FIVE-YEAR REVOLVING CREDIT AGREEMENT

EXECUTION COPY

 

$2,500,000,000

 

FIVE-YEAR REVOLVING CREDIT AGREEMENT

 

among

 

DOMINION RESOURCES, INC.,

VIRGINIA ELECTRIC AND POWER COMPANY,

CONSOLIDATED NATURAL GAS COMPANY,

 

The Several Lenders from Time to Time Parties Hereto,

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

 

CITIBANK, N.A.,

as Syndication Agent,

 

BARCLAYS BANK PLC,

THE BANK OF NOVA SCOTIA AND

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

 

 

J.P. MORGAN SECURITIES INC. AND

CITIGROUP GLOBAL MARKETS INC.,

as Joint Lead Arrangers and Joint Bookrunners

 

Dated as of May 12, 2005

 

Table of Contents

 

 

i

 

ii

 

iii

SCHEDULES

 

 

EXHIBITS

 

 

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5-YEAR

CREDIT AGREEMENT

 

5-YEAR CREDIT AGREEMENT (this “ Credit Agreement ”), dated as of May 12, 2005 among DOMINION RESOURCES, INC., a Virginia corporation, VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia corporation, CONSOLIDATED NATURAL GAS COMPANY, a Delaware corporation (each of the above, individually, a “ Borrower ” and collectively, the “ Borrowers ”), the several banks and other financial institutions from time to time parties to this Credit Agreement (each a “ Lender ” and, collectively, the “ Lenders ”), JPMORGAN CHASE BANK, N.A., a national banking association, as administrative agent for the Lenders hereunder (in such capacity, the “ Administrative Agent ”), CITIBANK, N.A., as Syndication Agent, and BARCLAYS BANK PLC, THE BANK OF NOVA SCOTIA AND WACHOVIA BANK, NATIONAL ASSOCIATION, as Co-Documentation Agents.

 

The parties hereto hereby agree as follows:

 

SECTION

1. DEFINITIONS AND ACCOUNTING TERMS

 

1.1 Definitions .

 

As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms herein shall include in the singular number the plural and in the plural the singular:

 

“ Absolute Rate Competitive Bid Loan ” means a Competitive Bid Loan bearing interest at a fixed percentage rate per annum as requested by the relevant Borrower and as specified in the Competitive Bid made by the Lender in connection with such Competitive Bid Loan.

 

“ Adjusted Base Rate ” means with respect to any Borrower the Base Rate plus the Applicable Percentage for Base Rate Loans for the relevant Borrower.

 

“ Adjusted Eurodollar Rate ” means with respect to any Borrower the Eurodollar Rate plus the Applicable Percentage for Eurodollar Loans for the relevant Borrower.

 

“ Administrative Agent ” means JPMorgan Chase Bank, N.A. and any successors and assigns in such capacity.

 

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling (including but not limited to all directors and officers of such Person), controlled by or under direct or indirect common control with such Person. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power (i) to vote 20% or more of the securities having ordinary voting power for the election of directors of such corporation or (ii) to direct or cause direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.

 

“ Applicable Percentage ” means, for Revolving Loans made to, and Utilization Fees payable by, each Borrower, the appropriate applicable percentages, in each case, corresponding to the long-term, unsecured, senior, non –credit-enhanced debt rating of the relevant Borrower in effect from time to time as shown below:

 

 

Notwithstanding the above, if at any time there is a split in ratings between S&P and Moody’s of one level, the Applicable Percentage will be determined based upon the higher rating, and if at any time there is a split in ratings between S&P and Moody’s of two or more levels, the Applicable Percentage shall be determined based upon the ratings level that is one level below the higher of the S&P or Moody’s rating.

 

The Applicable Percentages shall be determined and adjusted on the date of any applicable change in the long term unsecured senior, non –credit-enhanced debt rating of the relevant Borrower. Any adjustment in the Applicable Percentages shall be applicable to all existing Loans as well as any new Loans.

 

The Applicable Percentage for the Facility Fees payable by DRI shall be the appropriate applicable percentages from time to time, as shown above, calculated based on the Ratings of the lowest rated Borrower at such time. This lowest Ratings shall be determined

 

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based upon the long term unsecured, senior, non-credit enhanced public debt rating for the relevant Borrower in effect on such day as published by S&P and Moody’s; it being understood that the initial Applicable Percentages for Facility Fees are based on Pricing Level III (as shown above) and shall remain at Pricing Level III until an applicable change in the Ratings of the lowest rated Borrower. In the event that such ratings differ by only one level, the higher rating shall apply. In the event that such ratings differ by two or more levels, the rating one level below the higher rating shall apply.

 

Each Borrower shall promptly deliver to the Administrative Agent, at the address set forth on Schedule 12.1 , information regarding any change in the long-term, unsecured senior, non-credit enhanced debt rating of such Borrower that would change the existing Pricing Level (as set forth in the chart above) with respect to such Borrower and/or the Facility Fees.

 

“ Application ” means an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to issue a Letter of Credit.

 

“ Bankruptcy Code ” means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

 

“ Base Rate ” means, for any day, a simple rate per annum equal to the greater of (a) the Prime Rate for such day or (b) the sum of one-half of one percent (.50%) plus the Federal Funds Rate for such day.

 

“ Base Rate Loan ” means a Loan that bears interest at an Adjusted Base Rate.

 

“ Borrower ” has the meaning set forth in the preamble hereof.

 

“ Business Day ” means any day other than a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or required by law or other governmental action to close in New York, New York; provided that in the case of Eurodollar Loans, such day is also a day on which dealings between banks are carried on in U.S. dollar deposits in the London interbank market.

 

“ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

“ Capitalization ” means the sum of (a) Total Funded Debt plus (b) Net Worth.

 

“ Change of Control ” means with respect to Dominion Resources the direct or indirect acquisition by any person (as such term is defined in Section 13(d) of the Securities and Exchange Act of 1934, as amended) of beneficial ownership of more than 50% of the outstanding shares of the capital stock of Dominion Resources entitled to vote generally for the election of directors of Dominion Resources, and with respect to any other Borrower, either such Borrower shall cease to be a Subsidiary of Dominion Resources or a Change of Control shall occur with respect to Dominion Resources.

 

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“ Closing Date ” means the date hereof.

 

“ CNG ” means Consolidated Natural Gas Company, a Delaware corporation and its successors and permitted assigns.

 

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

 

“ Commitment ” means, with respect to each Lender, such Lender’s share of the Revolving Loan Commitment based upon such Lender’s Commitment Percentage.

 

“ Commitment Percentage ” means, for each Lender, the percentage identified as its Commitment Percentage opposite such Lender’s name on Schedule 1.1 attached hereto, as such percentage may be modified by assignment in accordance with the terms of this Credit Agreement.

 

“ Commitment Period ” means the period from the Closing Date to the Maturity Date.

 

“ Competitive Bid ” means an offer by a Lender to make a Competitive Bid Loan to a Borrower pursuant to the terms of Section 2.1(b) hereof.

 

“ Competitive Bid Loan ” means a loan made by a Lender to a Borrower in its discretion pursuant to the provisions of Section 2.1(b) hereof.

 

“ Competitive Bid Loan Notes ” means with respect to any Borrower the promissory notes of such Borrower in favor of each Lender evidencing the Competitive Bid Loans made to such Borrower and substantially in the form of Exhibit 2.6(b) , as such promissory notes may be amended, modified, supplemented or replaced from time to time.

 

“ Competitive Bid Rate ” means, as to any Competitive Bid made by a Lender to a Borrower in accordance with the provisions of Section 2.1(b) hereof, the rate of interest offered by the Lender making the Competitive Bid (which for a Eurodollar Competitive Bid Loan shall be a rate of interest determined by reference to the Eurodollar Rate).

 

“ Competitive Bid Request ” means a request by a Borrower for Competitive Bids in the form of Exhibit 2.1(b)(ii) .

 

“ Competitive Bid Request Fee ” means $2,500 for each Competitive Bid Request made by a Borrower.

 

“ Consolidated Subsidiary ” means, as to any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired), the financial statements of which are consolidated with the financial statements of such Person in accordance with GAAP, including principles of consolidation.

 

“ Controlled Group ” means with respect to each Borrower (i) the controlled group of corporations as defined in Section 414(b) of the Code and the applicable regulations

 

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thereunder or (ii) the group of trades or businesses under common control as defined in Section 414(c) of the Code and the applicable regulations thereunder, of which such Borrower is a part or may become a part.

 

“ Credit Documents ” means this Credit Agreement, the Notes, and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto.

 

“ Credit Exposure ” has the meaning set forth in the definition of “Required Lenders” below.

 

“ Default ” means with respect to each Borrower any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default by such Borrower.

 

“ Defaulting Lender ” means, at any time, any Lender that, at such time (a) has failed to make a Loan required pursuant to the terms of this Credit Agreement, (b) has failed to pay to the Administrative Agent or any Lender an amount owed by such Lender pursuant to the terms of this Credit Agreement or (c) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official.

 

“ Dollar ”, “ dollar ” and “ $ ” means lawful currency of the United States.

 

“ Dominion Resources or DRI ” means Dominion Resources, Inc., a Virginia corporation, and its successors and permitted assigns.

 

“ Effective Date ” has the meaning set forth in Section 12.15 hereof.

 

“ Eligible Assignee ” means (a) any Lender or Affiliate or Subsidiary of a Lender and (b) any other commercial bank, financial institution or “accredited investor” (as defined in Regulation D) that is either a bank organized or licensed under the laws of the United States of America or any State thereof or that has agreed to provide the information listed in Section 4.4(d) to the extent that it may lawfully do so and that is approved by the Administrative Agent and DRI (such approval not to be unreasonably withheld or delayed); provided that (i) DRI’s consent is not required pursuant to clause (a) or, with respect to clause (b), during the existence and continuation of a Default or an Event of Default, (ii) no person or entity shall be an Eligible Assignee without the consent of the Issuing Lenders, which consent may be given or withheld in the sole discretion of the Issuing Lenders and (iii) neither the Borrowers nor any Affiliate or Subsidiary of the Borrowers shall qualify as an Eligible Assignee.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.

 

“ ERISA Affiliate ” means with respect to each Borrower each person (as defined in Section 3(9) of ERISA) which together with such Borrower or any Subsidiary of such Borrower would be deemed to be a member of the same “controlled group” within the meaning of Section 414(b), (c), (m) and (o) of the Code.

 

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“ Eurodollar Competitive Bid Loan ” means a Competitive Bid Loan bearing interest at a fixed rate of interest determined by reference to the Eurodollar Rate as requested by the relevant Borrower and as specified in the Competitive Bid made by the Lender in connection with such Competitive Bid Loan.

 

“ Eurodollar Loans ” means a Loan that bears interest at the Eurodollar Rate (including a Eurodollar Competitive Bid Loan).

 

“ Eurodollar Rate ” means with respect to any Eurodollar Loan, for the Interest Period applicable thereto, a rate per annum determined pursuant to the following formula:

 

 

“ Eurodollar Reserve Percentage ” means, for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D, as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Loans is determined), whether or not any Lender has any Eurocurrency liabilities subject to such reserve requirement at that time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credits for proration, exceptions or offsets that may be available from time to time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Reserve Percentage.

 

“ Eurodollar Revolving Loan ” means a Revolving Loan bearing interest at a rate of interest determined by reference to the Eurodollar Rate.

 

“ Event of Default ” with respect to any Borrower has the meaning specified in Section 9.1.

 

“ Exchange Act ” means the Securities and Exchange Act of 1934, as amended.

 

“ Facility Fee ” has the meaning set forth in Section 3.4(a).

 

“ Federal Funds Rate ” means for any day the rate per annum (rounded upward to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the immediately preceding Business Day and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

 

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“ Fee Payment Date ” shall mean (a) the first Business Day of each January, April, July and October and (b) the Maturity Date.

 

“ First Mortgage Bond Indenture ” means the first mortgage bond indenture, dated November 1, 1935, by and between VaPower and The Chase Manhattan Bank, as supplemented and amended.

 

“ Funded Debt ” means, as to any Person, without duplication: (a) all Indebtedness of such Person for borrowed money or which has been incurred in connection with the acquisition of assets (excluding letters of credit, bankers’ acceptances, Non-Recourse Debt, Mandatorily Convertible Securities and Trust Preferred Securities), (b) all capital lease obligations (including Synthetic Lease Obligations) of such Person and (c) all Guaranty Obligations of Funded Debt of other Persons.

 

“ GAAP ” means generally accepted accounting principles in the United States applied on a consistent basis and subject to Section 1.3.

 

“ Governmental Authority ” means any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

 

“ Granting Lender ” has the meaning set forth in Section 12.18 hereof.

 

“ Guaranty Obligations ” means, in respect of any Person, any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness of another Person, including, without limitation, any obligation (a) to purchase or pay, or advance or supply funds for the purchase or payment of, such Indebtedness or (b) entered into primarily for the purpose of assuring the owner of such Indebtedness of the payment thereof (such as, for example, but without limitation, an agreement to advance or provide funds or other support for the payment or purchase of such Indebtedness or to maintain working capital, solvency or other balance sheet conditions of such other Person, including, without limitation, maintenance agreements, comfort letters or similar agreements or arrangements, or to lease or purchase property, securities or services) if such obligation would constitute an indirect guarantee of indebtedness of others, the disclosure of which would be required in the relevant Borrower’s financial statements under GAAP; provided , however , that the term Guaranty Obligations shall not include (i) endorsements for deposit or collection in the ordinary course of business, (ii) obligations under purchased power contracts or (iii) obligations of such Borrower otherwise constituting Guaranty Obligations under this definition to provide contingent equity support, to keep well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise in respect of any Subsidiary or Affiliate of such Borrower in connection with the non-utility nonrecourse financing activities of such Subsidiary or Affiliate.

 

“ Indebtedness ” means, as to any Person, without duplication: (a) all obligations of such Person for borrowed money or evidenced by bonds, debentures, notes or similar instruments; (b) all obligations of such Person for the deferred purchase price of property or services (except trade accounts payable arising in the ordinary course of business, customer deposits, provisions for rate refunds, deferred fuel expenses and obligations in respect of pensions and other post-retirement benefits); (c) all capital lease obligations of such Person;

 

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(d) all Indebtedness of others secured by a Lien on any properties, assets or revenues of such Person (other than stock, partnership interests or other equity interests of a Borrower or any of its Subsidiaries in other entities) to the extent of the lesser of the value of the property subject to such Lien or the amount of such Indebtedness; (e) all Guaranty Obligations; and (f) all non-contingent obligations of such Person under any letters of credit or bankers’ acceptances.

 

“ Indenture ” means the Indenture dated as of April 1, 1995 between CNG and United States Trust Company of New York, as Trustee, as in effect on the date hereof and without giving effect to any modifications or supplements thereto, or terminations thereof, after the date hereof.

 

“ Interbank Offered Rate ” means, for any Eurodollar Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in U.S. dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided , however, if more than one rate is specified on Telerate Page 3750, the applicable rate shall be the arithmetic mean of all such rates. If, for any reason, such rate is not available, the term “Interbank Offered Rate” shall mean, for any Eurodollar Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided , however , if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).

 

“ Interest Payment Date ” means (a) as to Base Rate Loans of any Borrower, the last day of each fiscal quarter of such Borrower and on the Maturity Date, (b) as to Eurodollar Loans of any Borrower, on the last day of each applicable Interest Period and on the Maturity Date and (c) as to Absolute Rate Competitive Bid Loans of any Borrower, on the last day of the Interest Period for each Absolute Rate Competitive Bid Loan and on the Maturity Date. If an Interest Payment Date falls on a date which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then such Interest Payment Date shall be deemed to be the immediately preceding day.

 

“ Interest Period ” means, (a) as to Eurodollar Loans, a period of 14 days (in the case of new money borrowing) and one, two or three months’ duration, as the relevant Borrower may elect, commencing, in each case, on the date of the borrowing (including continuations and conversions of Eurodollar Revolving Loans) and (b) with respect to Absolute Rate Competitive Bid Loans, a period beginning on the date the Absolute Rate Competitive Bid Loan is made and ending on the date specified in the respective Competitive Bid whereby the offer to make such Absolute Rate Competitive Loan was extended, which shall not be less than 7 days nor more than 360 days duration; provided , however , (i) if any Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that where the next succeeding Business Day falls in the next succeeding calendar month, then such Interest Period shall end on the next preceding Business Day), (ii) no Interest

 

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Period shall extend beyond the Maturity Date and (iii) with respect to Eurodollar Loans, where an Interest Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Interest Period is to end, such Interest Period shall end on the last Business Day of such calendar month.

 

“ Issuing Lender ” means, with respect to any Letter of Credit, the issuer thereof, which shall be JPMCB or Citibank, N.A., or any affiliate thereof, in its capacity as issuer of any Letter of Credit.

 

“ Joint Lead Arrangers ” means J.P. Morgan Securities Inc. and Citigroup Global Markets Inc.

 

“ JPMCB ” means JPMorgan Chase Bank, N.A.

 

“ L/C Commitment ” means $1,250,000,000.

 

“ L/C Obligations ” means, at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 5.5.

 

“ L/C Participants ” means the collective reference to all the Lenders other than the Issuing Lender.

 

“ Lenders ” means those banks and other financial institutions identified as such on the signature pages hereto and such other institutions that may become Lenders pursuant to Section 12.3(b).

 

“ Letter of Credit ” has the meaning set forth in Section 5.1(a).

 

“ Letter of Credit Fees ” has the meaning set forth in Section 5.3(a).

 

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof).

 

“ Loan ” means any loan made by any Lender pursuant to this Agreement.

 

“ Mandatorily Convertible Securities ” means any mandatorily convertible equity-linked securities issued by a Borrower, so long as the terms of such securities require no repayments or prepayments and no mandatory redemptions or repurchases, in each case prior to at least 91 days after the later of the termination of the Commitments and the repayment in full of the Loans and all other amounts due under the Credit Agreement.

 

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“ Material Adverse Effect ” means with respect to any Borrower a material adverse effect, after taking into account applicable insurance, if any, on (a) the operations, financial condition or business of such Borrower, (b) the ability of such Borrower to perform its obligations under this Credit Agreement or (c) the validity or enforceability of this Credit Agreement or any of the other Credit Documents against such Borrower, or the rights and remedies of the Lenders against such Borrower hereunder or thereunder; provided , however , that a transfer of assets permitted under and in compliance with Section 9.3 shall not be considered to have a Material Adverse Effect.

 

“ Material Subsidiary ” shall mean with respect to any Borrower, a Subsidiary of such Borrower whose total assets (as determined in accordance with GAAP) represent at least 20% of the total assets of such Borrower, on a consolidated basis.

 

“ Maturity Date ” means the fifth anniversary of the Closing Date.

 

“ Moody’s ” means Moody’s Investors Service, Inc., or any successor or assignee of the business of such company in the business of rating securities.

 

“ Multiemployer Plan ” means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the Controlled Group during such five year period but only with respect to the period during which such Person was a member of the Controlled Group.

 

“ Net Worth ” means with respect to any Borrower, as of any date, the shareholders’ equity or net worth of such Borrower and its Consolidated Subsidiaries (including, but not limited to, the value of any Mandatorily Convertible Securities and Trust Preferred Securities), on a consolidated basis, as determined in accordance with GAAP.

 

“ Non-Recourse Debt ” means Indebtedness (a) as to which no Borrower (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (ii) is directly or indirectly liable as a guarantor or otherwise, or (iii) constitutes the lender; (b) no default with respect to which would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Loans or the Notes) of any Borrower to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (c) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of any Borrower and the relevant legal documents so provide.

 

“ Notes ” means the collective reference to the Revolving Loan Notes and the Competitive Bid Loan Notes of the Borrowers.

 

“ Notice of Borrowing ” means a request by a Borrower for a Loan in the form of Exhibit 2.2(a) .

 

“ Notice of Continuation/Conversion ” means a request by a Borrower for the continuation or conversion of a Loan in the form of Exhibit 2.2(c) .

 

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“ Other Taxes ” has the meaning set forth in Section 4.4(b) hereof.

 

“ PBGC ” means the Pension Benefit Guaranty Corporation established under ERISA and any successor thereto.

 

“ Pension Plans ” has the meaning set forth in Section 8.8 hereof.

 

“ Person ” means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise (whether or not incorporated), or any government or political subdivision or any agency, department or instrumentality thereof.

 

“ Plan ” means any single-employer plan as defined in Section 4001 of ERISA, which is maintained, or at any time during the five calendar years preceding the date of this Credit Agreement was maintained, for employees of a Borrower, any Subsidiary of a Borrower or any ERISA Affiliate of a Borrower.

 

“ Prime Rate ” means the per annum rate of interest established from time to time by JPMCB at its principal office in New York, New York as its Prime Rate. Any change in the interest rate resulting from a change in the Prime Rate shall become effective as of 12:01 a.m. of the Business Day on which each change in the Prime Rate is announced by the Administrative Agent. The Prime Rate is a reference rate used by the Administrative Agent in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit to any debtor.

 

“ Ratings ” means the rating assigned by S&P or Moody’s to a Borrower based on such Borrower’s senior, unsecured, non-credit-enhanced obligations.

 

“ Register ” has the meaning set forth in Section 12.3(c).

 

“ Regulation A, D, T, U or X ” means Regulation A, D, T, U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

 

“ Reimbursement Obligation ” means the obligation of the Borrowers to reimburse the Issuing Lenders pursuant to Section 5.5 for amounts drawn under Letters of Credit.

 

“ Reportable Event ” means a “reportable event” as defined in Section 4043 of ERISA with respect to which the notice requirements to the PBGC have not been waived.

 

“ Required Lenders ” means Lenders whose aggregate Credit Exposure (as hereinafter defined) constitutes more than 50% of the aggregate Credit Exposure of all Lenders at such time; provided , however , that if any Lender shall be a Defaulting Lender at such time then there shall be excluded from the determination of Required Lenders the aggregate principal amount of Credit Exposure of such Lender at such time. For purposes of the preceding sentence, the term “ Credit Exposure ” as applied to each Lender shall mean (a) at any time prior to the termination of the Commitments, the Commitment Percentage of such Lender multiplied by the Revolving Loan Commitment and (b) at any time after the termination of the Commitments,

 

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(i) the outstanding amount of Loans owed to such Lender and (ii) such Lender’s Commitment Percentage of the L/C Obligations then outstanding.

 

“ Responsible Officer ” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of the relevant Borrower, but in any event, with respect to financial matters, the chief financial officer of the relevant Borrower.

 

“ Revolving Loan ” means a Loan made by the Lenders to a Borrower pursuant to Section 2.1(a) hereof.

 

“ Revolving Loan Commitment ” means Two Billion Five Hundred Million Dollars ($2,500,000,000), as such amount may be otherwise reduced in accordance with Section 2.5.

 

“ Revolving Loan Notes ” means with respect to any Borrower the promissory notes of such Borrower in favor of each Lender evidencing the Revolving Loans made to such Borrower and substantially in the form of Exhibit 2.6(a) , as such promissory notes may be amended, modified, supplemented or replaced from time to time.

 

“ S&P ” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., or any successor or assignee of the business of such division in the business of rating securities.

 

“ Solvent ” means, with respect to any Person as of a particular date, that on such date (a) the fair saleable value (on a going concern basis) of such Person’s assets exceeds its liabilities, contingent or otherwise, fairly valued, (b) such Person will be able to pay its debts as they become due, (c) such Person does not have unreasonably small capital with which to satisfy all of its current and reasonably anticipated obligations and (d) such Person does not intend to incur nor does it reasonably anticipate that it will incur debts beyond its ability to pay as such debts become due.

 

“ SPV ” has the meaning set forth in Section 12.18 hereof.

 

“ Subsidiary ” means, as to any Person, (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time, any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any partnership, association, joint venture or other entity in which such person directly or indirectly through Subsidiaries has more than 50% equity interest at any time.

 

“ Synthetic Lease ” means each arrangement, however described, under which the obligor accounts for its interest in the property covered thereby under GAAP as lessee of a lease which is not a capital lease under GAAP and accounts for its interest in the property covered thereby for federal income tax purposes as the owner.

 

“ Synthetic Lease Obligation ” means, as to any Person with respect to any Synthetic Lease at any time of determination, the amount of the liability of such Person in respect of such Synthetic Lease that would (if such lease was required to be classified and

 

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accounted for as a capital lease on a balance sheet of such Person in accordance with GAAP) be required to be capitalized on the balance sheet of such Person at such time.

 

“ Taxes ” has the meaning set forth in Section 4.4(a).

 

“ Total Funded Debt ” means with respect to each Borrower all Funded Debt of such Borrower and its Consolidated Subsidiaries, on a consolidated basis, as determined in accordance with GAAP.

 

“ Trust Preferred Securities ” means the trust preferred securities issued by one of the five subsidiary capital trusts established by any of the Borrowers outstanding on the date hereof and reflected as such in the financial statements of Dominion Resources for the fiscal year ended December 31, 2004, and any additional trust preferred securities that are substantially similar thereto, along with the junior subordinated debt obligations of the Borrowers, so long as (a) the terms thereof require no repayments or prepayments and no mandatory redemptions or repurchases, in each case prior to at least 91 days after the later of the termination of the Commitments and the repayment in full of the Loans and all other amounts due under the Credit Agreement, (b) such securities are subordinated and junior in right of payment to all obligations of the Borrowers for or in respect of borrowed money and (c) the obligors in respect of such preferred securities and subordinated debt have the right to defer interest and dividend payments, in each case to substantially the same extent as such currently outstanding preferred securities or on similar terms customary for trust preferred securities and not materially less favorable to the interests of the Borrowers or the Lenders.

 

“ Utilization Fees ” has the meaning set forth in Section 3.4(b).

 

“ Utilized Revolving Commitment ” means, for any Borrower for any day from the Closing Date to the Maturity Date, an amount equal to the sum of (a) the aggregate principal amount of all Loans outstanding on such day to such Borrower and (b) the aggregate L/C Obligations then outstanding.

 

“ VaPower ” means Virginia Electric and Power Company, a Virginia corporation and its successors and assigns.

 

“ Wholly Owned Subsidiary ” means, as to any Person, any other Person all of the Capital Stock of which (other than de minimis directors’ qualifying shares or local ownership shares required by law and outstanding publicly owned preferred stock of VaPower) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

 

1.2 Computation of Time Periods; Other Definitional Provisions .

 

For purposes of computation of periods of time hereunder, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.” References in this Credit Agreement to “Sections”, “Schedules” and “Exhibits” shall be to Sections, Schedules or Exhibits of or to this Credit Agreement unless otherwise specified.

 

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1.3 Accounting Terms .

 

Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall be prepared, in accordance with GAAP applied on a consistent basis. All calculations made for the purposes of determining compliance with this Credit Agreement shall (except as otherwise expressly provided herein) be made by application of GAAP applied on a basis consistent with the most recent annual or quarterly financial statements delivered pursuant to Section 8.1 (or, prior to the delivery of the first financial statements pursuant to Section 8.1, consistent with the financial statements described in Section 6.1(g)); provided , however , if (a) a Borrower shall object to determining such compliance on such basis at the time of delivery of such financial statements due to any change in GAAP or the rules promulgated with respect thereto or (b) the Administrative Agent or the Required Lenders shall so object in writing within 30 days after delivery of such financial statements, then such calculations shall be made on a basis consistent with the most recent financial statements delivered by such Borrower to the Lenders as to which no such objection shall have been made.

 

1.4 Time .

 

All references to time herein shall be references to Eastern Standard Time or Eastern Daylight time, as the case may be, unless specified otherwise.

 

SECTION

2. LOANS

 

2.1 Revolving Loan Commitment .

 

(a) Revolving Loans . Subject to the terms and conditions set forth herein, each Lender severally agrees to make revolving loans to each Borrower in U.S. dollars, at any time and from time to time, during the Commitment Period (each a “ Revolving Loan ” and collectively the “ Revolving Loans ”); provided that (i) the sum of the aggregate amount of Revolving Loans plus the L/C Obligations then outstanding plus the aggregate amount of Competitive Bid Loans outstanding to the Borrowers on any day shall not exceed the Revolving Loan Commitment and (ii) with respect to each individual Lender, the Lender’s pro rata share of the sum of outstanding Revolving Loans plus the L/C Obligations then outstanding on any day shall not exceed such Lender’s Commitment Percentage of the Revolving Loan Commitment. Revolving Loans made to any Borrower shall be the several obligations of such Borrower. Subject to the terms and conditions of this Credit Agreement, each Borrower may borrow, repay and reborrow the amount of the Revolving Loan Commitment made to it.

 

(b) Competitive Bid Loans Subfacility .

 

(i) Competitive Bid Loans . Subject to the terms and conditions set forth herein, a Borrower may, from time to time, during the period from the Closing Date until the date occurring seven days prior to the Maturity Date, request and each Lender may, in its sole discretion, agree to make Competitive Bid Loans to such Borrower; provided , however , that (A) the sum of the aggregate amount of Revolving Loans outstanding plus the aggregate amount of Competitive Bid Loans outstanding to the Borrowers on any day shall not exceed the Revolving Loan Commitment and (B) if a Lender makes a

 

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Competitive Bid Loan, such Lender’s obligation to make its pro rata share of any Revolving Loan shall not be reduced thereby.

 

(ii) Competitive Bid Requests . Each Borrower may solicit Competitive Bids by delivery of a Competitive Bid Request to the Administrative Agent by 10:00 a.m. (A) with respect to a request for a Eurodollar Competitive Bid Loan, on a Business Day four Business Days prior to the date of a requested Eurodollar Competitive Bid Loan and (B) with respect to a request for an Absolute Rate Competitive Bid Loan, on a Business Day not less than one nor more than five Business Days prior to the date of the requested Absolute Rate Competitive Bid Loan. A Competitive Bid Request must be substantially in the form of Exhibit 2.1(b)(ii) , shall be accompanied by the Competitive Bid Request Fee and shall specify (I) the date of the requested Competitive Bid Loan (which shall be a Business Day), (II) the amount of the requested Competitive Bid Loan, (III) whether such Borrower is requesting a Eurodollar Competitive Bid Loan or an Absolute Rate Competitive Bid Loan and (IV) the applicable Interest Period or Interest Periods requested. The Administrative Agent shall notify the Lenders of its receipt of a Competitive Bid Request and the contents thereof and invite the Lenders to submit Competitive Bids in response thereto. Such Borrower may not request a Competitive Bid for more than three different Interest Periods per Competitive Bid Request nor request Competitive Bid Requests more frequently than four times every calendar month.

 

(iii) Competitive Bid Procedure . Each Lender may, in its sole discretion, make one or more Competitive Bids to the relevant Borrower in response to a Competitive Bid Request. Each Competitive Bid must be received by the Administrative Agent not later than 10:00 a.m. (A) with respect to a request for a Eurodollar Competitive Bid Loan, three Business Days prior to the date of the requested Eurodollar Competitive Bid Loan and (B) with respect to a request for an Absolute Rate Competitive Bid Loan, on the proposed date of the requested Absolute Rate Competitive Bid Loan; provided , however , that should the Administrative Agent, in its capacity as a Lender, desire to submit a Competitive Bid it shall notify such Borrower of its Competitive Bid and the terms thereof not later than 15 minutes prior to the time the other Lenders are required to submit their Competitive Bids. A Lender may offer to make all or part of the requested Competitive Bid Loan and may submit multiple Competitive Bids in response to a Competitive Bid Request. Any Competitive Bid must specify (I) the particular Competitive Bid Request as to which the Competitive Bid is submitted, (II) the minimum (which shall be not less than $5,000,000 and integral multiples of $1,000,000 in excess thereof) and maximum principal amounts of the requested Competitive Bid Loan or Loans which the Lender is willing to make and (III) the applicable interest rate or rates and Interest Period or Interest Periods therefor. A Competitive Bid submitted by a Lender in accordance with the provisions hereof shall be irrevocable. The Administrative Agent shall promptly notify the relevant Borrower of all Competitive Bids made and the terms thereof. The Administrative Agent shall send a copy of each of the Competitive Bids to such Borrower and each of the Lenders for their respective records as soon as practicable.

 

(iv) Acceptance of Competitive Bids . Each Borrower may, in its sole discretion, subject only to the provisions of this subsection (iv), accept or refuse any

 

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Competitive Bid offered to it. To accept a Competitive Bid, the relevant Borrower shall give oral notification of its acceptance of any or all such Competitive Bids (which shall be promptly confirmed in writing) to the Administrative Agent by 11:00 a.m. (A) with respect to a request for a Eurodollar Competitive Bid Loan, three Business Days prior to the date of the requested Eurodollar Competitive Bid Loan and (B) with respect to a request for an Absolute Rate Competitive Bid Loan, on the proposed date of the Absolute Rate Competitive Bid Loan; provided , however , (I) the failure by such Borrower to give timely notice of its acceptance of a Competitive Bid shall be deemed to be a refusal thereof, (II) to the extent Competitive Bids are for comparable Interest Periods, such Borrower may accept Competitive Bids only in ascending order of rates, (III) the aggregate amount of Competitive Bids accepted by such Borrower shall not exceed the principal amount specified in the Competitive Bid Request, (IV) if such Borrower shall accept a bid or bids made at a particular Competitive Bid Rate, but the amount of such bid or bids shall cause the total amount of bids to be accepted by such Borrower to be in excess of the amount specified in the Competitive Bid Request, then such Borrower shall accept a portion of such bid or bids in an amount equal to the amount specified in the Competitive Bid Request less the amount of all other Competitive Bids accepted with respect to such Competitive Bid Request, which acceptance in the case of multiple bids at such Competitive Bid Rate, shall be made pro rata in accordance with the amount of each such bid at such Competitive Bid Rate and (V) no bid shall be accepted for a Competitive Bid Loan unless such Competitive Bid Loan is in a minimum principal amount of $5,000,000 and integral multiples of $1,000,000 in excess thereof, except that where a portion of a Competitive Bid is accepted in accordance with the provisions of clause (IV) of subsection (iv) hereof, then in a minimum principal amount of $500,000 and integral multiples of $100,000 (but not in any event less than the minimum amount specified in the Competitive Bid), and in calculating the pro rata allocation of acceptances of portions of multiple bids at a particular Competitive Bid Rate pursuant to clause (IV) of subsection (iv) hereof, the amounts shall be rounded to integral multiples of $100,000 in a manner which shall be in the discretion of such Borrower. A notice of acceptance of a Competitive Bid given by a Borrower in accordance with the provisions hereof shall be irrevocable. The Administrative Agent shall, not later than noon (A) with respect to a Eurodollar Competitive Bid Loan, three Business Days prior to the date of such Eurodollar Competitive Bid Loan and (B) with respect to a Absolute Rate Competitive Bid Loan, on the proposed date of such Competitive Bid Loan, notify each bidding Lender whether or not its Competitive Bid has been accepted (and if so, in what amount and at what Competitive Bid Rate), and each successful bidder will thereupon become bound, subject to the other applicable conditions hereof, to make the Competitive Bid Loan in respect of which its bid has been accepted.

 

(v) Funding of Competitive Bid Loans . Each Lender which is to make a Competitive Bid Loan shall make its Competitive Bid Loan available to the Administrative Agent by 2:00 p.m. on the date specified in the Competitive Bid Request by deposit of immediately available funds at the office of the Administrative Agent in New York, New York or at such other address as the Administrative Agent may designate in writing. The Administrative Agent will, upon receipt, make the proceeds of such Competitive Bid Loans available to the relevant Borrower.

 

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(vi) Maturity of Competitive Bid Loans . Each Competitive Bid Loan shall mature and be due and payable in full on the last day of the Interest Period applicable thereto. Unless the relevant Borrower shall give notice to the Administrative Agent otherwise (or repays such Competitive Bid Loan), or a Default or Event of Default with respect to such Borrower exists and is continuing, such Borrower shall be deemed to have requested Revolving Loans from all of the Lenders (in the amount of the maturing Competitive Bid Loan and accruing interest at the Base Rate), the proceeds of which will be used to repay such Competitive Bid Loan.

 

2.2 Method of Borrowing for Revolving Loans .

 

(a) Base Rate Loans . By no later than 11:00 a.m. on the date of a Borrower’s request for the borrowing (or for the conversion of Eurodollar Revolving Loans to Base Rate Loans), such Borrower shall submit a Notice of Borrowing to the Administrative Agent setting forth (i) the amount requested, (ii) the desire to have such Revolving Loans accrue interest at the Base Rate and (iii) except in the case of conversions of Eurodollar Revolving Loans to Base Rate Loans, complying in all respects with Section 6.2 hereof.

 

(b) Eurodollar Revolving Loans . By no later than 11:00 a.m. three Business Days prior to the date of a Borrower’s request for the borrowing (or for the conversion of Base Rate Loans to Eurodollar Revolving Loans or the continuation of existing Eurodollar Loans), such Borrower shall submit a Notice of Borrowing to the Administrative Agent setting forth (i) the amount requested, (ii) the desire to have such Revolving Loans accrue interest at the Adjusted Eurodollar Rate, (iii) the Interest Period applicable thereto, and (iv) except in the case of conversions of Base Rate Loans to Eurodollar Revolving Loans or the continuation of existing Eurodollar Loans, to complying in all respects with Section 6.2 hereof.

 

(c) Continuation and Conversion . Each Borrower shall have the option, on any Business Day, to continue existing Eurodollar Revolving Loans made to it for a subsequent Interest Period, to convert Base Rate Loans made to it into Eurodollar Revolving Loans or to convert Eurodollar Revolving Loans made to it into Base Rate Loans. By no later than 11:00 a.m. (a) on the date of the requested conversion of a Eurodollar Revolving Loan to a Base Rate Loan or (b) three Business Days prior to the date for a requested continuation of a Eurodollar Revolving Loan or conversion of a Base Rate Loan to a Eurodollar Revolving Loan, the relevant Borrower shall provide telephonic notice to the Administrative Agent, followed promptly by a written Notice of Continuation/Conversion, setting forth (i) whether the relevant Borrower wishes to continue or convert such Loans and (ii) or if the request is to continue a Eurodollar Revolving Loan or convert a Base Rate Loan to a Eurodollar Revolving Loan, the Interest Period applicable thereto. Notwithstanding anything herein to the contrary, (i) except as provided in Section 4.1 hereof, Eurodollar Revolving Loans may be converted to Base Rate Loans only on the last day of an Interest Period applicable thereto; (ii) Eurodollar Revolving Loans may be continued and Base Rate Loans may be converted to Eurodollar Revolving Loans only if no Default or Event of Default with respect to the relevant Borrower is in existence on the date of such extension or conversion; (iii) any continuation or conversion must comply with Sections 2.2(a) or 2.2(b) hereof, as applicable; and (iv) failure by such Borrower to properly continue Eurodollar Revolving Loans at the end of an Interest Period shall be deemed a conversion to Base Rate Loans.

 

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2.3 Funding of Revolving Loans .

 

Upon receipt of a Notice of Borrowing, the Administrative Agent shall promptly inform the Lenders as to the terms thereof. Each Lender will make its pro rata share of the Revolving Loans available to the Administrative Agent by 1:00 p.m. on the date specified in the Notice of Borrowing by deposit (in U.S. dollars) of immediately available funds at the offices of the Administrative Agent at its principal office in New York, New York, or at such other address as the Administrative Agent may designate in writing. All Revolving Loans shall be made by the Lenders pro rata on the basis of each Lender’s Commitment Percentage.

 

No Lender shall be responsible for the failure or delay by any other Lender in its obligation to make Loans hereunder; provided , however , that the failure of any Lender to fulfill its obligations hereunder shall not relieve any other Lender of its obligations hereunder. Unless the Administrative Agent shall have been notified by any Lender prior to the time of any such Loan that such Lender does not intend to make available to the Administrative Agent its portion of the Loans to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on the date of such Loans, and the Administrative Agent in reliance upon such assumption, may (in its sole discretion without any obligation to do so) make available to the relevant Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent, the Administrative Agent shall be able to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent will promptly notify the relevant Borrower and such Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from the Lender or such Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to such Borrower to the date such corresponding amount is recovered by the Administrative Agent at a per annum rate equal to (a) from such Borrower at the applicable rate for such Loan pursuant to the Notice of Borrowing and (b) from a Lender at the Federal Funds Rate.

 

2.4 Minimum Amounts of Revolving Loans .

 

Each request for Revolving Loans shall be, in the case of Eurodollar Revolving Loans, in an aggregate principal amount that is not less than the lesser of $10,000,000 or the remaining amount available to be borrowed and, in the case of Base Rate Loans, in an aggregate principal amount that is not less than the lesser of $5,000,000 or the remaining amount available to be borrowed. Any Revolving Loan requested shall be in an integral multiple of $1,000,000 unless the request is for all of the remaining amount available to be borrowed.

 

2.5 Reductions of Revolving Loan Commitment .

 

Upon at least three Business Days’ notice, Dominion Resources, on its own behalf and/or acting on the request of any other Borrower, shall have the right to permanently terminate or reduce the aggregate unused amount of the Revolving Loan Commitment available to it and/or such other Borrower at any time or from time to time; provided that (a) each partial reduction shall be in an aggregate amount at least equal to $10,000,000 and in integral multiples of

 

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$1,000,000 above such amount and (b) no reduction shall be made which would reduce the Revolving Loan Commitment to an amount less than the sum of the then outstanding Revolving Loans plus the then outstanding Competitive Bid Loans. Any reduction in (or termination of) the Revolving Loan Commitment shall be permanent and may not be reinstated.

 

2.6 Notes .

 

(a) Revolving Loan Notes . The Revolving Loans made by the Lenders to a Borrower shall be evidenced, upon request by any Lender, by a promissory note of such Borrower payable to each Lender in substantially the form of Exhibit 2.6(a) hereto (the “ Revolving Loan Notes ”) and in a principal amount equal to the amount of such Lender’s Commitment Percentage of the Revolving Loan Commitment as originally in effect.

 

(b) Competitive Bid Loan Notes . The Competitive Bid Loans made by the Lenders to a Borrower shall be evidenced, upon request by any Lender, by a promissory note of such Borrower payable to each Lender in substantially the form of Exhibit 2.6(b) hereto (the “ Competitive Bid Loan Notes ”) and in a principal amount equal to the Revolving Loan Commitment as originally in effect.

 

The date, amount, type, interest rate and duration of Interest Period (if applicable) of each Loan made by each Lender to each Borrower, and each payment made on account of the principal thereof, shall be recorded by such Lender on its books; provided that the failure of such Lender to make any such recordation or endorsement shall not affect the obligations of such Borrower to make a payment when due of any amount owing hereunder or under any Note in respect of the Loans to be evidenced by such Note, and each such recordation or endorsement shall be conclusive and binding absent manifest error.

 

SECTION

3. PAYMENTS

 

3.1 Interest .

 

(a) Interest Rate .

 

(i) All Base Rate Loans made to a Borrower shall accrue interest at the Adjusted Base Rate with respect to such Borrower.

 

(ii) All Eurodollar Loans made to a Borrower shall accrue interest at the Adjusted Eurodollar Rate with respect to such Borrower applicable to such Eurodollar Loan.

 

(iii) All Competitive Bid Loans shall accrue interest at the applicable Competitive Bid Rate with respect to each Competitive Bid Loan.

 

(b) Default Rate of Interest . Upon the occurrence, and during the continuance, of an Event of Default with respect to any Borrower, the principal of and, to the extent permitted by law, interest on the Loans outstanding to such Borrower and any other amounts owing by such Borrower hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate equal to 2% plus the rate which would

 

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otherwise be applicable (or if no rate is applicable, then the rate for Loans outstanding to such Borrower that are Base Rate Loans plus 2% per annum).

 

(c) Interest Payments . Interest on Loans shall be due and payable in arrears on each Interest Payment Date.

 

3.2 Prepayments .

 

(a) Voluntary Prepayments . Each Borrower shall have the right to prepay Loans made to it in whole or in part from time to time without premium or penalty; provided, however, that (i) Eurodollar Loans may only be prepaid on three Business Days’ prior written notice to the Administrative Agent and any prepayment of Eurodollar Loans will be subject to Section 4.3 hereof and (ii) each such partial prepayment of Loans shall be in the minimum principal amount of $10,000,000. Amounts prepaid hereunder shall be applied as such Borrower may elect; provided that if such Borrower fails to specify the application of a voluntary prepayment then such prepayment shall be applied in each case first to Base Rate Loans of such Borrower and then to Eurodollar Revolving Loans of such Borrower in direct order of Interest Period maturities.

 

(b) Mandatory Prepayments . If at any time the amount of Revolving Loans outstanding plus the aggregate amount of Competitive Bid Loans outstanding plus the aggregate amount of L/C Obligations exceeds the Revolving Loan Commitment, one or more of the Borrowers shall immediately make a principal payment to the Administrative Agent in the manner and in an amount necessary to be in compliance with Section 2.1 hereof. Any payments made under this Section 3.2(b) shall be subject to Section 4.3 hereof and shall be applied first to Base Rate Loans of the relevant Borrower, then to Eurodollar Revolving Loans of the relevant Borrower in direct order of Interest Period maturities, then to Competitive Bid Loans of the relevant Borrower pro rata among all Lenders holding same.

 

3.3 Payment in Full at Maturity .

 

On the Maturity Date, the entire outstanding principal balance of all Loans, together with accrued but unpaid interest and all other sums owing under this Credit Agreement, shall be due and payable in full, unless accelerated sooner pursuant to Section 10 hereof.

 

3.4 Fees .

 

(a) Facility Fees .

 

(i) In consideration of the Revolving Loan Commitment being made available by the Lenders hereunder, DRI agrees to pay to the Administrative Agent, for the pro rata benefit of each Lender, a per annum fee equal to the Applicable Percentage for Facility Fees multiplied by the Revolving Loan Commitment (the “ Facility Fees ”).

 

(ii) The accrued Facility Fees shall be due and payable in arrears on each Fee Payment Date (as well as on any date that the Revolving Loan Commitment is reduced) for the immediately preceding fiscal quarter (or portion thereof), beginning with the first of such dates to occur after the Closing Date.

 

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(b) Utilization Fees .

 

(i) If on any day the sum of the aggregate outstanding principal amount of all Loans to the Borrowers plus the L/C Obligations then outstanding exceeds the product of (A) one-half (1/2) times (B) the Revolving Loan Commitment, each Borrower shall pay to the Administrative Agent, for the pro rata benefit of each Lender, a per annum fee equal to the Applicable Percentage for Utilization Fees multiplied by such Borrower’s outstanding Loans plus the L/C Obligations then outstanding (the “ Utilization Fees ”).

 

(ii) The accrued Utilization Fees shall be due and payable quarterly in arrears on each Fee Payment Date (as well as on any date that the Revolving Loan Commitment is reduced), beginning with the first of such dates to occur after the Closing Date.

 

(c) Administrative Fees . Dominion Resources agrees to pay to the Administrative Agent an annual fee as agreed to between the Borrowers and the Administrative Agent.

 

3.5 Place and Manner of Payments .

 

All payments of principal, interest, fees, expenses and other amounts to be made by each Borrower under this Credit Agreement shall be received not later than 2:00 p.m. on the date when due in U.S. dollars and in immediately available funds, without setoff, deduction, counterclaim or withholding of any kind, by the Administrative Agent at its offices in New York, New York, except payments to be made directly to the Issuing Lender as provided herein. Each Borrower shall, at the time it makes any payment under this Credit Agreement, specify to the Administrative Agent, the Loans, fees or other amounts payable by such Borrower hereunder to which such payment is to be applied (and in the event that it fails to specify, or if such application would be inconsistent with the terms hereof, the Administrative Agent, shall distribute such payment to the Lenders in such manner as it reasonably determines in its sole discretion).

 

3.6 Pro Rata Treatment .

 

Except to the extent otherwise provided herein, all Revolving Loans, each payment or prepayment of principal of any Revolving Loan, each payment of interest on the Revolving Loans, each payment of Facility Fees and Letter of Credit Fees, each reduction of the Revolving Loan Commitment, and each conversion or continuation of any Revolving Loans, shall be allocated pro rata among the Lenders in accordance with the respective Commitment Percentages.

 

3.7 Computations of Interest and Fees .

 

(a) Except for Base Rate Loans, on which interest shall be computed on the basis of a 365 or 366 day year as the case may be, all computations of interest and fees hereunder shall be made on the basis of the actual number of days elapsed over a year of 360 days.

 

(b) It is the intent of the Lenders and each Borrower to conform to and contract in strict compliance with applicable usury law from time to time in effect. All

 

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agreements between the Lenders and the Borrowers are hereby limited by the provisions of this paragraph which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral. In no way, nor in any event or contingency (including but not limited to prepayment or acceleration of the maturity of any obligation), shall the interest taken, reserved, contracted for, charged, or received under this Credit Agreement, under the Notes or otherwise, exceed the maximum non-usurious amount permissible under applicable law. If, from any possible construction of any of the Credit Documents or any other document, interest would otherwise be payable in excess of the maximum non-usurious amount, any such construction shall be subject to the provisions of this paragraph and such documents shall be automatically reduced to the maximum non-usurious amount permitted under applicable law, without the necessity of execution of any amendment or new document. If any Lender shall ever receive anything of value which is characterized as interest on the Loans under applicable law and which would, apart from this provision, be in excess of the maximum lawful amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loans of the relevant Borrower and not to the payment of interest, or refunded to the relevant Borrower or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal amount of the Loans of the relevant. The right to demand payment of the Loans of any Borrower or any other indebtedness evidenced by any of the Credit Documents does not include the right to receive any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand. All interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Loans so that the amount of interest on account of such indebtedness does not exceed the maximum non-usurious amount permitted by applicable law.

 

3.8 Sharing of Payments .

 

Each Lender agrees that, in the event that any Lender shall obtain payment in respect of any Revolving Loan or L/C Obligation owing to such Lender under this Credit Agreement through the exercise of a right of set-off, banker’s lien, counterclaim or otherwise (including, but not limited to, pursuant to the Bankruptcy Code) in excess of its pro rata share as provided for in this Credit Agreement, such Lender shall promptly purchase from the other Lenders a participation in such Loans, in such amounts and with such other adjustments from time to time, as shall be equitable in order that all Lenders share such payment in accordance with their respective ratable shares as provided for in this Credit Agreement. Each Lender further agrees that if a payment to a Lender (which is obtained by such Lender through the exercise of a right of set-off, banker’s lien, counterclaim or otherwise) shall be rescinded or must otherwise be restored, each Lender which shall have shared the benefit of such payment shall, by repurchase of a participation theretofore sold, return its share of that benefit to each Lender whose payment shall have been rescinded or otherwise restored. Each Borrower agrees that any Lender so purchasing such a participation in Loans made to such Borrower may, to the fullest extent permitted by law, exercise all rights of payment, including set-off, banker’s lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Loan or other obligation in the amount of such participation. Except as otherwise expressly provided in this Credit Agreement, if any Lender shall fail to remit to the Administrative Agent

 

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or any other Lender an amount payable by such Lender to the Administrative Agent or such other Lender pursuant to this Credit Agreement on the date when such amount is due, such payments shall accrue interest thereon, for each day from the date such amount is due until the day such amount is paid to the Administrative Agent or such other Lender, at a rate per annum equal to the Federal Funds Rate.

 

3.9 Evidence of Debt .

 

(a) Each Lender shall maintain an account or accounts evidencing each Loan made by such Lender to a Borrower from time to time, including the amounts of principal and interest payable and paid to such Lender by or for the account of each Borrower from time to time under this Credit Agreement. Each Lender will make reasonable efforts to maintain the accuracy of its account or accounts and to promptly update its account or accounts from time to time, as necessary.

 

(b) The Administrative Agent shall maintain the Register for each Borrower pursuant to Section 12.3(c), and a subaccount for each Lender, in which Registers and subaccounts (taken together) shall be recorded (i) the amount, type and Interest Period of each such Loan hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from or for the account of the Borrowers and each Lender’s share thereof. The Administrative Agent will make reasonable efforts to maintain the accuracy of the subaccounts referred to in the preceding sentence and to promptly update such subaccounts from time to time, as necessary.

 

(c) The entries made in the accounts, Registers and subaccounts maintained pursuant to subsection (b) of this Section 3.9 (and, if consistent with the entries of the Administrative Agent, subsection (a)) shall be prima facie evidence of the existence and amounts of the obligations of each Borrower therein recorded; provided , however, that the failure of any Lender or the Administrative Agent to maintain any such account, such Registers or such subaccounts, as applicable, or any error therein, shall not in any manner affect the obligation of any Borrower to repay the Loans made by such Lender to such Borrower in accordance with the terms hereof.

 

SECTION

4. ADDITIONAL PROVISIONS REGARDING LOANS

 

4.1 Eurodollar Loan Provisions .

 

(a) Unavailability . In the event that the Administrative Agent shall have determined in good faith (i) that U.S. dollar deposits in the principal amounts requested with respect to a Eurodollar Loan are not generally available in the London interbank Eurodollar market or (ii) that reasonable means do not exist for ascertaining the Eurodollar Rate, the Administrative Agent shall, as soon as practicable thereafter, give notice of such determination to the Borrowers and the Lenders. In the event of any such determination under clauses (i) or (ii) above, until the Administrative Agent shall have advised the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist, (A) any request by a Borrower for Eurodollar Loans shall be deemed to be a request for Base Rate Loans (or Absolute Rate

 

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Competitive Bid Loans, as the case may be), and (B) any request by a Borrower for conversion into or continuation of Eurodollar Revolving Loans shall be deemed to be a request for conversion into or continuation of Base Rate Loans.

 

(b) Change in Legality .

 

(i) Notwithstanding any other provision herein, if any change in any law or regulation or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Loan, then, by written notice to the relevant Borrower and to the Administrative Agent, such Lender may:

 

(A) declare that Eurodollar Loans, and conversions to or continuations of Eurodollar Loans, will not thereafter be made by such Lender to such Borrower hereunder, whereupon any request by such Borrower for, or for conversion into or continuation of, Eurodollar Loans shall, as to such Lender only, be deemed a request for, or for conversion into or continuation of, Base Rate Loans (or Absolute Rate Competitive Bid Loans, as the case may be), unless such declaration shall be subsequently withdrawn; and

 

(B) require that all outstanding Eurodollar Loans made by it to such Borrower be converted to Base Rate Loans (or Absolute Rate Competitive Bid Loans, as the case may be) in which event all such Eurodollar Loans shall be automatically converted to Base Rate Loans (or Absolute Rate Competitive Bid Loans, as the case may be).

 

In the event any Lender shall exercise its rights under clause (A) or (B) above, all payments and prepayments of principal which would otherwise have been applied to repay the Eurodollar Loans that would have been made by such Lender to such Borrower or the converted Eurodollar Loans of such Lender to such Borrower shall instead be applied to repay the Base Rate Loans (or Absolute Rate Competitive Bid Loans, as the case may be) made by such Lender to such Borrower in lieu of, or resulting from the conversion of, such Eurodollar Loans.

 

(c) Increased Costs . If at any time a Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to the making, the commitment to make or the maintaining of any Eurodollar Loan because of (i) any change since the date of this Credit Agreement in any applicable law, governmental rule, regulation, guideline or order (or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline or such order) including, without limitation, the imposition, modification or deemed applicability of any reserves, deposits or similar requirements (such as, for example, but not limited to, a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Adjusted Eurodollar Rate) or (ii) other circumstances affecting the London interbank Eurodollar market; then the relevant Borrower shall pay to such Lender promptly upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender may determine in its sole

 

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discretion) as may be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder.

 

Each determination and calculation made by a Lender under this Section 4.1 shall, absent manifest error, be binding and conclusive on the