., for 5,400,000 Securities.
2. The Amended and Restated Trust Agreement dated as of
_______________, 1995 provides for the voting by holders of the
Securities under certain circumstances. The Trust shall establish
a record date for such purposes and shall, to the extent possible,
give DTC notice of such record date not less than 15 calendar days
in advance of such record date. Notices to DTC pursuant to this
paragraph by telecopy shall be sent to DTC's Reorganization
Department at (212) 709-6896 or (212) 709-6897, and receipt of such
notices shall be confirmed by telephoning (212) 709-6870. Notices
to DTC pursuant to this paragraph by mail or by other means shall
be sent to DTC's Reorganization Department as indicated in
paragraph 6.
3. In the event of stock split, conversion,
recapitalization, reorganization or any other similar transaction
resulting in the cancellation of all or any part of the Securities
outstanding, the Trust shall send DTC a notice of such event 5
business days prior to the effective date of such event.
4. In the event of a distribution with respect to the
Securities outstanding, the Property Trustee shall send DTC a
notice specifying the amount of and conditions, if any, applicable
to such payment or distribution. Such notice shall be sent to DTC
by a secure means (e.g., legible telecopy, registered or certified
mail, overnight
Exhibit B - Page 1
<PAGE>
delivery) in a timely manner designed to assure that such notice is in
DTC's possession no later than the close of business on the business
day before the Publication Date. (The Property Trustee shall have a
method to verify subsequently the use of such means and the timeliness
of such notice.) After establishing the amount of payment to be made
on the Securities, the Property Trustee will notify DTC's Dividend
Department of such payment 5 business days prior to payment date.
5. In the event of a redemption by the Trust of the
Securities, notice to holders of the Securities by the Trust
specifying the terms of the redemption and the Publication Date of
such notice shall be sent to DTC not less than 30 days prior to
such event by a secure means in the manner set forth in the
preceding paragraph. Such redemption notice shall be sent to DTC's
Call Notification Department at (516) 227-4039 or 4190, and receipt
of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Securities,
notice by the Trust to holders of the Securities specifying the
terms of the tender and the Publication Date of such notice shall
be sent to DTC by the Trust by a secure means and in a timely
manner as described in Paragraph 4. Notices to DTC pursuant to
this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes), shall be sent by
telecopy to DTC's Reorganization Department at (212) 709-1093 or
(212) 709-1094, and receipt of such notices shall be confirmed by
telephoning (212) 709-6884, or by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain
the CUSIP number of the Securities and the accompanying description
of the Securities, which, as of the date of this letter, is
"Virginia Power Capital Trust I, ___% Trust Preferred Securities."
8. Notices to DTC's Dividend Department by telecopy shall be
sent to (212) 709-1723. Such notices by mail or by any other means
shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, New York 10004
The Trust shall confirm DTC's receipt of such telecopy by
telephoning the Dividend Department at (212) 709-1270.
9. Payments of cash distributions, including payments on
redemption, with respect to the Securities evidenced by the Global
Certificate shall be received by Cede & Co., as nominee of DTC, or
its registered assigns in same day funds on each payment date (or
in accordance with existing arrangements between the Property
Trustee and DTC). Such payments shall be made payable to the order
of Cede & Co.
Exhibit B - Page 2
<PAGE>
10. Other cash payments shall be received by Cede & Co., as
a nominee of DTC, or its registered assigns in next day funds on
each payment date (or in accordance with existing arrangements
between the Property Trustee and DTC). Such payments shall be made
payable to the order of Cede & Co., and shall be addressed as
follows:
NFDS Redemption Department
The Depository Trust Department
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
11. DTC may direct the Trust and the Property Trustee to use
any other telecopy number or address of DTC as the number or
address to which notices or payments may be sent.
12. In the event of a conversion, redemption, or any other
similar transaction (e.g., tender made and accepted in response to
the Trust's invitation) necessitating a reduction in the aggregate
number of Securities outstanding, DTC, in its discretion: (a) may
request the Trust to issue and authenticate a new Security
certificate; or (b) may make an appropriate notation on the
Security certificate indicating the date and amount of such
reduction.
13. DTC may discontinue its services as a securities
depositary with respect to the Global Certificate at any time by
giving reasonable notice to the Trust (at which time DTC will
confirm with the Trust the aggregate number of Securities deposited
with it) and discharging its responsibilities with respect thereto
under applicable law. Under such circumstances, at DTC's request
the Trust shall cooperate fully with DTC by taking prompt
appropriate action to make alternative arrangements for book-entry
settlement for the Securities or to make available one or more
separate certificates evidencing Securities, to any participant
having Securities credited to its DTC account.
14. In the event that the Trust determines that beneficial
owners of Securities shall be able to obtain certificated
Securities the Trust shall notify DTC of the availability of
certificates. In such event, the Trust shall issue, transfer and
exchange certificates in appropriate amounts, as required by DTC
and others.
15. Nothing herein shall require the Trustees to advance
their own funds for any purposes.
Exhibit B - Page 3
<PAGE>
This letter may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the
same instrument.
Very truly yours,
Virginia Power Capital Trust I
By:
-----------------------------------
Name: J. Kennerly Davis
Title: Administrative Trustee
CHEMICAL BANK,
as Property Trustee of
Virginia Power Capital Trust I
By:
-----------------------------------
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By: ________________________________
Authorized Officer
Exhibit B - Page 4
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1
Certificate Evidencing Common Securities
of
Virginia Power Capital Trust I
Common Securities
(liquidation amount $25 per Common Security)
Virginia Power Capital Trust I, a statutory business trust
formed under the laws of the State of Delaware (the Trust), hereby
certifies that Virginia Electric and Power Company (the Holder) is
the registered owner of __________ (_____) common securities of the
Trust representing ownership interests in the Trust and designated
the Common Securities (liquidation amount $25 per Common Security)
(the Common Securities). In accordance with Section 5.10 of the
Trust Agreement (as defined below) the Common Securities are not
transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities are set forth
in, and this certificate and the Common Securities represented
hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of ____________ __, 1995, as the same may be amended
from time to time (the Trust Agreement), including the designation
of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Trust Agreement to the Holder
without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this ____ day of ______________, 1995.
Virginia Power Capital Trust I
By:__________________________
J. Kennerly Davis, Jr.,
as Administrative Trustee
Exhibit C - Page 1
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of ____________ __, 1995, between Virginia
Electric and Power Company, a Virginia public service corporation
(the Company), and Virginia Power Capital Trust I, a Delaware
business trust (the Trust).
WHEREAS, the Trust intends to issue its ____% Common
Securities (the Common Securities) to and receive Junior
Subordinated Notes from the Company and to issue and sell Virginia
Power Capital Trust I ___% Preferred Securities, Series A (the
Preferred Securities) with such powers, preferences and special
rights and restrictions as are set forth in the Amended and
Restated Trust Agreement of the Trust dated as of __________ __,
1995 as the same may be amended from time to time (the Trust
Agreement);
WHEREAS, the Company is the issuer of the Junior Subordinated
Notes;
NOW, THEREFORE, in consideration of the purchase by each
holder of the Preferred Securities, which purchase the Company
hereby agrees shall benefit the Company and which purchase the
Company acknowledges will be made in reliance upon the execution
and delivery of this Agreement, the Company and the Trust hereby
agree as follows:
ARTICLE I
Section 1.01. Guarantee by the Company. Subject to the terms
and conditions hereof, the Company hereby irrevocably and
unconditionally guarantees to each person or entity to whom the
Trust is now or hereafter becomes indebted or liable (the
Beneficiaries) the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As
used herein, "Obligations" means any indebtedness, expenses or
liabilities of the Trust, other than obligations of the Trust to
pay to holders of any Preferred Securities or other similar
interests in the Trust the amounts due such holders pursuant to the
terms of the Preferred Securities or such other similar interests,
as the case may be. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries,
whether or not such Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
terminate and be of no further force and effect upon the date on
which there are no Beneficiaries remaining; provided, however, that
this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of
Preferred Securities or any Beneficiary must restore payment of any
sums paid under the Preferred Securities, under any Obligation,
under the Guarantee Agreement dated the date hereof by the Company
and Chemical Bank, as guarantee trustee, or under this Agreement
for any reason whatsoever. This Agreement is continuing,
irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. The Company hereby waives
notice of acceptance of this Agreement and of any Obligation to
which it applies or may apply, and the Company hereby waives
presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and
demands.
Section 1.04. No Impairment. The obligations, covenants,
agreements and duties of the Company under this Agreement shall in
no way be affected or impaired by reason of the happening from time
to time of any of the following:
(a) the extension of time for the payment by the Trust
of all or any portion of the Obligations or for the
performance of any other obligation under, arising out of, or
in connection with, the Obligations;
Exhibit D - Page 1
<PAGE>
(b) any failure, omission, delay or lack of diligence on
the part of the Beneficiaries to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations or any action on
the part of the Trust granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of
debt or, or other similar proceedings affecting, the Trust or
any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, the Company with respect to the
happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this
Agreement directly against the Company and the Company waives any
right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against the
Company.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements
contained in this Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall
inure to the benefit of the Beneficiaries.
Section 2.02. Amendment. So long as there remains any
Beneficiary or any Preferred Securities of any series are
outstanding, this Agreement shall not be modified or amended in any
manner adverse to such Beneficiary or to the holders of the
Preferred Securities.
Section 2.03. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be
given in writing by delivering the same against receipt therefor by
facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and if so given, shall be
deemed given when mailed or upon receipt of an answer-back, if sent
by telex), to wit:
Virginia Power Capital Trust I
c/o Chemical Bank
450 West 33rd Street
New York, New York 10001
Facsimile No.:
Attention: Corporate Trustee
Administration Department
Virginia Electric and Power Company
One James River Plaza
Richmond, Virginia 23219-3932
Facsimile No.:
Attention:
Exhibit D - Page 2
<PAGE>
Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF VIRGINIA.
THIS AGREEMENT is executed as of the date and year first above
written.
VIRGINIA ELECTRIC AND POWER COMPANY
By:
Name:
Title:
VIRGINIA POWER CAPITAL TRUST I
By:___________________________
J. Kennerly Davis, Jr., as
Administrative Trustee but not
in his individual capacity
Exhibit D - Page 3
<PAGE>
EXHIBIT E
(IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT:
Unless this Certificate is presented by an authorized
representative of the Depository Trust Company, a New York
Corporation ("DTC"), to Virginia Power Capital Trust I or its agent
for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of
DTC (and any payment made to Cede & Co. or to such other entity as
is requested by an authorized representative of DTC), any transfer,
pledge, or other use hereof for value or otherwise by or to any
person is wrongful inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.
Certificate Number Number of Preferred Securities
P- CUSIP NO.
Certificate Evidencing Preferred Securities
of
Virginia Power Capital Trust I
___% Trust Preferred Securities,
(Liquidation amount $25 per Preferred Security)
Virginia Power Capital Trust I, a statutory business trust
formed under the laws of the State of Delaware (the Trust), hereby
certifies that ____________ (the "Holder") is the registered owner
of ___________ (_______________) preferred securities of the Trust
representing an ownership interest in the Trust and designated the
Virginia Power Capital Trust I ___% Trust Preferred Securities
(liquidation amount $25 per Preferred Security) (the Preferred
Securities). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.04 of the Trust
Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this
certificate and the Preferred Securities represented hereby are
issued and shall in all respects be subject to the terms and
provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of _________________ __, 1995, as the same may be
amended from time to time (the Trust Agreement) including the
designation of the terms of Preferred Securities as set forth
therein. The holder of this certificate is entitled to the
benefits of a guarantee by Virginia Electric and Power Company, a
Virginia public service corporation (the Company) pursuant to a
Guarantee Agreement between the Company and Chemical Bank, as
guarantee trustee, dated as of ______________ __, 1995 (the
Guarantee) to the extent provided therein. The Trust will furnish
a copy of the Trust Agreement and the Guarantee to the holder of
this certificate without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the holder of this
certificate is bound by the Trust Agreement and is entitled to the
benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this ______ day of ______________, 1995.
VIRGINIA POWER CAPITAL TRUST I
By:__________________________
J. Kennerly Davis, Jr.,
as Administrative Trustee
Exhibit E - Page 1
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books
of the Trust. The agent may substitute another to act for him or
her.
Date: __________________
Signature: _________________
(Sign exactly as your name appears on the other side of this
Preferred Security Certificate)
Exhibit E - Page 2
<PAGE>
Exhibit 4(g)
GUARANTEE AGREEMENT
Between
Virginia Electric and Power Company
(as Guarantor)
and
Chemical Bank
(as Trustee)
dated as of
August __, 1995
<PAGE>
CROSS-REFERENCE TABLE/1/
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ------------------- ----------
310(a)......................................................... 4.01(a)
310(b)................................................... 4.01(c), 2.08
310(c).................................................... Inapplicable
311(a)......................................................... 2.02(b)
311(b)......................................................... 2.02(b)
311(c).................................................... Inapplicable
312(a)......................................................... 2.02(a)
312(b)......................................................... 2.02(b)
313............................................................... 2.03
314(a)............................................................ 2.04
314(b).................................................... Inapplicable
314(c)............................................................ 2.05
314(d).................................................... Inapplicable
314(e)................................................ 1.01, 2.05, 3.02
314(f)...................................................... 2.01, 3.02
315(a)......................................................... 3.01(d)
315(b)............................................................ 2.07
315(c)............................................................ 3.01
315(d)......................................................... 3.01(d)
316(a)................................................... 5.04(a), 2.06
316(b)............................................................ 5.03
316(c)............................................................ 2.02
317(a).................................................... Inapplicable
317(b).................................................... Inapplicable
318(a)......................................................... 2.01(b)
318(b)............................................................ 2.01
318(c)......................................................... 2.01(a)
- ----------------------
/1/This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS........................... 1
SECTION 1.01. Definitions....................................... 1
ARTICLE II
TRUST INDENTURE ACT.................... 3
SECTION 2.01. Trust Indenture Act; Application.................. 3
SECTION 2.02. Lists of Holders of Securities.................... 3
SECTION 2.03. Reports by the Trustee............................ 3
SECTION 2.04. Periodic Reports to Trustee....................... 3
SECTION 2.05. Evidence of Compliance with Conditions Precedent.. 3
SECTION 2.06. Events of Default; Waiver......................... 3
SECTION 2.07. Event of Default; Notice.......................... 4
SECTION 2.08. Conflicting Interests............................. 4
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUSTEE............. 4
SECTION 3.01. Powers and Duties of the Trustee.................. 4
SECTION 3.02. Certain Rights of Trustee......................... 5
ARTICLE IV
TRUSTEE............................ 6
SECTION 4.01. Trustee; Eligibility.............................. 6
SECTION 4.02. Appointment, Removal and Resignation of Trustee... 7
ARTICLE V
GUARANTEE........................... 7
SECTION 5.01. Guarantee......................................... 7
SECTION 5.02. Waiver of Notice and Demand....................... 7
SECTION 5.03. Obligations Not Affected.......................... 8
SECTION 5.04. Rights of Holders................................. 8
SECTION 5.05. Guarantee of Payment.............................. 9
SECTION 5.06. Subrogation....................................... 9
SECTION 5.07. Independent Obligations........................... 9
ARTICLE VI
SUBORDINATION........................ 9
SECTION 6.01. Subordination..................................... 9
ARTICLE VII
TERMINATION.......................... 9
SECTION 7.01. Termination....................................... 9
ARTICLE VIII
MISCELLANEOUS........................ 9
SECTION 8.01. Successors and Assigns............................ 9
SECTION 8.02. Amendments........................................ 10
SECTION 8.03. Notices........................................... 10
SECTION 8.04. Benefit........................................... 10
<PAGE>
Page
----
SECTION 8.05. Interpretation.................................... 10
SECTION 8.06. Governing Law..................................... 11
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of August
__, 1995, is executed and delivered by VIRGINIA ELECTRIC AND POWER COMPANY, a
Virginia public service corporation (the Guarantor), and CHEMICAL BANK, a New
York banking corporation, as trustee (the Trustee), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of VIRGINIA POWER CAPITAL TRUST I, a Delaware statutory business
trust (the Trust).
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of August __, 1995 among the Trustee, the other
Trustees named therein, Virginia Electric and Power Company, as Depositor, and
the Holders from time to time of ownership interests in the Trust, the Trust is
issuing as of the date hereof $135,000,000 aggregate liquidation amount of its
____% Trust Preferred Securities (the Preferred Securities) representing
ownership interests in the Trust and having the terms set forth in the Trust
Agreement;
WHEREAS, the Preferred Securities will be issued by the Trust and the
proceeds thereof will be used to purchase the Junior Subordinated Notes (as
defined in the Trust Agreement) of the Guarantor, which will be held by the
Trust as trust assets; and
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the payment for Preferred
Securities by each Holder thereof, which payment the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. As used in this Guarantee Agreement, the
-----------
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common ownership
interests in the assets of the Trust.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Trust: (i) any accrued and
unpaid distributions that are required to be paid on such Preferred Securities
but if and only to the extent the Trustee has available in the Payment Account
funds sufficient to make such payment, (ii) the redemption price, including all
accrued and unpaid distributions to the date of redemption (the Redemption
Price), with respect to the Preferred Securities called for redemption by the
Trust but if and only to the extent that the Trustee has available in the
<PAGE>
Payment Account funds sufficient to make such payment, (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Trust (other than in
connection with a redemption of all of the Preferred Securities), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Preferred Securities to the date of payment, to the extent
the Trust has funds legally available therefor, and (b) the amount of assets of
the Trust remaining available for distribution to Holders in liquidation of the
Trust (in either case, the Liquidation Distribution).
"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indenture" means the Subordinated Note Indenture dated as of August
__, 1995, among the Guarantor, as Subordinated Note Issuer, and Chemical Bank,
as trustee, as supplemented by the Supplemental Indenture dated as of August __,
1995, by and between the Guarantor and Chemical Bank, as Trustee.
"Majority in liquidation amount of Preferred Securities" means a vote
by Holder(s) of Preferred Securities, voting separately as a class, of more than
50% of the liquidation amount of all Preferred Securities.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Guarantor, and delivered to the Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Responsible Officer" means, with respect to the Trustee, any vice-
president, any assistant vice-president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, any senior trust officer, trust officer
or assistant trust officer or any other officer of the Corporate Trust
Department of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Trustee" means a successor Trustee possessing the qualifications
to act as Trustee under Section 4.01.
-2-
<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means Chemical Bank until a Successor Trustee has been appointed
and has accepted such appointment pursuant to the terms of this Guarantee
Agreement and thereafter means each such Successor Trustee.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
--------------------------------
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Section 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.02. Lists of Holders of Securities.
------------------------------
(a) The Guarantor shall furnish or cause to be furnished to the Trustee (a)
semiannually, not later than June 1 and December 1 in each year, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders of the Preferred Securities ("List of Holders") as of the most recent
Record Date (as defined in the Trust Agreement), and (b) at such other times as
the Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of the most recent Record
Date (as defined in the Trust Agreement); provided that, the Guarantor shall not
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Trustee by the
Guarantor. The Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Trustee shall comply with its obligations under Sections 311(a),
311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Trustee. Within 60 days after July 15 of
----------------------
each year, the Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by Section 313(a) of the Trust Indenture Act, if
any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Trustee shall also comply with the other requirements of
Section 313 of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Trustee. The Guarantor shall provide to
---------------------------
the Trustee such documents, reports and information as required by Section 314
(if any) in the form, in the manner and at the times required by Section 314 of
the Trust Indenture Act, and shall provide, by May 1 of each year, the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form and in the manner required by such Section.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
------------------------------------------------
Guarantor shall provide to the Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Guarantee Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
-------------------------
liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default
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and its consequences. Upon such waiver, any such Event of Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Guarantee Agreement, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 2.07. Event of Default; Notice.
------------------------
(a) The Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders of the
Preferred Securities, notices of all Events of Default known to the Trustee,
unless such defaults have been cured before the giving of such notice, provided
that the Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Preferred Securities.
(b) The Trustee shall not be deemed to have knowledge of any Event of
Default unless the Trustee shall have received written notice, or a Responsible
Officer charged with the administration of the Trust Agreement shall have
obtained written notice, of such Event of Default.
SECTION 2.08. Conflicting Interests. The Trust Agreement shall be deemed
---------------------
to be specifically described in this Guarantee Agreement for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.01. Powers and Duties of the Trustee.
--------------------------------
(a) This Guarantee Agreement shall be held by the Trustee for the benefit
of the Holders of the Preferred Securities, and the Trustee shall not transfer
this Guarantee Agreement to any Person except a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.04 or to a Successor Trustee
on acceptance by such Successor Trustee of its appointment to act as Successor
Trustee. The right, title and interest of the Trustee shall automatically vest
in any Successor Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Trustee.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders of the
Preferred Securities.
(c) The Trustee, before the occurrence of any Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants shall be read into this Guarantee Agreement
against the Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.06), the Trustee shall exercise such
of the rights and powers vested in it by this Guarantee Agreement, and use the
same degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Guarantee Agreement, and, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.02. Certain Rights of Trustee.
-------------------------
(a) Subject to the provisions of Section 3.01:
(i) the Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever, in the administration of this Guarantee Agreement,
the Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor;
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(iv) the Trustee may consult with counsel of its choice, and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion; such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees;
the Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any court of
competent jurisdiction;
(v) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Guarantee Agreement at the request or
direction of any Holder, unless such Holder shall have provided to the
Trustee such adequate security and indemnity as would satisfy a reasonable
person in the position of the Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Trustee; provided that
nothing contained in this Section 3.02(a)(v) shall be taken to relieve the
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Guarantee Agreement;
(vi) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit;
(vii) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(viii) whenever in the administration of this Guarantee Agreement the
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Trustee (i) may request instructions from the Holders of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power
or authority available to the Trustee shall be construed to be a duty.
SECTION 3.03. Compensation; Fees; Indemnity.
-----------------------------
The Depositor agrees:
(1) To pay to the Trustee from time to time reasonable compensation
for all services rendered by the Trustee hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Guarantee (including the reasonable compensation and the expenses
and disbursements of their agents and counsel), except any such expense,
disbursement or advance as may be attributable to their negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold the Trustee harmless
against, any and all loss, damage, claims, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Guarantee,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The provisions of this Section 3.03 shall survive the termination of this
Guarantee.
ARTICLE IV
TRUSTEE
SECTION 4.01. Trustee; Eligibility.
--------------------
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.01(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Trustee shall cease to be eligible to so act under
Section 4.01(a), the Trustee shall immediately resign in the manner and with the
effect set out in Section 4.02(c).
(c) If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the rights of the Trustee under the
penultimate paragraph thereof.
SECTION 4.02. Appointment, Removal and Resignation of Trustee.
-----------------------------------------------
(a) Subject to Section 4.02(b), the Trustee may be appointed or removed
without cause at any time by the Guarantor.
(b) The Trustee shall not be removed until a Successor Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Trustee and delivered to the Guarantor.
(c) The Trustee appointed to office shall hold office until a Successor
Trustee shall have been appointed or until its removal or resignation. The
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trustee and delivered to the Guarantor and the
resigning Trustee.
(d) If no Successor Trustee shall have been appointed and accepted
appointment as provided in this Section 4.02 within 60 days after delivery to
the Guarantor of an instrument of resignation, the resigning Trustee may
petition any court of competent jurisdiction for appointment of a Successor
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
---------
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Trust), as and when due, regardless of any
defense, right of set-off or counterclaim which the Guarantor may have or assert
of the Trust. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Trust to pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
---------------------------
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment,
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<PAGE>
any right to require a proceeding first against the Trust or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligation of the Guarantor
------------------------
to make the Guarantee Payments under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Junior Subordinated Notes permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly acknowledges
-----------------
that: (i) this Guarantee Agreement will be deposited with the Trustee to be held
for the benefit of the Holders of the Preferred Securities; (ii) the Trustee has
the right to enforce this Guarantee Agreement on behalf of the Holders of the
Preferred Securities; (iii) the Holders of a Majority in liquidation amount of
the Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee in respect of
this Guarantee Agreement or exercising any trust or power conferred upon the
Trustee under this Guarantee Agreement, provided that such direction shall not
be in conflict with any rule of law or with this Guarantee Agreement, and could
not involve the Trustee in personal liability in circumstances where reasonable
indemnity would not be adequate; and (iv) if the Trustee fails to enforce this
Guarantee Agreement as above provided, any Holder of the Preferred Securities
may, after a period of 30 days has elapsed from such Holder's written request to
the Trustee to enforce this Guarantee Agreement and provision of indemnity
Satisfactory to the Trustee, institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Trustee or any other person or
entity; it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by
-8-
<PAGE>
availing of, any provision of this Guarantee Agreement to affect, disturb or
prejudice the rights of any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Guarantee Agreement, except in the manner herein provided and
for the equal and ratable benefit of all of such Holders.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
--------------------
guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except by payment of the Guarantee Payments in full (without
duplication).
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
-----------
any) rights of the Holders of Preferred Securities against the Trust in respect
of any amounts paid to the Holders by the Guarantor under this Guarantee
Agreement; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Guarantee Agreement, if, at the time of any such payment, any amounts of
Guarantee Payments are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor acknowledges that
-----------------------
its obligations hereunder are independent of the obligations of the Trust with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.01. Subordination. This Guarantee Agreement will constitute an
-------------
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, including the
Junior Subordinated Notes, except those made pari passu or subordinate by their
terms, (ii) pari passu with the most senior preferred or preference stock now or
hereafter issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference
securities of any Affiliate of the Guarantor, and (iii) senior to all common
stock of the Guarantor.
ARTICLE VII
TERMINATION
SECTION 7.01. Termination. This Guarantee Agreement shall terminate and
-----------
be of no further force and effect upon: (i) full payment of the Redemption Price
of all Preferred Securities, (ii) the distribution of Junior Subordinated Notes
to Holders of Preferred Securities in exchange for all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance with
the Trust Agreement upon liquidation of the Trust. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to Preferred Securities or under this Guarantee
Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Successors and Assigns. All guarantees and agreements
----------------------
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure
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to the benefit of the Holders of the Preferred Securities then outstanding.
Except in connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eight of the Indenture, the Guarantor
shall not assign its obligations hereunder.
SECTION 8.02. Amendments. Except with respect to any changes which do not
----------
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than 66 2/3% in liquidation amount of all
the outstanding Preferred Securities. The provisions of Article Six of the
Trust Agreement concerning meetings of Holders shall apply to the giving of such
approval.
SECTION 8.03. Notices. Any notice, request or other communication
-------
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Trustee and Holders of
the Preferred Securities:
Virginia Electric and Power Company
One James River Plaza
Richmond, Virginia 23219
Attn: Treasury Department
(b) if given to the Trust, in care of the Trustee, or to the Trustee at the
Trust's (and the Trustee's) address set forth below or such other address as the
Trustee on behalf of the Trust may give notice to the Holders of the Preferred
Securities:
Virginia Power Capital Trust I
c/o Chemical Bank
450 W. 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
(c) if given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Trust.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 8.04. Benefit. This Guarantee Agreement is solely for the benefit
-------
of the Holders of the Preferred Securities and, subject to Section 3.01(a), is
not separately transferable from the Preferred Securities.
SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the
--------------
context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
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<PAGE>
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
SECTION 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
-------------
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
VIRGINIA ELECTRIC AND POWER COMPANY
By: ____________________________
Name: ____________________________
Title: ____________________________
CHEMICAL BANK
By: ____________________________
Name: ____________________________
Title: ____________________________
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<PAGE>
EXHIBIT 5(a)
[LETTERHEAD OF HUNTON & WILLIAMS]
July 24, 1995
Virginia Electric and Power Company
One James River Plaza
Richmond, Virginia 23219
Virginia Electric and Power Company
Virginia Power Capital Trust I
-----------------------------------
Gentlemen:
We have acted as counsel to Virginia Electric and Power Company (the
Company) in connection with the preparation of a Registration Statement on Form
S-3 (the Registration Statement), which has been filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the Act), for
the registration under the Act of (1) up to $140 million aggregate principal
amount of Series A ____% Junior Subordinated Notes (the Junior Subordinated
Notes), to be issued by the Company to Virginia Power Capital Trust I (the
Trust), (2) 5,400,000 Trust Preferred Securities (liquidation amount $25 per
Trust Preferred Security) to be issued by the Trust, and (3) the Company's
Preferred Securities Guarantee (the Guarantee). The Junior Subordinated Notes
will be issued pursuant to an indenture between the Company and the trustee
named therein, and the Trust Preferred Securities will be issued pursuant to an
amended and restated trust agreement between the Company and the trustees named
therein. The Guarantee will be issued pursuant to an agreement between the
Company and the trustee named therein.
We are of the opinion that the Company is a corporation duly organized and
existing under the laws of Virginia, is duly qualified as a foreign corporation
in West Virginia and North Carolina, and has the corporate power to conduct its
business and to issue the Junior Subordinated Notes, to organize the Trust, and
to issue the Guarantee.
We are further of the opinion that when the steps mentioned in the next
paragraph below shall have been taken, (a) all requisite corporate and
governmental authorizations will have been given for the issuance and sale of
the Junior Subordinated Notes and the issue of the Guarantee (except such
governmental authorization as may be necessary under the Blue Sky Laws of the
several States), (b) the Junior Subordinated Notes and the Guarantee will be
valid, legal and binding obligations of the Company (subject to applicable
bankruptcy, moratorium and similar laws from time to time in force and to
general principles of equity, whether considered in a proceeding at law or in
equity).
The steps to be taken as indicated in the preceding paragraph are:
(1) Authorization by the Board of Directors and Executive Committee of the
Company and by the State Corporation Commission of Virginia for the
Company to (i) issue and sell the Junior Subordinated Notes, (ii) to
organize the Trust, and (iii) to issue the Guarantee;
(2) Compliance with the Securities Act of 1933, as amended; and
(3) Issuance and sale of the Junior Subordinates Notes and the Guarantee
in accordance with such authorizations.
We hereby consent to the statements made in regard to our firm under the
caption LEGAL MATTERS in the Registration Statement. In giving this consent, we
do not admit that we are in the category of persons whose consent is required
under section 7 of the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder by the Securities and Exchange Commission.
The opinions expressed in this letter are solely for your information and
use, and no other person may rely upon or otherwise use the opinions for any
purpose without our express written consent.
Very truly yours,
<PAGE>
Virginia Electric and Power Company
July 24, 1995
Page 2
HUNTON & WILLIAMS
<PAGE>
EXHIBIT 5(b)
[LETTERHEAD OF POTTER ANDERSON & CORROON]
July 24, 1995
Virginia Power Capital Trust I
One James River Plaza
Richmond, Virginia 23219
Virginia Power Capital Trust I
--------------------------------------
Gentlemen:
We have acted as special Delaware counsel to Virginia Power Capital Trust,
a Delaware business trust, (the Trust) in connection with the preparation of a
Registration Statement on Form S-3 (the Registration Statement), which has been
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the Act), for the registration under the Act of (1) 5,400,000
___% Trust Preferred Securities (liquidation amount $25 per Trust Preferred
Security) to be issued by the Trust. The Trust Preferred Securities will be
issued pursuant to an amended and restated trust agreement between the Virginia
Electric and Power Company (Company) and the trustees of the Trust named therein
(the Amended Trust Agreement).
We are of the opinion that the Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Business Trust
Act (12 Del. C. Section 3801 et seq.) (the Delaware Act); all filings required
under the laws of the State of Delaware with respect to the Trust have been
made and the Trust has all necessary power and authority to own property and to
conduct its business as described in the Registration Statement.
We are also of the opinion that the Trust Preferred Securities have been
duly authorized by the Trust Agreement and, when delivered against payment
therefor, will be validly issued, fully paid and non-assessable and evidence
beneficial interests in the assets of the Trust; the holders of the Trust
Preferred Securities will, subject to the terms of the Trust Agreement, be
entitled to the same limitation of personal liability under Delaware law as is
extended to stockholders of private corporations for profit organized under the
general corporation law of the State of Delaware; and the issuance of the Trust
Preferred Securities is not subject to preemptive or other similar rights.
The foregoing opinions are limited to the laws of the State of Delaware
(other than the securities laws and blue sky laws of the State of Delaware)
presently in effect, and we have not considered, and we express no opinion on,
the laws of any other jurisdiction, including federal laws and rules and
regulations relating thereto. We have assumed that all signatures on documents
and instruments examined by us are genuine, that all documents and instruments
submitted to us as originals are authentic, and that all documents and
instruments submitted to us as copies conform with the originals, which facts we
have not independently verified.
We hereby consent to the statements made in regard to our firm under the
caption LEGAL MATTERS in the Registration Statement. In giving this consent, we
do not admit that we are in the category of persons whose consent is required
under section 7 of the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder by the Securities and Exchange Commission.
The opinions expressed in this letter are solely for your information and
use, and no other person may rely upon or otherwise use the opinions for any
purpose without our express written consent.
Very truly yours,
POTTER ANDERSON & CORROON
<PAGE>
EXHIBIT 8
[LETTERHEAD OF HUNTON & WILLIAMS]
July 24, 1995
Virginia Electric and Power Company
One James River Plaza
Richmond, Virginia 23219-3932
VIRGINIA POWER CAPITAL TRUST I
CERTAIN FEDERAL INCOME TAX MATTERS
----------------------------------
Gentlemen:
We have acted as counsel to Virginia Electric and Power Company (the
"Company") in connection with the preparation of a Registration Statement
on Form S-3 (the "Registration Statement"), which has been filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), for the registration under the Act of (1) up to $140
million aggregate principal amount of Series A ___% Junior Subordinated
Notes to be issued by the Company to Virginia Power Capital Trust I (the
"Trust"), (2) 5,400,000 Trust Preferred Securities (liquidation amount $25
per Trust Preferred Security) to be issued by the Trust, and (3) the
Company's Preferred Securities Guarantee (Guarantee). The Junior
Subordinated Notes will be issued pursuant to an indenture between the
Company and the trustee named therein, and the Trust Preferred Securities
will be issued pursuant to an amended and restated trust agreement between
the Company and the trustees named therein. The Guarantee will be issued
pursuant to an agreement between the Company and the trustee named therein.
We have reviewed copies of (1) the Registration Statement and the
prospectus included therein and (2) such other documents as we have deemed
necessary or appropriate as a basis for the opinion set forth below.
Based on the foregoing, we are of the opinion that the statements
and legal conclusions contained in the Registration Statement under the
caption "Certain Federal Income Tax Considerations" are correct and that
the discussion thereunder does not omit any material provision with respect
to the matters covered.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to Hunton &
Williams under the caption "Certain Federal Income Tax Considerations" and
"Legal Matters" in the Registration Statement. In giving this consent, we
do not admit that we are in the category of persons whose consent is
required by Section 7 of the Act or the rules and regulations promulgated
thereunder by the Securities and Exchange Commission.
Very truly yours,
HUNTON & WILLIAMS
<PAGE>
EXHIBIT 12
VIRGINIA ELECTRIC AND POWER COMPANY
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(thousands of dollars)
<TABLE>
<CAPTION>
12 Months
Ended
March 31,
1995 1994 1993 1992 1991 1990
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Income 428,706 447,144 509,051 469,521 487,379 450,354
Add: Income Taxes 215,643 225,647 257,217 211,295 233,323 213,463
----------------------------------------------------------------------
Total Pretax Net Income $644,349 $672,791 $766,268 $680,816 $720,702 $663,817
======================================================================
Fixed Charges:
Interest on Long-Term
Debt 294,549 291,864 300,152 300,857 335,651 356,279
Other Interest 8,039 7,551 19,121 29,534 27,805 25,927
Estimated Interest Factor
of Rents Charged to Op-
erating Expenses, Clear-
ing and Other Accounts 7,647 7,132 5,660 6,231 9,999 10,400
----------------------------------------------------------------------
Total Fixed Charges $310,235 $306,547 $324,933 $336,622 $373,455 $392,606
----------------------------------------------------------------------
Earnings as Defined $954,584 $979,339 $1,091,201 $1,017,438 $1,094,157 $1,056,423
======================================================================
Ratio of Pretax Income
of Net Income 1.50 1.50 1.51 1.45 1.48 1.47
Preferred Div. Req. 44,027 42,274 42,145 45,710 51,465 58,190
Portion Allowable as
Deduction for Federal
Income Taxes 213 213 213 369 456 466
----------------------------------------------------------------------
Difference 43,814 42,061 41,932 45,341 51,009 57,724
Times Pretax Ratio 65,853 63,287 63,120 65,745 75,429 85,085
Preferred Divd. Factor 66,066 63,500 63,333 66,114 75,885 85,551
Fixed Charges as Above 310,235 306,547 324,933 336,622 373,455 392,606
----------------------------------------------------------------------
Total Fixed Charges and
Preferred Divd. Factor $376,301 $370,047 $388,266 $402,736 $449,340 $478,157
======================================================================
Ratio of Earnings to
Combined Fixed Charges and
Preferred Stock
Dividends 2.54 2.65 2.81 2.53 2.44 2.21
======================================================================
</TABLE>
<PAGE>
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Virginia Electric and Power Company on Form S-3 of our report dated February 6,
1995, appearing in the Annual Report on Form 10-K of Virginia Electric and Power
Company for the year ended December 31, 1994 and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.
Deloitte & Touche LLP
Richmond, Virginia
July 24, 1995
<PAGE>
EXHIBIT 25(a)
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
VIRGINIA ELECTRIC AND POWER COMPANY
(Exact name of obligor as specified in its charter)
VIRGINIA 54-0418825
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
ONE JAMES RIVER PLAZA
RICHMOND, VIRGINIA 23219-3932
(Address of principal executive offices) (Zip Code)
___________________________________________
____% JUNIOR SUBORDINATED NOTES, SERIES A
(Title of the indenture securities)
_____________________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 20TH day of JULY, 1995.
CHEMICAL BANK
By /s/ P. Kelly
----------------------------
P. Kelly
Assistant Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................. $ 5,797
Interest-bearing balances ......................... 2,523
Securities: .........................................
Held to maturity securities.......................... 6,195
Available for sale securities........................ 17,785
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold................................. 2,493
Securities purchased under agreements to resell.... 50
Loans and lease financing receivables:
Loans and leases, net of unearned income $ 68,937
Less: Allowance for loan and lease losses 1,898
Less: Allocated transfer risk reserve..... 113
--------
Loans and leases, net of unearned income,
allowance, and reserve............................. 66,926
Trading Assets....................................... 37,294
Premises and fixed assets (including capitalized
leases)............................................ 1,402
Other real estate owned.............................. 99
Investments in unconsolidated subsidiaries and
associated companies............................... 148
Customer's liability to this bank on acceptances
outstanding........................................ 1,051
Intangible assets.................................... 512
Other assets......................................... 6,759
--------
TOTAL ASSETS......................................... $149,034
========
</TABLE>
- 4 -
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
Deposits
<S> <C>
In domestic offices..................................... $ 44,882
Noninterest-bearing .........................$14,690
Interest-bearing ............................ 30,192
In foreign offices, Edge and Agreement subsidiaries,
and IBF's............................................... 32,537
Noninterest-bearing .........................$ 146
Interest-bearing ............................ 32,391
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased................................. 10,587
Securities sold under agreements to repurchase.......... 3,083
Demand notes issued to the U.S. Treasury.................. 464
Trading liabilities....................................... 31,358
Other Borrowed money:
With original maturity of one year or less.............. 7,527
With original maturity of more than one year............ 914
Mortgage indebtedness and obligations under capitalized
leases.................................................. 20
Bank's liability on acceptances executed and outstanding 1,054
Subordinated notes and debentures......................... 3,410
Other liabilities......................................... 5,986
TOTAL LIABILITIES......................................... 141,822
--------
</TABLE>
EQUITY CAPITAL
<TABLE>
<CAPTION>
<S> <C>
Common stock......................................... 620
Surplus.............................................. 4,501
Undivided profits and capital reserves............... 2,558
Net unrealized holding gains (Losses)
on available-for-sale securities..................... (476)
Cumulative foreign currency translation adjustments.. 9
TOTAL EQUITY CAPITAL................................. 7,212
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL............................ $149,034
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
- 5 -
<PAGE>
EXHIBIT 25(b)
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
VIRGINIA ELECTRIC AND POWER COMPANY
(Exact name of obligor as specified in its charter)
VIRGINIA 54-0418825
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
ONE JAMES RIVER PLAZA
RICHMOND, VIRGINIA 23219-3932
(Address of principal executive offices) (Zip Code)
___________________________________________
PREFERRED SECURITIES GUARANTEE
(Title of the indenture securities)
_____________________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 20TH day of JULY, 1995.
CHEMICAL BANK
By /s/ P. Kelly
---------------------------------
P. Kelly
Assistant Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................. $ 5,797
Interest-bearing balances ......................... 2,523
Securities: .........................................
Held to maturity securities.......................... 6,195
Available for sale securities........................ 17,785
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold................................. 2,493
Securities purchased under agreements to resell.... 50
Loans and lease financing receivables:
Loans and leases, net of unearned income $ 68,937
Less: Allowance for loan and lease losses 1,898
Less: Allocated transfer risk reserve..... 113
--------
Loans and leases, net of unearned income,
allowance, and reserve............................. 66,926
Trading Assets....................................... 37,294
Premises and fixed assets (including capitalized
leases)............................................ 1,402
Other real estate owned.............................. 99
Investments in unconsolidated subsidiaries and
associated companies............................... 148
Customer's liability to this bank on acceptances
outstanding........................................ 1,051
Intangible assets.................................... 512
Other assets......................................... 6,759
--------
TOTAL ASSETS......................................... $149,034
========
</TABLE>
- 4 -
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
Deposits
<S> <C>
In domestic offices..................................... $ 44,882
Noninterest-bearing .........................$14,690
Interest-bearing ............................ 30,192
In foreign offices, Edge and Agreement subsidiaries,
and IBF's............................................... 32,537
Noninterest-bearing .........................$ 146
Interest-bearing ............................ 32,391
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased................................. 10,587
Securities sold under agreements to repurchase.......... 3,083
Demand notes issued to the U.S. Treasury.................. 464
Trading liabilities....................................... 31,358
Other Borrowed money:
With original maturity of one year or less.............. 7,527
With original maturity of more than one year............ 914
Mortgage indebtedness and obligations under capitalized
leases.................................................. 20
Bank's liability on acceptances executed and outstanding 1,054
Subordinated notes and debentures......................... 3,410
Other liabilities......................................... 5,986
TOTAL LIABILITIES......................................... 141,822
--------
</TABLE>
EQUITY CAPITAL
<TABLE>
<CAPTION>
<S> <C>
Common stock......................................... 620
Surplus.............................................. 4,501
Undivided profits and capital reserves............... 2,558
Net unrealized holding gains (Losses)
on available-for-sale securities..................... (476)
Cumulative foreign currency translation adjustments.. 9
TOTAL EQUITY CAPITAL................................. 7,212
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL............................ $149,034
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
- 5 -
<PAGE>
EXHIBIT 25(c)
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
VIRGINIA POWER CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
VIRGINIA APPLIED FOR
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
ONE JAMES RIVER PLAZA
RICHMOND, VIRGINIA 23219-3932
(Address of principal executive offices) (Zip Code)
___________________________________________
PREFERRED SECURITIES
(Title of the indenture securities)
_____________________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N. Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 20TH day of JULY, 1995.
CHEMICAL BANK
By /s/ P. Kelly
--------------------------------------
P. Kelly
Assistant Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................. $ 5,797
Interest-bearing balances ......................... 2,523
Securities: .........................................
Held to maturity securities.......................... 6,195
Available for sale securities........................ 17,785
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold................................. 2,493
Securities purchased under agreements to resell.... 50
Loans and lease financing receivables:
Loans and leases, net of unearned income $ 68,937
Less: Allowance for loan and lease losses 1,898
Less: Allocated transfer risk reserve..... 113
--------
Loans and leases, net of unearned income,
allowance, and reserve............................. 66,926
Trading Assets....................................... 37,294
Premises and fixed assets (including capitalized
leases)............................................ 1,402
Other real estate owned.............................. 99
Investments in unconsolidated subsidiaries and
associated companies............................... 148
Customer's liability to this bank on acceptances
outstanding........................................ 1,051
Intangible assets.................................... 512
Other assets......................................... 6,759
--------
TOTAL ASSETS......................................... $149,034
========
</TABLE>
- 4 -
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
Deposits
<S> <C>
In domestic offices..................................... $ 44,882
Noninterest-bearing .........................$14,690
Interest-bearing ............................ 30,192
In foreign offices, Edge and Agreement subsidiaries,
and IBF's............................................... 32,537
Noninterest-bearing .........................$ 146
Interest-bearing ............................ 32,391
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased................................. 10,587
Securities sold under agreements to repurchase.......... 3,083
Demand notes issued to the U.S. Treasury.................. 464
Trading liabilities....................................... 31,358
Other Borrowed money:
With original maturity of one year or less.............. 7,527
With original maturity of more than one year............ 914
Mortgage indebtedness and obligations under capitalized
leases.................................................. 20
Bank's liability on acceptances executed and outstanding 1,054
Subordinated notes and debentures......................... 3,410
Other liabilities......................................... 5,986
TOTAL LIABILITIES......................................... 141,822
--------
</TABLE>
EQUITY CAPITAL
<TABLE>
<CAPTION>
<S> <C>
Common stock......................................... 620
Surplus.............................................. 4,501
Undivided profits and capital reserves............... 2,558
Net unrealized holding gains (Losses)
on available-for-sale securities..................... (476)
Cumulative foreign currency translation adjustments.. 9
TOTAL EQUITY CAPITAL................................. 7,212
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL............................ $149,034
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
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