10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

____________

FORM 10-Q
____________

(Mark one)

X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003

or

____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number 1-2255

VIRGINIA ELECTRIC AND POWER COMPANY
(Exact name of registrant as specified in its charter)

VIRGINIA (State or other jurisdiction of incorporation or organization)	54-0418825 (I.R.S. Employer Identification No.)
701 East Cary Street RICHMOND, VIRGINIA (Address of principal executive offices)	23219 (Zip Code)
(804) 819-2000 (Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    X   No         

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act). Yes       No   X   

At October 31, 2003, the latest practicable date for determination, 177,932 shares of common stock, without par value, of the registrant were outstanding.

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VIRGINIA ELECTRIC AND POWER COMPANY

INDEX

		Page   Number
PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Statements of Income - Three and Nine Months Ended September 30, 2003 and 2002	3
	Consolidated Balance Sheets - September 30, 2003 and December 31, 2002	4
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2003 and 2002	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 4.	Submission of Matters to a Vote of Security Holders	35
Item 6.	Exhibits and Reports on Form 8-K	35

PAGE 3

VIRGINIA ELECTRIC AND POWER COMPANY

PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended September 30,		Nine Months Ended September 30,
	2003	2002	2003		2002
	(millions)
Operating Revenue	$1,518	$1,474	$4,244	$3,847
Operating Expenses
Electric fuel and energy purchases, net	387	361	1,073	955
Purchased electric capacity	152	173	463	517
Other purchased energy commodities	72	-	214	-
Other operations and maintenance	389	225	849	682
Depreciation and amortization	115	117	344	373
Other taxes	41	44	133	113
Total operating expenses	1,156	920	3,076	2,640
Income from operations	362	554	1,168	1,207
Other income	18	11	57	28
Interest and related charges:
Interest expense - mandatorily redeemable trust preferred securities	7	-	7	-
Interest expense-other	55	68	186	211
Distribution - preferred securities of subsidiary trust	-	6	15	11
Total interest and related charges	62	74	208	222
Income before income taxes	318	491	1,017	1,013
Income taxes	118	175	377	369
Income before cumulative effect of changes in accounting principle	200	316	640	644
Cumulative effect of changes in accounting principle (net of income taxes of $51)	-	-	84	-
Net Income	200	316	724	644
Preferred dividends	4	5	12	13
Balance available for common stock	$   196	$   311	$ 712	$ 631

_______________

The accompanying notes are an integral part of the Consolidated Financial Statements.

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VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS
(Unaudited)

	September 30, 2003	December 31, 2002(1)
ASSETS	(millions)
Current Assets
Cash and cash equivalents	$    88	$    132
Customer accounts receivable (net of allowance of $13 and $12)	1,746	1,758
Other accounts receivable	46	73
Receivables from affiliates	61	41
Inventories	503	446
Derivative and energy trading assets	1,133	1,261
Prepayments	23	47
Other	146	108
Total current assets	3,746	3,866
Investments
Nuclear decommissioning trust funds	945	838
Other	22	22
Total investments	967	860
Property, Plant and Equipment
Property, plant and equipment	18,607	17,797
Accumulated depreciation and amortization	(7,759)	(8,240)
Total property, plant and equipment, net	10,848	9,557
Deferred Charges and Other Assets
Regulatory assets	435	239
Derivative and energy trading assets	402	402
Other	317	239
Total deferred charges and other assets	1,154	880
Total assets	$16,715	$15,163

  _______________

The accompanying notes are an integral part of the Consolidated Financial Statements.

(1) The Consolidated Balance Sheet at December 31, 2002 has been derived from the audited Consolidated Financial Statements at that date.

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VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS
(Unaudited)

	September 30, 2003	December 31, 2002(1)
LIABILITIES AND SHAREHOLDER'S EQUITY	(millions)
Current Liabilities
Securities due within one year	$     385	$     360
Short-term debt	336	443
Accounts payable, trade	1,454	1,591
Payables to affiliates	108	56
Affiliated current borrowings	142	100
Accrued interest, payroll and taxes	292	207
Derivative and energy trading liabilities	1,108	1,206
Other	350	206
Total current liabilities	4,175	4,169
Long-Term Debt
Company obligated mandatorily redeemable preferred securities of subsidiary trust(2)	400	-
Other long-term debt	3,948	3,794
Total long-term debt	4,348	3,794
Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits	2,105	1,763
Asset retirement obligations	728	-
Derivative and energy trading liabilities	255	279
Other	213	170
Total deferred credits and other liabilities	3,301	2,212
Total liabilities	11,824	10,175
Commitments and Contingencies (See Note 10)
Company Obligated Mandatorily Redeemable    Preferred Securities of Subsidiary Trust(2)	-	400
Preferred stock not subject to mandatory redemption	257	257
Common Shareholder's Equity
Common stock, no par, 300,000 shares authorized, 177,932 shares outstanding	2,888	2,888
Other paid-in capital	18	16
Accumulated other comprehensive income	48	8
Retained earnings	1,680	1,419
Total common shareholder's equity	4,634	4,331
Total liabilities and shareholder's equity	$16,715	$15,163

_______________

The accompanying notes are an integral part of the Consolidated Financial Statements.

⁽¹⁾ The Consolidated Balance Sheet at December 31, 2002 has been derived from the audited Consolidated Financial
  Statements at that date.

⁽²⁾ Debt securities issued by Virginia Electric and Power Company constitute 100 percent of the trust's assets.

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VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended September 30,
	2003	2002
	(millions)
Operating Activities
Net income	$724	$644
Adjustments to reconcile net income to net cash from operating activities:
Cumulative effect of changes in accounting principle, net of income  taxes	(84)	- -
Depreciation and amortization	397	433
Deferred income taxes and investment tax credits, net	229	33
Net unrealized (gains) losses on energy-related derivatives held for           trading purposes	(59)	9
Changes in:
Accounts receivable	39	(492)
Affiliated accounts receivable and payable	32	(14)
Inventories	(57)	(87)
Deferred fuel expenses, net	(180)	(19)
Prepayments	24	109
Accounts payable, trade	(137)	335
Accrued interest, payroll and taxes	85	36
Margin deposit assets and liabilities	3	(53)
Other, net	78	(64)
Net cash provided by operating activities	1,094	870
Investing Activities
Plant expenditures and other property additions	(656)	(463)
Nuclear fuel	(75)	(47)
Nuclear decommissioning contributions	(36)	(27)
Other	(4)	(10)
Net cash used in investing activities	(771)	(547)
Financing Activities
Issuance (repayment) of short-term debt, net	(107)	12
Short-term borrowings from parent, net	42	73
Issuance of preferred securities of subsidiary trust	-	400
Repayment of preferred securities of subsidiary trust	-	(135)
Issuance of long-term debt	400	533
Repayment of long-term debt	(236)	(572)
Repayment preferred stock	-	(175)
Common stock dividend payments	(451)	(467)
Other	(15)	(30)
Net cash used in financing activities	(367)	(361)
Decrease in cash and cash equivalents	(44)	(38)
Cash and cash equivalents at beginning of period	132	84
Cash and cash equivalents at end of period	$    88	$   46
Supplemental Cash Flow Information
Noncash exchange of mortgage bonds for senior notes	$     -	$  117

_______________

The accompanying notes are an integral part of the Consolidated Financial Statements.

PAGE 7

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Operations

Virginia Electric and Power Company (Virginia Power or the Company), a Virginia public service company, is a wholly-owned subsidiary of Dominion Resources, Inc. (Dominion). The Company is a regulated public utility that generates, transmits and distributes electric energy within a 30,000 square-mile area in Virginia and northeastern North Carolina. It sells electricity to approximately 2.2 million retail customers, including governmental agencies, and to wholesale customers such as rural electric cooperatives, municipalities, power marketers and other utilities. The Virginia service area comprises about 65 percent of Virginia's total land area but accounts for over 80 percent of its population. The Company has trading relationships beyond the geographic limits of its retail service territory and buys and sells wholesale electricity, natural gas and other energy commodities. Within this document, the term the "Company" refers to the entirety of Virginia Electric and Power Company, including its Virginia and N orth Carolina operations, and all of its subsidiaries.

The Company manages its daily operations through two operating segments, Energy and Delivery. In addition, the Company presents its corporate and other operations as a segment.

Note 2. Significant Accounting Policies

As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles). These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes for the year ended December 31, 2002 as well as the quarterly reports for previous interim periods of 2003 filed on Form 10-Q. On May 9, 2003, the Company filed a current report on Form 8-K that included its Consolidated Financial Statements and Notes for the year ended December 31, 2002, which were reformatted to reflect the transfer of electric transmission operations to the Energy segment from the Delivery segment effective Jan uary 1, 2003. References to the Consolidated Financial Statements and Notes for the year ended December 31, 2002 refer to those included in the May 9, 2003 current report on Form 8-K.

In the opinion of management, the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring accruals, necessary to present fairly the Company's financial position as of September 30, 2003 and its results of operations for the three and nine months and cash flows for the nine months ended September 30, 2003 and 2002.

The accompanying unaudited Consolidated Financial Statements represent the accounts of the Company and its subsidiaries, with all significant intercompany transactions and accounts eliminated in consolidation.

The accompanying unaudited Consolidated Financial Statements reflect certain estimates and assumptions made by management in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.

The Company reports certain contracts and instruments at fair value in accordance with generally accepted accounting principles. Market pricing and indicative price information from external sources are used to measure fair value when available. In the absence of this information, the Company estimates fair value based on near-term and historical price information and statistical methods. For individual contracts, the use of differing assumptions could have a material effect on the contract's estimated fair value. See Note 2 to the Consolidated Financial Statements for the year ended December 31, 2002 for more discussion of the Company's estimation techniques.

The results of operations for the interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, timing of electric fuel and energy purchases and other factors.

PAGE 8

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Certain amounts in the 2002 Consolidated Financial Statements have been reclassified to conform to the 2003 presentation.

Note 3. Newly Adopted Accounting Standards

Accounting for Asset Retirement Obligations

Effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations, which provides accounting requirements for the recognition and measurement of liabilities associated with the retirement of tangible long-lived assets. The Company has identified certain asset retirement obligations that are subject to the standard. These obligations are primarily associated with the decommissioning of its nuclear generation facilities.

The effect of adopting SFAS No. 143 for the three and nine months ended September 30, 2003, as compared to an estimate of net income reflecting the continuation of former accounting policies, was to increase net income by $5 million and $153 million for those periods, respectively. The $153 million increase for the nine months ended September 30, 2003 is comprised of a $139 million after-tax gain, representing the cumulative effect of a change in accounting principle and an increase in income before the cumulative effect of a change in accounting principle of $14 million.

Accounting for Energy Trading Contracts

In October 2002, the Emerging Issues Task Force (EITF) reached consensus on EITF Issue No. 02-3, Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities. As a result, certain energy-related commodity contracts that are held in connection with the Company's energy trading activities are no longer subject to fair value accounting. The affected contracts are those energy-related contracts that are not considered to be derivatives under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Energy-related contracts affected by this change are now subject to accrual accounting and recognized as revenue or expense at the time of contract performance, settlement or termination. The new rules were effective for energy-related contracts initiated prior to October 25, 2002 as of January 1, 2003, and required that the Company record a cumulative effect of a change in accounting principle r esulting in an after-tax loss of $55 million.

EITF 02-3 also affects the classification of gains and losses arising from derivative energy contracts no longer considered to be held for trading purposes. Under the provisions of EITF 02-3, for those energy-related derivative instruments determined to be held for trading purposes, all changes in fair value, including amounts realized upon settlement, continue to be presented in revenue on a net basis. A derivative contract is held for trading purposes if the intent of the transaction is to generate profits on short-term differences in price. For non-trading derivatives not designated as hedges, all unrealized changes in fair value are presented in other operations and maintenance expense on a net basis. For non-trading derivative contracts that involve physical delivery of commodities, gross sales contract settlements are presented in revenue, while gross purchase contract settlements are reported in expenses.

PAGE 9

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity

Effective July 1, 2003, the Company adopted SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. The standard requires an issuer to classify certain financial instruments with characteristics of both liabilities and equity as a liability if the issuer is obligated to redeem such instruments. As a result, beginning July 1, 2003, the Company presents the mandatorily redeemable preferred securities issued by a subsidiary trust as long-term debt and related distributions as interest expense. These securities are described in Note 16 to the Consolidated Financial Statements for the year ended December 31, 2002.

Amendment of SFAS No. 133

During the second quarter of 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149 reflects decisions made by the FASB and its Derivatives Implementation Group in connection with issues raised about the application of SFAS No. 133. Generally, changes resulting from SFAS No. 149 apply to contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. Although industry efforts to interpret SFAS No. 149 are ongoing, the Company believes that SFAS 149 will not have a material impact on its results of operations and financial position based on an assessment of currently available information.

Note 4.     Recently Issued Accounting Standards and Other Accounting Matters

Consolidation of Variable Interest Entities

In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities, (FIN 46) which addresses the consolidation of "variable interest entities"(VIEs). VIEs are entities that are not controllable through voting interests or in which the equity investors do not bear the residual economic risks and rewards. In October 2003, the FASB decided to permit more time for the implementation of FIN 46 and now requires adoption as of December 31, 2003.

Leases with Special Purpose Entities

The Company has entered into agreements with another Dominion subsidiary (lessor) in order to finance and lease a new power generation facility. Under existing accounting guidance, neither the project assets nor related debt would be reported on the Company's Consolidated Balance Sheets upon inception of the lease. The project was completed on July 1, 2003, at which time the facility was put into service and the lease agreement became effective. Under FIN 46, the lessor is considered a VIE and the Company has been determined to be the primary beneficiary and will therefore consolidate it in the preparation of its Consolidated Financial Statements.

The Company estimates that consolidating this VIE for which it is the primary beneficiary under FIN 46, effective December 31, 2003, will result in an additional $365 million in net property, plant and equipment and $370 million of related debt. The cumulative effect of adopting FIN 46 is estimated to result in an after-tax charge of $3 million, representing depreciation expense associated with the consolidated assets.

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Trust Preferred Securities

The Company established Virginia Power Capital Trust II which sold trust preferred securities to third party investors. The Company received the proceeds from the sale of the trust preferred securities in exchange for junior subordinated notes issued by the Company to be held by the trust. Under existing accounting guidance, the Company consolidates the trust in the preparation of its Consolidated Financial Statements. Under FIN 46, the Company will cease consolidating the trust beginning on December 31, 2003. Upon adoption, the Company's Consolidated Balance Sheets will report the junior subordinated instruments held by the trust as long-term debt, rather than trust preferred securities.

Other SFAS No. 133 Guidance

In connection with a request to reconsider an interpretation of SFAS No. 133, the FASB issued Statement 133 Implementation Issue No. C20, Interpretation of the Meaning of 'Not Clearly and Closely Related' in Paragraph 10(b) regarding Contracts with a Price Adjustment Feature. Under C20, criteria are established to determine if a contract's pricing terms that contain broad market indices (e.g., the consumer price index) could qualify as a normal purchase or sale and therefore not be subject to fair value accounting. The Company has several contracts that are subject to the C20 guidance. The Company estimates the cumulative effect of adopting C20 to be an after-tax charge of approximately $101 million, representing the fair value of the contracts as of October 1, 2003. Price adjustments in these contracts satisfy the normal purchase and sale criteria as defined under C20.

Balance Sheet Classification - Provision for Future Cost of Removal by Regulated Operations

The Company adopted SFAS No. 143 on January 1, 2003. SFAS No. 143 provides accounting requirements for the recognition and measurement of liabilities associated with the retirement of tangible long-lived assets.

In accordance with applicable regulatory uniform system of accounts and as permitted by SFAS No. 71, Accounting for the Effects of Certain Types of Regulation, the Company's electric utility operations recognize a provision for the cost of future asset removal activities subject to cost-of service rate regulation, even if no legal obligation to perform such activities exists. The periodic provision is recorded as a component of depreciation expense on the income statement, resulting in a credit being recorded in accumulated depreciation and amortization on the balance sheet. At September 30, 2003 and December 31, 2002, the Company's accumulated depreciation and amortization included $356 million and $375 million, respectively, representing regulatory liabilities for the estimated amounts collected from customers for the future cost of such asset removal activities.

A question has recently arisen about whether these regulatory liabilities should continue to be classified in accumulated depreciation and amortization or be reported as liabilities on the balance sheet. If, as a result of the resolution of this issue, reclassification of this accumulated provision for future removal costs is required, the Company's accumulated depreciation would decrease and its regulatory liabilities would increase. While resolution of this issue may affect the balance sheet classification of these items, there would be no impact on the Company's results of operations or cash flows.

PAGE 11

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 5. Operating Revenue

	Three Months Ended September 30,		Nine Months Ended September 30,
	(millions)
	2003	2002	2003	2002
Regulated electric sales	$1,383	$1,454	$3,742	$3,731
Non-regulated electric sales	19	1	75	87
Non-regulated gas sales	50	(5)	248	(43)
Other	66	24	179	72
Total operating revenue	$1,518	$1,474	$4,244	$3,847

The composition of revenue from non-regulated electric sales, non-regulated gas sales and other revenue has changed effective January 1, 2003. For non-trading derivatives not designated as hedges, all unrealized changes in fair value are presented in other operations and maintenance expense on a net basis. For non-trading derivative contracts that involve physical delivery of commodities, gross sales contract settlements are presented in revenue, while gross purchase contract settlements are reported in expenses.

Note 6. Comprehensive Income

The following table presents total comprehensive income:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2003	2002	2003	2002
	(millions)
Net income	$200	$316	$724	$644
Other comprehensive income (loss)(1)	7	(2)	40	4
Total comprehensive income	$207	$314	$764	$648

________________

(1) Represents primarily the effective portion of changes in fair value of derivatives designated as cash flow hedges and unrealized gains and losses on investments held in decommissioning trusts.

Note 7. Derivatives and Hedge Accounting

The Company recognized no hedge ineffectiveness during the three and nine months ended September 30, 2003 and 2002. The Company recognized net other comprehensive income (loss) associated with the effective portion of changes in fair value of derivatives, net of taxes and amounts reclassified to earnings, as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2003	2002	2003	2002
	(millions)
Other comprehensive income (loss) - cash flow hedges	$2	$(2)	$11	$4

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

The following table presents selected information related to cash flow hedges included in accumulated other comprehensive income in the Consolidated Balance Sheet at September 30, 2003:

	Accumulated Other Comprehensive Income (Loss) After-Tax	Portion Expected to be Reclassified to Earnings During the Next 12 Months	Maximum Term
	(millions)
Interest Rate	$(1)	$(1)	40 months
Foreign Currency	21	1	50 months
Total	$20	$ -

The actual amounts that will be reclassified to earnings during the next 12 months will vary from the expected amounts presented above as a result of changes in interest rates and foreign exchange rates. The effect of amounts being reclassified from other comprehensive income to earnings will generally be offset by the recognition of the hedged transactions (e.g., anticipated purchases) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies.

Note 8. Significant Financing Transactions

Joint Credit Facilities

Dominion, Consolidated Natural Gas Company (CNG) and the Company are parties to two joint credit facilities that allow aggregate borrowings of up to $2 billion: a $1.25 billion 364-day revolving credit facility executed in May 2003 and terminates in May 2004; and a $750 million 3-year revolving credit facility executed in May 2002 and terminates in May 2005. The 3-year facility can also be used to support up to $200 million of letters of credit. The remaining joint credit facilities will be used for working capital; as support for the combined commercial paper programs of Dominion, CNG and the Company; and for other general corporate purposes.

At September 30, 2003, outstanding commercial paper under the companies' combined commercial paper programs was $875 million and total outstanding letters of credit supported by the 3-year facility were $88 million: $17 million issued on behalf of an unregulated subsidiary of the Company and $71 million issued on behalf of other Dominion subsidiaries. At September 30, 2003, capacity available under the two credit facilities was $1.0 billion.

Long-Term Debt

In the first quarter of 2003, the Company issued $400 million of 4.75 percent senior notes due March 2013. The Company used the cash proceeds for general corporate purposes, including the repayment of other debt.

The Company repaid $10 million of medium-term notes in the first quarter of 2003, $200 million of 6.625 percent mortgage bonds in the second quarter of 2003 and $16 million of medium-term notes in the third quarter of 2003.

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 9. Asset Retirement Obligations

The following table describes the changes to the Company's asset retirement obligations during the nine months ended September 30, 2003:

	Amount (millions)
Asset retirement obligations at January 1, 2003	-
Asset retirement obligations recognized in transition	$697
Asset retirement obligations incurred during the period	4
Asset retirement obligations settled during the period	(2)
Accretion expense	29
Revisions in estimated cash flows	-
Asset retirement obligations at September 30, 2003	$728

The Company has established external trusts dedicated to funding the future decommissioning of its nuclear plants. At September 30, 2003, the aggregate fair value of these trusts, consisting primarily of debt and equity securities, totaled $945 million.

Had the provisions of SFAS No. 143 been applied for the following periods in 2003 and 2002, the Company's net income would have been as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2003	2002	2003	2002
	(millions)
Net income, as reported	$200	$316	$724	$644
Pro forma net income	$200	$314	$585	$637

Note 10. Commitments and Contingencies

Other than the matters discussed below, there have been no significant developments regarding commitments and contingencies disclosed in Note 21 to the Consolidated Financial Statements for the year ended December 31, 2002, nor have any significant new matters arisen during the nine months ended September 30, 2003.

PAGE 14

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Environmental Matters

In relation to a Notice of Violation received by the Company in 2000 from the U.S. Environmental Protection Agency (EPA) and related proceedings, the Company, the U.S. Department of Justice, the EPA, the states of Virginia, West Virginia, Connecticut, New Jersey and New York agreed to a settlement in April 2003 in the form of a proposed Consent Decree. The Virginia federal district court entered the final Consent Decree in October 2003, resolving the underlying actions. The settlement includes payment of a $5 million civil penalty, an obligation to fund $14 million for environmental projects and a commitment to improve air quality under the Consent Decree estimated to involve expenditures of $1.2 billion. The Company has already incurred certain capital expenditures for environmental improvements at its coal-fired stations in Virginia and West Virginia and has committed to additional measures in its current financial plans and capital budget to satisfy the requirements of the Conse nt Decree. As of September 30, 2003, the Company had accrued $19 million for the civil penalty and the funding of the environmental projects, substantially all of which was recorded in 2000.

Fuel Purchase Commitments

The Company enters into long-term purchase commitments for fuel used in electric generation. As of September 30, 2003, estimated fuel purchase commitments are as follows: 2004-$360 million; 2005-$220 million; 2006-$160 million; and 2007-$80 million. The Company recovers the costs of these purchases in regulated rates through June 30, 2007.

Surety Bonds

At September 30, 2003, the Company had issued $67 million of surety bonds, of which $57 million is associated with the financial assurance requirements imposed by the Nuclear Regulatory Commission with respect to the decommissioning of the Company's nuclear units. Under the terms of the surety bonds, the Company is obligated to indemnify the respective surety bond company for any amounts paid.

Note 11. Related Party Transactions

The Company, through an unregulated subsidiary, exchanges certain quantities of natural gas with affiliates at market prices in the ordinary course of business. The affiliated commodity transactions are presented below:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2003	2002	2003	2002
	(millions)
Purchases of natural gas, gas transportation and storage  services from affiliates
	$185	$42	$484	$110
Sales of natural gas to affiliates	171	55	510	161
Sales of electricity to affiliates	5	-	10	2

PAGE 15

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Through the same unregulated subsidiary, the Company is involved in facilitating Dominion's enterprise risk management strategy. In connection with this strategy, the Company's unregulated subsidiary enters into certain commodity derivative contracts with other Dominion affiliates. These contracts, which are principally comprised of commodity swaps, are used by Dominion affiliates to manage commodity price risks associated with purchases and sales of natural gas. As part of Dominion's enterprise risk management strategy, the Company's unregulated subsidiary generally manages such risk exposures by entering into offsetting derivative instruments with non-affiliates. The Company reports both affiliated and non-affiliated derivative instruments at fair value, with related changes included in earnings. At September 30, 2003 and December 31, 2002, the Company's Consolidated Balance Sheets included derivative assets with Dominion affiliates of $80 million and $84 million, respectively and de rivative liabilities with Dominion affiliates of $63 million and $90 million, respectively. The Company's income from operations includes the recognition of the following derivative gains and losses on affiliated transactions:

		Three Months Ended September 30,		Nine Months Ended September 30,
		2003	2002	2003	2002
	(millions)
Net realized gains (losses) on commodity derivative contracts		$3	$7	$(21)	$38

Dominion Resources Services, Inc. (Dominion Services) provides certain administrative and technical services to the Company. The cost of services provided by Dominion Services to the Company for the three months ended September 30, 2003 and 2002 was approximately $70 million and $67 million, respectively, and for the nine months ended September 30, 2003 and 2002 was approximately $217 million and $198 million, respectively. The Company provides certain services to affiliates, including charges for facilities and equipment usage. The cost of services provided by the Company to Dominion Services and other Dominion affiliates was approximately $7 million and $8 million for the three months ended September 30, 2003 and 2002, respectively, and, for the nine months ended September 30, 2003 and 2002, was approximately $21 million and $22 million, respectively.

The Company and its subsidiaries have made certain borrowings from Dominion pursuant to a short-term demand note. At September 30, 2003 and December 31, 2002, net outstanding borrowings under this note totaled $142 million and $100 million, respectively. Interest charges related to this note during the three and nine months ended September 30, 2003 were not material.

The Company's accounts receivable and payable balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions.

An unregulated subsidiary of the Company, at its sole discretion, has provided at September 30, 2003 and December 31, 2002, approximately $8 million and $31 million, respectively, of cash collateral to third parties on behalf of several of its natural gas supply customers. For this and other financial support services, the unregulated subsidiary receives fees and has a security interest in the customers' assets. The arrangements terminate at various dates beginning in 2005 through 2007, subject to periodic renewal thereafter unless terminated by either party.

PAGE 16

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

After receiving regulatory approval, on October 1, 2003, the Company assigned energy contracts with counterparties to another Dominion subsidiary in connection with Dominion's plan to transfer certain wholesale power marketing activities that occur outside of the Company's service territory. In exchange for the transfer of the contracts, the Company will receive $13 million representing the net fair value of the contracts. The transferred contracts involve the delivery of electric energy in the following years:

	2003	2004	2005	2006
	(million megawatt-hours)
Physical power purchases	17	18	5	2
Physical power sales	19	27	8	2

Note 12.     Concentration of Credit Risk

The Company calculates its gross credit exposure for each counterparty as the unrealized fair value of derivative and energy trading contracts plus any outstanding receivables (net of payables, where netting agreements exist), prior to the application of collateral. Presented below is a summary of the Company's gross and net credit exposure as of September 30, 2003. The amounts presented exclude accounts receivable for regulated electric retail distribution and regulated electric transmission services, amounts receivable from affiliated companies and the Company's provision for credit losses. See Note 23 to the Consolidated Financial Statements for the year ended December 31, 2002 for a discussion of the nature of the Company's credit risk exposures.

	At September 30, 2003
	Credit Exposure Before Credit Collateral	Credit Collateral	Net Credit Exposure
	(millions)
Investment grade(1)	$376	$16	$360
Non-investment grade(2)	26	13	13
No external ratings:
Internally rated-investment grade(3)	244	--	244
Internally rated-non-investment grade(4)	48	--	48
Total	$694	$29	$665

_______________________

(1) This category includes counterparties with minimum credit ratings of Baa3 assigned by Moody's Investor Service (Moody's) and BBB- assigned by Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. (Standard & Poor's). The five largest counterparty exposures, combined, for this category represented approximately 15 percent of the total gross credit exposure.

(2) This category includes counterparties with credit ratings that are below investment grade. The five largest counterparty exposures, combined, for this category represented approximately 2 percent of the total gross credit exposure.

(3) This category includes counterparties that have not been rated by Moody's or Standard & Poor's but are considered investment grade based on the Company's evaluation of the counterparty's creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 30 percent of the total gross credit exposure.

(4) This category includes counterparties that have not been rated by Moody's or Standard & Poor's and are considered non-investment grade based on the Company's evaluation of the counterparty's creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 6 percent of the total gross credit exposure.

PAGE 17

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 13. Operating Segments

The Company manages its operations through the following segments:

Energy manages the Company's portfolio of generating facilities and power purchase contracts. It also manages the Company's energy trading, marketing, hedging and arbitrage activities. Energy also manages the electric transmission operations formerly managed by Delivery. Amounts for 2002 have been restated to reflect the transfer of electric transmission operations to Energy effective January 1, 2003. The transmission operations continue to be subject to the requirements of SFAS No. 71.

Delivery manages the Company's electric distribution and customer service. The segment continues to be subject to the requirements of SFAS No. 71. Amounts for 2002 have been restated to reflect the transfer of electric transmission operations to Energy effective January 1, 2003.

Corporate and Other includes certain expenses which are not allocated to the Energy and Delivery segments, including those related to the following: 1) corporate operations and assets; 2) severance costs of $8 million related to 2003 workforce reductions; 3) the 2003 cumulative effect of changes in accounting principle (see Note 3); and
4) incremental restoration costs of approximately $129 million associated with damage caused by Hurricane Isabel; substantially all of these costs are attributable to Delivery.

	Energy	Delivery	Corporate and Other	Consolidated Total
Three Months Ended September 30, 2003	(millions)
Operating revenue	$1,202	$314	$   2	$1,518
Net income	189	93	(82)	200
Three Months Ended September 30, 2002
Operating revenue	$1,156	$315	$3	$1,474
Net income	217	99	-	316
Nine Months Ended September 30, 2003
Operating revenue	$3,390	$846	$   8	$4,244
Net income	505	222	(3)	724
Nine Months Ended September 30, 2002
Operating revenue	$3,033	$806	$8	$3,847
Net income	442	202	-	644

PAGE 18

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) discusses the results of operations and general financial condition of Virginia Power. MD&A should be read in conjunction with the Consolidated Financial Statements. "The Company" is used throughout MD&A and, depending on the context of its use, may represent any of the following: the legal entity, Virginia Electric and Power Company; one of Virginia Power's consolidated subsidiaries; or the entirety of Virginia Power and its consolidated subsidiaries. The Company is a wholly-owned subsidiary of Dominion.

On May 9, 2003, the Company filed a current report on Form 8-K that included its Consolidated Financial Statements and Notes for the year ended December 31, 2002, as well as certain portions of MD&A, which were reformatted to reflect the transfer of electric transmission operations to the Energy segment from the Delivery segment effective January 1, 2003. References to the Consolidated Financial Statements and Notes for the year ended December 31, 2002 refer to those included in the May 9, 2003 current report on Form 8-K.

Risk Factors and Cautionary Statements That May Affect Future Results

This report contains statements concerning the Company's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by words such as "anticipate," "estimate," "forecast," "expect," "believe," "should," "could," "plan," "may" or other similar words.

The Company makes forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ are often presented with the forward-looking statements themselves. In addition, other factors could cause actual results to differ materially from those indicated in any forward-looking statement. These factors include weather conditions; governmental regulations; cost of environmental compliance; inherent risk in the operation of nuclear facilities; fluctuations in energy-related commodities prices and the effect these could have on the Company's earnings, liquidity position, and the underlying value of its assets; trading counterparty credit risk; capital market conditions, including price risk due to marketable securities held as investments in trusts and benefit plans; fluctuations in interest rates; changes in rating agency requirements or ratings; changes in accounting s tandards; the risks of operating businesses in regulated industries that are becoming deregulated; transfer of control over the Company's transmission facilities to a regional transmission entity; collective bargaining agreements and labor negotiations; and political and economic conditions (including inflation and deflation). Some more specific risks are discussed below.

The Company bases its forward-looking statements on management's beliefs and assumptions using information available at the time the statements are made. The Company cautions the reader not to place undue reliance on its forward-looking statements because the assumptions, beliefs, expectations and projections about future events may and often do materially differ from actual results. The Company undertakes no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

The Company's operations are weather sensitive. The Company's results of operations can be affected by changes in the weather. Weather conditions directly influence the demand for electricity and affect the price of energy commodities. In addition, severe weather, including hurricanes, winter storms and droughts, can be destructive, causing outages and property damage that require the Company to incur additional expenses.

The Company is subject to complex governmental regulation which could adversely affect its operations. The Company's operations are subject to extensive regulation and require numerous permits, approvals and certificates from various federal, state and local governmental agencies. The Company must also comply with environmental legislation and other regulations. Management believes the necessary approvals have been obtained for the Company's existing operations and that its business is conducted in accordance with applicable laws. However, new laws or regulations, or the revision or reinterpretation of existing laws or regulations, may require the Company to incur additional expenses.

PAGE 19

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Costs of environmental compliance, liabilities and litigation could exceed the Company's estimates. Compliance with federal, state and local environmental laws and regulations may result in increased capital, operating and other costs, including remediation and containment and monitoring obligations. In addition, the Company may be a responsible party for environmental clean-up at a site identified by a regulatory body. Management cannot predict with certainty the amount and timing of all future expenditures related to environmental matters because of the difficulty of estimating clean-up costs and compliance, and the possibility that changes will be made to the current environmental laws and regulations. There is also uncertainty in quantifying liabilities under environmental laws that impose joint and several liability on all potentially responsible parties.

Capped electric rates in Virginia may be insufficient to allow full recovery of stranded and other costs. Under the Virginia Electric Utility Restructuring Act (the Virginia Restructuring Act), the Company's base rates (excluding, generally, fuel costs and certain other allowable adjustments) remain unchanged until July 2007 unless modified or terminated consistent with that Act. The capped rates and wires charges that, where applicable, are being assessed to customers opting for alternative suppliers allow the Company to recover certain generation-related costs and fuel costs; however, the Company remains exposed to numerous risks of cost-recovery shortfalls. These include exposure to potentially stranded costs, future environmental compliance requirements, changes in tax laws, inflation and increased capital costs. See Management's Discussion and Analysis of Financial Condition and Results of Operations-Future Issues and Outlook in the Company's Annual Report on Form 10-K for the y ear ended December 31, 2002 and Note 21 to the Consolidated Financial Statements for the year ended December 31, 2002.

The electric generation business is subject to competition. The generation portion of the Company's operations in Virginia is open to competition and is no longer subject to cost-based rate regulation. As a result, there is increased pressure to lower costs, including the cost of purchased electricity. Because the Company's generation business has not previously operated in a competitive environment, the extent and timing of entry by additional competitors into the electric market in Virginia is unknown. Therefore, it is difficult to predict the extent to which the Company will be able to operate profitably within this new environment.

There are inherent risks in the operation of nuclear facilities. The Company operates nuclear facilities that are subject to inherent risks. These risks include the cost of and the Company's ability to maintain adequate reserves for decommissioning, plant maintenance costs, terrorism, spent nuclear fuel disposal costs and exposure to potential liabilities arising out of the operation of these facilities. The Company maintains decommissioning trusts and external insurance coverage to minimize the financial exposure to these risks. However, it is possible that costs arising from claims could exceed the amount of any insurance coverage.

The use of derivative instruments could result in financial losses. The Company uses derivative instruments including futures, forwards, options and swaps, to manage its commodity and financial market risks. In addition, the Company purchases and sells commodity-based contracts in the natural gas, electricity and oil markets for trading purposes. In the future, the Company could recognize financial losses on these contracts as a result of volatility in the market values of the underlying commodities or if a counterparty fails to perform under a contract. In the absence of actively quoted market prices and pricing information from external sources, the valuation of these contracts involves management's judgment or use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the value of the reported fair value of these contracts. For additional information concerning the Company's derivatives and commodity-based trading contracts, see Management's Discussion and Analysis of Financial Condition and Results of Operations-Market Rate Sensitive Instruments and Risk Management in the Company's Annual Report on Form 10-K for the year ended December 31, 2002 and Notes 2 and 9 to the Consolidated Financial Statements for the year ended December 31, 2002.

PAGE 20

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

The Company is exposed to market risks beyond its control in its energy clearinghouse operations. The Company's energy clearinghouse and risk management operations are subject to multiple market risks including market liquidity, counterparty credit strength and price volatility. Many industry participants have experienced severe business downturns resulting in some being forced to exit or curtail their participation in the energy trading markets. This has led to a reduction in the number of trading partners and lower industry trading revenues. Declining creditworthiness of some of the Company's trading counterparties may limit the level of its trading activities with these parties and increase the risk that these counterparties may not perform under a contract.

An inability to access financial markets could affect the execution of the Company's business plan.The Company relies on access to both short-term money markets and longer-term capital markets as a significant source of liquidity for capital requirements not satisfied by the cash flows of its operations. Management believes that the Company and its subsidiaries will maintain sufficient access to these financial markets based upon current credit ratings. However, certain disruptions outside of the Company's control may increase its cost of borrowing or restrict its ability to access one or more financial markets. Such disruptions could include an economic downturn, the bankruptcy of an unrelated energy company or changes to the Company's credit ratings. Restrictions on the Company's ability to access financial markets may affect its ability to execute its business plan as scheduled.

Changing rating agency requirements could negatively affect the Company's growth and business strategy. As of November 3, 2003, the Company's senior secured debt was rated A-, stable outlook, by Standard & Poor's and A2, stable outlook, by Moody's. Both agencies have recently implemented more stringent applications of the financial requirements for various ratings levels. In order to maintain its current credit ratings in light of these or future new requirements, the Company may find it necessary to take steps or change its business plans in ways that may adversely affect its growth and earnings. A reduction in the Company's credit ratings by either Standard & Poor's or Moody's could increase its borrowing costs and adversely affect operating results.

Potential changes in accounting practices may adversely affect the Company's financial results. The Company cannot predict the impact future changes in accounting standards or practices may have on public companies in general or the energy industry or in its operations specifically. New accounting standards could be issued by the FASB or the SEC which could impact the way the Company records revenues, expenses, assets and liabilities. These changes in accounting standards could adversely affect the Company's reported earnings or could increase reported liabilities.

Operating Segments

In general, management's discussion of the Company's results of operations focuses on the contributions of its operating segments. However, the discussion of the Company's financial condition under Liquidity and Capital Resources is for the entire Company. The Company's two operating segments are Energy and Delivery. In addition, the Company presents its corporate and other operations, including certain expenses, which are not allocated to the Energy and Delivery segments, as a segment.

Critical Accounting Policies

As of September 30, 2003, other than the adoption of SFAS No. 143, there have been no significant changes with regard to critical accounting policies as disclosed in MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. The policies disclosed included the accounting for risk management and energy trading contracts at fair value and accounting for regulated operations.

PAGE 21

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Asset Retirement Obligations

Effective January 1, 2003, the Company adopted SFAS No. 143, which provides accounting requirements for the recognition and measurement of liabilities associated with the retirement of tangible long-lived assets. At September 30, 2003, the Company's asset retirement obligations totaled $728 million, the majority of which relates to the decommissioning of its nuclear units.

Asset retirement obligations are recognized at fair value as incurred and capitalized as part of the cost of the related tangible long-lived assets. In the absence of quoted market prices, the Company estimates the fair value of asset retirement obligations using present value techniques, involving discounted cash flow analysis. Measurement using such techniques is dependent upon many subjective factors, including the selection of discount and cost escalation rates, identification of planned retirement activities and related cost estimates and assertions of probability regarding the timing, nature and costs of such activities. Inputs and assumptions are based on the best information available at the time the estimates are made. However, estimates of future cash flows are highly uncertain by nature and may vary significantly from actual results.

Results Of Operations

The Company's discussion of its results of operations includes a summary of contributions by the operating segments to net income, an overview of consolidated 2003 results of operations, as compared to 2002, and a more detailed discussion of the results of operations of the operating segments. The 2002 segment results have been restated to reflect the transfer of the electric transmission operations from the Delivery segment to the Energy segment effective January 1, 2003. All variances are stated as actual results for the three and nine months ended September 30, 2003, as compared to the actual results for the same periods of 2002.

	Net Income		Operating Revenue		Operating Expenses
	(millions)
Three Months Ended September 30,	2003	2002	2003	2002	2003	2002
Energy	$189	$217	$ 1,202	$ 1,156	$871	$771
Delivery	93	99	314	315	150	145
Corporate and Other	(82)	-	2	3	135	4
Total	$200	$316	$1,518	$1,474	$1,156	$920
Nine Months Ended September 30,	2003	2002	2003	2002	2003	2002
Energy	$505	$442	$3,390	$3,033	$2,493	$2,204
Delivery	222	202	846	806	434	425
Corporate and Other	(3)	-	8	8	149	11
Total	$724	$644	$4,244	$3,847	$3,076	$2,640

PAGE 22

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Consolidated Overview

Third Quarter 2003

The impact of Hurricane Isabel and milder weather decreased net income for the three months ended September 30, 2003, as compared to the same period in 2002. Regulated electric sales decreased, reflecting 11 percent fewer cooling degree days in the third quarter of 2003 and lost revenue due to hurricane-related outages, partially offset by revenue from serving approximately 38,000 new electric customers over the last twelve months. This decrease in regulated electric sales revenue was offset by increases in other revenue categories.

Total operating expenses increased, compared to the third quarter of 2002, reflecting primarily the impact of Hurricane Isabel on operations and maintenance expense in the third quarter of 2003. In addition, operating expenses increased as a result of the recognition of previously deferred fuel costs in connection with a proposed settlement of the 2003 Virginia fuel rate case and the effect of reclassifying purchases of other energy commodities as a result of implementing EITF 02-3, beginning in 2003.

Other income increased primarily due to the adoption of SFAS 143. The decrease in interest and related charges primarily included the impact of comparably lower interest rates in 2003 and a reduction in interest accrued, resulting from the favorable resolution of previously outstanding income tax issues.

Nine Months Ended September 30, 2003

Net income increased for the nine months ended September 30, 2003, as compared to the same period in 2002. The increase includes a net $84 million after-tax gain for changes in accounting principles, reflecting the adoption of SFAS No. 143 and EITF 02-3. Income before the cumulative effect of changes in accounting principle decreased slightly, reflecting the impact of Hurricane Isabel and milder weather. Regulated electric sales increased for the first nine months of 2003, primarily as a result of comparably colder weather during the first quarter, partially offset by milder weather in the second and third quarters. Customer growth and higher fuel rate recoveries also contributed to the increase in regulated electric sales. The Company's non-regulated electric revenue decreased, and non-regulated gas revenue and other revenue increased for the first nine months of 2003.

Total operating expenses increased reflecting primarily the impact of Hurricane Isabel on operations and maintenance expense in the third quarter of 2003. Higher electric fuel and energy purchases are due primarily to higher costs reflected in fuel rate recoveries, certain reclassifications required by the adoption of EITF 02-3 and a charge to recognize previously deferred fuel costs in connection with a proposed settlement of the 2003 Virginia fuel rate case. In addition, other purchased energy commodities are reported as expenses in 2003 due to implementing EITF 02-3.

Changes in other income and interest and related charges were attributable to the same factors impacting the third quarter.

Adoption of EITF 02-3

Effective January 1, 2003, the Company adopted EITF 02-3. Energy manages the Company's energy trading, hedging, arbitrage and power marketing activities through the Dominion Energy Clearinghouse (Clearinghouse). The implementation of EITF 02-3 primarily affects the timing of recognition in earnings for certain Clearinghouse energy-related contracts, as well as the presentation of gains and losses associated with energy-related contracts in the Consolidated Statement of Income.

The adoption of EITF 02-3 had the following initial and ongoing impact on the accounting for and presentation of Clearinghouse energy-related contracts in the Consolidated Financial Statements, effective January 1, 2003:

PAGE 23

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

• Cumulative effect of adopting EITF 02-3: For non-derivative energy-related contracts initiated prior to October 25, 2002 in connection with the Company's energy trading activities and previously designated as trading under prior accounting guidance, the Company recognized an after-tax loss of $55 million as the cumulative effect of a change in accounting principle effective January 1, 2003, which is reflected in the Corporate and Other segment.
• Derivative Contracts: Energy-related derivative contracts continue to be subject to fair value accounting. Under fair value accounting, unrealized changes in fair value are recorded in earnings each reporting period, as well as amounts realized as settlements occur. For those derivatives determined to be held for trading purposes, all changes in fair value, including amounts realized upon settlement, are presented in revenue on a net basis. For non-trading derivatives not designated as hedges, all unrealized changes in fair value are presented in other operations and maintenance expense on a net basis. For non-trading derivative contracts that involve physical delivery of commodities, gross sales contract settlements are presented in revenue, while gross purchase contract settlements are reported in expenses.
• Non-Derivative Contracts: Non-derivative energy-related contracts, previously subject to fair value accounting under prior accounting guidance, are now subject to accrual accounting. Under accrual accounting, the Company recognizes revenue or expense on a gross basis at the time of contract performance, settlement or termination. These contracts will no longer be reported at fair value in the Company's Consolidated Financial Statements.

The recognition and presentation requirements of EITF 02-3 described above were applied prospectively in 2003, and the Consolidated Statement of Income for the three and nine months ended September 30, 2002 were not restated.

Adoption of SFAS 143

The principal impact of the Company's implementation of SFAS No. 143 is a change in the method of accounting for nuclear decommissioning. When comparing SFAS No. 143 to the method of accounting used for nuclear decommissioning in 2002, the components of cost are presented differently in the income statement. Under SFAS No. 143, the Company records accretion expense related to its asset retirement obligations in other operations and maintenance expense. Under its former accounting policy in 2002, the Company recorded accretion expense related to its accumulated provision for nuclear decommissioning in other income.

Energy Segment

	Three Months Ended September 30,		Nine Months Ended September 30,
Selected Financial and Statistical Information	2003	2002	2003	2002
	(millions)
Selected operating revenue:
Regulated electric sales	$1,078	$1,152	$2,922	$2,964
Non-regulated electric sales	19	1	75	87
Non-regulated gas sales	50	(5)	248	(43)
Other revenue	55	8	145	25
Selected operating expenses:
Electric fuel and energy purchases, net	387	361	1,073	955
Purchased electric capacity	152	173	463	517
Other purchased energy commodities	72	-	214	-
Operations and maintenance	185	154	513	487
Depreciation	51	56	151	179
Other taxes	24	27	79	66
Other income	$14	$3	$37	$8
Electricity supplied (million mwhrs)	20.8	21.9	58.0	57.5

PAGE 24

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Third Quarter 2003 Results

Energy's net income contribution decreased $28 million to $189 million for the three months ended September 30, 2003, as compared to the same period in 2002.

The overall increase in operating revenue reflects the following:

• A decrease in regulated electric sales revenue, primarily resulting from milder temperatures ($56 million), a reallocation of base rate revenue between Energy and Delivery, effective January 1, 2003 ($25 million) and loss of base rate revenue during outages caused by Hurricane Isabel, offset by customer growth.
• An increase in non-regulated electric sales revenue, reflecting primarily higher margins on settled contracts, the effects of favorable changes in the fair value of unsettled derivative contracts and the impact of adopting EITF 02-3.
• An increase in non-regulated gas sales revenue, net of applicable trading purchases, primarily reflecting the effect of higher margins on settled contracts and favorable changes in the fair value of unsettled derivative contracts and the impact of adopting EITF 02-3. The increase includes $36 million related to financial derivative contracts held by one of the Company's unregulated subsidiaries involved in Clearinghouse operations as part of Dominion's consolidated price risk management strategy associated with anticipated sales of Dominion's natural gas production.
• An increase in other revenue, primarily reflecting revenue from sales of coal. This increase largely reflects the impact of adopting EITF 02-3.

The overall increase in operating expenses primarily reflects the following:

• An increase in electric fuel and energy purchases, net, reflecting the recognition of $14 million of previously deferred fuel costs in connection with a proposed settlement of the 2003 Virginia fuel rate case and $8 million associated with the reclassification of purchases under certain derivative contracts that are no longer considered held for trading purposes under EITF 02-3.
• A decrease in purchased electric capacity, reflecting scheduled rate reductions on certain utility supply contracts ($13 million) and lower purchased capacity for utility operations ($8 million).
• An increase in other purchased energy commodities, reflecting the reclassification of purchases under certain gas and coal contracts that are no longer considered held for trading purposes after the implementation of EITF 02-3.
• An increase in other operations and maintenance expense reflecting an increase in general and administrative expenses such as wages and benefit costs ($8 million) and an increase for the accretion of the nuclear decommissioning asset retirement obligation beginning in 2003 ($10 million). It also reflects an increase due to the change in fair value of unsettled derivative contracts related to adopting EITF 02-3 ($13 million).

Other income increased reflecting net realized gains from the Company's decommissioning trusts in 2003 and as a result of accretion expense related to the Company's provision for decommissioning being reported in other income in 2002.

Nine Months Ended September 30, 2003 Results

Energy's net income contribution increased $63 million to $505 million for the nine months ended September 30, 2003, as compared to the same period in 2002.

PAGE 25

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

The overall increase in operating revenue primarily reflects the following:

• A decrease in regulated electric sales revenue, primarily resulting from a reallocation of base rate revenue between Energy and Delivery ($63 million), milder summer temperatures ($28 million), the loss of base rate revenue during outages caused by Hurricane Isabel ($13 million) and other factors ($17 million). These decreases were partially offset by increased fuel rate recoveries ($49 million) and customer growth ($30 million). Fuel rate recoveries are generally offset by a comparable increase in fuel expense and do not materially affect net income.
• A decrease in non-regulated electric sales, net of applicable trading purchases, reflecting a decrease primarily due to the effects of unfavorable changes in the fair value of derivative contracts held and not yet settled, lower margins and the impact of adopting EITF 02-3.
• An increase in non-regulated gas revenue, reflecting an increase due to higher margins on settled contracts, the effect of favorable changes in fair value of unsettled derivative contracts and the impact of adopting EITF 02-3. The increase includes $48 million related to financial derivative contracts held by one of the Company's unregulated subsidiaries involved in Clearinghouse operations as part of Dominion's consolidated price risk management strategy associated with anticipated sales of Dominion's natural gas production.
• An increase in other revenue, primarily reflecting revenue from sales of coal. This increase largely reflects the impact of adopting EITF 02-3.

The overall increase in operating expenses primarily reflects the following:

• An increase in electric fuel and energy purchases, net, reflecting the recognition of $14 million of previously deferred fuel costs in connection with a proposed settlement of the 2003 Virginia fuel rate case; $49 million due to higher fuel rate recoveries; $19 million for increased purchases not subject to fuel rate recoveries; and $34 million reflecting the reclassification of purchases under certain derivative contracts that are no longer considered held for trading purposes under EITF 02-3.
• A decrease in purchased electric capacity, reflecting scheduled rate reductions on certain utility supply contracts ($35 million) and lower purchased capacity for utility operations ($19 million).
• An increase in other purchased energy commodities, reflecting the reclassification of purchases under certain gas and coal contracts that are no longer considered held for trading purposes after the implementation of EITF 02-3.
• An increase in other operations and maintenance expense, primarily reflecting an increase in general and administrative expenses ($36 million), including higher wages and benefit costs, and an increase in outage and maintenance costs primarily at the nuclear power stations ($31 million) and an increase for the recognition of accretion expense related to nuclear decommissioning asset retirement obligations beginning in 2003 ($29 million). Partially offsetting these items was a decrease due to the adoption of EITF 02-3 ($65 million), which now reflects changes in the fair value of certain derivative energy contracts no longer considered held for trading purposes under EITF 02-3.
• A decrease in depreciation expense, primarily reflecting a change in the presentation of expenses associated with asset retirement obligations. The remaining decrease reflects the extension of estimated useful lives of most fossil fuel stations and electric transmission property during the second quarter of 2002, partially offset by the impact of new property additions.
• An increase in other taxes, primarily reflecting the impact in 2002 of a favorable resolution of sales and use tax issues and the recognition of business and occupation tax credits. Similar benefits were not recognized in the first nine months of 2003.

PAGE 26

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Other income increased reflecting net realized gains from the Company's decommissioning trusts in 2003 and as a result of accretion expense related to the Company's provision for decommissioning being reported in other income in 2002.

Selected Information-Energy Trading Activities

See Selected Information-Energy Trading Activities in the reformatted portion of MD&A included in the current report on Form 8-K filed on May 9, 2003 for a detailed discussion of the energy trading, hedging and arbitrage
activities of the Clearinghouse and related accounting policies. For additional discussion of trading activities, see Market Rate Sensitive Instruments and Risk Management.

A summary of the changes in the unrealized gains and losses recognized for the Company's energy-related derivative instruments held for trading purposes during the nine months ended September 30, 2003 follows:

	Amount
	(millions)
Net unrealized gain at December 31, 2002	$111
Reclassification of contracts - adoption of EITF 02-3:
Non-derivative energy contracts	(90)
Derivative energy contracts, not held for trading purposes	(18)
	(108)
Contracts realized or otherwise settled during the period	31
Net unrealized gain at inception of contracts initiated during the period	-
Changes in valuation techniques	-
Other changes in fair value	28
Net unrealized gain at September 30, 2003	$62

The balance of net unrealized gains and losses recognized for the Company's energy-related derivative instruments held for trading purposes at September 30, 2003 is summarized in the following table based on the approach used to determine fair value and the contract settlement or delivery dates:

	Maturity Based on Contract Settlement or Delivery Date(s)
Source of Fair Value:	Less than    1 year	1-2 years	2-3 years	3-5 years	In Excess of 5 Years	Total
	(millions)
Actively quoted(1)	$18	$28	$8	-	-	$54
Other external sources(2)	-	4	2	$2	-	8
Models and other valuation techniques(3)	-	-	-	-	-	-
Total	$18	$32	$10	$2	-	$62

(1) Exchange-traded and over-the-counter contracts.

(2) Values based on prices from over-the-counter broker activity and industry services and, where applicable, conventional option pricing models.
(3) Values based on the Company's estimate of future commodity prices when information from external sources is not available and use of internally-developed models, reflecting option pricing theory, discounted cash flow concepts, etc.

PAGE 27

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Delivery Segment

	Three Months Ended September 30,		Nine Months Ended September 30,
Selected Financial and Statistical Information	2003	2002	2003	2002
	(millions)
Selected operating revenue:
Regulated electric sales	$305	$302	$820	$767
Other revenue	9	13	26	39
Selected operating expenses:
Operations and maintenance	77	75	213	210
Depreciation	57	54	169	170
Other taxes	16	16	52	45
Electricity delivered (million mwhrs)	20.6	21.7	57.6	57.2

Third Quarter 2003 Results

Delivery's net income contribution decreased $6 million to $93 million for the third quarter ended September 30, 2003, as compared to the same period in 2002.

The increase in regulated electric sales revenue primarily reflects a reallocation of base rate revenue between Energy and Delivery, effective January 1, 2003 ($25 million) and customer growth. These increases were partially offset by the effects of milder temperatures ($24 million) and loss of base rate revenue during outages caused by Hurricane Isabel.

The increase in operating expenses primarily reflects an increase in other operations and maintenance expense, reflecting primarily higher expenditures for contractors and service restoration costs for storms other than Hurricane Isabel.

Nine Months Ended September 30, 2003 Results

Delivery's net income contribution increased $20 million to $222 million for the nine months ended September 30, 2003, as compared to the same period in 2002.

The overall increase in operating revenue primarily reflects an increase in regulated electric sales revenue, primarily resulting from a reallocation of base rate revenue between Energy and Delivery, effective January 1, 2003 ($63 million) and customer growth ($13 million). These increases were partially offset by comparably milder temperatures in the second and third quarters ($12 million), the loss of base rate revenue during outages caused by Hurricane Isabel ($6 million) and other factors ($5 million). The decrease in other revenue primarily reflects a change in allocation of late payment fees and lower miscellaneous service revenues.

The increase in operating expenses primarily reflects an increase in other operations and maintenance expense, primarily reflecting higher expenditures for contractors and service restoration costs for storms other than Hurricane Isabel.

PAGE 28

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Corporate and Other

	Three Months Ended September 30,		Nine Months Ended September 30,
	2003	2002	2003	2002
	(millions)
Net expense	$(82)	-	$(3)	-

Third Quarter 2003 Results

The net expense for the third quarter of 2003 includes $129 million of operations and maintenance expense ($80 million after tax), representing the cost of restoration activities following Hurricane Isabel. Hurricane Isabel caused extensive damage to overhead electrical facilities throughout a substantial portion of the Company's Virginia and North Carolina utility service territory. Substantially all of these expenses are attributable to the Delivery segment.

Nine Months Ended September 30, 2003 Results

Net expense for the first nine months of 2003 includes the following:

• $129 million of operations and maintenance expense ($80 million after tax), representing the cost of restoration activities following Hurricane Isabel.
• $8 million ($5 million after tax) related to severance costs for workforce reductions, including $3 million attributable to the Energy segment and $5 million attributable to the Delivery segment.
• $139 million after-tax gain, representing the cumulative effect of a change in accounting principle from adoption of SFAS No. 143, including $140 million after-tax gain attributable to the Energy segment and $1 million after-tax loss attributable to the Delivery segment.
• $55 million after-tax loss, representing the cumulative effect of a change in accounting principle from adoption of EITF 02-3, all of which was related to Energy's operations.

For more information on the cumulative effect of the changes in accounting principles, see Note 3 to the Consolidated Financial Statements.

Liquidity and Capital Resources

The Company depends on both internal and external sources of liquidity to provide working capital and to fund capital requirements. Short-term cash requirements not met by cash flow from operations are generally satisfied with proceeds from short-term borrowings. Long-term cash needs are met through sales of securities and additional long-term debt financings.

PAGE 29

VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Internal Sources of Liquidity

As presented on the Company's Consolidated Statements of Cash Flows, net cash flow provided by operating activities totaled approximately $1.1 billion and $870 million during the nine months ended September 30, 2003 and 2002, respectively. The Company's management believes that its operations provide a stable source of cash flow sufficient to contribute to planned levels of capital expenditures and to maintain current dividends payable to Dominion. As noted above, the Company uses a combination of short-term borrowings and sales of securities to fund capital requirements not covered by the timing or amounts of operating cash flows.

The Company's operations are subject to risks and uncertainties that may negatively impact cash flows from operations. See the discussion of such factors in Internal Sources of Liquidity in the MD&A of the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

External Sources of Liquidity

In the External Sources of Liquidity section of the MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2002, the Company discussed its use of capital markets as well as the impact of credit ratings on the accessibility and costs of using these markets. In addition, the Company discussed various covenants present in the enabling agreements underlying the Company's debt. As of September 30, 2003, there have been no downgrades of the Company's credit ratings. In addition, there have been no changes to or events of default under the Company's debt covenants.

Long-term Debt

In the first quarter of 2003, the Company issued $400 million of 4.75 percent senior notes due March 2013. The Company used the cash proceeds for general corporate purposes, including the repayment of other debt.

The Company repaid $10 million of medium-term notes in the first quarter of 2003, $200 million of 6.625 percent mortgage bonds in the second quarter of 2003 and $16 million of medium-term notes in the third quarter of 2003.

Joint Credit Facilities

Dominion, Consolidated Natural Gas Company (CNG) and the Company are parties to two joint credit facilities that allow aggregate borrowings of up to $2 billion: a $1.25 billion 364-day revolving credit facility executed in May 2003 and terminates in May 2004; and a $750 million 3-year revolving credit facility executed in May 2002 and terminates in May 2005. The 3-year facility can also be used to support up to $200 million of letters of credit. The remaining joint credit facilities will be used for working capital; as support for the combined commercial paper programs of Dominion, CNG and the Company; and for other general corporate purposes.

At September 30, 2003, outstanding commercial paper under the companies' combined commercial paper programs was $875 million and total outstanding letters of credit supported by the 3-year facility were $88 million: $17 million issued on behalf of an unregulated subsidiary of the Company and $71 million issued on behalf of other Dominion subsidiaries. At September 30, 2003, capacity available under the two credit facilities was $1.0 billion.

PAGE 30

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Short-term Debt

At September 30, 2003, net borrowings of the Company under the commercial paper program were $336 million, a decrease of $107 million from December 31, 2002. Commercial paper borrowings are used primarily to fund working capital requirements and may vary significantly during the course of the year depending upon the timing and amount of cash requirements not satisfied by cash provided from operations.

Borrowings from Parent

The Company and its subsidiaries have made certain borrowings from Dominion pursuant to a short-term demand note. At September 30, 2003 and December 31, 2002, net outstanding borrowings under this note totaled $142 million and $100 million, respectively. Interest charges related to this note for the three and nine months ended September 30, 2003 were not material.

Amounts Available under Shelf Registrations

At September 30, 2003, the Company had $1.325 billion of available capacity under currently effective shelf registrations with the SEC that would permit the Company to issue debt and preferred securities to meet future capital requirements.

Investing Activities

During the nine months ended September 30, 2003, investing activities resulted in a net cash outflow of $771 million. These activities included plant construction and other property expenditures of $656 million and nuclear fuel expenditures of $75 million. The plant expenditures related to generation-related projects totaled approximately $358 million and included costs related to environmental upgrades, nuclear reactor vessel head replacement expenditures and other capital improvements. The plant expenditures related to transmission and distribution projects totaled approximately $271 million, reflecting routine capital improvements and expenditures associated with new connections. Other general and information technology projects totaled approximately $27 million. Investing activities also include $36 million of contributions to the Company's nuclear decommissioning trusts.

Contractual Obligations

As of September 30, 2003, other than scheduled maturities of new debt issued during the first nine months of 2003, and increased fuel commitments described in Note 10 to the Consolidated Financial Statements, there have been no significant changes to the contractual obligations disclosed in MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

PAGE 31

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Future Issues

The following discussion of future issues and other information includes current developments of previously disclosed matters and new issues arising during the period covered by and subsequent to the Consolidated Financial Statements. This section should be read in conjunction with Future Issues and Outlook in MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

Regional Transmission Organization (RTO)

In June 2003, the Company submitted an application to the Virginia State Corporation Commission (Virginia Commission), as required by the Virginia Restructuring Act, requesting authorization to become a transmission owning member of PJM Interconnection, LLC (PJM) and transfer operational control of the Company's electric transmission facilities to PJM on November 1, 2004. The Virginia Commission issued an order in September 2003 that directed the Company to provide additional information concerning its application and stated that it will not fully consider the application and make a final determination until the Federal Energy Regulatory Commission (FERC) has issued a final order addressing Standard Market Design. It is uncertain at this time when FERC will issue a final order on Standard Market Design. The Company has requested that the Virginia Commission eliminate the requirement to provide the additional information and establish a schedule to rule on its application without a FERC final order on Standar d Market Design.

Virginia Rate Matters

In July 2003, the Company filed its 2004 fuel factor application with the Virginia Commission, requesting a total fuel factor increase of $442 million that included a projected $308 million under-recovery balance as of December 31, 2003. The under-recovery balance was attributed to nuclear plant outages for reactor vessel head replacements, increased fuel prices and an unusually cold winter. The Company also suggested for consideration a cost recovery mechanism that would amortize the under-recovery balance over two years.

In October 2003, the Company reached a tentative settlement of its 2004 fuel factor application with the Virginia Attorney General's Office, the Virginia Commission Staff and other parties. If approved by the Virginia Commission, the settlement would reduce the total proposed increase by $56 million to $386 million. The reduction includes $42 million attributed to updated projected fuel cost forecasts and the recognition of $14 million of previously deferred fuel costs which would now not be recovered. The settlement includes a recovery period for the under-recovery balance over three and a half years. About $171 million of the $386 million would be recovered in 2004, $85 million in 2005, $87 million in 2006 and $43 million in the first six months of 2007. The proposed settlement addressed neither the extent to which the Company's trading activities may be taken into account by the Virginia Commission in future fuel factor determinations nor a party's recommended delay in the effective dat e of increased fuel rates to allow the General Assembly an opportunity to consider issues raised in this fuel factor proceeding.

The Company is still permitted under the Virginia Restructuring Act to request adjustments to its fuel rates until July 1, 2007.

Status of Retail Competition in Virginia

In August 2003, the Virginia Commission issued its annual report on the status of the development of a competitive retail market for electric generation in Virginia. In the report, the Virginia Commission renewed its recommendation that the General Assembly suspend key portions of the Virginia Restructuring Act through the re-bundling of retail rates and suspension of the Act's retail choice provisions. The report also recommended extending the moratorium on Virginia utilities' participation in RTOs. In October 2003, the offices of the Governor and the Attorney General recommended that the Commission on Electric Utility Restructuring consider legislation that would extend the existing capped rates under the Virginia Restructuring Act for three years, until July 1, 2010, and phase out or eliminate wires charges.

PAGE 32

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Proposed Pilot Programs

In September 2003, the Virginia Commission issued a final order approving three proposed electric retail access pilot programs, subject to several specified modifications. The pilot programs will run through the remainder of the capped rate period and make available to competitive service providers up to 500 megawatts of load, with expected participation of more than 65,000 customers from a variety of customer classes. Enrollment in the pilot programs is scheduled to begin in February 2004.

Environmental Matters

In relation to a Notice of Violation received by the Company in 2000 from the EPA and related proceedings, the Company, the U.S. Department of Justice, the EPA, the states of Virginia, West Virginia, Connecticut, New Jersey and New York agreed to a settlement in April 2003 in the form of a proposed Consent Decree. The Virginia federal district court entered the final Consent Decree in October 2003, resolving the underlying actions. The settlement includes payment of a $5 million civil penalty, an obligation to fund $14 million for environmental projects and a commitment to improve air quality under the Consent Decree estimated to involve expenditures of $1.2 billion. The Company has already incurred certain capital expenditures for environmental improvements at its coal-fired stations in Virginia and West Virginia and has committed to additional measures in its current financial plans and capital budget to satisfy the requirements of the Consent Decree. As of September 30, 2003, the Company had accrued $19 m illion for the civil penalty and the funding of the environmental projects, substantially all of which was recorded in 2000.

Restructuring of Contract with Non-Utility Generating Facility

In July 2003, the Company reached an agreement, pending regulatory approvals, to pay approximately $150 million for the termination of a long-term power purchase contract and the purchase of the related generating facility used by a non-utility generator to provide electricity to the Company. The Company expects the transaction to be completed in the fourth quarter of 2003, resulting in an after-tax charge in the range of $65 million to $85 million for the purchase and termination of the long-term power purchase contract. The transaction is part of an ongoing program which seeks to achieve competitive cost structures at the Company's power generating business.

Accounting Matters

Recently Issued Accounting Standards

The following new accounting standards will be adopted during the fourth quarter of 2003, as described in Note 4 to the Consolidated Financial Statements:

• FASB Interpretation No. 46, Consolidation of Variable Interest Entities, and
• SFAS No. 133 Implementation Issue No. C20, Interpretation of the Meaning of 'Not Clearly and Closely Related' in Paragraph 10(b) regarding Contracts with a Price Adjustment Feature.

PAGE 33

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

The matters discussed in this Item may contain "forward-looking statements" as described in the introductory paragraphs under Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q. The reader's attention is directed to those paragraphs for discussion of various risks and uncertainties that may affect the future of the Company.

Market Rate Sensitive Instruments and Risk Management

The Company's financial instruments, commodity contracts and related derivative instruments are exposed to potential losses due to adverse changes in interest rates, equity security prices, foreign currency exchange rates and commodity prices. Interest rate risk generally is related to the Company's outstanding debt. The Company is exposed to foreign exchange risk associated with purchases of certain nuclear fuel processing services denominated in foreign currencies. Commodity price risk is present in the Company's electric operations and energy marketing and trading operations due to the exposure to market shifts for prices received and paid for natural gas, electricity and other commodities. The Company uses derivative instruments to manage price risk exposures for these operations. In addition, the Company is exposed to equity price risk through various portfolios of equity securities.

The Company's sensitivity analysis estimates the potential loss of future earnings or fair value from market risk sensitive instruments over a selected time period due to a 10 percent unfavorable change in commodity prices, interest rates and foreign currency exchange rates.

Commodity Price Risk-Trading Activities

As part of its strategy to market energy and to manage related risks, the Company manages a portfolio of commodity-based financial derivative instruments held for trading purposes. These contracts are sensitive to changes in the prices of natural gas, electricity and certain other commodities. The Company uses established policies and procedures to manage the risks associated with these price fluctuations and uses various derivative instruments, such as futures, forwards, swaps and options, to mitigate risk by creating offsetting market positions. In addition, the Company seeks to use its generation capacity, when not needed to serve customers in its service territory, to satisfy commitments to sell energy.

A hypothetical 10 percent unfavorable change in commodity prices would have resulted in a decrease of approximately $32 million and $26 million in the fair value of its commodity-based financial derivative contracts held for trading purposes as of September 30, 2003 and December 31, 2002, respectively.

Interest Rate Risk

The Company's interest rate risk exposure does not differ materially from that discussed under Item 7A of its Annual Report on Form 10-K for 2002.

Foreign Exchange Risk

The Company's foreign exchange risk exposure does not differ materially from that discussed under Item 7A of its Annual Report on Form 10-K for 2002.

Investment Price Risk

The Company is subject to investment price risk due to marketable securities held as investments in nuclear decommissioning trust funds. In accordance with current accounting standards, these marketable securities are reported on the Consolidated Balance Sheets at fair value. The Company recognized a net realized gain (including investment income) of $25 million and a net unrealized gain of $46 million on decommissioning trust investments for the first nine months of 2003. For the year ended December 31, 2002, the Company recognized a net realized gain (including investment income) of $11 million and an unrealized loss of $67 million.

PAGE 34

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 4. CONTROLS AND PROCEDURES

Senior management, including the Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, the Chief Executive Officers and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are effective. There were no changes in the Company's internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PAGE 35

VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company and its subsidiaries are alleged to be in violation or in default under orders, statutes, rules or regulations relating to the environment, compliance plans imposed upon or agreed to by the Company and its subsidiaries, or permits issued by various local, state and federal agencies for the construction or operation of facilities. From time to time, there also may be administrative proceedings on these matters pending. In addition, in the normal course of business, the Company and its subsidiaries are involved in various legal proceedings. Management believes that the ultimate resolution of these proceedings will not have a material adverse effect on the Company's financial position, liquidity or results of operations. See Future Issues in Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) for discussion on various regulatory proceedings to which the Company and its subsidiaries are a party.

In June 2002, Wiley Fisher, Jr. and John Fisher filed a purported class action lawsuit against the Company and Dominion Telecom, Inc. (Dominion Telecom) in the U.S. District Court in Richmond, Virginia. The plaintiffs claim that the Company and Dominion Telecom strung fiber-optic cable across their land, along a Virginia Power electric transmission corridor without paying compensation. The plaintiffs are seeking damages for trespass and "unjust enrichment," as well as punitive damages from the defendants. The named plaintiffs purport to "represent a class . . . consisting of all owners of land in North Carolina and Virginia, other than public streets or highways, that underlies Virginia Power's electric transmission lines and on or in which fiber optic cable has been installed." In August 2003, the federal district court issued an order granting the named plaintiffs' motion for class certification. The U.S. Court of Appeals for the Fourth Circuit denied Dominion's petition for appeal and its petition for reh earing on the class certification issue. The outcome of the proceeding, including an estimate as to any potential exposure, cannot be predicted at this time.

In connection with a Notice of Violation received by Virginia Power in 2000 from the U.S. Environmental Protection Agency and related proceedings, the Virginia federal district court entered the final Consent Decree in October 2003 involving Dominion, the U.S. government and five states. See Environmental Matters in the MD&A of this Form 10-Q for further information relating to this development.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At a special meeting of shareholders held on October 23, 2003, Dominion Resources, Inc., the sole holder of all of the common stock of the Company, voted to amend the Company's Articles of Incorporation to delete obsolete sections and amendments concerning various series of preferred stock that are no longer outstanding and will not be reissued.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:
	3.1	Restated Articles of Incorporation, as in effect on October 28, 2003 (filed herewith).
	3.2	Bylaws, as amended, as in effect on April 28, 2000 (Exhibit 3, Form 10- Q for the period ended March 31, 2000, File No. 1-2255, incorporated by reference).
	10.1	$1,250,000,000 364-Day Credit Agreement among Dominion Resources, Inc., Virginia Electric and Power Company, Consolidated Natural Gas Company and JPMorgan Chase Bank, as Administrative Agent for the Lenders, dated as of May 29, 2003 (filed herewith).

PAGE 36

VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION

(a) Exhibits (continued):
	10.2	Dominion Resources, Inc. Retirement Benefit Restoration Plan as adopted effective January 1, 1991 as amended and restated October 17, 2003 (filed herewith).
	10.3	Dominion Resources, Inc. Executive Supplemental Retirement Plan, effective January 1, 1981 as amended and restated October 17, 2003 (filed herewith).
	12.1	Ratio of earnings to fixed charges (filed herewith).
	12.2	Ratio of earnings to fixed charges and preferred dividends (filed herewith).
	31.1	Certification by Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.2	Certification by Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.3	Certification by Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.4	Certification by Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.5	Certification by Registrant's Senior Vice President and Chief Financial Officer (Principal Financial Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	32	Certification to the Securities and Exchange Commission by Registrant's Chief Executive Officers and Principal Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
	99	Condensed consolidated earnings statements (unaudited) (filed herewith).

(b) Reports on Form 8-K:
	There were no reports on Form 8-K filed during the quarter ended September 30, 2003.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VIRGINIA ELECTRIC AND POWER COMPANY Registrant
November 7, 2003	/s/ Steven A. Rogers
	Steven A. Rogers Vice President (Principal Accounting Officer)

EX-3.1

Exhibit 3.1 

VIRGINIA ELECTRIC AND POWER COMPANY

____________________

RESTATED ARTICLES OF INCORPORATION
As in effect on October 28, 2003

TABLE OF CONTENTS

___________________________

	Page
I.          NAME	1
II          PURPOSE	1
III.        STOCK	1
Division A---Preferred Stock	1
1. Issuance in Series	1
2. Dividends	3
3. Preference on Liquidation, etc.	3
4. Redemption and Purchase	4
5. Restrictions on Certain Corporate Action	5
6. Voting Rights	9
7. Series of Preferred Stock	11
(a)      $5 Dividend Preferred Stock	11
(b)      $4.04 Dividend Preferred Stock	11
(c)      $4.20 Dividend Preferred Stock	12
(d)      $4.12 Dividend Preferred Stock	12
(e)      $4.80 Dividend Preferred Stock	13
Division B---Common Stock	14
1.      Dividends	14
2.      Distribution of Assets	14
3.      Voting Rights	14
4.         Purchase of Junior Stock	15
Division C---General Provisions	15
IV. OFFICE	16
V. DIRECTORS	16
VI. INDEMNIFICATION	16
ARTICLES OF AMENDMENT -- $7.05 Dividend Preferred Stock	18
ARTICLES OF AMENDMENT -- $6.98 Dividend Preferred Stock	20
ARTICLES OF AMENDMENT -- Flexible Money Market Cumulative Preferred Stock (Flex MMP), 2002 Series A	23

Page 1

I.
NAME.

The name of the Corporation is Virginia Electric and Power Company.

II.
PURPOSES.

The purpose of the Corporation is to engage in the business of a public service company, including the business of a general electric, power and lighting company, with all the rights, powers and privileges conferred by the constitution and laws of the Commonwealth of Virginia as they now are or may hereafter exist;

And in addition thereto, the Corporation shall have and enjoy all of the rights, powers and privileges granted to or conferred upon railway, light and power companies by the laws of the Commonwealth of Virginia; the powers set forth in or conferred by the charter of the Corporation and all the powers set forth in the charter, articles of association or certificates of incorporation, as amended, of each and every other predecessor corporation.

III.
STOCK.

The Corporation shall have authority to issue 10,000,000 shares of Preferred Stock.

The Corporation shall have authority to issue 300,000 shares of Common Stock.

The number of authorized shares of the Corporation of any class may be increased or decreased in the manner and subject to the conditions and limitations prescribed by the laws of the Commonwealth of Virginia, as they now or may hereafter exist, and subject to the provisions hereinafter contained.

The description of said classes of stock, and the designations, preferences and voting powers of such classes of stock, or restrictions or qualifications thereof, and the terms on which such stock is to be issued (together with certain related provisions for the regulation of the business and for the conduct of the affairs of the Corporation) shall be as hereinafter in Divisions A, B, and C set forth.

Page 2

Division A---Preferred Stock

1. Issuance in Series. The Board of Directors is hereby empowered to cause the Preferred Stock of the Corporation to be issued in series with such of the variations permitted by clauses (a)-(f), both inclusive, of this Section 1 as shall have been determined by the Board of Directors with respect to any series prior to the issue of any shares of such series, and to reclassify any of the authorized but unissued Preferred Stock of a particular series as shares, or additional shares, of any other series whether then or theretofore created (except any series as to which it shall have been otherwise provided at the time of creating such series), subject, however, to the provisions of Sections 2-6, both inclusive, of this Division A, which shall apply to all series of the Preferred Stock of the Corporation.

The shares of the Preferred Stock of different series may vary as to:

(a) The designation of such series, which may be by distinguishing number, letter or title;

(b) The rate or rates (which may be fixed or variable) at which dividends are payable on the shares of such series, hereinafter referred to as the "dividend rate", and the dividend payment dates of the shares of such series;

(c) The price payable in respect of the shares of such series, if and when redeemable, in case of the redemption thereof, which price in respect of any series may, but need not, vary according to the time or circumstances of such action, said price or prices being hereinafter referred to as the "redemption price";

(d) The amount payable in respect of the shares of such series in case of liquidation, dissolution or winding up of the Corporation, the amount or amounts so fixed being hereinafter referred to as the "liquidation price", and the amount payable, if any, in addition to the liquidation price for such series in case such action be voluntary, the amount or amounts so fixed being hereinafter referred to as the "liquidation premium"; which amounts in respect of any series may, but need not, vary according to the time or circumstances of such action;

(e) The amount of the sinking fund, if any, providing for the purchase or redemption of the shares of such series; and

(f) The right, if any, to convert the shares of such series into shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation, and the rate or basis, time, manner and conditions of conversion or the method by which the same shall be determined.

Page 3

The shares of all series of Preferred Stock shall be equal in all respects except as, consistently with this Section 1, shall have been otherwise determined by the Board of Directors prior to the issuance thereof. All shares of Preferred Stock of each series shall be equal in all respects.

2. Dividends. The holders of the Preferred Stock of each series shall be entitled to receive, if and when declared payable by the Board of Directors, dividends in lawful money of the United States of America at, but not exceeding, the dividend rate or rates (which may be fixed or variable) for such series, payable on such dates as shall be prescribed for such series. Such dividends shall be cumulative (but dividends in arrears shall not bear interest) and no dividends shall be declared or paid upon or set apart for Junior Stock (which term means, for the purpose of this Article, the Common Stock and stock of any other class hereafter created ranking junior to the Preferred Stock in respect of dividends or assets) unless and until full dividends on the outstanding Preferred Stock at the dividend rate or rates therefor shall have been paid or declared and set apart for payment with respect to all past dividend periods and the current dividend period. Dividends on all shares of the Preferr ed Stock of each series shall commence to accrue and be cumulative from the date of the initial issue of any shares of such series; but (a) all dividends declared payable to the holders of record of Preferred Stock of any series as of a date on which shares of Preferred Stock of such series are owned by the Corporation shall be deemed to have been paid in respect of such shares owned by the Corporation on such date, and (b) in the event of the issuance of additional shares of Preferred Stock of any series subsequent to the date of the initial issuance of shares of such series, all dividends declared payable to the holders of record of Preferred Stock of such series as of a date prior to such additional issuance shall be deemed to have been paid in respect of the additional shares so issued. Unless full dividends with respect to all past dividend periods on the outstanding Preferred Stock at the dividend rate or rates therefor shall have been paid or declared and set apart for payment, no dividends shall be d eclared on the Preferred Stock of any series unless dividends are declared on the Preferred Stock of all series then outstanding in proportion to the aggregate amounts of the deficiencies in payment of such full dividends for the respective series.

The terms "current dividend period" and "past dividend period", for the purposes of this Article, mean, if two or more series of Preferred Stock having different dividend periods are at the time outstanding, the current dividend period or any past dividend period, as the case may be, with respect to each such series.

3. Preference on Liquidation, etc. In the event of any liquidation, dissolution or winding up of the Corporation, the holders of the Preferred Stock of each series shall be entitled to receive, for each share thereof, the liquidation price for such series, plus, in case such liquidation, dissolution or winding up shall have been voluntary, the liquidation premium for such series, if any, together in all cases with a sum equal to all dividends accrued or in arrears thereon, before any distribution of the assets shall be made to holders of Junior Stock; but the holders of the Preferred Stock shall be entitled to no further participation in such distribution. If, upon any such liquidation, dissolution or winding up, the assets distributable among the holders of the Preferred Stock shall be insufficient to permit the payment of the full preferential amounts aforesaid, then such assets shall be distributed among the holders of the Preferred Stock then outstanding, ratably in proportion to th e full preferential amounts to which they are respectively entitled. The expression "dividends accrued or in arrears" means, for the purposes of this Section 3 and of Section 4 of this Division A, in respect of each share of the Preferred Stock of any series, that amount which shall be equal to simple interest upon the sum of one hundred dollars at an annual rate equal to the percentage that the dividend rate or rates for such series is of one hundred dollars, from the date from which cumulative dividends thereon commence to accrue to the date as of which the computation is to be made, less the aggregate amount of all dividends theretofore paid or deemed to have been paid. Nothing in this Section 3 shall be deemed to prevent the purchase, acquisition or other retirement by the Corporation of shares of its Junior Stock consistently with the restrictions of Section 4 of this Division A, and no such purchase, acquisition or other retirement of shares of its Junior Stock shall be deemed to be a liquidation, diss olution or winding up of the Corporation. A merger of the Corporation into any other corporation, or merger of any other corporation into the Corporation, or consolidation of the Corporation with any other corporation or a sale or transfer of the property of the Corporation as or substantially as an entirety shall not be deemed to be a liquidation, dissolution or winding up of the Corporation.

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4. Redemption and Purchase. The Corporation may, at its option expressed by resolution of its Board of Directors, at any time or from time to time, redeem the whole or any part of the Preferred Stock or of any series thereof which is at the time redeemable, at the redemption price for such series, together with a sum equal to all dividends accrued or in arrears thereon. Notice of any proposed redemption of the Preferred Stock shall be given by publication at least once in one newspaper printed in the English language and customarily published on each business day and, wherever published, of general circulation in the City of Richmond, Commonwealth of Virginia, and in one newspaper printed in the English language and customarily published on each business day and, wherever published, of general circulation in the Borough of Manhattan, the City of New York, the publication in each such newspaper to be at least thirty (30) days, and not more than ninety (90) days, prior to the date fixed f or such redemption. Notice of any proposed redemption of Preferred Stock shall also be given by the Corporation by mailing a copy of such notice, at least thirty (30) days, and not more than ninety (90) days, prior to the date fixed for such redemption, to the holders of record of the Preferred Stock to be redeemed, at their respective addresses then appearing on the books of the Corporation; but neither failure to mail such copy nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of the Preferred Stock so to be redeemed. In case of the redemption of a part only of any series of the Preferred Stock at the time outstanding, the Corporation shall select by lot or pro rata the shares so to be redeemed. The Board of Directors shall have full power and authority, subject to the limitations and provisions herein contained, to prescribe the manner in which, and the terms and conditions upon which, the shares of the Preferred Stock shall be r edeemed from time to time.

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On or at any time before the redemption date, the Corporation shall deposit in trust, for the account of the holders of the shares to be redeemed, funds necessary for such redemption with a bank or trust company in good standing, organized under the laws of the United States of America or of the State of New York, doing business in the Borough of Manhattan, the City of New York, and having, or being a part of a bank holding company group having, capital, surplus and undivided profits aggregating at least $500,000,000, or organized under the laws of the United States of America or of the Commonwealth of Virginia, doing business in the City of Richmond and having, or being a part of a bank holding company group having, capital,surplus and undivided profits aggregating at least $75,000,000, designated or to be designated in such notice of redemption. Upon completing the publication as hereinabove provided of the notice of such redemption or upon the earlier delivery to said bank or trust comp any of irrevocable authorization and direction to begin promptly and complete such publication of notice, then all shares with respect to the redemption of which such deposit shall have been made and such publication completed or authorization therefor given shall, whether or not the certificates therefor shall have been surrendered for cancellation, be deemed no longer to be outstanding for any purpose, and all rights with respect to such shares shall thereupon cease and terminate, except only the right of the holders of the certificates for such shares to receive, out of the funds so deposited in trust, from and after the date of such deposit, the amount payable upon the redemption thereof, without interest. At the expiration of five years after the redemption date any such moneys then remaining on deposit with such bank or trust company shall be paid over to the Corporation, free of trust, and thereafter the holders of the certificates for such shares shall have no claims against such bank or trust compan y, but only claims as unsecured creditors against the Corporation, or against the Commonwealth of Virginia or as otherwise provided by law in the event of escheat by law, for amounts equal to their pro rata shares of the moneys so paid over without interest.

The Corporation may also from time to time purchase or otherwise acquire for a consideration shares of its Preferred Stock at a price or prices per share not exceeding the price at which the same may be redeemed plus the usual and customary brokerage commissions paid in connection with the purchase thereof.

The Corporation shall not, however, at any time redeem, purchase or otherwise acquire for a consideration less than the whole of its then outstanding Preferred Stock, or redeem, purchase, or otherwise acquire for a consideration any shares of any class of stock ranking on a parity with the Preferred Stock in respect of dividends or assets (such stock being hereinafter referred to as "Parity Stock"), or redeem, purchase, or otherwise acquire for a consideration any shares of Junior Stock, unless full dividends at the dividend rate or rates therefor with respect to all past dividend periods and the current dividend period in which the date fixed for such redemption, purchase or other acquisition shall fall shall have been paid or declared and set apart for payment on all shares of Preferred Stock then outstanding and not then to be redeemed, purchased or so acquired. Shares of Preferred Stock redeemed, or purchased or otherwise acquired by the Corporation and cancelled, shall be retired, but such retirement shall not reduce the maximum authorized amount of the Preferred Stock. If shares of Preferred Stock purchased or otherwise acquired by the Corporation shall be held in its treasury, such shares may from time to time be sold as the Board of Directors may determine consistently with the restrictions of Section 5 of this Division A.

5. Restrictions on Certain Corporation Action. So long as any shares of the Preferred Stock shall remain outstanding, the Corporation shall not, without the affirmative vote of a majority of the shares of the Preferred Stock represented at a meeting at which a quorum exists, called for such purpose but upon such vote, and upon any requisite consent or vote of the holders of the shares of the Common Stock then outstanding, may:

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(a) Authorize or issue any stock ranking prior to the Preferred Stock in respect of dividends or assets (such stock being hereinafter referred to as "Senior Stock"), except the issue of Senior Stock upon conversion of obligations or securities convertible into, or upon exercise of warrants, rights or options to purchase or subscribe to, Senior Stock;

(b) Authorize or issue any Parity Stock, except the issue of Parity Stock upon conversion of obligations or securities convertible into, or upon exercise of warrants, rights or options to purchase or subscribe to, Parity Stock;

(c) Increase the number of authorized shares of the Preferred Stock;

(d) Authorize or issue any obligation or security convertible into, or any warrants, rights or options to purchase or subscribe to, shares of Senior Stock, Preferred Stock or Parity Stock;

(e) Amend the provisions of this Article so as to change the designation, rights, preferences or limitations of the Preferred Stock; provided, however, that if any such amendment would change the designation, rights, preferences or limitations of the holders of one or more, but not all, of the series of the Preferred Stock at the time outstanding, such consent of the holders of a majority of the number of shares constituting a quorum of the series affected shall also be required; or

(f) Reduce the amount of capital represented by the outstanding Preferred Stock; or reduce the aggregate amount of capital represented by Junior Stock below the aggregate amount of capital represented by the outstanding Preferred Stock, Senior Stock and Parity Stock, except in a case where any State or Federal regulatory body having jurisdiction shall have required or permitted the Corporation to reduce the book value of any of its assets and, in connection therewith, the amount of capital represented by Junior Stock shall be reduced by an amount or amounts not exceeding in the aggregate the amount of such reduction in book value of assets.

(g) Issue any shares of its then authorized but unissued Preferred Stock, unless:

           (i) The amount of capital represented by the outstanding Preferred Stock, Senior Stock and Parity Stock to be outstanding immediately after the issue, sale or other disposition of such shares, shall not exceed the amount of capital represented by the Common Stock, together with the sum of premiums on capital stock and surplus; and

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           (ii) The following earnings limitation shall be satisfied: (x) the net income of the Corporation, less dividend requirements on Senior Stock, for any twelve consecutive calendar months within the fifteen calendar months immediately preceding the month within which such shares are to be issued, sold or otherwise disposed of, shall have been at least two and one-half times the dividend requirements for a twelve months' period upon all shares of Preferred Stock and Parity Stock to be outstanding immediately after the issue, sale or other disposition of such shares, but excluding from the foregoing computation interest charges on all indebtedness, and dividends on all shares of Senior Stock, to be retired through the issue, sale or other disposition of such shares; and (y) the sum of the net income of the Corporation and the interest charges deducted in arriving at such net income shall be at least one and one-half times the sum of the interest requirements for a twelve months' period on all debt to be outstanding, and the dividend requirements for a twelve months' period upon all shares of Preferred Stock, Parity Stock and Senior Stock to be outstanding, immediately after the proposed issue, sale or other disposition of such shares. The net income of the Corporation for the purposes of this clause (ii) shall be calculated in accordance with such system of accounts as may be prescribed by governmental authorities having jurisdiction in the premises or in the absence thereof in accordance with recognized accounting practice applicable to companies engaged in a business similar to that of the Corporation, except that if the Corporation shall have acquired, within or after the particular period for which the calculation of net income is made (such period being hereinafter sometimes referred to as the calculation period), any plant or system, including any property used in connection therewith, which was not constructed or erected b y or for the Corporation and which prior to the purchase or acquisition thereof by the Corporation had been used or operated by others than the Corporation (such plant or system being hereinafter sometimes referred to as an acquired plant or system), or in case the proceeds of the proposed issue, sale or other disposition are to be used to acquire any plant or system of similar character, then, in computing the net income of the Corporation there shall be included, to the extent that they may not have been otherwise included, the net earnings or net losses (computed as if such plant or system had been owned by the Corporation during the whole of the calculation period, and computed so as to eliminate all inter-company items, if any) of such acquired plant or system, or of the plant or system of similar character to be acquired for the whole of the calculation period, and if such plant or system was acquired in exchange for any properties of the Corporation as a going concern, plant or system, the net earning s or net losses of such latter property shall be excluded pursuant to the requirements of the next sentence hereinbelow. In case during or after the calculation period the Corporation shall have sold any part of its properties as a going concern, plant or system, then, in computing the net income of the Corporation, the net earnings or net losses of such property for the whole of the calculation period, or for the portion thereof up to the time of the sale, as the case may be, shall be excluded to the extent practicable on the basis of actual net earnings or net losses of such property or on the basis of such estimates of the net earnings or net losses of such property as shall be made pursuant to the next sentence hereinbelow. The net earnings or net losses of any operating properties so acquired or to be acquired or so sold as a going concern, plant or system shall, except to the extent that they may, consistently with the above requirements, have been separately kept, be determined, consistently with the above requirements, by an estimate made and certified to the Corporation by an independent accountant or firm of independent accountants selected and paid by it. Net earnings or net losses of any acquired plant or system, or of any plant or system of similar character to be acquired, or of any part of the properties of the Corporation that shall have been sold as a going concern, plant, or system, shall, for the purposes of this clause (ii), mean the net income or net income deficit, respectively, of such plant or system or properties.

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(h) Merge the Corporation into any other corporation, merge any other corporation into the Corporation, consolidate the Corporation with any other corporation or sell or transfer the property of the Corporation as or substantially as an entirety, unless such merger, consolidation, sale or transfer, or the issuance or assumption of all securities to be issued or assumed in connection therewith, shall have been ordered, approved or permitted by the State Corporation Commission of Virginia or any regulatory authority of the United States having jurisdiction in the premises; provided that the provisions of this clause shall not apply to a purchase or other acquisition by the Corporation of the assets or franchises of another corporation, or to any other transaction which does not include such a merger, consolidation, sale or transfer of property.

Notwithstanding anything elsewhere in this Article, if in connection with the accomplishment of any matter whatever provision is to be made for the redemption or retirement of all of the Preferred Stock of any series at the time outstanding, (x) nothing in this Article shall be construed to confer on the holders of the Preferred Stock of such series any power or right to vote in respect of any such matter, and (y) the holders of the Preferred Stock of such series shall not have any power or right to vote in respect of any such matter except where, and to the extent that, a right to vote which can not be waived by the terms hereof is conferred by then existing laws of the Commonwealth of Virginia on holders of non-voting stock.

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6. Voting Rights. The holders of the Preferred Stock shall not be entitled to vote except as follows:

           (a) As expressly provided in the preceding Section 5; and

           (b) In proceedings as to which a right to vote which cannot be waived by the terms hereof is conferred by then existing laws of the Commonwealth of Virginia on holders of non-voting stock; and

           (c) If and when dividends on any of the outstanding Preferred Stock shall be in default in an amount equivalent to full dividends for one year or more, there shall accrue to holders of outstanding shares of Preferred Stock the right, as a class, to elect the smallest number of directors necessary to constitute a majority of the full board and such holders shall retain such right until full dividends on the outstanding Preferred Stock at the dividend rate or rates therefor with respect to all past dividend periods and the current dividend period shall have been paid or declared and set apart for payment, at which time such right shall terminate.

So long as holders of the Preferred Stock shall have the right, voting as a class, to elect a majority of the directors under the terms of clause (c) of the first sentence of this Section 6, the holders of the Common Stock voting as a class shall be entitled to elect the remaining directors.

Whenever the holders of Preferred Stock shall acquire the right to elect a majority of the directors under the terms of clause (c) of the first sentence of this Section 6, a special meeting of the Shareholders shall be called by or on the written request of the holders of not less than ten percent (10%) of the total number of shares of Preferred Stock then outstanding, for the purpose of electing a new Board of Directors, to be held on not less than ten (10) nor more than sixty (60) days' notice, provided, however, that no special meeting shall be called if an annual meeting of the Shareholders is to be held within sixty (60) days after the holders of the Preferred Stock shall have become entitled to exercise such voting right. The terms of office of all persons who may be directors of the Corporation at the time shall terminate upon any election of directors by the holders of Preferred Stock in accordance with these provisions, regardless of whether or not the holders of the Common Stock shall have elected the remaining directors of the Corporation; and unless and until such remaining directors of the Corporation shall be elected by the holders of the Common Stock, the number of directors, for the purpose of determining the existence of a quorum or the validity of any action taken, shall, notwithstanding any other provisions hereof, be deemed to be the number of directors elected by the holders of the Preferred Stock.

Whenever the holders of Preferred Stock shall have ceased to have the right to elect a majority of the directors under the terms of clause (c) of the first sentence of this Section 6, a special meeting of the Shareholders shall be called by or on the written request of the holders of not less than ten percent (10%) of the total number of shares of Common Stock then outstanding, for the purpose of electing a new Board of Directors, to be held on not less than ten (10) nor more than sixty (60) days' notice, provided, however, that no such special meeting shall be called if an annual meeting of the Shareholders is to be held within sixty (60) days after the holders of the Preferred Stock shall have ceased to be entitled to exercise such voting right. The terms of office of all persons who may be directors of the Corporation at the time shall terminate upon any election of directors by the holders of Common Stock in accordance with the provisions of this paragraph.

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If, during any interval between meetings of Shareholders for the election of directors while the holders of Preferred Stock shall be entitled to elect any director pursuant to this Section 6, the number of directors in office who have been elected by the holders of the Preferred Stock or Common Stock, as the case may be, shall become less than the total number of directors which the holders of shares of such class are entitled to elect, whether by reason of the resignation, death or removal of any director or directors, or an increase in the total number of directors, the vacancy or vacancies shall be filled by a majority vote of the remaining directors then in office who were elected by the holders of shares of such class or whose predecessors were so elected.

Any director may be removed from office by vote of the holders of a majority of the shares of the class of stock voted for his election or for his predecessor in cases where such director was elected by other directors. A special meeting of holders of shares of any class may be called by a majority vote of the directors then in office who were elected by the holders of shares of such class or whose predecessors were so elected, for the purpose of removing a director in accordance with the provisions of the preceding sentence, and shall be called by or on the written request of the holders of not less than twenty percent (20%) of the outstanding shares of the class entitled to vote with respect to the removal of any such director, to be held on not less than ten (10) nor more than sixty (60) days' notice.

The holders of Preferred Stock shall not be entitled to receive notice of any meeting of holders of any class of stock at which they are not entitled to vote, except as notice to holders of non-voting stock may be required by the laws of the Commonwealth of Virginia.

At any meeting of Shareholders when the holders of the Preferred Stock shall be entitled to vote for the election of directors, the absence of a quorum of the holders of the Preferred Stock or of the holders of Common Stock shall not prevent an election at any such meeting or adjournment thereof of directors by the other such class if the necessary quorum of the holders of stock of such other class is present in person or by proxy at such meeting. In the absence of a quorum of the holders of stock of either such class, a majority of those holders of the stock of such class who are present in person or by proxy shall have power to adjourn the election of the directors to be elected by such class from time to time without notice other than announcement at the meeting until the holders of the requisite number of shares of such class shall be present in person or by proxy.

Except when some provision of law shall be controlling and except as otherwise provided in clause (e) of Section 5 of this Division A, whenever shares of two or more series of the Preferred Stock are outstanding, no particular series of the Preferred Stock shall be entitled to vote as a separate class on any matter and all shares of the Preferred Stock of all series shall be deemed to constitute but one class for any purpose for which the vote of the shareholders of the Corporation by classes may now or hereafter be required.

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7. Series of Preferred Stock.

           (a) $5 Dividend Preferred Stock. The first series of Preferred Stock is designated as "$5 Dividend Preferred Stock"; the dividend rate on the shares of such series shall be $5 per share per annum; the dividend payment dates on the shares of such series shall be March 20, June 20, September 20 and December 20 of each year; the redemption price of the shares of such series shall be $112.50 per share on and after March 20, 1953; the liquidation price of the shares of such series shall be $100 per share; and the liquidation premium of the shares of such series shall be $12.50 per share on and after March 20, 1953. 106,677 shares of the Preferred Stock are classified as $5 Dividend Preferred Stock. All such shares shall be deemed to have been issued on May 26, 1944, except that shares issued in conversion of script certificates for Preferred Stock of Virginia Railway and Power Company shall be deemed to have been issued as of the respective dates of the surrender of such script certificates therefor.

           (b) $4.04 Dividend Preferred Stock.

(i) The distinctive serial designation of such series shall be "$4.04 Dividend Preferred Stock".

(ii) The dividend rate on the shares of such series shall be $4.04 per share per annum. The dividend payment dates on the shares of such series shall be March 20, June 20, September 20 and December 20 of each year beginning June 20, 1950. All shares of such series issued prior to the record date for the dividend payable June 20, 1950, shall be deemed to have been issued on March 14, 1950, and dividends shall be cumulative from that date.

(iii) The redemption price of the shares of such series shall be $102.27 per share on and after March 20, 1960.

(iv) The liquidation price of the shares of such series shall be $100 per share; and the liquidation premium of the shares of such series shall be $2.27 per share on and after March 20, 1960.

(v) The shares of such series shall not be entitled to any sinking fund or right of conversion.

(vi) Except as above provided, the shares of such series shall have all the designations, preferences and voting powers, and restrictions or qualifications thereof, expressed in the Articles of Incorporation of the Corporation. The shares of $4.04 Dividend Preferred Stock shall not have any special rights other than those specified herein or elsewhere in the Articles of Incorporation of the Corporation.

(vii) 12,926 shares of the Preferred Stock are classified as $4.04 Dividend Preferred Stock. This number may be increased or, upon retirement of shares, may be decreased, by filing articles of amendment to that effect.

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(c) $4.20 Dividend Preferred Stock.

(i) The distinctive serial designation of such series shall be "$4.20 Dividend Preferred Stock".

(ii) The dividend rate on the shares of such series shall be $4.20 per share per annum. The dividend payment dates on the shares of such series shall be March 20, June 20, September 20 and December 20 of each year beginning June 20, 1951. All shares of such series issued prior to the record date for the dividend payable June 20, 1951, shall be deemed to have been issued on March 14, 1951, and dividends shall be cumulative from that date.

(iii) The redemption price of the shares of such series shall be $102.50 per share on and after March 20, 1961.

(iv) The liquidation price of the shares of such series shall be $100 per share; and the liquidation premium of the shares of such series shall be $2.50 per share on and after March 20, 1961.

(v) The shares of such series shall not be entitled to any sinking fund or right of conversion.

(vi) Except as above provided, the shares of such series shall have all the designations, preferences and voting powers, and restrictions or qualifications thereof, expressed in the Articles of Incorporation of the Corporation. The shares of $4.20 Dividend Preferred Stock shall not have any special rights other than those specified herein or elsewhere in the Articles of Incorporation of the Corporation.

(vii) 14,797 shares of the Preferred Stock are classified as $4.20 Dividend Preferred Stock. This number may be increased or, upon retirement of shares, may be decreased by filing articles of amendment to that effect.

(d) $4.12 Dividend Preferred Stock.

(i) The distinctive serial designation of such series shall be "$4.12 Dividend Preferred Stock, 1955 Series".

(ii) The dividend rate on the shares of such series shall be $4.12 per share per annum. The dividend payment dates on the shares of such series shall be March 20, June 20, September 20 and December 20 of each year beginning March 20, 1956. All shares of such series issued prior to the record date for the dividend payable March 20, 1956, shall be deemed to have been issued on December 15, 1955, and dividends shall be cumulative from that date.

(iii) The redemption price of the shares of such series shall be $103.73 per share on and after January 1, 1966.

(iv) The liquidation price of the shares of such series shall be $100 per share; and the liquidation premium of the shares of such series shall be $3.73 per share on and after January 1, 1966.

(v) The shares of such series shall not be entitled to any sinking fund or right of conversion.

(vi) Except as above provided, the shares of such series shall have all the designations, preferences and voting powers, and restrictions or qualifications thereof, expressed in the Articles of Incorporation of the Corporation. The shares of $4.12 Dividend Preferred Stock, 1955 Series, shall not have any special rights other than those specified herein or elsewhere in the Articles of Incorporation of the Corporation.

(vii) 32,534 shares of the Preferred Stock are classified as $4.12 Dividend Preferred Stock, 1955 Series. This number may be increased, or upon retirement of shares, may be decreased by filing articles of amendment to that effect.

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(e) $4.80 Dividend Preferred Stock.

(i) The distinctive serial designation of such series shall be "$4.80 Dividend Preferred Stock".

(ii) The dividend rate on the shares of such series shall be $4.80 per share per annum. The dividend payment dates on the shares of such series shall be March 20, June 20, September 20 and December 20 of each year beginning September 20, 1962. The date of the initial issue of shares of such series shall be August 1, 1962, and dividends shall be cumulative from that date.

(iii) The redemption price of the shares of such series shall be $101.00.

(iv) The liquidation price of the shares of such series shall be $100 per share; and the liquidation premium (payable in addition to the liquidation price in case of voluntary liquidation, dissolution or winding up) of the shares of such series shall be $1.00.

(v) The shares of such series shall not be entitled to any sinking fund or right of conversion.

(vi) Except as above provided, the shares of such series shall have all the designations, preferences and voting powers, and restrictions or qualifications thereof, expressed in the Articles of Incorporation of the Corporation. The shares of $4.80 Dividend Preferred Stock shall not have any special rights other than those specified herein and in the Articles of Incorporation.

(vii)      73,206 shares of the Preferred Stock are classified as $4.80 Dividend Preferred Stock. This number may be increased or, upon retirement of shares, may be decreased by filing articles of amendment to that effect.

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Division B---Common Stock

1. Dividends. Out of any assets of the Corporation available for dividends remaining after full dividends on the outstanding Preferred Stock at the dividend rate or rates therefor, together with the full additional amount required by any participation right, with respect to all past dividend periods and the current dividend period shall have been paid or declared and set apart for payment and all mandatory sinking fund payments that shall have become due in respect of any series of the Preferred Stock shall have been made, then, and not otherwise, dividends may be paid upon the Common Stock.

2. Distribution of Assets. In the event of any liquidation, dissolution or winding up of the Corporation, after there shall have been paid to or set aside for the holders of the Preferred Stock the full preferential amounts to which they are respectively entitled under the provisions of Section 3 of Division A hereof, the holders of the Preferred Stock shall have no claim to any of the remaining assets of the Corporation. In the event of any liquidation, dissolution or winding up of the Corporation the Board of Directors may, after satisfaction of the rights of the holders of all shares of Preferred Stock or the deposit in trust of money adequate for such satisfaction, distribute in kind to the holders of the Common Stock all then remaining assets of the Corporation or may sell, transfer or otherwise dispose of all or any of such remaining assets of the Corporation and receive payment therefor wholly or partly in cash and/or in stock and/or in obligations and may sell all or any part of the consideration received therefor and distribute all or the balance thereof in kind to the holders of the Common Stock.

3. Voting Rights. The holders of the Common Stock shall, to the exclusion of the holders of the Preferred Stock have the sole and full power to vote for the election of directors and for all other purposes without limitation except only as otherwise recited or provided in clauses (a), (b) or (c) of Section 6 of Division A hereof.

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4. Purchase of Junior Stock. Subject to the provisions of Section 4 of Division A hereof, the Corporation may from time to time purchase or otherwise acquire for a consideration or redeem (if permitted by the terms thereof) shares of Common Stock or shares of any other class of stock hereafter created ranking junior to the Preferred Stock in respect of dividends or assets and any shares so purchased or acquired may be held or disposed of by the Corporation from time to time for its corporate purposes or may be retired as provided by law.

Division C---General Provisions

1. Any and all shares of Preferred Stock and Common Stock of the Corporation, at the time authorized but not issued and outstanding may be issued and disposed of by the Board of Directors of the Corporation in any awful manner, consistently, in the case of shares of Preferred Stock, with the requirements of clause (g) of Section 5 of Division A hereof, at any time and from time to time, for such considerations as may be fixed by the Board of Directors of the Corporation.

2. The Board of Directors shall have authority from time to time to set apart out of any assets of the Corporation otherwise available for dividends a reserve or reserves as working capital or for any other proper purpose or purposes, and to reduce, abolish or add to any such reserve or reserves from time to time as said board may deem to be in the interests of the Corporation; and said board shall likewise have power to determine in its discretion what part of the assets of the Corporation available for dividends in excess of such reserve or reserves shall be declared as dividends and paid to the Shareholders of the Corporation.

3. No Shareholder shall have any pre-emptive right to acquire unissued shares of the Corporation or to acquire any securities convertible into or exchangeable for such shares or to acquire any options, warrants or rights to purchase such shares.

4. Each holder of record of outstanding shares of any class of stock entitled to vote at any meeting of Shareholders, or of holders of any class of stock, shall, as to all matters in respect of which such stock has voting power, be entitled to one vote for each share of such stock held by him, as shown by the stock books of the Corporation, and may cast such vote in person or by proxy. Except as herein expressly provided, or mandatorily provided by the laws of the Commonwealth of Virginia, a quorum of any class of stock entitled to vote as a class at any meeting shall consist of a majority of such class, and a plurality vote of such quorum shall govern.

5. The Board of Directors of the Corporation may, by resolution, determine that only a part of the consideration which it is to receive for any shares of stock which it shall issue shall be capital and that the balance of such consideration (not greater, however, than the excess of such consideration over the par value, if any, of such shares) shall be capital surplus of the Corporation.

Page 16  

IV.
OFFICE.

The principal office of the Corporation in the Commonwealth of Virginia is located in the City of Richmond.

V.  
DIRECTORS.

The number of Directors shall be fixed by the Bylaws.

If the office of any Director shall become vacant, the Directors, at the time in office, whether or not a quorum, may, by a majority vote of the Directors then in office, choose a successor or successors who shall hold office for the unexpired term or until the authorized number of Directors is decreased. Vacancies resulting from an increase in the number of Directors shall be filled in the same manner.

VI.
INDEMNIFICATION.

1. To the full extent that the Virginia Stock Corporation Act, as it exists on the date hereof or may hereafter be amended, permits the limitation or elimination of the liability of directors or officers, a Director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages.

2. To the full extent permitted and in the manner prescribed by the Virginia Stock Corporation Act and any other applicable law, the Corporation shall indemnify a Director or officer of the Corporation who is or was party to any proceeding by reason of the fact that he is or was such a Director or officer or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. The Board of Directors is hereby empowered by majority vote of a quorum of disinterested Directors, to contact in advance to indemnify any Director or officer.

3. The Board of Directors is hereby empowered, by majority vote of a quorum of disinterested Directors, to cause the Corporation to indemnify or contact in advance to indemnify any person not specified in Section 2 of this Article who was or is a party to any proceeding, by reason of the fact that he is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, to the same extent as if such person were specified as one to whom indemnification is granted in Section 2.

4. The Corporation may purchase and maintain insurance to indemnify it against the whole or any portion of the liability assumed by it in accordance with this Article and may also procure insurance, in such amounts as the Board of Directors may determine, on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability asserted against or incurred by any such person in any such capacity or arising from his status as such, whether or not the Corporation would have power to indemnify him against such liability under the provisions of this Article.

5. In the event there has been a change in the composition of a majority of the Board of Directors after the date of the alleged act or omission with respect to which indemnification is claimed, any determination as to indemnification and advancement of expenses shall be made by special legal counsel agreed upon by the Board of Directors and the proposed indemnitee. If the Board of Directors and the proposed indemnitee are unable to agree upon such special legal counsel, the Board of Directors and the proposed indemnitee each shall select a nominee, and the nominees shall select such special legal counsel.

6. The provisions of this Article VI shall be applicable to all actions, claims, suits or proceedings, commenced after the adoption hereof, whether arising from any action taken or failure to act before or after such adoption. No amendment, modification or repeal of this Article shall diminish the rights provided hereby or diminish the right to indemnification with respect to any claim, issue or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act prior to such amendment, modification or repeal.

7. Reference herein to Directors, officers, employees or agents shall include former Directors, officers, employees and agents and their respective heirs, executors and administrators.

Page 18

VIRGINIA ELECTRIC AND POWER COMPANY

ARTICLES OF AMENDMENT

1. The name of the corporation is Virginia Electric and Power Company.

2. The Restated Articles of Incorporation, as amended, of Virginia Electric and Power Company (the Company) hereby are amended to create a new series (the New Series) of the Company's Preferred Stock. In accordance with the provisions of the Restated Articles of Incorporation, as amended, of the Company, the distinctive designation, preferences, limitations and relative rights of said series of Preferred Stock are determined and fixed as follows:

(a) The distinctive serial designation of the New Series shall be "7.05 Dividend Preferred Stock" (hereinafter sometimes referred to as the $7.05 Series).

(b) The dividend rate on the shares of the $7.05 Series shall be $7.05 per share per annum. Dividends shall be cumulative from the date of initial issue of the shares of the $7.05 Series. The payment dates for the dividends on the shares of the $7.05 Series shall be March 20, June 20, September 20 and December 20 of each year, beginning September 20, 1993.

(c) The stated value and fixed liquidation preference of the shares of the $7.05 Series shall be $100 per share. In the event of a voluntary liquidation, dissolution or winding up of the Company, the fixed liquidation premium on the shares of the $7.05 Series, payable in addition to the liquidation preference, will be an amount per share equal to $5.00 prior to August 1, 2003 and, thereafter, to the applicable per share premium, if any, payable in optional redemption.

(d) The $7.05 Series shall not be to redeemable by the Company (except to the extent otherwise provided for redemption in liquidation) prior to August 1, 2003. The fixed redemption price of the shares of the $7.05 Series for redemption on and after August 1, 2003 shall be $100 per share plus a premium, in the case of redemption prior to August 1, 2013, from time to time applicable to such redemption as follows:

Time Period	Optional Redemption Premium Per Share
August 1, 2003 through July 31, 2004	$3.53
August 1, 2004 through July 31, 2005	$3.18
August 1, 2005 through July 31, 2006	$2.82
August 1, 2006 through July 31, 2007	$2.47
August 1, 2007 through July 31, 2008	$2.12
August 1, 2008 through July 31, 2009	$1.77
August 1, 2009 through July 31, 2010	$1.41
August 1, 2010 through July 31, 2011	$1.06
August 1, 2011 through July 31, 2012	$0.71
August 1, 2012 through July 31, 2013	$0.36

and thereafter without any premium.

(e) The shares of the $7.05 Series shall not be entitled to any sinking fund or right of conversion or any preemptive right to acquire any other security.

(f) Except as above provided, the shares of the $7.05 Series shall have all the designations, preferences, limitations and relative rights and voting powers, and restrictions or qualifications thereof, expressed in the Restated Articles of Incorporation, as amended, of the Company. The shares of the $7.05 Series shall not have any special rights other than those specified herein and in the Restated Articles of Incorporation, as amended.

(g) There are hereby classified as the series of $7.05 Dividend Preferred Stock 500,000 shares of the Preferred Stock. No more than 500,000 shares of the $7.05 Series may be issued. Upon retirement of the shares of the $7.05 Series, this number may be decreased by filing articles of amendment to that effect.

(h) No shares of the $7.05 Series purchased or otherwise acquired by the Company shall be reissued, resold or otherwise transferred by the Company as shares of the $7.05 Series.

3. The designation of the $7.05 Series, as herein provided, has been duly approved by the Executive Committee on behalf of the Board of Directors of the Company within and in accordance with limits specifically prescribed by the Board of Directors.

4. These Articles of Amendment were duly adopted on June 30, 1993 by said Executive Committee on behalf of the Board of Directors of Virginia Electric and Power Company and shareholder action was not required in connection with such adoption.

Dated: June 30, 1993

VIRGINIA ELECTRIC AND POWER COMPANY

By B. D. Johnson
Senior Vice President - Finance,
Controller, Treasurer and
Corporate Secretary

Page 20

VIRGINIA ELECTRIC AND POWER COMPANY

ARTICLES OF AMENDMENT

1. The name of the corporation is Virginia Electric and Power Company.

2. The Restated Articles of Incorporation, as amended, of Virginia Electric and Power Company (the Company) hereby are amended to create a new series (the New Series) of the Company's Preferred Stock. In accordance with the provisions of the Restated Articles of Incorporation, as amended, of the Company, the distinctive designation, preferences, limitations and relative rights of said series of Preferred Stock are determined and fixed as follows:

(a) The distinctive serial designation of the New Series shall be "$6.98 Dividend Preferred Stock" (hereinafter sometimes referred to as the $6.98 Series).

(b) The dividend rate on the shares of the $6.98 Series shall be $6.98 per share per annum. Dividends shall be cumulative from the date of initial issue of the shares of the $6.98 Series. The payment dates for the dividends on the shares of the $6.98 Series shall be March 20, June 20, September 20 and December 20 of each year, beginning September 20, 1993.

(c) The stated value and fixed liquidation preference of the shares of the $6.98 Series shall be $100 per share. In the event of a voluntary liquidation, dissolution or winding up of the Company, the fixed liquidation premium on the shares of the $6.98 Series, payable in addition to the liquidation preference, will be an amount per share equal to $5.00 prior to September 1, 2003 and, thereafter, to the applicable per share premium, if any, payable in optional redemption.

(d) The $6.98 Series shall not be to redeemable by the Company (except to the extent otherwise provided for redemption in liquidation) prior to September 1, 2003. The fixed redemption price of the shares of the $6.98 Series for redemption on and after September 1, 2003 shall be $100 per share plus a premium, in the case of redemption prior to September 1, 2013, from time to time applicable to such redemption as follows:

Time Period	Optional Redemption Premium Per Share
September 1, 2003 through August 31, 2004	$3.49
September 1, 2004 through August 31, 2005	$3.15
September 1, 2005 through August 31, 2006	$2.80
September 1, 2006 through August 31, 2007	$2.45
September 1, 2007 through August 31, 2008	$2.10
September 1, 2008 through August 31, 2009	$1.75
September 1, 2009 through August 31, 2010	$1.40
September 1, 2010 through August 31, 2011	$1.05
September 1, 2011 through August 31, 2012	$0.70
September 1, 2012 through August 31, 2013	$0.35

and thereafter without any premium.

(e) The shares of the $6.98 Series shall not be entitled to any sinking fund or right of conversion or any preemptive right to acquire any other security.

(f) Except as above provided, the shares of the $6.98 Series shall have all the designations, preferences, limitations and relative rights and voting powers, and restrictions or qualifications thereof, expressed in the Restated Articles of Incorporation, as amended, of the Company. The shares of the $6.98 Series shall not have any special rights other than those specified herein and in the Restated Articles of Incorporation, as amended.

(g) There are hereby classified as the series of $6.98 Dividend Preferred Stock 600,000 shares of the Preferred Stock. No more than 600,000 shares of the $6.98 Series may be issued. Upon retirement of the shares of the $6.98 Series, this number may be decreased by filing articles of amendment to that effect.

(h) No shares of the $6.98 Series purchased or otherwise acquired by the Company shall be reissued, resold or otherwise transferred by the Company as shares of the $6.98 Series.

3. The designation of the $6.98 Series, as herein provided, has been duly approved by the Executive Committee on behalf of the Board of Directors of the Company within and in accordance with limits specifically prescribed by the Board of Directors.

4. These Articles of Amendment were duly adopted on August, 1993 by said Executive Committee on behalf of the Board of Directors of Virginia Electric and Power Company and shareholder action was not required in connection with such adoption.

Dated: August 10, 1993

VIRGINIA ELECTRIC AND POWER COMPANY

By: B. D. Johnson
Senior Vice President - Finance,
Controller, Treasurer and
Corporate Secretary

Page 23

VIRGINIA ELECTRIC AND POWER COMPANY

ARTICLES OF AMENDMENT
ESTABLISHING

FLEXIBLE MONEY MARKET CUMULATIVE PEFERRED STOCK
(Flex MMP^®),
2002 SERIES A
OF
VIRGINIA ELECTRIC AND POWER COMPANY

LIQUIDATION PREFERENCE $100 PER SHARE)

Part I

1. The name of the Company is Virginia Electric and Power Company (the "Company").

2. The Restated Articles of Incorporation, as amended (the Articles) of the Company are hereby amended to create a series of the Company's Preferred Stock which shall be designated the Flexible Money Market Cumulative Preferred Stock (Flex MMP), 2002 Series A (hereinafter sometimes referred to as the Flex MMP). In accordance with the provisions of the Articles, the distinctive designation, preferences, limitations and relative rights of the Flex MMP are determined and fixed as follows:

(a) The distinctive serial designation of the Flex MMP shall be "Flexible Money Market Cumulative Preferred Stock (Flex MMP), 2002 Series A." Shares of the Flex MMP may only be purchased or transferred in whole units of 1,000 shares each (Units) or integral multiples thereof and the shares included in the Units may not be separately purchased or transferred.

(b) The shares of the Flex MMP shall not be entitled to any right of conversion or any preemptive right to acquire any other security.

            (c) The shares of the Flex MMP shall not be entitled to a sinking fund.

(d) For the Initial Dividend Period (as defined in Part II), the dividend rate on shares of the Flex MMP shall be the Initial Dividend Rate (as defined in Part II). For each Dividend Period (as defined in Part II) thereafter, the dividend rate shall be determined according to the procedures set forth in Part II. The liquidation preference of shares of the Flex MMP shall be as set forth in Part II, and shares of the Flex MMP may be redeemed on the basis set forth in Part II.

(e) There are hereby classified as the Flexible Money Market Cumulative Preferred Stock (Flex MMP), 2002 Series A, 1,250,000 shares (the "Shares") of the Preferred Stock, in 1,250 Units, with each Unit consisting of 1,000 shares of the Flex MMP; not more than 1,250,000 shares of the Flex MMP may be issued.

(f) No shares of the Flex MMP redeemed, purchased or otherwise acquired by the Company shall be reissued, resold or otherwise transferred by the Company as shares of the Flex MMP.

3. The shares of the Flex MMP shall have the further relative rights, preferences and limitations set forth in Sections I through 6 of Division A of Article III of the Articles, and the rates, dates, terms and other conditions upon which distributions shall be payable thereon shall be as set forth in these Articles of Amendment.

4. The designation of the Flex MMP, as herein provided, has been duly approved, and these Articles of Amendment have been duly adopted, by the Board of Directors of the Company on December 5, 2002. No shareholder action was taken, or was required to be taken, in connection with the adoption of these Articles of Amendment.

Part II

1. DEFINITIONS.

(A). Unless the context or use indicates another or different meaning or intent, or a term is otherwise defined in Part I, in these Articles of Amendment the following terms have the following meanings, whether used in the singular or plural:

"'AA' Composite Commercial Paper Rate," on any date of determination, means (i) the Interest Equivalent of the rate on commercial paper placed on behalf of issuers whose corporate bonds are rated "AA" by S&P or "Aa" by Moody's or the equivalent of such rating by another nationally recognized statistical rating organization, as such rate is made available on a discount basis or otherwise by the Federal Reserve Bank of New York for the Business Day immediately preceding such date, or (ii) in the event that the Federal Reserve Bank of New York does not make available such a rate, then the arithmetic average of the Interest Equivalent of the rate on commercial paper placed on behalf of such issuers, as quoted on a discount basis or otherwise by the Commercial Paper Dealers, to the Auction Agent for the close of business on the Business Day immediately preceding such date. If the Commercial Paper Dealers do not quote a rate required to determine the "AA" Composite Commercial Paper Rate, the "AA" Composite Commercial Paper Rate will be determined on the basis of the quotation or quotations furnished by any Substitute Commercial Paper Dealers. If the number of Dividend Period Days shall be (i) seven or more but fewer than 49 days, such rate shall be the Interest Equivalent of the 30-day rate on such commercial paper; (ii) 49 or more but fewer than 70 days, such rate shall be the Interest Equivalent of the 60-day rate on such commercial paper; (iii) 70 or more days but fewer than 85 days, such rate shall be the arithmetic average of the Interest Equivalent of the 60-day and 90-day rates on such commercial paper; (iv) 85 or more days but fewer than 99 days, such rate shall be the Interest Equivalent of the 90-day rate on such commercial paper; or (v) 99 or more days but fewer than 183 days, such rate shall be determined by linear interpolation between the Interest Equivalents of the 90-day rate and the 180-day rate on such commercial paper.

"Affected Dividend Payment Date" has the meaning set forth in paragraph 2(e).

"Affiliate" means any Person known to the Auction Agent to be controlled by, in control of, or under common control with, the Company.

"Applicable Rate" means, with respect to any Shares for any Dividend Period therefor, the rate per annum at which cash dividends are payable on such Shares for such Dividend Period.

"Auction" means a periodic implementation of the Auction Procedures.

"Auction Agent" means a commercial bank, trust company or other financial institution selected by the Company that has entered into an agreement with the Company to follow the Auction Procedures for the purpose of determining the Applicable Rate and to act as dividend disbursing agent and/or redemption agent for the Shares.

"Auction Procedures" means the procedures for conducting Auctions set forth in paragraph 5.

"Beneficial ownership" or "beneficially own" shall have the meanings ascribed to them under Rule 13d-3 under the Securities Exchange Act and "beneficial owner" shall have a corollary meaning.

"Board of Directors" means the Board of Directors of the Company or, to the extent permitted by applicable law, any duly authorized committee thereof or any duly authorized officer of the Company.

"Broker-Dealer" means any broker-dealer, or other entity permitted by law to perform the functions required of a Broker-Dealer in paragraph 5, that has been selected by the Company and has entered into a Broker-Dealer Agreement with the Auction Agent that remains effective.

"Broker-Dealer Agreement" means an agreement between the Auction Agent and one or more Broker-Dealers pursuant to which each such Broker-Dealer agrees to follow the procedures specified in paragraph 5.

"Business Day" means a day on which the New York Stock Exchange, Inc. is open for trading and which is not a Saturday, Sunday or other day on which banks in Richmond, Virginia or New York, New York are authorized or obligated by law to close.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commercial Paper Dealer" or "Commercial Paper Dealers" means such commercial paper dealer or dealers as the Company may from time to time appoint, or, in lieu of any thereof, their respective affiliates or successors.

"Common Stock" means the common stock, without par value, of the Company.

"Date of Original Issue" means, with respect to the Shares, the date on which the Company originally issues such Shares.

"Dividend Non-Payment Period" has the meaning set forth in paragraph 2(b)(iii)(B).

"Dividend Payment Date," with respect to the Shares, includes each Initial Dividend Payment Date, Subsequent Dividend Payment Date and Period-End Dividend Payment Date.

"Dividend Period," with respect to the Shares, includes the Initial Dividend Period and each Subsequent Dividend Period.

"Dividend Period Days," with respect to any Dividend Period, means the calendar days included in such Dividend Period.

"Dividends Received Percentage" means the percentage of dividends received by corporate taxpayers which may be deducted for federal income tax purposes pursuant to Section 243(a)(1) of the Code (or any successor provision).

"DRD Formula" means the amount derived from the following fraction:

1 - [.35(1-.70)]

1 - [.35(1-DRP)]

"DRD Gross-Up Provisions" has the meaning set forth in paragraph 2(e).

"DRP," as used in computing the DRD Formula, means the Dividends Received Percentage, measured as a fraction, applicable to the dividend in question; provided, however, that DRP shall in no event be less than .50.

"Existing Holder," with respect to the Shares, means a Person who is listed as such in the Share Books.

"Holder" or "holder," with respect to any Shares, means the record holder thereof.

"IRS" means the Internal Revenue Service.

"Initial Dividend Payment Dates," with respect to the Shares, means each March 20, June 20, September 20 and December 20 of each year during the Initial Dividend Period, commencing March 20, 2003.

"Initial Dividend Period," with respect to the Shares, means the period from and including the Date of Original Issue for the Shares to but excluding the Initial Period-End Dividend Payment Date for the Shares.

"Initial Dividend Rate," with respect to the Shares, means $5.50 per annum for the Initial Dividend Period for the Shares.

"Initial Period-End Dividend Payment Date," with respect to the Shares, means December 20, 2007.

"Interest Equivalent" means a yield on a 360-day basis of a discount basis security which is equal to the yield on an equivalent interest-bearing security.

"Maximum Applicable Rate" has the meaning set forth in paragraph 5(a)(vi).

"Minimum Holding Period" means, at the time of reference thereto, the minimum holding period then required for corporate taxpayers to be entitled to the dividends received deduction set forth in Section 243(a)(1) of the Code.

"Moody's" means Moody's Investors Service, Inc. or its successors.

"Non-Call Period," with respect to the Shares, means a specified portion or the entirety of a Special Dividend Period for the Shares during which the Shares shall not be subject to Optional Redemption, as selected by the Company pursuant to a Notice of Special Dividend Period.

"Non-Payment Period" includes any Dividend Non-Payment Period and Redemption Non-Payment Period.

"Non-Payment Period Rate," with respect to the Shares, means 275% of the Reference Rate applicable to such Shares.

"Notice of Redemption" means a written notice of redemption given pursuant to paragraph 4.

"Notice of Revocation" has the meaning set forth in paragraph 2(c)(iii).

"Notice of Special Dividend Period" has the meaning set forth in paragraph 2(c)(iii).

"Optional Redemption" means an optional redemption of Shares by the Company pursuant to paragraph 4(a)(i) or 4(a)(ii).

"Optional Redemption Date" means the Dividend Payment Date selected by the Company for an Optional Redemption, which is at least 30 days but not more than 90 days after delivery of a Notice of Redemption with respect to such Optional Redemption.

"Outstanding" means, as of any date, (i) with respect to the Shares, the Shares theretofore issued by the Company except, without duplication, (A) any Shares theretofore cancelled, or delivered to the Auction Agent for cancellation, or redeemed by the Company, or as to which a Notice of Redemption shall have been given and the full amount payable upon such redemption shall have been deposited in trust by the Company with irrevocable payment instructions given pursuant to paragraph 4(c), provided that Shares as to which a Notice of Redemption has been given by the Company shall be deemed to be not Outstanding for purposes of any Auction for such Shares held subsequent to the date of such Notice of Redemption and (B) any

Shares as to which the Company or any Affiliate shall be an Existing Holder or beneficial owner and (ii) with respect to shares of other Preferred Stock, has the equivalent meaning.

"Parity Preferred" means, with respect to the Shares, each other Outstanding series of Preferred Stock the holders of which, together with the Holders of the Shares, shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up of the Company, as the case may be, in proportion to the full respective preferential amounts to which they are entitled, without preference or priority of one over the other.

"Participant" means a participant of the Securities Depository that will act on behalf of an Existing Holder, a beneficial owner, or a Potential Holder or potential beneficial owner of one or more Shares.

"Period-End Dividend Payment Dates" include the Initial Period-End Dividend Payment Date and each Subsequent Period-End Dividend Payment Date.

"Person" means and includes an individual, a partnership, a Company, a trust, an unincorporated association, a joint venture or other entity or a government or any agency or political subdivision thereof.

"Potential Holder" means any Person who is not an Existing Holder but who may be interested in acquiring Shares, or who is an Existing Holder but who wishes to acquire additional Shares.

"Preferred Stock" means any Preferred Stock of the Company, including the Shares, that the Board of Directors has authority to issue under the Articles.

"Redemption Non-Payment Period" has the meaning set forth in paragraph 2(b)(iv)(C)(1).

"Reference Rate" means, (i) with respect to a Dividend Period of 49 days to 183 days, the applicable "AA" Composite Commercial Paper Rate, (ii) with respect to a Dividend Period of 184 days to 364 days, the applicable U.S. Treasury Bill Rate, (iii) with respect to a Dividend Period of one year to ten years, the applicable U.S. Treasury Note Rate, and (iv) with respect to a Dividend Period in excess of ten years, the applicable U.S. Treasury Bond Rate.

"Regular Dividend Period" means a Subsequent Dividend Period consisting of 49 days as the same may be adjusted from time to time pursuant to paragraph 2(b)(i) in connection with the requirement of, or a change of law altering the requirements of, the Minimum Holding Period, but in no event exceeding 98 days.

"Retroactive Dividends" has the meaning set forth in Section 2(e).

"S&P" means Standard & Poor's Ratings Services or its successors.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Depository" means The Depository Trust Company or any successor Company or other entity elected by the Company as securities depository for the Shares that agrees to follow the procedures required to be followed by such securities depository in connection with the Shares.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Share Books" means the books maintained by the Auction Agent setting forth at all times a current list, as determined by the Auction Agent, of Existing Holders, based on notices from the Company, from Existing Holders and from any Participant or Broker-Dealer of any Existing Holder.

"Shares" means the shares of Preferred Stock, liquidation preference $100 per share, plus an amount equal to accumulated but unpaid dividends (whether or not earned or declared), designated as the "Flexible Money Market Cumulative Preferred Stock (Flex MMP), 2002 Series A" of the Company.

"Special Dividend Period" means a Subsequent Dividend Period consisting of at least 49 days as selected by the Company pursuant to a Notice of Special Dividend Period, to the extent that such selection by the Company shall be available pursuant hereto and subject to adjustment from time to time pursuant to paragraph 2(b)(i) in connection with the requirements of, or a change of law altering requirements of, the Minimum Holding Period.

"Subsequent Dividend Payment Date" has the meaning set forth in paragraph 2(b)(i).

"Subsequent Dividend Period" has the meaning set forth in paragraph 2(c)(i).

"Subsequent Period-End Dividend Payment Date," with respect to each Subsequent Dividend Period, means the Business Day immediately succeeding the last day of such Subsequent Dividend Period.

"Substitute Commercial Paper Dealer" or "Substitute Commercial Paper Dealers" means such substitute Commercial Paper Dealer or substitute Commercial Paper Dealers as the Company may from time to time appoint or, in lieu of any thereof, their respective affiliates or successors.

"Substitute Rating Agency" and "Substitute Rating Agencies" mean a nationally recognized statistical rating organization and two nationally recognized statistical rating organizations, respectively, each term as defined for purposes of Rule 436(g)(2) under the Securities Act, selected by the Company after consultation with each Broker-Dealer, to act as the substitute rating agency or substitute rating agencies, as the case may be, to determine the credit ratings of the Shares.

"Sufficient Clearing Bids" has the meaning as defined in paragraph 5(a).

"Transfer Agent" means an commercial bank, trust company, other financial institution or other Company selected by the Company that has entered into an agreement with the Company to act as transfer agent and registrar for the Shares.

"U.S. Treasury Bill Rate" on any date means (i) the Interest Equivalent of the rate on the actively traded Treasury Bill with a maturity most nearly comparable to the length of the related Dividend Period, as such rate is made available on a discount basis or otherwise by the Federal Reserve Bank of New York in its Composite 3:30 P.M. Quotations for U.S. Government Securities report for such Business Day, or (ii) if such yield as so calculated is not available, the Alternate Treasury Bill Rate on such date. "Alternate Treasury Bill Rate" on any date means the Interest Equivalent of the yield as calculated by reference to the arithmetic average of the bid price quotations of the actively traded Treasury Bill with a maturity most nearly comparable to the length of the related Dividend Period, as determined by bid price quotations as of any time on the Business Day immediately preceding such date, obtained from at least three recognized primary U.S. Government securities dealers selected by the Auction Agent .

"U.S. Treasury Bond Rate" on any date means (i) the yield as calculated by reference to the bid price quotation of the actively traded, current coupon Treasury Bond with a maturity most nearly comparable to the length of the related Dividend Period, as such bid price quotation is published on the Business Day immediately preceding such date by the Federal Reserve Bank of New York in its Composite 3:30 P.M. Quotations for U.S. Government Securities report for such Business Day, or (ii) if such yield as so calculated is not available, the Alternate Treasury Bond Rate on such date. "Alternate Treasury Bond Rate" on any date means the yield as calculated by reference to the arithmetic average of the bid price quotations of the actively traded, current coupon Treasury Bond with a maturity most nearly comparable to the length of the related Dividend Period, as determined by the bid price quotations as of any time on the Business Day immediately preceding such date, obtained from at least three recognized primar y U.S. Government securities dealers selected by the Auction Agent.

"U.S. Treasury Note Rate" on any date means (i) the yield as calculated by reference to the bid price quotation of the actively traded, current coupon Treasury Note with a maturity most nearly comparable to the length of the related Dividend Period, as such bid price quotation is published on the Business Day immediately preceding such date by the Federal Reserve Bank of New York in its Composite 3:30 P.M. Quotations for U.S. Government Securities report for such Business Day, or (ii) if such yield as so calculated is not available, the Alternate Treasury Note Rate on such date. "Alternate Treasury Note Rate" on any date means the yield as calculated by reference to the arithmetic average of the bid price quotations of the actively traded, current coupon Treasury Note with a maturity most nearly comparable to the length of the related Dividend Period, as determined by the bid price quotations as of any time on the Business Day immediately preceding such date, obtained from at least three recognized primar y U.S. Government securities dealers selected by the Auction Agent.

2. DIVIDENDS.

(a) The holders of Shares shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefor, cumulative cash dividends at the Applicable Rate determined as set forth in paragraph 2(c), payable on the respective Dividend Payment Dates for the Shares.

(b)

(i) Dividends on Shares shall accumulate (whether or not earned or declared) at the Applicable Rate for such Shares from the Date of Original Issue and shall be payable, when, as and if declared by the Board of Directors, out of funds legally available therefor, on each Initial Dividend Payment Date for the Shares and on the Initial Period-End Dividend Payment Date for the Shares.

Following the Initial Period-End Dividend Payment Date for the Shares, dividends on the Shares will be payable on each Subsequent Period-End Dividend Payment Date, and in addition, (A) with respect to any Subsequent Dividend Period of 100 days to 190 days, on the 91st day, (B) with respect to any Subsequent Dividend Period of 191 days to 281 days, on the 91st and 182nd days, (C) with respect to any Subsequent Dividend Period of 282 days to 364 days, on the 91st, 182nd and 273rd days, and (D) with respect to any Subsequent Dividend Period of one year or longer, on March 20, June 20, September 20 and December 20 of each year (each such date referred to in clause (A) through (D) above being herein referred to as a "Subsequent Dividend Payment Date"). Notwithstanding the foregoing, if any Dividend Payment Date is not a Business Day then such Dividend Payment Date shall be the immediately succeeding Business Day.

Notwithstanding the foregoing, if any date on which dividends on the Shares would be payable as described in the immediately preceding paragraph is a day that would result in the number of Dividend Period Days in the then current Dividend Period for the Shares not being at least equal to the then current Minimum Holding Period, then dividends with respect to such Dividend Period shall be payable on the first Business Day following such date on which dividends would be so payable that results in the number of Dividend Period Days in such Dividend Period being at least equal to the Minimum Holding Period or, if earlier, the 98th day of such Dividend Period. Moreover, notwithstanding the foregoing, in the event of a change in law altering the Minimum Holding Period, the Board of Directors shall adjust, if necessary, the number of Dividend Period Days in each Regular Dividend Period and the minimum number of days of each Special Dividend Period commencing after the date of such change in law to equal or excee d the Minimum Holding Period, provided that the number of Dividend Period Days in a Regular Dividend Period shall not exceed by more than nine days the length of the Minimum Holding Period and shall be evenly divisible by seven, as adjusted pursuant hereto, and shall in no event exceed 98 days.

Upon any change in the number of Dividend Period Days in any then current Dividend Period or in the number of days in a Regular Dividend Period or the minimum duration of a Special Dividend Period as a result of a change in the Minimum Holding Period, the Company will mail notice of such change to all holders of record of Shares. Although any particular Dividend Payment Date for the Shares may not occur on the day of the week or the date originally scheduled as a Dividend Payment Date for the Shares because of the adjustments set forth above, each succeeding Dividend Payment Date for the Shares shall occur, subject to such adjustments, on the day of the week or the date originally scheduled as a Dividend Payment Date for the Shares as if each preceding Dividend Payment Date had occurred on such day of the week or date.

(ii) On or prior to any Dividend Payment Date for the Shares, the Company shall pay to the Auction Agent sufficient funds for the payment in full of all accumulated dividends with respect to the Shares payable on such Dividend Payment Date. Each dividend shall be paid to the holder or holders of the Shares as they appear on the Stock Books of the Company on the record date fixed by the Company's Board of Directors prior to the applicable Dividend Payment Date.

Dividends in arrears in respect of Shares for any past Dividend Period may be declared and paid at any time, without reference to any regular Dividend Payment Date, to the holder or holders of record of such Shares as they appear on the Stock Books on a record date fixed by the Board of Directors. Any dividend payment made on the Shares shall be applied, without duplication, in the following order of priority:

FIRST, in or toward payment of all accumulated dividends with respect to such earliest Dividend Period for such Shares for which dividends have not been paid; and

SECOND, in or toward payment of all then accumulated dividends with respect to each succeeding Dividend Period for such Shares for which dividends have not been paid.

(iii) If the Company fails to pay to the Auction Agent on or prior to any Period-End Dividend Payment Date for the Shares the full amount of all accumulated and unpaid dividends payable on the Shares on such Period-End Dividend Payment Date, then:

(A) if such failure to pay is cured as provided below, the Applicable Rate for the Shares for the Dividend Period commencing on the period-End Dividend Payment Date on which the Company failed to pay shall be equal to the dividend rate determined on the Auction Date immediately preceding such Period-End Dividend Payment Date; and

(B) if such failure to pay is not cured as provided below, then, for the period (the "Dividend Non-Payment Period") commencing on and including such Period-End Dividend Payment Date and ending on and including the Business Day on which, by 12:00 noon, New York City time, all unpaid cash dividends shall have been deposited with the Auction Agent or otherwise made available for payment to the applicable Holders in same day funds (provided that, at least two Business Days but no more than 30 days prior to such Business Day, the Company shall have given the Auction Agent, the Securities Depository and the applicable Holders written notice of such deposit or availability):

(1) each Subsequent Dividend Period shall be a Regular Dividend Period (regardless of any Special Dividend Period election made by the Company) and Auctions for the Shares shall be suspended and shall not resume, in each case until all accumulated and unpaid dividends on the Shares for all past Dividend Periods shall have been paid to the Auction Agent, not later than the second Business Day immediately preceding an Auction Date for the Shares; and

(2) the Applicable Rate for the Shares during such Dividend Non-Payment Period shall be equal to Non-Payment Period Rate for the Shares.

(iv) If the Company fails to pay to the Auction Agent on or prior to any date set for redemption of less than all of the Shares the full amount payable upon redemption of the Shares called for redemption, then:

(A) Auctions for the Shares shall be suspended and shall not resume until all amounts payable upon the redemption of the Shares called for redemption shall have been paid to the Auction Agent not later than the second Business Day immediately preceding an Auction Date for the Outstanding Shares;

(B) If such failure to pay is cured as provided below, the Applicable Rate for the Shares for the Dividend Period commencing after the redemption date on which the Company failed to pay shall be equal to the Maximum Applicable Rate for the Shares (as determined on the Business Day immediately preceding the first day of such Dividend Period) and such Dividend Period shall be a Regular Dividend Period (regardless of any Special Dividend Period election made by the Company), unless on the Auction Date for such Dividend Period, Auctions for the Shares may be resumed as provided in clause (A) above; and

(C) If such failure to pay is not cured as provided below, then:

(1) Each Subsequent Dividend Period shall be a Regular Dividend Period regardless of any Special Dividend Period election made by the Company) and the Applicable Rate for the Shares not called for redemption for each Dividend Period, commencing on the date immediately succeeding the redemption date on which the Company failed to pay, to but excluding the Dividend Period, if any, next succeeding the Auction Date on which Auctions for the Shares may be resumed as provided in clause (A) above (the "Redemption Non-Payment Period"), shall be equal to the Non-Payment Period Rate for the Shares (as determined on the Business Day immediately preceding the first day of each such Dividend Period); and

(2) the Applicable Rate for the Shares called for redemption for each Dividend Period for the Shares commencing on the date immediately succeeding the redemption date on which the Company failed to pay shall be equal to the Non-Payment Period Rate for the Shares (as determined on the Business Day immediately preceding the first day of each such Dividend Period).

For purposes of paragraphs 2(b)(iii) and 2(b)(iv), any such failure to pay with respect to the Shares shall be deemed cured if, not later than 12:00 noon, New York City time, on the third Business Day immediately succeeding such failure to pay, there shall have been paid to the Auction Agent (i) all accumulated and unpaid dividends on the Shares including the full amount of any dividends to be paid on the Period-End Dividend Payment Date with respect to which such failure to pay occurred but excluding amounts accumulated after such Period-End Dividend Payment Date, plus additional dividends in an amount computed by multiplying (A) the Non-Payment Period Rate for the Shares (as determined on the Business Day immediately preceding such Dividend Payment Date) by (B) a fraction, the numerator of which shall be the number of days in respect of which such failure to pay is not cured in accordance herewith (including the day such failure to pay occurs and excluding the day such failure to pay is cured) and the d enominator of which is 360, and multiplying the rate so obtained by the product of $100 and the number of Shares then Outstanding and (ii) the full amount payable upon redemption of the Shares called for redemption that have not been so redeemed, plus (except to the extent such amount has been paid pursuant to paragraph 2(b)(iv) above) an amount computed by multiplying (X) the Non-Payment Period Rate for the Shares (as determined on the Business Day immediately preceding the first day of the current Dividend Period), by (Y) a fraction, the numerator of which shall be the number of days for which such failure to pay is not cured in accordance herewith (including the day such failure to pay occurs and excluding the day such failure to pay is cured) and the denominator of which is 360, and multiplying the rate so obtained against the product of $100 and the number of Shares called for redemption that have not been so redeemed.

If the Company fails to pay the Auction Agent on or prior to any date for redemption of all the Shares the full amount payable upon such redemption of the Shares, then the Applicable Rate for the Shares for each Dividend Period or portion thereof commencing on or after the redemption date on which the Company failed to pay shall be equal to the Non-Payment Period Rate for the Shares (as determined on the Business Day immediately preceding the first day of each such Dividend Period).

(c)

(i) During the Initial Dividend Period, the Applicable Rate for the Shares shall be the Initial Dividend Rate. Commencing on the Initial Period-End Dividend Payment Date for the Shares, the Applicable Rate for the Shares for the period commencing on and including the Initial Period-End Dividend Payment Date and ending on and including the calendar day immediately preceding the immediately succeeding Subsequent Period-End Dividend Payment Date and for each period thereafter commencing on and including each Subsequent Period-End Dividend Payment Date and ending on and including the calendar day immediately preceding to the immediately succeeding Subsequent Period-End Dividend Payment Date (each such period being herein referred to as a "Subsequent Dividend Period"), shall be equal to the rate per annum that results from implementation of the Auction Procedures with respect to Shares as the Auction Agent advises the Company following the conclusion of the Auction for such Shares.

Each Subsequent Dividend Period shall be a Regular Dividend Period unless the Company has duly selected a Special Dividend Period with respect thereto pursuant to paragraph 2(c)(iii) and such selection is available hereunder. In the event that Sufficient Clearing Bids have not been made in any Auction under paragraph 5, then the immediately succeeding Subsequent Dividend Period shall automatically be a Regular Dividend Period regardless of whether the Company has elected a Special Dividend Period.

In the event that an Auction for any Subsequent Dividend Period with respect to the Shares is not held for any reason (other than as a result of the existence and continuance of a Non-Payment Period), such Subsequent Dividend Period next succeeding the originally scheduled Auction shall automatically be a Regular Dividend Period and the Applicable Rate for such Subsequent Dividend Period shall be equal to the Maximum Applicable Rate on the business Day immediately preceding the commencement of such Subsequent Dividend Period.

The Applicable Rate for each Dividend Period commencing during a Non-Payment Period shall be equal to the Non-Payment Period Rate, and each Dividend Period, commencing after the first day of, and during, a Non-Payment Period shall be a Regular Dividend Period regardless of any election made by the Company for a Special Dividend Period relating thereto.

(ii) During the Initial Dividend Period and any Special Dividend Period in excess of 364 days in duration, the amount of dividends accumulated and payable, if declared, on each Share for each period that begins on a Dividend Payment Date and ends on the day immediately preceding the immediately succeeding Dividend Payment Date shall be computed by (A) multiplying the Applicable Rate for such Dividend Period by 25% and (B) multiplying $100 by the rate so obtained.

The amount of dividends accumulated and payable, if declared, on each Share on any Dividend Payment Date with respect to any Regular Dividend Period and any period during the Initial Dividend Period and any Special Dividend Period in excess of 364 days that is not set forth in clause (A) above will be computed by (X) multiplying the Applicable Rate for such Dividend Period by a fraction, the numerator of which is the actual number of days in the portion of such Dividend Period prior to such Dividend Payment Date as to which dividends have not been paid and the denominator of which is 360, and (Y) multiplying $100 by the rate so obtained.

(iii) The Company may, at its option and to the extent permitted by law, by written notice (a "Notice of Special Dividend Period") to the Auction Agent and each Holder of the Shares, request that the next succeeding Dividend Period for the Shares be a number of days, at least as long as the Minimum Holding Period, specified in such notice, provided that such Notice of Special Dividend Period shall be null and void if Sufficient Clearing Bids have not been made in the relevant Auction and the Company may not again give a Notice of Special Dividend Period for the Shares (and any such attempted notice shall be null and void) until Sufficient Clearing Bids have been made in an Auction with respect to the Shares. Such Notice of Special Dividend Period shall be delivered or sent by the Company, by first-class mail, postage prepaid, to each Holder of the Shares, not less than 10 days nor more than 60 days prior to the Auction for the relevant Subsequent Dividend Period. A Notice of Special Dividend Period wit h respect to the Shares will specify (A) the Company's determination of the length of the Special Dividend Period (which shall be equal to or longer than the Minimum Holding Period), (B) in the case of any Special Dividend Period in excess of 99 days in duration, any Subsequent Dividend Payment Date or Dates other than the Subsequent Period-End Dividend Payment Date for such Special Dividend Period, (C) if the Company has elected that the Shares will be subject to a Non-Call Period during such Special Dividend Period, a statement to that effect, (D) if the Company has specified that all or any portion of the Special Dividend Period will be a Non-Call Period and has elected that the DRD Gross-Up Provisions shall apply during such Special Dividend Period, a statement to that effect, and (E) if the Company has made the election specified in clause (D) and has affirmatively elected to have the right to redeem the Shares during such Special Dividend Period in accordance with paragraph 4(a)(ii), a statement to tha t effect. If the Company has given a Notice of Special Dividend Period, the Company may withdraw such election by giving telephonic and written notice of its revocation (a "Notice of Revocation") to each Holder of the Shares by no later than 3:00 P.M., New York City time, on the Business Day immediately preceding the date of the Auction with respect to which such Notice of Special Dividend Period and Notice of Revocation were delivered, and in such event such election by the Company of a Special Dividend Period shall be of no force and effect. The Company shall deliver, or cause to be delivered, physically, by telecopier or by other written electronic communication, copies of each Notice of Special Dividend Period and each Notice of Revocation to the Auction Agent at the same time such notices are transmitted to the Holders of the Shares. In the event that the Company has effectively revoked its election of a Special Dividend Period for the Shares as described above, the next succeeding Dividend Period for t he Shares shall be a Regular Dividend Period. No defect in a Notice of Special Dividend Period or in the mailing thereof shall affect the validity of any change in any Dividend Period.

(d)

(i) Except as provided in these Articles of Amendment, Holders shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of full cumulative dividends, as herein provided, on any Shares, and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment on any Shares that may be in arrears.

(ii) So long as any Shares are Outstanding, no dividend (other than a

dividend in Common Stock and other than as provided in paragraph 2(d)(iii)) shall be declared or made upon any Parity Preferred, the Common Stock or any other shares of capital stock of the Company ranking junior to the Shares as to dividends or upon liquidation, nor shall any Parity Preferred, Common Stock or any other shares of capital stock of the Company ranking junior to the Shares as to dividends or upon liquidation, be redeemed, purchased or otherwise acquired for any consideration (nor shall any funds be paid to, or made available for, a sinking fund for the redemption of any shares of such stock) by the Company (except by conversion into or exchange for Common Stock or shares of capital stock of the Company ranking junior to the Shares as to dividends or upon liquidation) unless, in each case, the full cumulative dividends on the Outstanding Shares shall have been or contemporaneously are, paid, or declared and a sum sufficient for the payment thereof has been or is set apart for such payment.

(e) If, at any time prior to the date that is 18 months after the Date of Original Issue, any amendment to the Code shall have been enacted that has the effect of changing the Dividends Received Percentage, then the Applicable Rate with respect to such Shares for the Dividend Period in which the effective date of such amendment to the Code occurs will, to the extent that such amendment applies to such Dividend Period, be adjusted on and after such effective date for the remainder of such Dividend Period by multiplying the Applicable Rate (determined before such adjustment) by the DRD Formula and rounding the result to the nearest basis point. No amendment to the Code, other than a change in the percentage of the dividends received deduction set forth in Section 243(a)(1) of the Code or any successor provision which is enacted prior to 18 months after the Date of Original Issue, will give rise to an adjustment. Notwithstanding the foregoing provisions, in the event that, with respect to any such amendme nt, the Company shall receive either (1) an unqualified opinion of independent recognized tax counsel based upon the legislation amending or establishing the DRP or upon a published pronouncement of the IRS addressing such legislation or (2) a private letter ruling or similar form of assurance from the IRS, in either case to the effect that such an amendment would not apply to dividends payable on the Shares, then any such amendment shall not result in the adjustment provided for pursuant to the DRD Formula. The Company's calculation of the dividends payable, as so adjusted and as certified accurate as to calculation and reasonable as to method by the independent certified public accountants then regularly engaged by the Company, shall be final and not subject to review. Notwithstanding the foregoing, in no event shall the Applicable Rate for any Dividend Period, if and as adjusted from time to time as set forth above, be more than the Maximum Applicable Rate as of the Date of Original Issue of the Shares or the date of the preceding Auction, as the case may be.

If any such amendment to the Code which reduces the Dividends Received Percentage is enacted and becomes effective after a dividend payable on a Dividend Payment Date has been declared but before such dividend has been paid, the amount of dividends payable on such Dividend Payment Date shall not be increased; but instead, an amount equal to the excess, if any, of (x) the product of the dividends paid by the Company on such Dividend Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be equal to the greater of the reduced Dividends Received Percentage or 50%) less (y) the dividends paid by the Company on such Dividend Payment Date, will be payable (if declared) on the next succeeding Dividend Payment Date to Holders of the Shares for such succeeding Dividend Payment Date, in addition to any other amounts payable on such Dividend Payment Date.

If the Applicable Rate shall have been adjusted pursuant to the provisions of this paragraph 2(e) (the "DRD Gross-Up Provisions"), the Company shall send notice of such adjustment to each Holder of the Shares and the Auction Agent on or prior to the next succeeding Dividend Payment Date for the Shares.

Unless otherwise required by the context, any reference in these Articles of Amendment to dividends shall mean dividends adjusted pursuant to the DRD Gross-Up Provisions. The DRD Gross-Up Provisions shall apply at any time prior to the date ending 18 months after the Date of Original Issue. After such date, the DRD Gross-Up Provisions shall not apply to any Regular Dividend Period and shall only apply to any Special Dividend Period for the Shares if so specified by the Board of Directors in the applicable Notice of Special Dividend Period.

In addition, if any such amendment to the Code is enacted that reduces the Dividends Received Percentage and such reduction retroactively applies to a Dividend Payment Date as to which the Company previously paid dividends on the Shares (each, an "Affected Dividend Payment Date"), the Company will pay (if declared) additional dividends (the "Retroactive Dividends") on the immediately succeeding Dividend Payment Date (or if such amendment is enacted after the dividend payable on such Dividend Payment Date has been declared, on the second immediately succeeding Dividend Payment Date following the date of enactment), to Holders of the Shares for such succeeding Dividend Payment Date, in an amount equal to the excess, if any, of (x) the product of the dividends paid by the Company on each Affected Dividend Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be equal to the greater of the reduced Dividends Received Percentage and 50%, applied to each Affected Dividend Payment Date) ov er (y) the dividends paid by the Company on each Affected Dividend Payment Date.

Retroactive Dividends will not be paid in respect of the enactment of any amendment to the Code if such amendment would not result in an adjustment due to the Company having received either an opinion of counsel or tax ruling referred to above. The Company will only make one payment of Retroactive Dividends.

No adjustments in the dividends payable by the Company will be made, and no Retroactive Dividends will be payable by the Company, because of any amendment to the Code effective at any time after 18 months following the Date of Original Issue that reduces the Dividends Received Percentage.

In the event that the amount of dividends payable per share of the Shares shall be adjusted pursuant to the DRD Formula and/or Retroactive Dividends are to be paid, the Company will cause notice of each such adjustment and, if applicable, any Retroactive Dividends, to be sent to each Holder of the Shares.

(f) No fractional Share shall be issued.

3. LIQUIDATION PREFERENCE.

The amount payable upon the Shares in the event of voluntary or involuntary dissolution, liquidation or winding up of the Company shall be $100 per share ($100,000 per Unit) plus an amount equivalent to the accrued and unpaid dividends thereon, if any, to the date of such voluntary or involuntary dissolution, liquidation or winding up.

4. REDEMPTION.

(a) The Shares shall be redeemable by the Company as provided below:

(i) Upon giving a Notice of Redemption with respect to an Optional Redemption to the Auction Agent, the Securities Depository and each holder of record of the Shares, the Company at its option may redeem the Shares, in whole or from time to time in part, out of funds legally available therefor, at a redemption price per Share of $100, on an Optional Redemption Date; provided that the Board of Directors shall have declared and shall pay on the redemption date all accumulated and unpaid dividends in respect of such Shares through the redemption date (whether earned or declared); and provided, further, that subject to Section 5(a)(ii) below, no Share may be redeemed at the option of the Company during (A) the Initial Dividend Period for the Shares or (B) a Non-Call Period to which such Shares are subject. Pursuant to such right of Optional Redemption, the Company may elect to redeem all or less than all of the Shares without redeeming the remaining Shares. Notwithstanding the foregoing, the Company may no t give a Notice of Redemption relating to, or redeem pursuant to, an Optional Redemption as described in this paragraph 4(a)(i) if any dividend on any Share is in arrears unless all Outstanding Shares are simultaneously redeemed. So long as any dividend on any Share in arrears remains unpaid, the Company shall not purchase or otherwise acquire any Shares; provided that the foregoing shall not prevent the purchase or acquisition of Shares pursuant to an otherwise lawful purchase or exchange offer made on the same terms to the holders of all Outstanding Shares.

(ii) If at any time prior to the date that is 18 months after the Date of Original Issue, or, during any Special Dividend Period, all or a portion of which the Company has designated as a Non-Call Period and, with respect to which (i) the DRD Gross-Up Provisions apply and (ii) the Company has affirmatively elected to have the right to redeem the shares if it is required to pay additional dividends under the DRD Gross-Up Provisions, if designated by the Company and specified in the applicable Special Dividend Period Notice, one or more amendments to the Code are enacted that reduce the Dividends Received Percentage, and, as a result, the amount of dividends on the Shares payable on any Dividend Payment Date may be adjusted upwards pursuant to paragraph 2(e) hereof, the Company at its option may redeem all, but not less than all, of the Outstanding Shares, provided that, within 60 days of the date on which an amendment to the Code is enacted that reduces the Dividends Received Percentage, the Company sen ds notice to the holders of the Shares of such redemption. Any redemption of the Shares pursuant to this paragraph 4(a)(ii) will take place on the date specified in the notice, which will be not less than 30 nor more than 90 days from the date such notice is sent to the holders of the Shares. Any such redemption of the Shares will be at a redemption price of $102.50 per Share ($102,500 per Unit), plus all accumulated and unpaid dividends (whether or not declared and including any increase in dividends payable due to changes in the Dividends Received Percentage).

(b) In the event that less than all the Outstanding Shares are to be redeemed and there is more than one Holder, the number of Shares to be redeemed shall be determined by the Board of Directors and communicated to the Auction Agent; and, if the Securities Depository or its nominee is the Holder of all such Shares, the Securities Depository will determine the number of Shares to be redeemed from the account of each Participant. Each Participant will determine the number of Shares to be redeemed from the account of each Holder for which it acts as agent and, if neither the Securities Depository nor its nominee is the Holder of all such Shares, the particular Shares to be redeemed shall be selected by the Company ratably or by lot, provided that adjustments may be made by the Company with respect to the number of Shares to be redeemed from each Holder to avoid redemption of fractional Units.

(c) Whenever Shares are to be redeemed pursuant to an Optional Redemption, the Notice of Redemption shall be delivered or mailed by first-class mail, postage prepaid, not less than 30 nor more than 90 days prior to the date fixed for such Optional Redemption, to each Holder of such Shares to be redeemed and the Auction Agent.

The Notice of Redemption shall set forth (i) the redemption date, (ii) the amount of the redemption price, (iii) the aggregate number of Shares to be redeemed, (iv) the place where Shares are to be surrendered for payment of the redemption price, (v) a statement that dividends on the Shares to be redeemed shall cease to accumulate on such date that the Company pays the full amount payable upon redemption of such Shares, and (vi) the provision of these Articles of Amendment pursuant to which such redemption is being made. A Notice of Redemption, once given, is irrevocable. No defect in the Notice of Redemption or in the mailing thereof shall affect the validity of the redemption proceedings, except as required by applicable law.

If the Company gives or causes to be given a Notice of Redemption, timely pays to the Auction Agent a sum sufficient to redeem the Shares as to which such Notice of Redemption has been given and gives the Auction Agent irrevocable instructions and authority to pay the full amount payable on redemption of such Shares to the Holders of such Shares, then on the date of such payment, all rights of the Holders of the Shares to be redeemed, as such, will terminate (except the right of the Holders of such Shares to receive the full amount payable upon redemption thereof upon surrender of the certificate or certificates therefor, but without interest) and such Shares will no longer be deemed to be Outstanding for any purpose (including, without limitation, the right of Holders of such Shares to vote on any matter or to participate, with respect to such Shares, in any subsequent Auction for the Units). In addition, any Shares as to which a Notice of Redemption has been given by the Company will be deemed to be not Outstanding for purposes of any Auction for the Shares held subsequent to the date of such Notice of Redemption. The Company will be entitled to receive from time to time from the Auction Agent the income, if any, derived from the investment of monies or other assets paid to it (to the extent that such income is not required to pay the redemption price of the Shares to be redeemed), and the holders of any Shares to be redeemed will not have any

claim to such income.

(d) So long as the Shares are held of record by the nominee of the Securities Depository, the amounts payable upon an Optional Redemption shall be
paid to such nominee of the Securities Depository on the Optional Redemption Date for the Shares.

5. AUCTION PROCEDURES.

(a) CERTAIN DEFINITIONS.

As used in this paragraph 5, the following terms shall have the following meanings, unless the context otherwise requires:

(i) "Auction Date" means the last Business Day preceding the first day of each Subsequent Dividend Period.

(ii) "Available Units" has the meaning specified in paragraph 5(d)(i) below.

(iii) "Bid" has the meaning specified in paragraph 5(b)(i) below.

(iv) "Bidder" has the meaning specified in paragraph 5(b)(i) below.

(v) "Hold Order" has the meaning specified in paragraph 5(b)(i) below.

(vi) "Maximum Applicable Rate" for any Subsequent Dividend Period will be the Applicable Percentage of the Reference Rate. The "Applicable Percentage" will be determined based on the lower of the credit rating or ratings assigned on such date to the Shares by Moody's and S&P (or if Moody's or S&P, or both, shall not make such a rating available, the equivalent of either or both of such ratings by a Substitute Rating Agency or two Substitute Rating Agencies or, in the event that only one such rating shall be available, such rating) as follows:

Credit Ratings

Moody's	S&P	Applicable Percentage of Reference Rate
"Aa3" or above	AA- or above	150%
"A3" to "A1"	A- to A+	200%
"Baa3 to "Baa1"	BBB- to BBB+	250%
Below "Baa3"	Below BBB-	275%

provided, however, that, if at 9:00 A.M., New York City time, on any Auction Date, (i) the rating of any Shares by Moody's shall be on the "Corporate Credit Watch List" of Moody's with a designation of "downgrade" or "uncertain," (ii) the rating of any Shares by S&P shall be on the "Credit Watch" of S&P with a designation of "negative implications" or "developing" or (iii) if Moody's or S&P, or both, shall not make such a rating available, the rating of any Shares by any Substitute Rating Agency shall be on the substantial equivalent of clause (i) or (ii) above, then the Maximum Applicable Rate for the Shares to which such Auction Date relates will be determined pursuant to an Applicable Percentage based on the credit rating that is one level lower in the above table (for example, from "A3" to "Baa1" for Moody's, or from "BBB+" to "BBB" for S&P).

The Company shall take all reasonable action necessary to enable Moody's and S&P (and, as appropriate, any Substitute Rating Agency or Substitute Rating Agencies) to provide a rating for the Shares. If neither S&P nor Moody's shall make such a rating available, the Company, after consultation with the Broker-Dealers or their affiliates and successors, shall select a nationally recognized statistical rating organization or two nationally recognized statistical rating organizations to act as a Substitute Rating Agency or Substitute Rating Agencies, as the case may be. If a Substitute Rating Agency or Substitute Rating Agencies are not available, the applicable rating shall be the highest rating last published by Moody's, S&P

or such Substitute Rating Agency or Substitute Rating Agencies.

(vii) "Order" has the meaning specified in paragraph 5(b)(i) below.

            (viii) "Sell Order" has the meaning specified in paragraph 5(b)(i) below.

(ix) "Submission Deadline" means 1:00 P.M., New York City time, on any Auction Date or such other time on the Auction Date as may be specified by the Auction Agent from time to time as the time by which each Broker-Dealer must submit to the Auction Agent in writing all Orders obtained by it for the Auction to be conducted on such Auction Date.

(x) "Submitted Bid" has the meaning specified in paragraph 5(d)(i) below.

(xi) "Submitted Hold Order" has the meaning specified in paragraph 5(d)(i) below.

(xii) "Submitted Order" has the meaning specified in paragraph 5(d)(i) below.

(xiii) "Submitted Sell Order" has the meaning specified in paragraph 5(d)(i) below.

(xiv) "Sufficient Clearing Bids" has the meaning specified in paragraph 5(d)(i) below.

            (xv) "Winning Bid Rate" has the meaning specified in paragraph 5(d)(i) below.

(b) ORDERS BY EXISTING HOLDERS AND POTENTIAL HOLDERS.

(i) Beneficial owners and potential beneficial owners may only participate in Auctions through their Broker-Dealers. Broker-Dealers will submit the Orders of their respective customers who are beneficial owners and potential beneficial owners to the Auction Agent, designating themselves (unless otherwise permitted by the Company) as Existing Holders in respect of Units subject to Orders submitted or deemed submitted to them by beneficial owners and as Potential Holders in respect of Units subject to Orders submitted to them by potential beneficial owners. A Broker-Dealer may also hold Units in its own account as a beneficial owner or wish to purchase Units for its own account as a potential beneficial owner. A Broker-Dealer may thus submit Orders to the Auction Agent as a beneficial owner or a potential beneficial owner and therefore participate in an Auction as an Existing Holder or Potential Holder on behalf of both itself and its customers. Prior to the Submission Deadline on each Auction Date:

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(A) each Existing Holder may submit to its Broker-Dealer information by telephone or otherwise as to:

(1) the number of Units, if any, held by such Existing Holder which such Existing Holder desires to continue to hold without regard to the Applicable Rate for the next succeeding Subsequent Dividend Period;

(2) the number of Units, if any, held by such Existing Holder which such Existing Holder desires to continue to hold, provided that the Applicable Rate for the next succeeding Subsequent Dividend Period shall not be less than the rate per annum specified by such Existing Holder; and/or

(3) the number of Units if any, held by such Existing Holder which such Existing Holder offers to sell without regard to the Applicable Rate for the next succeeding Subsequent Dividend Period; and

(B) each Broker-Dealer will contact Potential Holders by telephone or otherwise to determine whether such Potential Holders desire to submit Bids in which such Potential Holders will indicate the number of Units, if any, which each such Potential Holder offers to purchase, provided that the Applicable Rate for the next succeeding Subsequent Dividend Period shall not be less than the rate per annum specified in such Bids.

For the purposes hereof, the communication by an Existing Holder pursuant to clause (A) above or by a Potential Holder pursuant to clause (B) above to a Broker-Dealer, or the communication by a Broker-Dealer acting for its own account to the Auction Agent, of information referred to in clause (A) or (B) of this paragraph 5(b)(i) is hereinafter referred to as an "Order" and each Existing Holder and each Potential Holder placing an Order, including a Broker-Dealer acting in such capacity for its own account, is hereinafter referred to as a "Bidder"; an Order containing the information referred to in clause (A)(1) of this paragraph 5(b)(i) is hereinafter referred to as a "Hold Order"; an Order containing the information referred to in clause (A)(2) or (B) of this paragraph 5(b)(i) is hereinafter referred to as a "Bid"; and an Order containing the information referred to in clause (A)(3) of this paragraph 5(b)(i) is hereinafter referred to as a "Sell Order". Inasmuch as a Broker-Dealer participates in an Auct ion as an Existing Holder or a Potential Holder only to represent the interests of its customers or itself, the provisions herein relating to the consequences of an Auction for Existing Holders and Potential Holders also apply to the underlying beneficial ownership interests represented thereby.

(ii) (A) A Bid by an Existing Holder shall constitute an irrevocable offer to sell:

(1) the number of Units specified in such Bid if the Applicable Rate determined on such Auction Date shall be less than the rate per annum specified in such Bid; or

(2) such number or a lesser number of Units to be determined as set forth in paragraph 5(e)(i)(D) if the Applicable Rate determined on such Auction Date shall be equal to the rate per annum specified therein; or

(3) a lesser number of Units to be determined as set forth in paragraph 5(e)(ii)(C) if such specified rate per annum shall be higher than the Maximum Applicable Rate and Sufficient Clearing Bids do not exist.

(B) A Sell Order by an Existing Holder shall constitute an irrevocable offer to sell:

(1) the number of Units specified in such Sell Order; or

(2) such number or a lesser number of Units to be determined as set forth in paragraph 5(e)(ii)(C) if Sufficient Clearing Bids do not exist.

(C) A Bid by a Potential Holder shall constitute an irrevocable offer to purchase:

(1) the number of Units specified in such Bid if the Applicable Rate determined on such Auction Date shall be higher than the rate per annum specified in such Bid; or

(2) such number or a lesser number of Units to be determined as set forth in paragraph 5(e)(i)(E) if the Applicable Rate determined on such Auction Date shall be equal to the rate per annum specified therein.

(c) SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT.

(i) Each Broker-Dealer shall submit in writing or through the Auction Agent's auction processing system to the Auction Agent prior to the Submission Deadline on each Auction Date all Orders obtained by such Broker-Dealer for the Auction to be conducted on such Auction Date, designating itself (unless otherwise permitted by the Company) as an Existing Holder or a Potential Holder in respect of Units subject to such Orders, and specifying with respect to each Order:

(A) the name of the Bidder placing each Order (which shall be the Broker-Dealer unless otherwise permitted by the Company);

(B) the aggregate number of Units that are the subject of such Order;

(C) to the extent that such Bidder is an Existing Holder:

(1) the number of Units, if any, subject to any Hold Order placed by such Existing Holder;

(2) the number of Units, if any, subject to any Bid placed by such Existing Holder and the rate per annum specified in such Bid; and

(3) the number of Units, if any, subject to any Sell Order placed by such Existing Holder; and

(D) to the extent such Bidder is a Potential Holder, the rate per annum specified in such Potential Holder's Bid.

(ii) If any rate per annum specified in any Bid contains more than three figures to the right of the decimal point, the Auction Agent shall round such rate up to the next highest one-thousandth (.001) of 1%.

(iii) If an Order or Orders covering in the aggregate all of the Units held by an Existing Holder are not submitted to the Auction Agent prior to the Submission Deadline for any reason (including the failure of a Broker-Dealer to contact any Existing Holder or to submit an Order covering such Existing Holder's Order or Orders), the Auction Agent shall deem a Hold Order (in the case of an Auction relating to a Regular Dividend Period) or a Sell Order (in the case of an Auction relating to a Special Dividend Period) to have been submitted on behalf of such Existing Holder covering the number of Units held by such Existing Holder and not subject to Orders submitted to the Auction Agent.

(iv) If one or more Orders on behalf of an Existing Holder covering in the aggregate more than the number of Units held by such Existing Holder are submitted to the Auction Agent, such Order shall be considered valid as follows and in the following order of priority:

(A) any Hold Order submitted on behalf of such Existing Holder shall be considered valid up to and including the number of Units held by such Existing Holder; provided that if more than one Hold Order is submitted on behalf of such Existing Holder and the number of Units subject to such Hold Orders exceeds the number of Units held by such Existing Holder, the number of Units subject to each of such Hold Orders shall be reduced pro rata so that such Hold Orders, in the aggregate, will cover exactly the number of Units held by such Existing Holder;

(B) (I) any Bids submitted on behalf of such Existing Holder shall be considered valid up to and including the excess of the number of Units held by such Existing Holder over the number of Units subject to any Hold Order referred to in paragraph 5(c)(iv)(A) above; (II) if more than one Bid submitted on behalf of such Existing Holder specifies the same rate per annum and together they cover more than the remaining number of Units that can be the subject of valid Bids after application of paragraph 5(c)(iv)(A) above and of subclause (I) of this paragraph 5(c)(iv)(B) to any Bid or Bids specifying a lower rate or rates per annum, the number of Units subject to each of such Bids shall be reduced pro rata so that such Bids, in the aggregate, cover exactly such remaining number of Units; and (III) subject to subclauses (I) and (II) above, if more than one Bid submitted on behalf of such Existing Holder specifies different rates per annum, such Bids shall be considered valid in the ascending order of their res pective rates per annum and in any such event the number of Units, if any, subject to Bids not valid under this paragraph 5(c)(iv)(B) shall be treated as the subject of a Bid by a Potential Holder; and

(C) any Sell Order shall be considered valid up to and including the excess of the number of Units held by such Existing Holder over the number of Units subject to Hold Orders referred to in paragraph 5(c)(iv)(A) and valid Bids referred to in paragraph 5(c)(iv)(B); provided that if more than one Sell Order is submitted on behalf of any Existing Holder and the number of Units subject to such Sell Orders is greater than such excess, the number of Units subject to each of such Sell Orders shall be reduced pro rata so that such Sell Orders, in the aggregate, cover exactly the number of Units equal to such excess.

(v) If more than one Bid is submitted on behalf of any Potential Holder, each Bid submitted shall be a separate Bid with the rate per annum and number of Units specified.

(vi) Any Order submitted by a Existing Holder or a Potential Holder to its Broker-Dealer, and any Order submitted by a Broker-Dealer to the Auction Agent, prior to the Submission Deadline on any Auction Date, shall be irrevocable.

(d) DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE AND APPLICABLE RATE.

(i) Not earlier than the Submission Deadline on each Auction Date, the Auction Agent shall assemble all Orders submitted or deemed submitted by the Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-Dealer being hereinafter referred to individually as a "Submitted Hold Order", a "Submitted Bid" or a "Submitted Sell Order", as the case may be, or as a "Submitted Order") and shall determine:

(A) the excess of the total number of Units over the number of Units that are the subject of Submitted Hold Orders (such excess being hereinafter referred to as the "Available Units");

(B) from the Submitted Orders whether the number of Units that are the subject of Submitted Bids by Potential Holders specifying one or more rates per annum equal to or lower than the Maximum Applicable Rate exceeds or is equal to the sum of:

(1) the number of Units that is the subject of Submitted Bids by Existing Holders specifying one or more rates per annum higher than the Maximum Applicable Rate, and

(2) the number of Units that is subject to Submitted Sell Orders (if such excess or such equality exists (other than because the number of Units in clause (1) above and this clause (2) are each zero because all of the Units are the subject of Submitted Hold Orders), such Submitted Bids by Potential Holders being hereinafter referred to collectively as "Sufficient Clearing Bids"); and

(C) if Sufficient Clearing Bids exist, the lowest rate per annum specified in the Submitted Bids (the "Winning Bid Rate") that, if:

(1) each Submitted Bid from Existing Holders specifying the Winning Bid Rate and all other Submitted Bids from Existing Holders specifying lower rates per annum were rejected, thus entitling such Existing Holders to continue to hold the Units that are the subject of such Submitted Bids, and

(2) each Submitted Bid from Potential Holders specifying the Winning Bid Rate and all other Submitted Bids from Potential Holders specifying lower rates per annum were accepted, thus entitling the Potential Holders to purchase the Units that are the subject of such Submitted Bids, would result in the number of Units subject to all Submitted Bids specifying the Winning Bid Rate or a lower rate per annum being at least equal to the Available Units.

(ii) Promptly after the Auction Agent has made the determinations pursuant to paragraph 5(d)(i), the Auction Agent shall advise the Company of the Maximum Applicable Rate and, based on such determinations, the Applicable Rate for the next succeeding Dividend Period as follows:

(A) if Sufficient Clearing Bids exist, that the Applicable Rate for the next succeeding Subsequent Dividend Period shall be equal to the Winning Bid Rate;

(B) if Sufficient Clearing Bids do not exist (other than because all of the Units are the subject of Submitted Hold Orders), that the Subsequent Dividend Period next succeeding the Auction shall automatically be a Regular Dividend Period and the Applicable Rate for such next succeeding Subsequent Dividend Period shall be equal to the Maximum Applicable Rate; or

(C) if all of the Units are the subject of Submitted Hold Orders, that the Subsequent Dividend Period next succeeding the Auction shall automatically be a Regular Dividend Period and the Applicable Rate for such next succeeding Subsequent Dividend Period shall be equal to 59% of the Reference Rate in effect on the date of such Auction.

           (e) ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL ORDERS AND ALLOCATION OF UNITS.

Based on the determinations made pursuant to paragraph 5(d)(i) the Submitted Bids and Submitted Sell Orders shall be accepted or rejected and the Auction Agent shall take such other action as set forth below:

(i) If Sufficient Clearing Bids have been made, subject to the provisions of paragraph 5(e)(iii) and paragraph 5(e)(iv), Submitted Bids and Submitted Sell Orders shall be accepted or rejected in the following order of priority and all other Submitted Bids shall be rejected:

(A) the Submitted Sell Orders of Existing Holders shall be accepted and the Submitted Bid of each of the Existing Holders specifying any rate per annum that is higher than the Winning Bid Rate shall be accepted, thus requiring each such Existing Holder to sell the Units that are the subject of such Submitted Sell Order or Submitted Bid;

(B) the Submitted Bid of each of the Existing Holders specifying any rate per annum that is lower than the Winning Bid Rate shall be rejected, thus entitling each such Existing Holder to continue to hold the Units that are the subject of such Submitted Bid;

(C) the Submitted Bid of each of the Potential Holders specifying any rate per annum that is lower than the Winning Bid Rate shall be accepted, thus requiring each such Potential Holder to purchase the Units subject to such Submitted Bid;

(D) the Submitted Bid of each of the Existing Holders specifying a rate per annum that is equal to the Winning Bid Rate shall be rejected, thus entitling each such Existing Holder to continue to hold the Units that are the subject of such Submitted Bid, unless the number of Units subject to all such Submitted Bids shall be greater than the excess (the "Remaining Excess") of the Available Units over the number of Units subject to Submitted Bids described in paragraph 5(e)(i)(B) and paragraph 5(e)(i)(C), in which event the Submitted Bids of each such Existing Holder shall be accepted, and each such Existing Holder shall be required to sell Units, but only in an amount equal to the difference between (1) the number of Units then held by such Existing Holder subject to such Submitted Bid and (2) the number of Units obtained by multiplying (x) the number of Remaining Excess of the Available Units by (y) a fraction the numerator of which shall be the number of Units held by such Existing Holder subject to su ch Submitted Bid and the denominator of which shall be the sum of the number of Units subject to such Submitted Bids made by all such Existing Holders that specified a rate per annum equal to the Winning Bid Rate; and

(E) the Submitted Bid of each of the Potential Holders specifying a rate per annum that is equal to the Winning Bid Rate shall be accepted but only in an amount equal to the number of Units obtained by multiplying (x) the difference between the Available Units and the number of Units subject to Submitted Bids described in paragraph 5(e)(i)(B), paragraph 5(e)(i)(C) and paragraph 5(e)(i)(D) by (y) a fraction the numerator of which shall be the number of Units subject to such Submitted Bid and the denominator of which shall be the sum of the number of Units subject to such Submitted Bids made by all such Potential Holders that specified rates per annum equal to the Winning Bid Rate.

(ii) If Sufficient Clearing Bids have not been made (other than because all of the Units are subject to Submitted Hold Orders), subject to the provisions of paragraph 5(e)(iii), Submitted Orders shall be accepted or rejected as follows in the following order of priority and all other Submitted Bids shall be rejected:

(A) the Submitted Bid of each Existing Holder specifying any rate per annum that is equal to or lower than the Maximum Applicable Rate shall be rejected, thus entitling such Existing Holder to continue to hold the Units that are the subject of such Submitted Bid;

(B) the Submitted Bid of each Potential Holder specifying any rate per annum that is equal to or lower than the Maximum Applicable Rate shall be accepted, thus requiring such Potential Holder to purchase the Units that are the subject of such Submitted Bid; and

(C) the Submitted Bids of each Existing Holder specifying any rate per annum that is higher than the Maximum Applicable Rate shall be accepted and the Submitted Sell Orders of each Existing Holder shall be accepted, in both cases only in an amount equal to the difference between (1) the number of Units then held by such Existing Holder subject to such Submitted Bid or Submitted Sell Order and (2) the number of Units obtained by multiplying (x) the difference between the Available Units and the aggregate number of Units subject to Submitted Bids described in paragraph 5(e)(ii)(A) and paragraph 5(e)(ii)(B) by (y) a fraction the numerator of which shall be the number of Units held by such Existing Holder subject to such Submitted Bid or Submitted Sell Order and the denominator of which shall be the number of Units subject to all such Submitted Bids and Submitted Sell Orders.

(iii) If, as a result of the procedures described in paragraph 5(e)(i) or paragraph 5(e)(ii), any Existing Holder would be entitled or required to sell, or any Potential Holder would be entitled or required to purchase, a fraction of a Unit on any Auction Date, the Auction Agent shall, in such manner as it shall determine in its sole discretion, round up or down the number of Units to be purchased or sold by any Existing Holder or Potential Holder on such Auction Date so that each Unit purchased or sold by each Existing Holder or Potential Holder on such Auction Date shall be a whole Unit.

(iv) If, as a result of the procedures described in paragraph 5(e)(i), any Potential Holder would be entitled or required to purchase less than a whole Unit on any Auction Date, the Auction Agent shall, in such manner as in its sole discretion it shall determine, allocate Units for purchase among Potential Holders so that only whole Units are purchased on such Auction Date by any Potential Holder, even if such allocation results in one or more of such Potential Holders not purchasing any Units on such Auction Date.

(v) Based on the results of each Auction, the Auction Agent shall determine, with respect to each Broker-Dealer that submitted Bids or Sell Orders on behalf of Existing Holders or Potential Holders, the aggregate number of Units to be purchased and the aggregate number of the Units to be sold by such Potential Holders and Existing Holders and, to the extent that such aggregate number of Units to be purchased and such aggregate number of Units to be sold differ, the Auction Agent shall determine to which other Broker-Dealer or Broker-Dealers acting for one or more purchasers such Broker-Dealer shall deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or more sellers such Broker-Dealer shall receive, as the case may be, Units.

(f) SUSPENSION OF AUCTION DURING NON-PAYMENT PERIOD.

Upon occurrence and during the continuance of a Non-Payment Period with respect to the Shares that has not been duly cured by the Company pursuant to paragraph 2(b), Auctions of the Units shall be suspended and shall not resume in each case until (A) in the case of a Dividend Non-Payment Period, all accumulated and unpaid dividends on such Shares for all past Dividend Periods shall have been paid to the Auction Agent, or (B) in the case of a Redemption Non-Payment Period in connection with an Optional Redemption of less than all of the Shares, all amounts payable upon such Optional Redemption of such Shares shall have been paid to the Auction Agent, in each case by 12:00 noon, New York City time, on the relevant Auction Date with respect to the Units, provided that, at least two Business Days but no more than 30 days prior to such Auction Date, the Company shall have given the Auction Agent, the Securities Depository and the applicable holders of record written notice of such deposit or availability.

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(g) MISCELLANEOUS.

The Company may interpret the provisions of this paragraph 5 to resolve any inconsistency or ambiguity, remedy any formal defect or make any other change or modification that does not substantially adversely affect the rights of Existing Holders of Shares. An Existing Holder (A) may sell, transfer or otherwise dispose of Shares only pursuant to a Bid or Sell Order in accordance with the procedures described in this paragraph 5 through a Broker-Dealer, except that transfers of Shares may also be effected through means other than pursuant to Auctions provided that each such transfer shall be in a minimum quantity of one Unit or in multiples thereof and shall be valid and accepted by the Auction Agent only if such Existing Holder or its Broker-Dealer or Participant, as applicable, shall have advised the Auction Agent in writing of such transfer by 3:00 P.M. on the Business Day next preceding the Auction Date with respect to the Units, and (B) except as otherwise required by law, shall have the ownership of the Shares held by it maintained in book-entry form by the Securities Depository in the account of its Participant, which in turn will maintain records of such Existing Holder's beneficial ownership. Neither the Company nor any Affiliate shall submit an Order in any Auction. Any Existing Holder that is an Affiliate shall not sell, transfer or otherwise dispose of Shares to any Person other than the Company. All of the Outstanding Shares shall be represented by one or more certificates registered in the name of the nominee of the Securities Depository unless otherwise required by law or unless there is no Securities Depository. If there is no Securities Depository, at the Company's option and upon its receipt of such documents as it deems appropriate, such Shares may be registered in the stock register in the name of the Existing Holder thereof and such Existing Holder thereupon will be entitled to receive certificates therefor and required to deliver certificates therefor upon transfer or exchange thereof .

6. MISCELLANEOUS.

The Board of Directors may interpret the provisions hereof to resolve any inconsistency or ambiguity which may arise or be revealed and if such inconsistency or ambiguity reflects an inaccurate provision hereof, the Board of Directors may, in appropriate circumstances, authorize the filing of an instrument to correct or resolve such inaccurate provision.

7. NOTICES.

All notices or communications to the Company, unless otherwise specified in the Bylaws of the Company or these Articles of Amendment, shall be sufficiently given if in writing and delivered or mailed by first-class mail, postage prepaid, to Dominion Virginia Power, 120 Tredegar Street, Pump House, 2^nd Floor, Richmond, Virginia 23219, attention: Treasury Department. Notice to the Company shall be deemed given on the earlier of the date received or the date seven days after such notice is mailed.

8. SECURITIES DEPOSITORY; STOCK CERTIFICATES.

(a) If there is a Securities Depository, one or more certificates for all of the Shares shall be issued to the Securities Depository and registered in the name of the Securities Depository or its nominee. Additional certificates may be issued as necessary to represent Shares. All such certificates shall bear a legend to the effect that such certificates are issued subject to the provisions restricting the transfer of Shares contained in these Articles of Amendment. Except as provided in paragraph (b) below, the Securities Depository or its nominee will be the holder, and no Existing Holder shall receive certificates representing its ownership interest in such Shares.

(b) If the Applicable Rate applicable to the Shares shall be the Non-Payment Period Rate or there is no Securities Depository, the Company may at its option issue one or more new certificates with respect to such Shares (without the legend referred to in paragraph (a) above) registered in the names of the Existing Holders or their nominees.

Dated: December 6, 2002

VIRGINIA ELECTRIC AND POWER COMPANY
 

By: /s/ G. Scott Hetzer                             
Senior Vice President and Treasurer

EX-10.1 4 ex101.htm EXHIBIT 10.1

Exhibit 10.1

$1,250,000,000

364-DAY 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,
as Administrative Agent,

BARCLAYS BANK PLC,
as Syndication Agent,

and

BANK OF AMERICA, N.A.,
THE BANK OF NOVA SCOTIA AND
CITIBANK, N.A.,
as Co-Documentation Agents 

 ____________________________________

J.P. MORGAN SECURITIES INC. AND
BARCLAYS CAPITAL,
as Joint Lead Arrangers and Joint Bookrunners

Dated as of May 29, 2003

Table of Contents
	Page
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS	1
1.1   Definitions	1
1.2   Computation of Time Periods; Other Definitional Provisions.	15
1.3   Accounting Terms.	15
1.4   Time.	16
SECTION 2. LOANS	16
2.1   Revolving Loan Commitment.	16
2.2   Method of Borrowing for Revolving Loans	19
2.3   Funding of Revolving Loans	20
2.4   Minimum Amounts of Revolving Loans	21
2.5   Reductions of Revolving Loan Commitment	21
2.6   Notes	21
SECTION 3. PAYMENTS	22
3.1   Interest	22
3.2   Prepayments	22
3.3   Payment in Full at Maturity	23
3.4   Fees	23
3.5   Place and Manner of Payments	24
3.6   Pro Rata Treatment	24
3.7   Computations of Interest and Fees	24
3.8   Sharing of Payments.	25
3.9   Evidence of Debt	26
3.10   Conversion Option	26
SECTION 4. ADDITIONAL PROVISIONS REGARDING LOANS	27
4.1   Eurodollar Loan Provisions.	27
4.2   Capital Adequacy	28
4.3   Compensation	29
4.4   Taxes	29
4.5   Mitigation; Mandatory Assignment.	31
SECTION 5. CONDITIONS PRECEDENT	32
5.1   Closing Conditions	32
5.2   Conditions to Loans	34
SECTION 6. REPRESENTATIONS AND WARRANTIES	34
6.1   Organization and Good Standing.	34
6.2   Due Authorization	35
6.3   No Conflicts	35
6.4   Consents	35
6.5   Enforceable Obligations	35
6.6   Financial Condition	36
6.7   No Default	36
6.8   Indebtedness	36
6.9   Litigation	36
6.10   Taxes	36
6.11   Compliance with Law	37
6.12   ERISA	37
6.13   Use of Proceeds	37
6.14   Government Regulation	37
6.15   Solvency	38
SECTION 7. AFFIRMATIVE COVENANTS	38
7.1   Information Covenants	38
7.2   Preservation of Existence and Franchises	39
7.3   Books and Records	40
7.4   Compliance with Law	40
7.5   Payment of Taxes.	40
7.6   Insurance	40
7.7   Performance of Obligations	40
7.8   ERISA	41
7.9   Use of Proceeds	41
7.10   Audits/Inspections	41
7.11   Total Funded Debt to Capitalization	42
SECTION 8. NEGATIVE COVENANTS	42
8.1   Nature of Business	42
8.2   Consolidation and Merger	42
8.3   Sale or Lease of Assets	43
8.4   Limitation on Liens	43
8.5   Fiscal Year	44
SECTION 9. EVENTS OF DEFAULT	44
9.1   Events of Default	44
9.2   Acceleration; Remedies.	46
9.3   Allocation of Payments After Event of Default	47
SECTION 10. AGENCY PROVISIONS	48
10.1   Appointment	48
10.2   Delegation of Duties	48
10.3   Exculpatory Provisions	48
10.4   Reliance on Communications	49
10.5   Notice of Default	50
10.6   Non-Reliance on Administrative Agent and Other Lenders	50
10.7   Indemnification	50
10.8   Administrative Agent in Its Individual Capacity	51
10.9   Successor Administrative Agent	51
SECTION 11. MISCELLANEOUS	52
11.1   Notices	52
11.2   Right of Set-Off; Adjustments	52
11.3   Benefit of Agreement	53
11.4   No Waiver; Remedies Cumulative	56
11.5   Payment of Expenses, etc.	56
11.6   Amendments, Waivers and Consents	57
11.7   Counterparts; Telecopy	58
11.8   Headings	58
11.9   Defaulting Lender	58
11.10   Survival of Indemnification and Representations and Warranties	58
11.11   GOVERNING LAW	58
11.12 WAIVER OF JURY TRIAL	59
11.13   Severability	59
11.14   Entirety	59
11.15   Binding Effect	59
11.16   Submission to Jurisdiction	59
11.17   Confidentiality	60
11.18   Designation of SPVs	61

SCHEDULES

Schedule 1.1A Commitment Percentages

Schedule 1.1B Eligible Dealers
Schedule 6.8 Indebtedness
Schedule 11.1 Notices

EXHIBITS

Exhibit 2.1(b)(ii) Form of Competitive Bid Request
Exhibit 2.2(a) Form of Notice of Borrowing
Exhibit 2.2(c) Form of Notice of Conversion/Continuation
Exhibit 2.6(a) Form of Revolving Loan Note
Exhibit 2.6(b) Form of Competitive Bid Loan Note
Exhibit 5.1(c) Form of Closing Certificate
Exhibit 5.1(f) Form of Legal Opinion
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 11.3 Form of Assignment Agreement

Page 1

364-DAY
CREDIT AGREEMENT

364-DAY CREDIT AGREEMENT (this "Credit Agreement"), dated as of May 29, 2003 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, a New York banking corporation, as administrative agent for the Lenders hereunder (in such capacity, the "Administrative Agent"), BARCLAYS BANK PLC, as Syndication Agent, and BANK OF AMERICA, N.A., THE BANK OF NOVA SCOTIA and CITIBANK, N.A., 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 Base Rate Interest Margin for the relevant Borrower.

"Adjusted Eurodollar Rate" means with respect to any Borrower the Eurodollar Rate plus the Eurodollar Rate Interest Margin for the relevant Borrower.

"Administrative Agent" means JPMorgan Chase Bank 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.

Page 2

"Asset Swap Spread" for any Borrower on any day means the amount in basis points resulting from the conversion by the Administrative Agent of the Price of the applicable Benchmark Bond (if four or more price quotes are received) into an asset swap spread using the Bloomberg "YAS" screen as follows: The Price will be entered in the "PRICE" field, the appropriate settlement date (which will be the third Business Day after the date such Price is determined) will be entered into the "SETTLE" field, and "I52" will be entered in the "CRV#" field. The resulting amount in the "ASSET SWAP" field, rounded to the nearest basis point, is the Asset Swap Spread. If fewer than four quotes are obtained, the Asset Swap Spread for such day will be equal to the applicable Ceiling for such Borrower. If the Bloomberg YAS function shall not be available, the Administrative Agent will solicit spot mid swap rates of a maturity that matches the maturity of the applicable Benchmark Bond ("Spot Mid Swap Rates") from J .P. Morgan Securities Inc. and two other Eligible Dealers. The Asset Swap Spread for such day will be equal to the implied yield derived from the Price minus the average of the three Spot Mid Swap Rates, rounded to the nearest basis point.

"Average Asset Swap Spread" for any Interest Period for any Eurodollar Revolving Loan means the arithmetic average of the two daily Asset Swap Spreads resulting from the Pricing Polls for the applicable Notice Date.

"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 Interest Margin" means for any day an interest margin equal to the Ceiling for the relevant Borrower minus 100 basis points per annum.

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

"Benchmark Bond" means the DRI Benchmark Bond, the VaPower Benchmark Bond or the CNG Benchmark Bond, as applicable.

If (a) any Benchmark Bond shall no longer be outstanding for any reason, including maturity, redemption or repurchase, (b) any Borrower shall issue a new senior, unsecured, non-credit-enhanced obligation having liquidity and tenor deemed more acceptable to the Administrative Agent, (c) the Administrative Agent shall receive a written request from any Borrower requesting that the Administrative Agent replace such Borrower's Benchmark Bond with another Acceptable Obligation of that Borrower, and the Administrative Agent so agrees in its sole discretion or (d) the Administrative Agent shall determine that, as a result of changes in the liquidity of any Benchmark Bond, price quotes for a Benchmark Bond are not consistently available, and if in any such case one or more other (i.e. other than the applicable Benchmark Bond) acceptable debt securities of any Borrower ("Acceptable Obligations") shall be outstanding for which price quotes are likely, in the judgment of the Administrative Agent, to be consis tently available, then the Administrative Agent, in consultation with that Borrower, will replace that Benchmark Bond with another Acceptable Obligation of that Borrower. If the Administrative Agent shall determine that no Acceptable Obligation is outstanding for a Borrower, the Eurodollar Rate Interest Margin for that Borrower will equal the Ceiling.

Page 3

"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.

"Ceiling" means for any day for any Borrower the sum of the Floor plus the Maximum Spread Adjustment for such Borrower, in each case based on such Borrower's Ratings and as set forth in the definition of Interest Margin.

"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.

"Closing Date" means the date hereof.

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

"CNG Benchmark Bond" means Consolidated Natural Gas' 6.25% Senior Notes due November 1, 2011 (CUSIP No. 209615BX0)

"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 Fee" has the meaning set forth in Section 3.4(a).

"Commitment Fee Rate" means, for Commitment Fees payable by DRI, the appropriate percentages, in each case, corresponding to the senior, unsecured, non-credit-enhanced obligations of DRI in effect from time to time as shown below:

Page 4

Category	Senior, Unsecured, Non-Credit-Enhanced Obligations of DRI	Commitment Fee
I.	≥A from S&P or	0.080%
	≥A2 from Moody's
II.	A- from S&P or	0.100%
	A3 from Moody's
III.	BBB+ from S&P or	0.125%
	Baa1 from Moody's
IV.	BBB from S&P or	0.150%
	Baa2 from Moody's
V.	BBB- from S&P or	0.175%
	Baa3 from Moody's
VI.	≤BB+ from S&P or	0.250%
	≤Ba1 from Moody's

Notwithstanding the above, if at any time there is a split in Ratings of one level, related to Categories I through V, between S&P and Moody's, the Commitment Fee in effect at any time will be determined based upon the higher rating, and if at any time there is a split in Ratings of two or more levels, related to Categories I through V, between S&P and Moody's, the Commitment Fee in effect at any time shall be determined based upon the Ratings level that is one level below the higher of the S&P or Moody's rating. If at any time either S&P or Moody's rates DRI at a Category VI level, the Commitment Fee in effect at any time will be based on Category VI levels.

Each Borrower shall deliver to the Administrative Agent (and the Administrative Agent shall notify each Lender), at the address set forth on Schedule 11.1, information regarding any change in its Ratings with respect to such Borrower within five Business Days of receipt of such information. The Administrative Agent may assume that Ratings remain in effect unless a Borrower notifies the Administrative Agent in writing that a Rating of a Borrower has changed.

Based on DRI's Ratings as of the Closing Date, Category III level pricing will apply as of the Closing Date.

Page 5

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

"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).

"Competitive Bid Request Fee" means $2500 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 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.

"Conversion Date" has the meaning set forth in Section 3.10 hereof.

"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.

Page 6

"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.

"DRI Benchmark Bond" means Dominion Resources, Inc.'s 6.25% Senior Notes due June 30, 2012 (CUSIP No. 25746UAJ8).

"Effective Date" has the meaning set forth in Section 11.15 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 during the existence and continuation of a Default or an Event of Default and (ii) neither the Borrowers nor any Affiliate or Subsidiary of the Borrowers shall qualify as an Eligible Assignee.

"Eligible Dealer" means the dealers listed on Schedule 1.1B, attached hereto, as such dealers may be replaced or added to with the consent of the Administrative Agent and DRI.

"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.

"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:

Page 7

"Eurodollar Rate" = Interbank Offered Rate
1 - Eurodollar Reserve Percentage

"Eurodollar Rate Interest Margin" for any Interest Period for a Eurodollar Revolving Loan means an interest margin equal to the greater of (a) the applicable Floor or (b) the applicable Average Asset Swap Spread, in each case for the relevant Borrower, provided that such interest margin shall in no event be greater than the Ceiling.

"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.

"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.

"Final Date" has the meaning set forth in Section 3.10 hereof.

"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.

Page 8

"Floor" for any day for any Borrower means the minimum Eurodollar Rate Interest Margin, based on such Borrower's Ratings, as set forth under the heading "Floor" in the table included in the definition of Interest Margin.

"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 11.18 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 relevan t 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; (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 let ters of credit or bankers' acceptances.

Page 9

"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 Margin" means, for Revolving Loans made to each Borrower, the appropriate percentages, in each case, corresponding to the senior, unsecured, non-credit-enhanced obligations of the relevant Borrower in effect from time to time as shown below:

Category	Senior, Unsecured, Non-Credit-Enhanced Obligations of Borrower	Floor	Maximum Spread Adjustment (prior to Conversion Date)	Maximum Spread Adjustment (after Conversion Date)
I.	≥A from S&P or	0.425%	1.00%	2.00%
	≥A2 from Moody's
II.	A- from S&P or	0.550%	1.00%	2.00%
	A3 from Moody's
III.	BBB+ from S&P or	0.750%	2.00%	4.00%
	Baa1 from Moody's
IV.	BBB from S&P or	0.875%	2.00%	4.00%
	Baa2 from Moody's
V.	BBB- from S&P or	1.125%	2.00%	4.00%
	Baa3 from Moody's
VI.	≤BB+ from S&P or	1.750%	5.00%	10.00%
	≤Ba1 from Moody's	Page 10

provided, that the Eurodollar Rate Interest Margin applicable to a Revolving Loan, once determined, shall remain set for the duration of the selected Interest Period.

Notwithstanding the above, if at any time there is a split in Ratings of one level, related to Categories I through V, between S&P and Moody's, the Floor and Maximum Spread Adjustment in effect at any time will be determined based upon the higher rating, and if at any time there is a split in Ratings of two or more levels, related to Categories I through V, between S&P and Moody's, the Floor and Maximum Spread Adjustment in effect at any time shall be determined based upon the Ratings level that is one level below the higher of the S&P or Moody's rating. If at any time either S&P or Moody's rates a Borrower at a Category VI level, the Floor and Maximum Spread Adjustment in effect at any time will be based on Category VI levels.

Each Borrower shall deliver to the Administrative Agent (and the Administrative Agent shall notify each Lender), at the address set forth on Schedule 11.1, information regarding any change in its Ratings with respect to such Borrower within five Business Days of receipt of such information. The Administrative Agent may assume that Ratings remain in effect unless a Borrower notifies the Administrative Agent in writing that a Rating of a Borrower has changed.

"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 borrowings) 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 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.

Page 11

"JPMCB" means JPMorgan Chase Bank.

"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 11.3.

"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.

"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 8.3 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 date 364 days after the Closing Date.

"Maximum Spread Adjustment" for any day for any Borrower means the percentage as set forth under the headings "Maximum Spread Adjustment" in the table included in the definition of Interest Margin.

"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.

Page 12

"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 Manditorily Convertible 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 Date" has the meaning set forth in Section 2.2(b) hereof.

"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).

"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 7.8 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.

Page 13

"Price" means, for any Benchmark Bond on any Business Day on which a Pricing Poll occurs, the Dollar price resulting from bid quotes solicited beginning at 2:00 p.m. (or such other time as may be set by the Administrative Agent) on such Business Day. If (a) five quotes are received, the Price for such Benchmark Bond for such day shall be the arithmetic average, as computed by the Administrative Agent, of the three quotes remaining after the highest and lowest quotes are excluded, or (b) four quotes are obtained, the Price for such Benchmark Bond for such day shall be the arithmetic average, as computed by the Administrative Agent, of the three quotes remaining after the lowest quote is excluded. The Administrative Agent agrees to solicit such quotes on each of the two Business Days immediately following a Notice Date; provided, that upon receipt by the Administrative Agent of written consent from the relevant Borrower, the Eurodollar Rate Interest Margin for such Borrower will equal the Ceil ing and no Pricing Poll shall be required.

"Pricing Poll" means the solicitation by the Administrative Agent on each of the two Business Days immediately following the Notice Date of Prices for the Benchmark Bonds from five Eligible Dealers as selected by DRI.

"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 11.3(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.

"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 times the Revolving Loan Commitment and (b) at any time after the termination of the Commitments, the outstanding amount of Loans owed to such Lender.

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"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 One Billion Two Hundred Fifty Million Dollars ($1,250,000,000), 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.

"Spot Mid Swap Rates" has the meaning set forth in the definition of "Asset Swap Spreads".

"SPV" has the meaning set forth in Section 11.18 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 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.

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"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, 2002, 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 t o 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.

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

"VaPower Benchmark Bond" means Virginia Electric and Power Company's 4.750% Senior Notes due March 1, 2013 (CUSIP No. 927804EU4).

"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.

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 7.1 (or, prior to the delivery of the first financial statements pursuant to Section 7.1, consistent with the financial statements described in Section 5.1(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 Adminis trative 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.

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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.

1. 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 period from the Closing Date to the Maturity Date (each a "Revolving Loan" and collectively the "Revolving Loans"); provided that (i) the sum of the aggregate amount of Revolving Loans 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 outstanding Revolving Loans 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.

2. Competitive Bid Loans Subfacility
1. 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 Competitive Bid Loan, such Lender's obligation to make its pro rata share of any Revolving Loan shall not be reduced thereby.

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2. 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 re quested. 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.

3. 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 Reque st. 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.

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4. Acceptance of Competitive Bids

Each Borrower may, in its sole discretion, subject only to the provisions of this subsection (iv), accept or refuse any 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 agg regate 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 th ereof, 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 o f 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.

5. 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.

6. 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.

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2.2  Method of Borrowing for Revolving Loans

1. 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 5.2 hereof.

2. 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) (the "Notice Date"), 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 5.2 hereof.

3. 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. Notwithstandin g 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 date 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.

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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 $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

1. 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.

2. 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.

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SECTION 3. PAYMENTS

3.1  Interest

1. Interest Rate
1. All Base Rate Loans made to a Borrower shall accrue interest at the Adjusted Base Rate with respect to such Borrower.
2. 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.
3. All Competitive Bid Loans shall accrue interest at the applicable Competitive Bid Rate with respect to each Competitive Bid Loan.
2. 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 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).

3. Interest Payments

Interest on Loans shall be due and payable in arrears on each Interest Payment Date.

3.2  Prepayments

1. 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. Any Loan outstanding after the Conversion Date, once prepaid, may not be reborrowed.

2. Mandatory Prepayments

If at any time the amount of Revolving Loans outstanding plus the aggregate amount of Competitive Bid Loans outstanding 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.

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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 9 hereof.

3.4  Fees 

1. Commitment Fees
1. 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 commitment fee for each day that will accrue on the unutilized Revolving Loan Commitment (i.e., the amount of the Revolving Loan Commitment over the outstanding aggregate principal amount of Revolving Loans) on such day according to the per annum percentages set forth under the heading "Commitment Fee" in the table included in the definition of "Commitment Fee Rate" (the "Commitment Fee").
2. The accrued Commitment Fees shall be due and payable in arrears on the first Business Day of each January, April, July and October (as well as on the Maturity Date and 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.
3. For purposes of calculating the Commitment Fees, outstanding Competitive Loans will be deemed to be zero.
2. Administrative Fees

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

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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. 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 Commitment 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

1. 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.
2. 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 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 redu ced 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. The Administrative Agent will deliver promptly, and in no event later than the end of the day one Business Day prior to the borrowing date specified in the Notice of Borrowing, a notice to the appropriate Borrower and each Lender setting forth the Average Asset Swap Spread, the Prices from each Eligible Dealer that were used in determining the Asset Swap Spreads, the two daily Asset Swap Spreads, the Spot Mid Swap Rates (if applicable) and the Base Rate Interest Margin or Eurodollar Rate Interest Margin applicable to the Loan.

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3.8  Sharing of Payments.

Each Lender agrees that, in the event that any Lender shall obtain payment in respect of any Loan 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 p articipation 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 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 t he Federal Funds Rate.

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3.9  Evidence of Debt

1. 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.
2. The Administrative Agent shall maintain the Register for each Borrower pursuant to Section 11.3(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.
3. 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.

3.10  Conversion Option

On the Maturity Date, each Borrower shall pay the entire outstanding principal balance of all Loans advanced to such Borrower (unless accelerated sooner pursuant to Section 9 hereof); provided that if such Borrower shall have delivered a notice to the Administrative Agent requesting a conversion of such Loans and an extension of the Maturity Date not earlier than 30 days but at least five Business Days prior to the Maturity Date (which notice shall be accompanied by a certificate signed by a Responsible Officer as to the matters specified in Section 5.2(b) and (c) hereof), then (a) the then outstanding principal amount of each Loan shall be aggregated on the Maturity Date (the "Conversion Date") into one Loan with one Interest Period, and each Lender's Commitment shall be reduced to an amount equal to the principal amount of such Lender's outstanding Loans on the Conversion Date and (b) the Loan shall become due and payable on the first anniversary o f the Maturity Date (the "Final Date"). In the event the Loans are converted on the Conversion Date, the term "Maturity Date" shall mean the Final Date. The conversion of the Loans on the Conversion Date shall be subject to, and shall constitute a representation and warranty of, the correctness as of the Conversion Date of the matters specified in Section 5.2 (b) and (c) hereof. The Administrative Agent shall promptly inform the Lenders of the receipt of the notice of conversion and the Conversion Date.

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SECTION 4. ADDITIONAL PROVISIONS REGARDING LOANS

4.1  Eurodollar Loan Provisions.

1. 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 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 reques t for conversion into or continuation of Base Rate Loans.
2. Change in Legality.
1. 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:
1. 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
2. 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.

3. 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 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 parties hereto.

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4.2  Capital Adequacy

If, after the date hereof, any Lender has determined that the adoption or effectiveness of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender (or its parent corporation) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's (or parent corporation's) capital or assets as a consequence of its commitments or obligations hereunder to any Borrower to a level below that which such Lender (or its parent corporation) could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender's (or parent corporation's) policies with respect to capital adequacy), then, upon notice from such Lender, the relevant Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender (or its parent corporation) for such reduction. Each determination by any such Lender of amounts owing under this Section 4.2 shall, absent manifest error, be conclusive and binding on the parties hereto.

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4.3  Compensation

Each Borrower shall compensate each Lender, upon its written request, for all reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by the Lender to fund its Eurodollar Loans to such Borrower) which such Lender may sustain:

1. if for any reason (other than a default by such Lender or the Administrative Agent) a borrowing of Eurodollar Loans or Absolute Rate Competitive Bid Loans to such Borrower does not occur on a date specified therefor in a Notice of Borrowing or Competitive Bid Request to such Borrower, as the case may be;
2. if any repayment, continuation or conversion of any Eurodollar Loan or Absolute Rate Competitive Bid Loan by such Borrower occurs on a date which is not the last day of an Interest Period applicable thereto, including, without limitation, in connection with any demand, acceleration, mandatory prepayment or otherwise (including any demand under this Section 4); or
3. if such Borrower fails to repay its Eurodollar Loans or Absolute Rate Competitive Bid Loan when required by the terms of this Credit Agreement.

Calculation of all amounts payable to a Lender under this Section 4.3 shall be made as though the Lender has actually funded its relevant Eurodollar Loan through the purchase of a Eurodollar deposit bearing interest at the Eurodollar Rate in an amount equal to the amount of that Loan, having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of that Lender to a domestic office of that Lender in the United States of America; provided, however, that each Lender may fund each of its Eurodollar Loans in any manner it sees fit and the foregoing assumption shall be utilized only for the calculation of amounts payable under this Section 4.3.

4.4  Taxes

1. Tax Liabilities Imposed on a Lender. Any and all payments by a Borrower hereunder or under any of the Credit Documents shall be made, in accordance with the terms hereof and thereof, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes measured by net income and franchise taxes imposed on any Lender by the jurisdiction under the laws of which such Lender is organized or transacting business or any political subdivision thereof (all such non-excluded taxes, being hereinafter referred to as "Taxes"). If such Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.4) such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions, (iii) such Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law, and (iv) such Borrower shall deliver to such Lender evidence of such payment to the relevant Governmental Authority.

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2. Other Taxes. In addition, each Borrower agrees to pay, upon notice from a Lender and prior to the date when penalties attach thereto, all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies of the United States or any state or political subdivision thereof or any applicable foreign jurisdiction that arise from any payment made hereunder by such Borrower or from the execution, delivery or registration of, or otherwise from such Borrower's participation with respect to, this Credit Agreement (collectively, the "Other Taxes").
3. Refunds. If a Lender or the Administrative Agent (as the case may be) shall become aware that it is entitled to claim a refund (or a refund in the form of a credit) (each, a "Refund") from a Governmental Authority (as a result of any error in the amount of Taxes or Other Taxes paid to such Governmental Authority or otherwise) of Taxes or Other Taxes which a Borrower has paid, or with respect to which a Borrower has paid additional amounts, pursuant to this Section 4.4, it shall promptly notify such Borrower of the availability of such Refund and shall, within 30 days after receipt of written notice by such Borrower, make a claim to such Governmental Authority for such Refund at such Borrower's expense if, in the judgment of such Lender or the Administrative Agent (as the case may be), the making of such claim will not be otherwise disadvantageous to it; provided that nothing in this subsection (c) shall be construed to require any Lender or the Administrative Agent to institute any administrative proceeding (other than the filing of a claim for any such Refund) or judicial proceeding to obtain such Refund.

If a Lender or the Administrative Agent (as the case may be) receives a Refund from a Governmental Authority (as a result of any error in the amount of Taxes or Other Taxes paid to such Governmental Authority or otherwise) of any Taxes or Other Taxes which have been paid by a Borrower, or with respect to which a Borrower has paid additional amounts pursuant to this Section 4.4, it shall promptly pay to such Borrower the amount so received (but only to the extent of payments made, or additional amounts paid, by such Borrower under this Section 4.4 with respect to Taxes or Other Taxes giving rise to such Refund), net of all reasonable out-of-pocket expenses (including the net amount of taxes, if any, imposed on such Lender or the Administrative Agent with respect to such Refund) of such Lender or Administrative Agent, and without interest (other than interest paid by the relevant Governmental Authority with respect to such Refund); provided, however, that such Borrower, upon the request of Len der or the Administrative Agent, agrees to repay the amount paid over to such Borrower (plus penalties, interest or other charges) to such Lender or the Administrative Agent in the event such Lender or the Administrative Agent is required to repay such Refund to such Governmental Authority. Nothing contained in this Section 4.4(c) shall require any Lender or the Administrative Agent to make available any of its tax returns (or any other information that it deems to be confidential or proprietary).

4. Foreign Lender. Each Lender (which, for purposes of this Section 4.4, shall include any Affiliate of a Lender that makes any Eurodollar Loan pursuant to the terms of this Credit Agreement) that is not a "United States person" (as such term is defined in Section 7701(a)(30) of the Code) shall submit to the Borrowers and the Administrative Agent on or before the Closing Date (or, in the case of a Person that becomes a Lender after the Closing Date by assignment, promptly upon such assignment), two duly completed and signed copies of (A) either (1) Form W-8BEN, or any applicable successor form, of the United States Internal Revenue Service entitling such Lender to a complete exemption from withholding on all amounts to be received by such Lender pursuant to this Credit Agreement and/or the Notes or (2) Form W-8ECI, or any applicable successor form, of the United States Internal Revenue Service relating to all amounts to be received by such Lender pursuant to this Credit Agreement and/or the Notes and , if applicable, (B) an Internal Revenue Service Form W-8BEN or W-9 entitling such Lender to receive a complete exemption from United States backup withholding tax. Each such Lender shall, from time to time after submitting either such form, submit to the Borrowers and the Administrative Agent such additional duly completed and signed copies of such forms (or such successor forms or other documents as shall be adopted from time to time by the relevant United States taxing authorities) as may be (1) reasonably requested in writing by the Borrowers or the Administrative Agent and (2) appropriate under then current United States laws or regulations. Upon the reasonable request of any Borrower or the Administrative Agent, each Lender that has not provided the forms or other documents, as provided above, on the basis of being a United States person shall submit to the Borrowers and the Administrative Agent a certificate to the effect that it is such a "United States person."

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4.5  Mitigation; Mandatory Assignment.

The Administrative Agent and each Lender shall use reasonable efforts to avoid or mitigate any increased cost or suspension of the availability of an interest rate under Sections 4.1 through 4.4 above to the greatest extent practicable (including transferring the Loans to another lending office or Affiliate of a Lender) unless, in the opinion of the Administrative Agent or such Lender, such efforts would be likely to have an adverse effect upon it. In the event a Lender makes a request to a Borrower for additional payments in accordance with Section 4.1, 4.2 or 4.4, then, provided that no Default or Event of Default with respect to such Borrower has occurred and is continuing at such time, such Borrower may, at its own expense (such expense to include any transfer fee payable to the Administrative Agent under Section 11.3(b) and any expense pursuant to Section 4 hereof) and in its sole discretion, require such Lender to transfer and assign in whole (but not in part), without recourse (in accordance with and subject to the terms and conditions of Section 11.3(b)), all of its interests, rights and obligations under this Credit Agreement to an Eligible Assignee which shall assume such assigned obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment); provided that (a) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority and (b) the Borrowers or such Eligible Assignee shall have paid to the assigning Lender in immediately available funds the principal of and interest accrued to the date of such payment on the portion of the Loans hereunder held by such assigning Lender and all other amounts owed to such assigning Lender hereunder, including amounts owed pursuant to Sections 4.1 through 4.4 hereof.

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SECTION 5. CONDITIONS PRECEDENT

5.1  Closing Conditions

The obligation of the Lenders to enter into the Credit Documents is subject to satisfaction of the following conditions (in form and substance acceptable to the Lenders):

1. Credit Documents. Receipt by the Administrative Agent of duly executed copies of: (i) this Credit Agreement and (ii) the other Credit Documents.
2. Corporate Documents. Receipt by the Administrative Agent of the following:
1. Charter Documents. Copies of the articles of incorporation or other charter documents of each Borrower certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation and certified by a secretary or assistant secretary of the relevant Borrower to be true and correct as of the Closing Date.
2. Bylaws. A copy of the bylaws of each Borrower certified by a secretary or assistant secretary of the relevant Borrower to be true and correct as of the Closing Date.
3. Resolutions. Copies of resolutions of the Board of Directors of each Borrower approving and adopting the Credit Documents, the transactions contemplated herein and therein and authorizing execution and delivery thereof, certified by a secretary or assistant secretary of the relevant Borrower to be true and correct and in force and effect as of the Closing Date.
4. Good Standing. Copies of (a) certificates of good standing, existence or its equivalent with respect to each Borrower certified as of a recent date by the appropriate Governmental Authorities of its jurisdiction of incorporation and each other jurisdiction in which the failure to so qualify and be in good standing would have a Material Adverse Effect on such Borrower and (b) to the extent available, a certificate indicating payment of all corporate franchise taxes certified as of a recent date by the appropriate Governmental Authorities of each Borrower's jurisdiction of incorporation and each other jurisdiction from which the failure to pay such franchise taxes would have a Material Adverse Effect on such Borrower.

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3. Closing Certificate. Receipt by the Administrative Agent of a certificate of each Borrower, dated the Closing Date, substantially in the form of Exhibit 5.1(c), executed by any Assistant Treasurer and the Secretary or any Assistant Secretary of such Borrower, and attaching the documents referred to in subsections 5.1(b).
4. Outstanding Facility. Each of (i) the Borrowers' $1,250,000,000 364-Day Credit Agreement, dated as of May 30, 2002, (ii) VaPower's $175,000,000 Credit Agreement, dated as of November 27, 2000 and (iii) VaPower's $21,600,000 Credit Agreement, dated as of November 25, 2002, shall have been terminated and all amounts owing thereunder shall have been paid in full.
5. Fees. The Lenders and the Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented.
6. Opinion of Counsel. Receipt by the Administrative Agent of an opinion, or opinions, satisfactory in form and content to the Administrative Agent and the Lenders, addressed to the Administrative Agent and each of the Lenders and dated as of the Closing Date, substantially in the form of Exhibit 5.1(f), from McGuireWoods LLP, legal counsel to the Borrowers.
7. Financial Statements. Receipt and approval by the Administrative Agent and the Lenders of the audited financial statements of each Borrower and its Consolidated Subsidiaries for each of the fiscal years ended as of December 31, 2001 and December 31, 2002 and the unaudited financial statements of each Borrower and its Consolidated Subsidiaries dated as of March 31, 2003.
8. Consents. Receipt by the Administrative Agent of a written representation from each Borrower that (i) all governmental, shareholder and third party consents (including Securities and Exchange Commission clearance) and approvals necessary or, in the reasonable opinion of the Administrative Agent, advisable in connection with the transactions contemplated hereby have been received and are in full force and effect and (ii) no condition or requirement of law exists which could reasonably be likely to restrain, prevent or impose any material adverse condition on the transactions contemplated hereby, and receipt by the Administrative Agent of copies of any required orders of the Virginia State Corporation Commission or any other state utilities commission approving the relevant Borrower's execution, delivery and performance of this Credit Agreement and the borrowings hereunder.
9. No Default; Representations and Warranties. As of the Closing Date (i) there shall exist no Default or Event of Default by any Borrower and (ii) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects.
10. Material Adverse Effect. No event or condition shall have occurred since the dates of the financial statements delivered pursuant to Section 5.1(g) above that has or would be likely to have a material adverse effect, after taking into account applicable insurance, if any, on (a) the business, assets, liabilities (actual or contingent), operations or condition (financial or otherwise) of the Borrowers and their respective Consolidated Subsidiaries taken as a whole, (b) the ability of the Borrowers to perform their respective obligations under this Credit Agreement or (c) the validity or enforceability of this Credit Agreement, any of the other Credit Documents, or the rights and remedies of the Lenders hereunder or thereunder.
11. Other. Receipt by the Lenders of such other documents, instruments, agreements or information as reasonably requested by any Lender.

The Administrative Agent shall provide written notice to the Borrowers and the Lenders upon the occurrence of the Effective Date (as defined in Section 11.15).

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5.2  Conditions to Loans

In addition to the conditions precedent stated elsewhere herein, the Lenders shall not be obligated to make new Loans to any Borrower unless:

1. Request. Such Borrower shall have timely delivered a duly executed and completed Notice of Borrowing or Competitive Bid Request, as applicable, in conformance with all the terms and conditions of this Credit Agreement.
2. Representations and Warranties. The representations and warranties made by such Borrower in or pursuant to the Credit Documents are true and correct in all material respects at and as if made as of the date of the funding of the Loans; provided, however, that the representation and warranty set forth in clause (ii) of the second paragraph of Section 6.6 hereof need not be true and correct as a condition to any borrowing utilized by the relevant Borrower in connection with the repayment of its commercial paper program or programs.
3. No Default. On the date of the funding of the Loans, no Default or Event of Default with respect to such Borrower has occurred and is continuing or would be caused by making the Loans.
4. Availability. Immediately after giving effect to the making of a Loan (and the application of the proceeds thereof), the sum of Loans outstanding shall not exceed the Revolving Loan Commitment.

The delivery of each Notice of Borrowing shall constitute a representation and warranty by such Borrower of the correctness of the matters specified in subsections (b), (c) and (d) above.

SECTION 6. REPRESENTATIONS AND WARRANTIES

Each Borrower, severally and not jointly, hereby represents and warrants to each Lender that:

6.1  Organization and Good Standing.

Such Borrower and each Material Subsidiary of each Borrower (other than any Material Subsidiary that is not a corporation) (a) is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (b) is duly qualified and in good standing as a foreign corporation authorized to do business in every jurisdiction where the failure to so qualify would have a Material Adverse Effect on such Borrower and (c) has the requisite corporate power and authority to own its properties and to carry on its business as now conducted and as proposed to be conducted. Each Material Subsidiary of such Borrower that is not a corporation (a) is a legal entity duly organized, existing and in good standing under the laws of its jurisdiction of organization, (b) is registered or qualified as an entity authorized to do business in every jurisdiction where the failure to be so registered or qualified would have a Material Adverse Effect on such Borrower and (c) has the re quisite power and authority to own its properties and to carry on its business as now conducted and as proposed to be conducted.

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6.2  Due Authorization

Such Borrower (a) has the requisite corporate power and authority to execute, deliver and perform this Credit Agreement and the other Credit Documents and to incur the obligations herein and therein provided for and (b) is duly authorized to, and has been authorized by all necessary corporate action, to execute, deliver and perform this Credit Agreement and the other Credit Documents.

6.3  No Conflicts

Neither the execution and delivery of the Credit Documents nor the consummation of the transactions contemplated therein, nor performance of and compliance with the terms and provisions thereof by such Borrower will (a) violate or conflict with any provision of its articles of incorporation or bylaws, (b) violate, contravene or materially conflict with any law (including without limitation, the Public Utility Holding Company Act of 1935, as amended (the "1935 Act")), regulation (including without limitation, Regulation U or Regulation X), order, writ, judgment, injunction, decree or permit applicable to it, (c) violate, contravene or materially conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which it is a party or by which it may be bound, the violation of which could have a Material Adverse Effect on such Borrower or (d) result in or require the creation of any Lien upon or with respect to its properties.

6.4  Consents

No consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required to be obtained or made by such Borrower in connection with such Borrower's execution, delivery or performance of this Credit Agreement or any of the other Credit Documents that has not been obtained or made.

6.5  Enforceable Obligations

This Credit Agreement and the other Credit Documents have been duly executed and delivered and constitute legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms, except as may be limited by bankruptcy or insolvency laws or similar laws affecting creditors' rights generally or by general equitable principles.

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6.6  Financial Condition

The financial statements provided to the Lenders pursuant to Section 5.1(g) and pursuant to Section 7.1(a) and (b) present fairly the financial condition, results of operations and cash flows of such Borrower and its Consolidated Subsidiaries as of the date stated therein.

In addition, (i) such financial statements were prepared in accordance with GAAP and, (ii) since the latest date of such financial statements, there have occurred no changes or circumstances which have had or would be reasonably expected to have a Material Adverse Effect on such Borrower.


6.7  No Default

Neither such Borrower nor any of its Material Subsidiaries is in default in any respect under any contract, lease, loan agreement, indenture, mortgage, security agreement or other agreement or obligation to which it is a party or by which any of its properties is bound which default would have or would be reasonably expected to have a Material Adverse Effect on such Borrower.

6.8  Indebtedness

As of the Closing Date, such Borrower has no Indebtedness except as disclosed in the financial statements referenced in Section 5.1(g) and on Schedule 6.8.

6.9  Litigation

Except as disclosed in such Borrower's Annual Report on Form 10-K for the year ended December 31, 2002 and such Borrower's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, there are no actions, suits or legal, equitable, arbitration or administrative proceedings, pending or, to the knowledge of such Borrower, threatened against such Borrower or a Material Subsidiary of such Borrower in which there is a reasonable possibility of an adverse decision which would have or would reasonably be expected to have a Material Adverse Effect on such Borrower.

6.10  Taxes

Such Borrower and each Material Subsidiary of such Borrower has filed, or caused to be filed, all material tax returns (federal, state, local and foreign) required to be filed by it and paid all amounts of taxes shown thereon to be due (including interest and penalties) and has paid all other taxes, fees, assessments and other governmental charges (including mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing by it, except for such taxes which are not yet delinquent or that are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with GAAP. Such Borrower is not aware of any proposed tax assessments against it or any of its Material Subsidiaries.

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6.11  Compliance with Law

Except as disclosed in such Borrower's Annual Report on Form 10-K for the year ended December 31, 2002 and such Borrower's Quarterly Report for the quarter ended March 31, 2003, such Borrower and each Material Subsidiary of such Borrower is in compliance with all laws, rules, regulations, orders and decrees applicable to it, or to its properties, unless such failure to comply would not have a Material Adverse Effect on such Borrower.

6.12  ERISA

1. No Reportable Event has occurred and is continuing with respect to any Plan of such Borrower; (b) no Plan of such Borrower has an accumulated funding deficiency determined under Section 412 of the Code; (c) no proceedings have been instituted, or, to the knowledge of such Borrower, planned to terminate any Plan of such Borrower; (d) neither such Borrower, nor any member of a Controlled Group including such Borrower, nor any duly-appointed administrator of a Plan of such Borrower has instituted or intends to institute proceedings to withdraw from any Multiemployer Pension Plan (as defined in Section 3(37) of ERISA); and (e) each Plan of such Borrower has been maintained and funded in all material respects in accordance with its terms and with the provisions of ERISA applicable thereto.

6.13  Use of Proceeds 

The proceeds of the Loans made to such Borrower hereunder will be used solely for the purposes specified in Section 7.9.

6.14  Government Regulation

1. None of the proceeds of the Loans made to such Borrower hereunder will be used for the purpose of purchasing or carrying any "margin stock" which violates Regulation U or Regulation X or for the purpose of reducing or retiring in violation of Regulation U or Regulation X any Indebtedness which was originally incurred to purchase or carry "margin stock" or for any other purpose which might constitute this transaction a "purpose credit" in violation of Regulation U or Regulation X.
2. As of the Closing Date, Dominion Resources and CNG each is a registered "holding company" within the meaning of that term under the 1935 Act. The issuance by such Borrower of the Notes, its incurrence of the Indebtedness contemplated by this Credit Agreement and the borrowing, repayment and reborrowing of Loans hereunder is permitted by the 1935 Act and requires no authorization or approval of any Governmental Authority other than such authorizations and approvals as have already been obtained.
3. Such Borrower is not an "investment company" registered or required to be registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and is not controlled by such a company, nor is otherwise subject to regulation under the Investment Company Act.

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6.15  Solvency

Such Borrower is and, after the consummation of the transactions contemplated by this Credit Agreement and the other Credit Documents, will be Solvent.

SECTION 7.  AFFIRMATIVE COVENANTS

Each Borrower, severally but not jointly, hereby covenants and agrees that so long as this Credit Agreement is in effect and until the Loans made to it, together with interest, fees and other obligations hereunder, have been paid in full and the Commitments hereunder shall have terminated:

7.1  Information Covenants

Such Borrower will furnish, or cause to be furnished, to the Administrative Agent and each Lender:

1. Annual Financial Statements. As soon as available, and in any event within 120 days after the close of each fiscal year of such Borrower, a Form 10-K, as required to be filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and the Exchange Act, which includes financial information required by such Form 10-K, such financial information to be in reasonable form and detail and audited by Deloitte & Touche or another independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent and whose opinion shall be to the effect that such financial statements have been prepared in accordance with GAAP (except for changes with which such accountants concur) and shall not be limited as to the scope of the audit or qualified in any respect.
2. Quarterly Financial Statements. As soon as available, and in any event within 60 days after the close of each of the first three fiscal quarters of such Borrower a Form 10-Q, as required to be filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and the Exchange Act, which includes the financial information required by such Form 10-Q, such financial information to be in reasonable form and detail and reasonably acceptable to the Administrative Agent, and accompanied by a certificate of the chief financial officer or treasurer of such Borrower to the effect that such quarterly financial statements fairly present in all material respects the financial condition of such Borrower and have been prepared in accordance with GAAP, subject to changes resulting from audit and normal year-end audit adjustments.
3. Officer's Certificate. At the time of delivery of the financial statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of the chief financial officer or treasurer of such Borrower, substantially in the form of Exhibit 7.1(c), (i) demonstrating compliance with the financial covenant contained in Section 7.11 by calculation thereof as of the end of each such fiscal period and (ii) stating that no Default or Event of Default by such Borrower exists, or if any such Default or Event of Default does exist, specifying the nature and extent thereof and what action such Borrower proposes to take with respect thereto.
4. Reports. Promptly upon transmission or receipt thereof, copies of any filings and registrations with, and reports to or from, the Securities and Exchange Commission, or any successor agency, and copies of all financial statements, proxy statements, notices and reports as Dominion Resources shall send to its shareholders.
5. Notices. Upon such Borrower obtaining knowledge thereof, such Borrower will give written notice to the Administrative Agent immediately of (i) the occurrence of an event or condition consisting of a Default or Event of Default by such Borrower, specifying the nature and existence thereof and what action such Borrower proposes to take with respect thereto and (ii) the occurrence of any of the following: (A) the pendency or commencement of any litigation, arbitral or governmental proceeding against such Borrower or a Material Subsidiary of such Borrower which, if adversely determined, is likely to have a Material Adverse Effect on such Borrower, (B) the institution of any proceedings against such Borrower or a Material Subsidiary of such Borrower with respect to, or the receipt of notice by such Person of potential liability or responsibility for violation, or alleged violation of any federal, state or local law, rule or regulation, the violation of which would likely have a Material Adverse Ef fect on such Borrower or (C) any notice or determination concerning the imposition of any withdrawal liability by a Multiemployer Plan against such Borrower or any of its ERISA Affiliates, the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA or the termination of any Plan of such Borrower.
6. Other Information. With reasonable promptness upon any such request, such other information regarding the business, properties or financial condition of such Borrower as the Administrative Agent or the Required Lenders may reasonably request.

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7.2  Preservation of Existence and Franchises

Such Borrower will do (and will cause each of its Material Subsidiaries to do) all things necessary to preserve and keep in full force and effect its existence, rights, franchises and authority; provided that nothing in this Section 7.2 shall prevent any transaction otherwise permitted under Section 8.2 or Section 8.3 or any change in the form of organization (by merger or otherwise) of any Material Subsidiary of any Borrower so long as such change shall not have an adverse effect on such Borrower's ability to perform its obligations hereunder.

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7.3  Books and Records

Such Borrower will keep (and will cause each of its Material Subsidiaries to keep) complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of GAAP (including the establishment and maintenance of appropriate reserves).

7.4  Compliance with Law

Such Borrower will comply (and will cause each of its Material Subsidiaries to comply) with all laws, rules, regulations and orders, and all applicable restrictions imposed by all Governmental Authorities, applicable to it and its property if noncompliance with any such law, rule, regulation, order or restriction would be reasonably expected to have a Material Adverse Effect on such Borrower.

7.5  Payment of Taxes.

Such Borrower will pay and discharge all taxes, assessments and governmental charges or levies imposed upon it, or upon its income or profits, or upon any of its properties, before they shall become delinquent; provided, however, that such Borrower shall not be required to pay any such tax, assessment, charge, levy, or claim which is being contested in good faith by appropriate proceedings and as to which adequate reserves therefor have been established in accordance with GAAP.

7.6  Insurance

Such Borrower will at all times maintain in full force and effect insurance (including worker's compensation insurance, liability insurance, casualty insurance and business interruption insurance) in such amounts, covering such risks and liabilities and with such deductibles or self-insurance retentions as are in accordance with normal industry practice.

7.7  Performance of Obligations

Such Borrower will perform (and will cause each of its Material Subsidiaries to perform) in all material respects all of its obligations under the terms of all material agreements, indentures, mortgages, security agreements or other debt instruments to which it is a party or by which it is bound.

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7.8  ERISA 

Such Borrower and each of its ERISA Affiliates will (a) at all times make prompt payment of all contributions (i) required under all employee pension benefit plans (as defined in Section 3(2) of ERISA) ("Pension Plans") and (ii) required to meet the minimum funding standard set forth in ERISA with respect to each of its Plans; (b) promptly upon request, furnish the Administrative Agent and the Lenders copies of each annual report/return (Form 5500 Series), as well as all schedules and attachments required to be filed with the Department of Labor and/or the Internal Revenue Service pursuant to ERISA, and the regulations promulgated thereunder, in connection with each of its Pension Plans for each Plan Year (as defined in ERISA); (c) notify the Administrative Agent immediately of any fact, including, but not limited to, any Reportable Event arising in connection with any of its Plans, which might constitute grounds for termination thereof by the PBGC or for the appointment by the appropriate United S tates District Court of a trustee to administer such Plan, together with a statement, if requested by the Administrative Agent, as to the reason therefor and the action, if any, proposed to be taken in respect thereof; and (d) furnish to the Administrative Agent, upon its request, such additional information concerning any of its Plans as may be reasonably requested. Such Borrower will not nor will it permit any of its ERISA Affiliates to (A) terminate a Plan if any such termination would have a Material Adverse Effect on such Borrower or (B) cause or permit to exist any Reportable Event under ERISA or other event or condition which presents a material risk of termination at the request of the PBGC if such termination would have a Material Adverse Effects.

7.9  Use of Proceeds

The proceeds of the Loans made to each Borrower hereunder may be used solely (a) to provide credit support for such Borrower's commercial paper, (b) for working capital of such Borrower and its Subsidiaries and (c) for other general corporate purposes.

7.10  Audits/Inspections

Upon reasonable notice, during normal business hours and in compliance with the reasonable security procedures of such Borrower, such Borrower will permit representatives appointed by the Administrative Agent or any Lender, including, without limitation, independent accountants, agents, attorneys, and appraisers to visit and inspect such Borrower's property, including its books and records, its accounts receivable and inventory, the Borrower's facilities and its other business assets, and to make photocopies or photographs thereof and to write down and record any information such representative obtains and shall permit any Lender or the Administrative Agent or its representatives to investigate and verify the accuracy of information provided to the Lenders and to discuss all such matters with the officers, employees and representatives of such Borrower.

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7.11  Total Funded Debt to Capitalization

The ratio of (a) Total Funded Debt to (b) Capitalization for such Borrower shall at all times be less than or equal to .65 to 1.00, in the case of Dominion Resources (on a consolidated basis), or .60 to 1.00, in the case of each of VaPower and CNG (each on a consolidated basis).


SECTION 8.  NEGATIVE COVENANTS

Each Borrower, severally but not jointly, hereby covenants and agrees that so long as this Credit Agreement is in effect and until the Loans, together with interest, fees and other obligations hereunder, have been paid in full and the Commitments hereunder shall have terminated:

8.1  Nature of Business

Such Borrower will not alter the character of its business from that conducted as of the Closing Date and activities reasonably related thereto and similar and related businesses; provided, however, that VaPower may transfer assets related to its electric power generation and marketing and trading operations to one or more Wholly-Owned Subsidiaries of DRI to the extent permitted under Section 8.3.

8.2  Consolidation and Merger

Such Borrower will not enter into any transaction of merger or consolidation or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); provided that notwithstanding the foregoing provisions of this Section 8.2, the following actions may be taken if, after giving effect thereto, no Default or Event of Default by such Borrower exists:

1. a Subsidiary of such Borrower may be merged or consolidated with or into any Borrower; provided that a Borrower shall be the continuing or surviving entity;
2. such Borrower may merge or consolidate with any other Person if either (i) such Borrower shall be the continuing or surviving entity or (ii) such Borrower shall not be the continuing or surviving entity and the entity so continuing or surviving (A) is an entity organized and duly existing under the law of any state of the United States and (B) executes and delivers to the Administrative Agent and the Lenders an instrument in form satisfactory to the Required Lenders pursuant to which it expressly assumes the Loans of such Borrower and all of the other obligations of such Borrower under the Credit Documents and procures for the Administrative Agent and each Lender an opinion in form satisfactory to the Required Lenders and from counsel satisfactory to the Required Lenders in respect of the due authorization, execution, delivery and enforceability of such instrument and covering such other matters as the Required Lenders may reasonably request; and
3. such Borrower may be merged or consolidated with or into any other Borrower.

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8.3  Sale or Lease of Assets

Such Borrower will not convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or substantially all of its business or assets whether now owned or hereafter acquired, it being understood and agreed that VaPower may transfer assets related to its electric power generation and marketing and trading operations to one or more Wholly-Owned Subsidiaries generally in accordance with a plan submitted to the Virginia State Corporation Commission, provided that (i) each such Wholly-Owned Subsidiary remains at all times a Wholly Owned Subsidiary of Dominion Resources and (ii) the Ratings of Dominion Resources and VaPower will not be lowered to less than BBB by S&P or Baa2 by Moody's in connection with or as a result of such transfer.

8.4  Limitation on Liens

In the case of VaPower, VaPower shall not, nor shall it permit any of its Material Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for (i) Liens permitted by the First Mortgage Bond Indenture and (ii) Liens created in the ordinary course of business.

In the case of CNG, if CNG shall pledge, mortgage or hypothecate, or permit any Lien upon, any property or assets at any time owned by CNG and by reason thereof CNG would under the Indenture be obligated to cause the Securities outstanding under the Indenture as from time to time in effect to be secured by such pledge, mortgage, hypothecation or other Lien, CNG shall concurrently make effective provision whereby the Loans outstanding hereunder will be equally and ratably secured with any and all other indebtedness thereby secured.

In the case of Dominion Resources, if Dominion Resources shall pledge as security for any indebtedness or obligations, or permit any Lien as security for Indebtedness or obligations upon, any capital stock owned by it on the date hereof or thereafter acquired, of any of its Material Subsidiaries, Dominion Resources will secure the outstanding Loans ratably with the indebtedness or obligations secured by such pledge, except for Liens incurred or otherwise arising in the ordinary course of business.

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8.5  Fiscal Year

Such Borrower will not change its fiscal year without prior notification to the Lenders.

SECTION 9.  EVENTS OF DEFAULT

9.1  Events of Default

An Event of Default with respect to a Borrower shall exist upon the occurrence and continuation of any of the following specified events with respect to such Borrower (each an "Event of Default"):

1. Payment. Such Borrower shall:
1. default in the payment when due of any principal of any of the Loans; or
2. default, and such default shall continue for three or more days, in the payment when due of any interest on the Loans or of any fees or other amounts owing hereunder, under any of the other Credit Documents or in connection herewith.
2. Representations. Any representation, warranty or statement made or deemed to be made by such Borrower herein, in any of the other Credit Documents, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove untrue in any material respect on the date as of which it was deemed to have been made.
3. Covenants. Such Borrower shall:
1. default in the due performance or observance of any term, covenant or agreement contained in Sections 7.2, 7.9, 7.11 or 8.1 through 8.5, inclusive; or
2. default in the due performance or observance by it of any term, covenant or agreement contained in Section 7.1(a), (b), (c) or (e) and such default shall continue unremedied for a period of five Business Days after the earlier of an officer of such Borrower becoming aware of such default or notice thereof given by the Administrative Agent; or
3. default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in subsections (a), (b), (c)(i), or (c)(ii) of this Section 9.1) contained in this Credit Agreement or any other Credit Document and such default shall continue unremedied for a period of at least 30 days after the earlier of an officer of such Borrower becoming aware of such default or notice thereof given by the Administrative Agent.

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4. Credit Documents. Any Credit Document shall fail to be in full force and effect with respect to such Borrower or to give the Administrative Agent and/or the Lenders the security interests, liens, rights, powers and privileges purported to be created thereby and relating to such Borrower.
5. Bankruptcy, etc. The occurrence of any of the following with respect to such Borrower or a Material Subsidiary of such Borrower (i) a court or governmental agency having jurisdiction in the premises shall enter a decree or order for relief in respect of such Borrower or a Material Subsidiary of such Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Borrower or a Material Subsidiary of such Borrower or for any substantial part of its property or ordering the winding up or liquidation of its affairs; or (ii) an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect is commenced against such Borrower or a Material Subsidiary of such Borrower and such petition remains unstayed and in effect for a period of 60 consecutive days; or (iii) such Borrower or a Material Su bsidiary of such Borrower shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or any substantial part of its property or make any general assignment for the benefit of creditors; or (iv) such Borrower or a Material Subsidiary of such Borrower shall admit in writing its inability to pay its debts generally as they become due or any action shall be taken by such Person in furtherance of any of the aforesaid purposes.
6. Defaults under Other Agreements. With respect to any Indebtedness (other than Indebtedness of such Borrower outstanding under this Credit Agreement) of such Borrower or a Material Subsidiary of such Borrower in a principal amount in excess of $25,000,000, (i) such Borrower or a Material Subsidiary of such Borrower shall (A) default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to any such Indebtedness, or (B) default (after giving effect to any applicable grace period) in the observance or performance of any covenant or agreement relating to such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or condition shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit, the holder or holders of such Indebtedness (or trustee or agent on behalf of such holders) to cause any such Indebtedness to become due prior to its stated maturity; or (ii) any such Indebtedness shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof; or (iii) any such Indebtedness matures and is not paid at maturity.
7. Judgments. One or more judgments, orders, or decrees shall be entered against such Borrower or a Material Subsidiary of such Borrower involving a liability of $25,000,000 or more, in the aggregate, (to the extent not paid or covered by insurance provided by a carrier who has acknowledged coverage) and such judgments, orders or decrees shall continue unsatisfied, undischarged and unstayed for a period ending on the first to occur of (i) the last day on which such judgment, order or decree becomes final and unappealable and, where applicable, with the status of a judicial lien or (ii) 30 days.
8. ERISA. (i) Such Borrower, or a Material Subsidiary of such Borrower or any member of the Controlled Group including such Borrower shall fail to pay when due an amount or amounts aggregating in excess of $20,000,000 which it shall have become liable to pay under Title IV of ERISA; or (ii) notice of intent to terminate a Plan or Plans of such Borrower which in the aggregate have unfunded liabilities in excess of $20,000,000 (individually and collectively, a "Material Plan") shall be filed under Title IV of ERISA by such Borrower or any member of the Controlled Group including such Borrower, any plan administrator or any combination of the foregoing; or (iii) the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan of such Borrower; or (iv) a condition shall exist by reason of which the PBGC would be entitled to obtain a decre e adjudicating that any Material Plan of such Borrower must be terminated; or (v) there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of the Controlled Group including such Borrower to incur a current payment obligation in excess of $20,000,000.
9. Change of Control. The occurrence of any Change of Control with respect to such Borrower.

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9.2  Acceleration; Remedies.

Upon the occurrence of an Event of Default with respect to any Borrower, and at any time thereafter unless and until such Event of Default has been waived by the Required Lenders or cured to the satisfaction of the Required Lenders, the Administrative Agent may with the consent of the Required Lenders, and shall, upon the request and direction of the Required Lenders, by written notice to such Borrower take any of the following actions without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against such Borrower, except as otherwise specifically provided for herein:

1. Termination of Commitments. Declare the Commitments with respect to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources) terminated whereupon the Commitments with respect to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources) shall be immediately terminated.
2. Acceleration of Loans. Declare the unpaid principal of and any accrued interest in respect of all Loans made to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources) and any and all other indebtedness or obligations of any and every kind owing by such Borrower (and, if such Borrower is either VaPower or CNG, then also by Dominion Resources) to any of the Lenders or the Administrative Agent hereunder to be due whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by such Borrower (and, if such Borrower is either VaPower or CNG, then also by Dominion Resources).
3. Enforcement of Rights. Enforce any and all rights and interests created and existing under the Credit Documents, including, without limitation, all rights of set-off, as against such Borrower.

Notwithstanding the foregoing, if an Event of Default specified in Section 9.1(e) shall occur, then the Commitments with respect to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources) shall automatically terminate and all Loans made to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources), all accrued interest in respect thereof, all accrued and unpaid fees and other indebtedness or obligations owing by such Borrower (and, if such Borrower is either VaPower or CNG, then also by Dominion Resources) to the Lenders and the Administrative Agent hereunder shall immediately become due and payable without the giving of any notice or other action by the Administrative Agent or the Lenders.

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9.3  Allocation of Payments After Event of Default

Notwithstanding any other provisions of this Credit Agreement, after the occurrence and during the continuance of an Event of Default with respect to any Borrower, all amounts collected from such Borrower or received by the Administrative Agent or any Lender on account of amounts outstanding under any of the Credit Documents shall be paid over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation reasonable attorneys' fees other than the fees of in-house counsel) of the Administrative Agent or any of the Lenders in connection with enforcing the rights of the Lenders under the Credit Documents against such Borrower and any protective advances made by the Administrative Agent or any of the Lenders, pro rata as set forth below;

SECOND, to payment of any fees owed to the Administrative Agent or any Lender by such Borrower, pro rata as set forth below;

THIRD, to the payment of all accrued interest payable to the Lenders by such Borrower hereunder, pro rata as set forth below;

FOURTH, to the payment of the outstanding principal amount of the Loans of such Borrower, pro rata as set forth below;

FIFTH, to all other obligations which shall have become due and payable of such Borrower under the Credit Documents and not repaid pursuant to clauses "FIRST" through "FOURTH" above; and

SIXTH, the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

In carrying out the foregoing, (a) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category and (b) each of the Lenders shall receive an amount equal to its pro rata share (based on each Lender's Commitment Percentages) of amounts available to be applied.

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SECTION 10.  AGENCY PROVISIONS

10.1  Appointment

Each Lender hereby designates and appoints JPMCB as administrative agent of such Lender to act as specified herein and the other Credit Documents, and each such Lender hereby authorizes the Administrative Agent, as the agent for such Lender, to take such action on its behalf under the provisions of this Credit Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated by the terms hereof and of the other Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere herein and in the other Credit Documents, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or any of the other Credit Documents, or shall otherwise e xist against the Administrative Agent. The provisions of this Section are solely for the benefit of the Administrative Agent and the Lenders and no Borrower shall have any rights as a third party beneficiary of the provisions hereof. In performing its functions and duties under this Credit Agreement and the other Credit Documents, the Administrative Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for any Borrower.

10.2  Delegation of Duties

The Administrative Agent may execute any of its duties hereunder or under the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

10.3  Exculpatory Provisions

Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection herewith or in connection with any of the other Credit Documents (except for its or such Person's own gross negligence or willful misconduct), or responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by a Borrower contained herein or in any of the other Credit Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection herewith or in connection with the other Credit Documents, or enforceability or sufficiency therefor of any of the other Credit Documents, or for any failure of the Borrowers to perform their respective obligations hereunder or thereunder. The Administrative Agent shall not be responsible to any Le nder for the effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Credit Agreement, or any of the other Credit Documents or for any representations, warranties, recitals or statements made herein or therein or made by a Borrower in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by the Administrative Agent to the Lenders or by or on behalf of a Borrower to the Administrative Agent or any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or of the existence or possible existence of any Default or Event of Default or to inspect the properties, books or records of a Borrower. The Administrative Agent is not a trustee for the Lenders and owes no fiduciary duty to the Le nders. None of the Lenders identified on the facing page or signature pages of this Agreement as "Syndication Agent" or "Co-Documentation Agents" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such, nor shall they have or be deemed to have any fiduciary relationship with any Lender.

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10.4  Reliance on Communications

The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to a Borrower, independent accountants and other experts selected by the Administrative Agent with reasonable care). The Administrative Agent may deem and treat the Lenders as the owner of its interests hereunder for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent in accordance with Section 11.3(b). The Administrative Agent shall be fully justified in failing or refusing to take any action under this Credit Agreement or under a ny of the other Credit Documents unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any of the other Credit Documents in accordance with a request of the Required Lenders (or to the extent specifically provided in Section 11.6, all the Lenders) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders (including their successors and assigns).

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10.5  Notice of Default

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or the relevant Borrower referring to the Credit Document, describing such Default or Event of Default and stating that such notice is a "notice of default." In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be directed by the Required Lenders (or, to the extent specifically provided in Section 11.6, all the Lenders).

10.6  Non-Reliance on Administrative Agent and Other Lenders

Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Administrative Agent or any affiliate thereof hereinafter taken, including any review of the affairs of a Borrower, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of a Borrower and made its own decision to make its Loans hereunder and enter into this Credit Agreement. Each Lender also represents that it will, independently and without reliance u pon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of a Borrower. Except for (i) delivery of the Credit Documents and (ii) notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial or other conditions, prospects or creditworthiness of a Borrower which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorn eys-in-fact or Affiliates.

10.7  Indemnification

Each Lender agrees to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by a Borrower and without limiting the obligation of a Borrower to do so), ratably according to its Revolving Loan Commitment, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in its capacity as such in any way relating to or arising out of this Credit Agreement or the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities , obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent. If any indemnity furnished to the Administrative Agent for any purpose shall, in the opinion of the Administrative Agent, be insufficient or become impaired, the Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder and under the other Credit Documents.

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10.8  Administrative Agent in Its Individual Capacity

The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with a Borrower as though the Administrative Agent were not Administrative Agent hereunder. With respect to the Loans made by it, the Administrative Agent shall have the same rights and powers under this Credit Agreement as any Lender and may exercise the same as though they were not Administrative Agent, and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity.

10.9  Successor Administrative Agent

The Administrative Agent may, at any time, resign upon 30 days written notice to the Lenders. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment, within 30 days after the notice of resignation, then the retiring Administrative Agent shall select a successor Administrative Agent provided such successor is an Eligible Assignee (or if no Eligible Assignee shall have been so appointed by the retiring Administrative Agent and shall have accepted such appointment, then the Lenders shall perform all obligations of the retiring Administrative Agent until such time, if any, as a successor Administrative Agent shall have been so appointed and shall have accepted such appointment as provided for above). Upon the acceptance of any appointment as Administrative Agent hereunder by a successor, such successor Administrative A gent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations as Administrative Agent, as appropriate, under this Credit Agreement and the other Credit Documents and the provisions of this Section 10.9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Credit Agreement.

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SECTION 11.  MISCELLANEOUS

11.1  Notices

Except as otherwise expressly provided herein, all notices and other communications shall have been duly given and shall be effective (a) when delivered, (b) when transmitted via telecopy (or other facsimile device), (c) the Business Day following the day on which the same has been delivered prepaid (or pursuant to an invoice arrangement) to a reputable national overnight air courier service, or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective parties at the address or telecopy numbers set forth on Schedule 11.1, or at such other address as such party may specify by written notice to the other parties hereto.

Notices and other communications to any Lender hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or a Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

11.2  Right of Set-Off; Adjustments

In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default by a Borrower and the commencement of remedies described in Section 9.2, each Lender is authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of such Borrower against obligations and liabilities of such Borrower to the Lenders hereunder, under the Notes, the other Credit Documents or otherwise, irrespective of whether the Administrative Agent or the Lenders shall have made any demand hereunder and although such obligations, liabilities or cl aims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto. Each Borrower hereby agrees that any Person purchasing a participation in the Loans and Commitments to it hereunder pursuant to Section 11.3(c) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder.

Except to the extent that this Credit Agreement expressly provides for payments to be allocated to a particular Lender, if any Lender (a "Benefitted Lender") shall receive any payment of all or part of the obligations owing to it by a Borrower under this Credit Agreement, receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 9.1(e), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the obligations owing to such other Lender by such Borrower under this Credit Agreement, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collat eral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

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11.3  Benefit of Agreement.

1. Generally. This Credit Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided that a Borrower may not assign and transfer any of its interests (except as permitted by Section 8.2) without prior written consent of the Lenders; and provided further that the rights of each Lender to transfer, assign or grant participations in its rights and/or obligations hereunder shall be limited as set forth in this Section 11.3.
2. Assignments. Each Lender may assign all or a portion of its rights and obligations under this Credit Agreement (including, without limitation, all or a portion of its Loans, its Notes, and its Commitment); provided, however, that:
1. each such assignment shall be to an Eligible Assignee;
2. except (A) in the case of an assignment to another Lender or to an Affiliate of a Lender, (B) in the case of an assignment of all of a Lender's rights and obligations under this Credit Agreement, or (C) with the consent of the Administrative Agent and DRI (such consent by DRI (i) not to be unreasonably withheld and (ii) not being required during the existence of a Default or Event of Default), any such partial assignment shall be in an amount at least equal to $10,000,000 (or, if less, the remaining amount of the Commitment being assigned by such Lender) or an integral multiple of $5,000,000 in excess thereof;
3. each such assignment by a Lender shall be of a constant, and not varying, percentage of all of its rights and obligations under this Credit Agreement and the Notes; and
4. the parties to such assignment shall execute and deliver to the Administrative Agent for its acceptance an Assignment Agreement in substantially the form of Exhibit 11.3, together with a processing fee from the assignor of $4,000.

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Upon execution, delivery, and acceptance of such Assignment Agreement, the assignee thereunder shall be a party hereto and, to the extent of such assignment, have the obligations, rights, and benefits of a Lender hereunder and the assigning Lender shall, to the extent of such assignment, relinquish its rights and be released from its obligations under this Credit Agreement. Upon the consummation of any assignment pursuant to this Section 11.3(b), the assignor, the Administrative Agent and the relevant Borrower shall make appropriate arrangements so that, if required, new Notes are issued to the assignee. If the assignee is not incorporated under the laws of the United States of America or a State thereof, it shall deliver to such Borrower and the Administrative Agent certification as to exemption from deduction or withholding of taxes in accordance with Section 4.4.

By executing and delivering an assignment agreement in accordance with this Section 11.3(b), the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (A) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and the assignee warrants that it is an Eligible Assignee; (B) except as set forth in clause (A) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto or the financial condition of a Borrower or the performance or observance by such Borrower of any of its obligations under this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (C) such assignee represents and warrants that it is legally authorized to enter into such assignment agreement; (D) such assignee confirms that it has received a copy of this Credit Agreement, the other Credit Documents and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such assignment agreement; (E) such assignee will independently and without reliance upon the Administrative Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Credit Agreement and the other Credit Documents ; (F) such assignee appoints and authorizes the Administrative Agent to take such action on its behalf and to exercise such powers under this Credit Agreement or any other Credit Document as are delegated to the Administrative Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto; and (G) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Credit Agreement and the other Credit Documents are required to be performed by it as a Lender.

For avoidance of doubt, the parties to this Credit Agreement acknowledge that the provisions of this Section 11.3 concerning assignments relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including any pledge or assignment by a Lender to any Federal Reserve Bank in accordance with applicable law.

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3. Register. The Administrative Agent shall maintain a copy of each Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time by each Borrower (collectively, the "Registers"). The entries in the Registers shall be conclusive and binding for all purposes, absent manifest error, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the relevant Register as a Lender hereunder for all purposes of this Credit Agreement. The Registers shall be available for inspection by the Borrowers or any Lender at any reasonable time and from time to time upon reasonable prior notice.
4. Acceptance. Upon its receipt of an assignment agreement executed by the parties thereto, together with any Note subject to such assignment and payment of the processing fee, the Administrative Agent shall, if such Assignment Agreement has been completed and is in substantially the form of Exhibit 11.3, (i) accept such assignment agreement, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the parties thereto.
5. Participations. Each Lender may sell, transfer, grant or assign participations in all or any part of such Lender's interests and obligations hereunder; provided that (i) such selling Lender shall remain a "Lender" for all purposes under this Credit Agreement (such selling Lender's obligations under the Credit Documents remaining unchanged) and the participant shall not constitute a Lender hereunder, (ii) no such participant shall have, or be granted, rights to approve any amendment or waiver relating to this Credit Agreement or the other Credit Documents except to the extent any such amendment or waiver would (A) reduce the principal of or rate of interest on or fees in respect of any Loans in which the participant is participating, or (B) postpone the date fixed for any payment of principal (including extension of the Maturity Date or the date of any mandatory prepayment), interest or fees in respect of any Loans in which the participant is participating and (iii)  sub-participations by the participant (except to an Affiliate, parent company or Affiliate of a parent company of the participant) shall be permitted with the consent of the Borrowers (which, in each case, shall not be unreasonably withheld or delayed and shall not be required during the existence of a Default or Event of Default). In the case of any such participation, the participant shall not have any rights under this Credit Agreement or the other Credit Documents (the participant's rights against the selling Lender in respect of such participation to be those set forth in the participation agreement with such Lender creating such participation) and all amounts payable by such Borrower hereunder shall be determined as if such Lender had not sold such participation; provided, however, that such participant shall be entitled to receive additional amounts under Section 4 to the same extent that the Lender from which such participant acquired its participation would be entitled to the benefit of such cost protection provisions.
6. Payments. No Eligible Assignee, participant or other transferee of any Lender's rights shall be entitled to receive any greater payment under Section 4 than such Lender would have been entitled to receive with respect to the rights transferred, unless such transfer is made with the relevant Borrower's written consent.
7. Nonrestricted Assignments. Notwithstanding any other provision set forth in this Credit Agreement, any Lender may at any time assign and pledge all or any portion of its Loans and its Notes to any Federal Reserve Bank as collateral security pursuant to Regulation A and any operating circular issued by such Federal Reserve Bank. No such assignment shall release the assigning Lender from its obligations hereunder.
8. Information. Any Lender may furnish any information concerning a Borrower or any of its Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants) who is notified of the confidential nature of the information and agrees to use its reasonable best efforts to keep confidential all non-public information from time to time supplied to it.

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11.4  No Waiver; Remedies Cumulative

No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between a Borrower and the Administrative Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender would otherwise have. No notice to or demand on a Borrower in any case shall entitle such Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.

11.5  Payment of Expenses, etc.

Each Borrower agrees to: (a) pay all reasonable out-of-pocket costs and expenses of (i) the Administrative Agent in connection with the negotiation, preparation, execution and delivery and administration of this Credit Agreement and the other Credit Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees and expenses of outside legal counsel to the Administrative Agent) and any amendment, waiver or consent relating hereto and thereto including, but not limited to, any such amendments, waivers or consents resulting from or related to any work-out, renegotiation or restructure relating to the performance by such Borrower under this Credit Agreement and (ii) of the Administrative Agent and the Lenders in connection with enforcement of the Credit Documents and the documents and instruments referred to therein (including, without limitation, in connection with any such enforcement, the reasonable fees and disbursements of counsel fo r the Administrative Agent and each of the Lenders) against such Borrower; and (b) indemnify the Administrative Agent and each Lender and its Affiliates, their respective officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not the Administrative Agent or any Lender or its Affiliates is a party thereto) related to the entering into and/or performance of any Credit Document or the use of proceeds of any Loans (including other extensions of credit) hereunder or the consummation of any other transactions contemplated in any Credit Document by such Borrower, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such losses, liabilities, claims, damages or expenses to the extent incurred by reason of gross negligence or willful misconduct on the part of the Person to be indemnified).

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11.6  Amendments, Waivers and Consents

Neither this Credit Agreement nor any other Credit Document nor any of the terms hereof or thereof may be amended, changed, waived, discharged or terminated unless such amendment, change, waiver, discharge or termination is in writing and signed by the Required Lenders and the Borrowers; provided that no such amendment, change, waiver, discharge or termination shall without the consent of each Lender affected thereby:

1. extend the Maturity Date;
2. reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) thereon or fees hereunder;
3. reduce or forgive the principal amount of any Loan;
4. increase or extend the Commitment of a Lender over the amount thereof in effect (it being understood and agreed that a waiver of any Default or Event of Default or a waiver of any mandatory reduction in the Commitments shall not constitute a change in the terms of any Commitment of any Lender);
5. release a Borrower from its obligations under the Credit Documents or consent to the transfer or assignment of such obligations;
6. amend, modify or waive any provision of this Section or Section 3.6, 3.8, 9.1(a), 10.7, 11.2, 11.3 or 11.5; or
7. reduce any percentage specified in, or otherwise modify, the definition of Required Lenders.

Notwithstanding the above, no provisions of Section 10 may be amended or modified without the consent of the Administrative Agent.

Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above, each Lender is entitled to vote as such Lender sees fit on any reorganization plan that affects the Loans and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersede the unanimous consent provisions set forth herein.

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11.7  Counterparts; Telecopy

This Credit Agreement may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Credit Agreement to produce or account for more than one such counterpart. Delivery of executed counterparts by facsimile shall be effective as an original and shall constitute a representation that an original will be delivered.

11.8  Headings

The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Credit Agreement.

11.9  Defaulting Lender

Each Lender understands and agrees that if such Lender is a Defaulting Lender then it shall not be entitled to vote on any matter requiring the consent of the Required Lenders or to object to any matter requiring the consent of all the Lenders; provided, however, that all other benefits and obligations under the Credit Documents shall apply to such Defaulting Lender.

11.10  Survival of Indemnification and Representations and Warranties

All indemnities set forth herein and all representations and warranties made herein shall survive the execution and delivery of this Credit Agreement, the making of the Loans, and the repayment of the Loans and other obligations and the termination of the Commitments hereunder.

11.11  GOVERNING LAW

THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Each Borrower irrevocably consents to the service of process out of any competent court in any action or proceeding brought in connection with this Credit Agreement by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at its address for notices pursuant to Section 11.1, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of a Lender to serve process in any other manner permitted by law.

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11.12  WAIVER OF JURY TRIAL

EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

11.13  Severability

If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.

11.14  Entirety

This Credit Agreement together with the other Credit Documents represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated herein and therein.

11.15  Binding Effect

This Credit Agreement shall become effective at such time (the "Effective Date") when all of the conditions set forth in Section 5.1 have been satisfied or waived by the Lenders and this Credit Agreement shall have been executed by each of the Borrowers and the Administrative Agent, and the Administrative Agent shall have received copies (telefaxed or otherwise) which, when taken together, bear the signatures of each Lender, and thereafter this Credit Agreement shall be binding upon and inure to the benefit of each Borrower, the Administrative Agent and each Lender and their respective successors and permitted assigns.

11.16  Submission to Jurisdiction

Each Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Credit Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Credit Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Credit Agreement against any Borrower or its properties in the courts of any jurisdiction. Each Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Credit Agreement in any court referred to above. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Each of the Borrowers also hereby irrevocably and unconditionally waives any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

11.17  Confidentiality

Each of the Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by any Borrower pursuant to this Agreement that is designated by such Borrower as confidential; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Administrative Agent, any other Lender or any of its Affiliates, (b) subject to an agreement to comply with the provisions of this Section, to any actual or prospective Assignee or participant, (c) to its employees, directors, agents, attorneys and accountants or those of any of its affiliates, (d) upon the request or demand of any Governmental Authority, (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any requirement of law, (f) if required to do so in connection with any litigation or similar proceeding, (g) that has been publicly disclosed, (h) to the Nat ional Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender's investment portfolio in connection with ratings issued with respect to such Lender, or (i) in connection with the exercise of any remedy hereunder or under any other Credit Document. Notwithstanding anything herein to the contrary, any party subject to confidentiality obligations hereunder or under any other related document (and any employee, representative or other agent of such party) may disclose to any and all persons, without limitation of any kind, such party's U.S. federal income tax treatment and the U.S. federal income tax structure of the transactions contemplated by this Credit Agreement relating to such party and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. However, no such party shall disclose any information relating to such t ax treatment or tax structure to the extent nondisclosure is reasonably necessary in order to comply with applicable securities laws.

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11.18  Designation of SPVs

 
Notwithstanding anything to the contrary contained herein, any Lender, (a "Granting Lender") may grant to a special purpose funding vehicle (an "SPV"), identified as such in writing from time to time by such Granting Lender to the Administrative Agent and the Borrowers, the option to fund all or any part of any Loan that such Granting Lender would otherwise be obligated to fund pursuant to this Credit Agreement; provided that (i) nothing herein shall constitute a commitment by any SPV to fund any Loan, (ii) if an SPV elects not to exercise such option or otherwise fails to fund all or any part of such Loan, the Granting Lender shall be obligated to fund such Loan pursuant to the terms hereof, (iii) no SPV shall have any voting rights pursuant to Section 11.6 and (iv) with respect to notices, payments and other matters hereunder, the Borrowers, the Administrative Agent and the Lenders shall not be obligated to deal with an SPV, but may limit their communications and ot her dealings relevant to such SPV to the applicable Granting Lender. The funding of a Loan by an SPV hereunder shall utilize the Revolving Loan Commitment of the Granting Lender to the same extent that, and as if, such Loan were funded by such Granting Lender.

As to any Loans or portion thereof made by it, each SPV shall have all the rights that its applicable Granting Lender making such Loans or portion thereof would have had under this Credit Agreement; provided, however, that each SPV shall have granted to its Granting Lender an irrevocable power of attorney, to deliver and receive all communications and notices under this Agreement (and any related documents) and to exercise on such SPV's behalf, all of such SPV's voting rights under this Credit Agreement. No additional Note shall be required to evidence the Loans or portion thereof made by an SPV; and the related Granting Lender shall be deemed to hold its Note as agent for such SPV to the extent of the Loans or portion thereof funded by such SPV. In addition, any payments for the account of any SPV shall be paid to its Granting Lender as agent for such SPV.

Each party hereto hereby agrees that no SPV shall be liable for any indemnity or payment under this Agreement for which a Lender would otherwise be liable for so long as, and to the extent, the Granting Lender provides such indemnity or makes such payment. In furtherance of the foregoing, each party hereto hereby agrees (which agreements shall survive the termination of this Credit Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPV, it will not institute against, or join any other person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof.

In addition, notwithstanding anything to the contrary contained in this Credit Agreement, any SPV may (i) at any time and without paying any processing fee therefor, assign or participate all or a portion of its interest in any Loans to the Granting Lender or to any financial institutions providing liquidity and/or credit support to or for the account of such SPV to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancements to such SPV. This Section 11.17 may not be amended without the written consent of any Granting Lender affected thereby.

[Remainder of Page Intentionally Blank]

Each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and delivered as of the date first above written.

DOMINION RESOURCES, INC.,
as a Borrower

By:__s/ G. Scott Hetzer_________________
Name: G. Scott Hetzer
Title: Senior Vice President & Treasurer

VIRGINIA ELECTRIC AND POWER COMPANY,
as a Borrower

By:___/s/ G. Scott Hetzer__________
Name: G. Scott Hetzer
Title:     Senior Vice President & Treasurer

CONSOLIDATED NATURAL GAS COMPANY,
as a Borrower

By: ___/s/ G. Scott Hetzer_______________
Name: G. Scott Hetzer
Title:    Senior Vice President & Treasurer

JPMORGAN CHASE BANK, as Administrative Agent and as a Lender

By:___/s/ Robert M. Bowen, II___________
Name: Robert M. Bowen, II
Title:    Managing Director

ABN AMRO BANK N.V.

By:___/s/ John J. Mack___________
Name: John J. Mack
Title:    Senior Vice President

By:____/s/ Mark A. Wesselmann_________
Name: Mark A. Wesselmann
Title:    Vice President

BANK OF AMERICA, N.A.

By:____/s/ Wade B. Sample________
Name: Wade B. Sample
Title:     Managing Director

BANK ONE, NA

By:_____/s/ Jane A. Bek__________
Name: Jane A. Bek
Title:    Director

BARCLAYS BANK PLC

By:___/s/ Sydney G. Dennis________
Name: Sydney G. Dennis
Title:    Director

CITIBANK, N.A.

By:___/s/ J. Nicholas McKee_______
Name: J. Nicholas McKee
Title:    Managing Director

CREDIT SUISSE FIRST BOSTON

By:____/s/ S. William Fox_________
Name: S. William Fox
Title:    Director

By:____/s/ David Dodd_________
Name: David Dodd
Title:    Associate

DEUTSCHE BANK AG NEW YORK BRANCH

By:___/s/ Michael Keating_________
Name: Michael Keating
Title:    Managing Director

By:___/s/ Hans Narberhaus________
Name: Hans Narberhaus
Title:    Vice President

KBC-BANK

By:____/s/ Jean-Pierre Diels_________
Name: Jean-Pierre Diels
Title:    First Vice President

By:____/s/ Robert Snauffer__________
Name: Robert Snauffer
Title:    First Vice President

KEYBANK NATIONAL ASSOCIATION

By:____/s/ Sherrie I. Manson_______
Name: Sherrie I. Manson
Title:    Vice President

LEHMAN BROTHERS BANK, FSB

By:____/s/ Gary T. Taylor_________
Name: Gary T. Taylor
Title:    Vice President

MERRILL LYNCH BANK USA

By:___/s/ Louis Alder_____________
Name: Louis Alder
Title:    Vice President

MIZUHO CORPORATE BANK, LTD

By:____/s/ Jun Shimmachi________
Name: Jun Shimmachi
Title:    Vice President

MORGAN STANLEY BANK

By:____/s/ Jaap L. Tonckens_______
Name: Jaap L. Tonckens
Title:    Vice President

THE BANK OF NOVA SCOTIA

By:____/s/ Frank F. Sandler________
Name: Frank F. Sandler
Title:    Managing Director

THE BANK OF TOYKO-MITSUBISHI, LTD., NEW YORK BRANCH

By:___/s/ J. William Rhodes________
Name: J. William Rhodes
Title:    Authorized Signatory

UBS AG, CAYMAN ISLANDS BRANCH



By:___/s/ Thomas R. Salzano______
Name: Thomas R. Salzano
Title:    Banking Products Services, US

By:____/s/ Mildred V. Saint________
Name: Mildred V. Saint
Title:    Associate Director

UFJ BANK LIMITED



By:____/s/ John T. Feeney______________
Name: John T. Feeney
Title:    Vice President

WACHOVIA BANK, N.A.



By:___/s/ Lawrence P. Sullivan______
Name: Lawrence P. Sullivan
Title:    Vice President

WILLIAM STREET COMMITMENT CORPORATION

(Recourse only to assets of William Street Commitment Corporation)



By:___/s/ Jennifer M. Hill__________
Name: Jennifer M. Hill
Title: Vice President and Chief Financial Officer

EX-10.2 5 ex102.htm EXHIBIT 10.2

Exhibit 10.2 

DOMINION RESOURCES, INC.

RETIREMENT BENEFIT RESTORATION PLAN

As Amended and Restated
Effective October 17, 2003

DOMINION RESOURCES, INC.
RETIREMENT BENEFIT RESTORATION PLAN

Purpose

The Board of Directors of Dominion Resources, Inc. determined that the adoption of the Retirement Benefit Restoration Plan effective January 1, 1991, would assist it in attracting and retaining those employees whose judgment, abilities and experience would contribute to its continued progress. The Plan is intended to be a plan that is unfunded and maintained primarily for the purpose of providing deferred compensation for a "select group of management or highly compensated employees" (as such phrase is used in the Employee Retirement Income Security Act of 1974). The Plan was subsequently amended from time to time and was amended and restated effective July 8, 2002 and amended and restated effective September 19, 2003.

Article I
Definitions

As defined herein, the following phrases or terms shall have the indicated meanings:

1.1 "Administrative Benefit Committee" means the Administrative Benefit Committee of Dominion Resources, Inc., which shall manage and administer the Plan in accordance with the provisions of Article X.

1.2 "Affiliate" means any entity that is (i) a member of a controlled group of corporations as defined in Section 1563(a) of the Code, determined without regard to Code Sections 1563(a)(4) and 1563(e)(3)(C), of which Dominion Resources, Inc. is a member according to Code Section 414(b); (ii) an unincorporated trade or business that is under common control with Dominion Resources, Inc., as determined according to Code Section 414(c); or (iii) a member of an affiliated service group of which Dominion Resources, Inc. is a member according to Code Section 414(m).

1.3 "Beneficiary" means the individual, individuals, entity, entities or the estate of a Participant which, in accordance with the provisions of Article XII, is entitled to receive the benefits payable under the Plan, if any, upon the Participant's death.

1.4 "Change in Control" means with regard to each Participant at any time an event that constitutes a "Change in Control" for purposes of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. as in effect at that time.

1.5 "Code" means the Internal Revenue Code of 1986, as amended.

1.6 "Company" means Dominion Resources, Inc., its predecessor, a subsidiary or an Affiliate.

1.7 "Eligible Employee" means an individual (i) who is employed by Dominion Resources, Inc. or an Affiliate, (ii) who is a member of management or a highly compensated employee, and (iii) whose Retirement Plan benefit is or has been reduced or limited by Code Section 401(a)(17), Code Section 415, or both.

1.8 "OCN Committee" means the Organization, Compensation and Nominating Committee of the Board of Directors of Dominion Resources, Inc.

1.9 "Participant" means an Eligible Employee who is designated by the OCN Committee to participate in the Plan.

1.10 "Plan" means the Dominion Resources, Inc. Retirement Benefit Restoration Plan.

1.11 "Potential Change in Control" means with regard to each Participant at any time an event that constitutes a "Potential Change in Control" for purposes of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. as in effect at that time.

1.12 "Retirement" and "Retire" mean a Participant's termination of employment with the Company at a time when the Participant is entitled to begin receiving an immediate annuity benefit under the Retirement Plan (regardless of whether the Participant actually elects to begin receiving an immediate annuity benefit); provided, however, that a Participant who is continuing to accrue benefits under the Retirement Plan shall in no event be considered "Retired" for purposes of this Plan. A terminating Participant who has a contractual agreement with the Company to be treated as a retiree shall be treated as Retired for purposes of this Plan.

1.13 "Retirement Plan" means with regard to each Participant a defined benefit pension plan that is qualified under Code Section 401(a), that is maintained by Dominion Resources, Inc. or an Affiliate, and in which the Participant participates.

1.14 "Totally and Permanently Disabled" means a condition that renders a Participant eligible to receive long term disability benefits under the Company's long term disability plan that covers the Participant.

Article II
Participation

An Eligible Employee who is designated to participate in the Plan by the OCN Committee shall become a Participant in the Plan as of the date specified by the OCN Committee. A Participant who is an employee of the Company shall continue to participate in the Plan until such date as the OCN Committee may declare that he or she is no longer a Participant or until the date that he or she is no longer an Eligible Employee. Except as otherwise specifically provided herein, a Participant whose employment with the Company terminates for any reason shall immediately cease to participate in the Plan and shall forfeit all rights to any benefits under the Plan.

Article III
Benefits

Subject to the provisions of Articles VI and VII, a Participant (or the Participant's Beneficiary, if applicable) shall be entitled to benefits under this Plan as follows:

3.1 (a) A Participant who Retires shall be entitled to a monthly benefit under the Plan equal to the difference between (y) and (z) below where:

            (y) = the monthly benefit that would have been payable to the Participant under the Retirement Plan but for the application of the limits set forth in Code Sections 401(a)(17) and 415; and

            (z) = the monthly benefit that the Participant is entitled to receive under the Retirement Plan.

(b) Except as otherwise specifically provided, all benefits under Section 3.1(a) shall be computed and paid at the same time and in the same annuity form as the Participant's annuity benefit is determined and paid under the Retirement Plan; provided, however, that if the Participant elects to receive an immediate lump sum payment of part of his or her benefit under the Retirement Plan, the Participant may also elect to have the corresponding portion of the Participant's benefits under this Plan be computed and paid in an immediate lump sum. Any such election shall be made in accordance with the same rules and within the same time period described in Section 3.1(c). Upon a Participant's death, no further benefits shall be payable under this Plan except as provided in Section 3.3.

(c) In lieu of receiving benefits under this Plan at the same time and in the same annuity form as the annuity benefit payable under the Retirement Plan, a Participant may elect to receive an immediate single lump sum payment equal to the actuarial equivalent of the entire benefit otherwise payable under this Plan. The Participant must make the election of a single lump sum payment either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one (1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion. Upon the denial of a Participant's election, the Participant shall receive the benefits provided under the Plan in the form that is otherwise payable absent the election. The actuarial equivalent of any lump sum benefit payable under this Section 3.1(c) shall be computed using actuarial factors, including interest rates, as determined by the Administrative B enefit Committee.

(d) Effective December 1, 2001, a Participant who is to receive a benefit under this Section 3.1 in a single lump sum payment may elect to defer payment of such lump sum benefit by electing to roll over the amount to the Dominion Resources, Inc. Executives' Deferred Compensation Plan. Payment of benefits rolled over to the Dominion Resources, Inc. Executives' Deferred Compensation Plan shall be determined under the distribution provisions of that plan. For distributions prior to June 1, 2002, the Participant may elect the rollover option (regardless of whether the Participant has previously made an election with respect to the payment of the benefit under this Section 3.1), and such election shall be effective ten (10) days after the receipt of such election by the Administrative Benefit Committee. For distributions on or after June 1, 2002, the election of the rollover option must be made either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one ( 1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion.

(e) Effective January 1, 2003, a Participant who is to receive a benefit under this Section 3.1 in a single lump sum payment may elect to defer payment of such lump sum benefit by electing to roll over the amount to the Dominion Security Option Plan. Payment of benefits rolled over to the Dominion Security Option Plan shall be determined under the distribution provisions of that plan. The election of the rollover option must be made either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one (1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion.

3.2 If a Participant becomes Totally and Permanently Disabled prior to Retirement and while the Participant is still employed with the Company, the Participant shall be entitled to receive a benefit calculated and paid in the manner set forth in Section 3.1; provided, however, that except to the extent a benefit is paid under the Retirement Plan, no benefit shall be payable under this Plan to a Totally and Permanently Disabled Participant as long as the Participant continues to accrue service for any purpose under the Retirement Plan.

3.3 (a) Subject to the provisions of Section 3.4, if a Participant dies before the commencement of benefit payments under this Plan and if the Participant's Beneficiary is entitled to receive a benefit under the Retirement Plan after the Participant's death, the Beneficiary shall be entitled to a monthly benefit under this Plan equal to one hundred percent (100%) of the benefit that would have been payable to the Participant under Section 3.1 if the Participant had Retired on his or her date of death. The amount payable under this Section 3.3(a) shall be determined as of the date of the Participant's death. The benefits payable under this Section 3.3(a) shall be paid at the same time and in the same form as the benefit payable to the Beneficiary under the Retirement Plan.

(b)     In lieu of a Beneficiary receiving benefits in the form provided in Section 3.3(a), a Participant may elect for the Beneficiary to receive an immediate single lump sum payment equal to the actuarial equivalent of the entire benefit otherwise payable under Section 3.3(a). The Participant must make the election of a single lump sum payment for the Beneficiary either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one (1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion. Upon the denial of a Participant's election, the Beneficiary shall receive the benefits provided under the Plan in the form that is otherwise payable absent the election. The actuarial equivalent lump sum benefit payable under this Section 3.3(b) shall be computed using actuarial factors, including interest rates, as determined by the Admini strative Benefit Committee. Payment of the benefit shall be made as soon as administratively practicable after the Participant's death.

(c)     Subject to the provisions of Section 3.4, if a Participant dies before the commencement of benefit payments under this Plan, and if the Participant's Beneficiary is not entitled to a benefit under the Retirement Plan, the Beneficiary shall receive an immediate single lump sum payment equal to the actuarial equivalent of one hundred percent (100%) of the benefit that would have been payable to the Participant under Section 3.1 if the Participant had Retired on his or her date of death The actuarial equivalent lump sum benefit payable under this Section 3.3(c) shall be computed using actuarial factors, including interest rates, as determined by the Administrative Benefit Committee. Payment of the benefit shall be made as soon as administratively practicable after the Participant's death.

(d)     If a Participant dies after the commencement of benefit payments under this Plan, the Participant's Beneficiary shall be entitled to the continuation of the form of benefit elected by the Participant under Section 3.1, but only if the form of benefit provides for payment of a benefit to the Beneficiary after the Participant's death. The payment of the benefit to the Beneficiary under this Section 3.3(d) shall begin as of the date of the Participant's death.

3.4 It is not intended that a Participant or Beneficiary receive duplicate benefits under this Plan. Anything herein to the contrary notwithstanding, therefore, the following provisions shall apply after a Participant has received a payment of any benefits under this Plan:

(a) If a Participant ceases to be employed by the Company, receives a lump sum distribution of part or all of the benefits payable under this Plan, and is subsequently reemployed by the Company, the amount of any benefit subsequently payable to the Participant from this Plan shall be appropriately adjusted to reflect the earlier distribution.

(b) If a Participant has already received a lump sum distribution of part or all of the benefits payable under this Plan, the amount of any benefit payable under this Plan to the Participant's Beneficiary shall be appropriately adjusted to reflect the earlier distribution. If the Participant has received an immediate lump sum payment of all benefits due to the Participant under this Plan, the Participant's Beneficiary shall not be entitled to receive any benefit under Section 3.3 or otherwise under this Plan.

(c) Any adjustment under this Section 3.4 shall be made in accordance with rules established by the Administrative Benefit Committee and applied in a uniform and nondiscriminatory manner.

3.5 All payments under the Plan shall be subject to any applicable payroll and withholding taxes.

Article IV
Coordination of Benefit Payments

Any amount payable to a Participant or a Beneficiary under the Plan may be paid in part or in whole from any trust which is maintained by or on behalf of Dominion Resources, Inc. or an Affiliate or to which Dominion Resources, Inc or an Affiliate contributes, including without limitation any so-called "rabbi" or "secular" trust established from time to time. Dominion Resources, Inc. shall have the complete discretion to determine the source of any payment due under the Plan to any Participant or Beneficiary.

Article V
Guarantees

The Company has only a contractual obligation to make payments of the benefits described in Article III. All benefits paid by the Company are to be satisfied solely out of the general corporate assets of the Company, which assets shall remain subject at all times to the claims of its creditors. No assets of the Company will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan.

Article VI
Termination of Employment

6.1 The Plan does not in any way limit the right of the Company at any time and for any reason to terminate either a Participant's employment or a Participant's status as an Eligible Employee. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company and a Participant.

6.2 Except as otherwise provided in Section 6.3, a Participant (a) who ceases to be an Eligible Employee while remaining employed by the Company or (b) whose employment with the Company terminates for any reason other than death, Retirement, or Total and Permanent Disability, shall in either case immediately cease to be a Participant under this Plan and shall forfeit all rights under this Plan. In no event shall an individual who as a Participant but who is not a Participant at the time of such individual's death, Retirement, or Total and Permanent Disability, be entitled to any benefit under the Plan. A Participant on authorized leave of absence from the Company shall not be deemed to terminate employment or to lose the status of an Eligible Employee solely as a result of such leave of absence.

6.3 Anything herein to the contrary notwithstanding, if a Participant is in the employ of a Company on the date of a Change in Control or a Potential Change in Control relating to that Company, the provisions of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. shall control (a) the Participant's subsequent participation in this Plan and (b) the eligibility for, computation of, and payment of any benefits under this Plan to the Participant.

Article VII
Termination, Amendment or Modification of Plan

7.1 Except as otherwise specifically provided, Dominion Resources, Inc. reserves the right to amend, modify or terminate this Plan, wholly or partially, at any time and from time to time by action of its Board of Directors or its delegate; provided, however, that:

(a) No such amendment, modification or termination may decrease the benefit that has already been earned by a Participant as of the date of the change, including without limitation any benefit determined by reference to a market based adjustment to a Participant's base salary;

(b) No action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby, which notice shall be given not less than thirty (30) days prior to such action; and

(c) If a Participant is in the employ of a Company on the date of a Change in Control or a Potential Change in Control relating to that Company, the provisions of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. shall apply to limit the ability of Dominion Resources, Inc. to amend, modify or terminate this Plan with regard to the affected Participant unless the Participant agrees to such amendment, modification or termination in writing.

7.2 Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to Dominion Resources, Inc., such notice shall be addressed to the corporate offices and sent to the attention of the Corporate Secretary. If notice is to be given to a Participant, such notice shall be addressed to the Participant's last known address.

7.3 Except as otherwise provided in Sections 6.3 and 7.1, upon the termination of this Plan, the Plan shall no longer be of any further force or effect and neither Dominion Resources, Inc. nor any Participant or Beneficiary shall have any further obligation or right under this Plan.

7.4 The rights of any individual who was a Participant and whose designation as a Participant is revoked or rescinded by the OCN Committee shall cease upon such action.

Article VIII
Other Benefits and Agreements

Except as provided in Article IV with regard to the coordination of benefit payments, the benefits provided for a Participant and the Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating.

Article IX
Restrictions on Transfer of Benefits

No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the OCN Committee, shall cease and terminate, and, in such event, the OCN Committee may hold or apply the same or any part thereof for the benefit of such Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the OCN Committee may deem proper.

Article X
Administration of the Plan

10.1 The Plan shall be administered by the Administrative Benefit Committee, which shall have the discretionary authority to interpret the terms of the Plan and to decide factual and other questions relating to the Participant and the Participant's benefits, including without limitation questions relating to eligibility for, calculation of, and payment of benefits under the Plan. Subject to the provisions of the Plan, the Administrative Benefit Committee may adopt such rules and regulations as it may deem necessary or desirable to carry out the purposes of the Plan. The Administrative Benefit Committee's interpretation and construction of any provision of the Plan shall be final, conclusive and binding upon the Company and upon Participants and their Beneficiaries.

10.2 Dominion Resources, Inc. shall indemnify and save harmless each member of the Administrative Benefit Committee and each member of the OCN Committee against any and all expenses and liabilities arising out of membership on the respective Committee, excepting only expenses and liabilities arising out of the member's own willful misconduct. Expenses against which a member of the OCN Committee or the Administrative Benefit Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled.

10.3 In addition to the powers specified in Section 10.1 and other provisions of this Plan, the Administrative Benefit Committee shall have the specific discretionary authority to compute and certify the amount and kind of benefits from time to time payable to Participants and their Beneficiaries under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant is Totally and Permanently Disabled so as to be entitled to a benefit under Section 3.2.

10.4 To enable the Administrative Benefit Committee to perform its functions, the Company shall supply full and timely information to the Administrative Benefit Committee on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Administrative Benefit Committee may require.

10.5 Any responsibility or authority given under this Plan to either the Administrative Benefit Committee or the OCN Committee may be delegated by the respective committee. Any such delegation shall be in writing and shall be prospectively revocable at any time.

10.6 (a) Every Participant, retired Participant, or Beneficiary of a Participant shall be entitled to file with the Administrative Benefit Committee a claim for benefits under the Plan. The claim is required to be in writing. For purposes of this section, any action required or authorized to be taken by the claimant may be taken by a representative authorized in writing by the claimant to represent the claimant.

(b) If the claim is denied by the Administrative Benefit Committee, in whole or in part, the claimant shall be furnished written notice of the denial of the claim within ninety (90) days after the Administrative Benefit Committee's receipt of the claim or within one hundred eighty (180) days after such receipt if special circumstances require an extension of time. If special circumstances require an extension of time, the claimant shall be furnished written notice prior to the termination of the initial ninety-day period explaining the special circumstances that require an extension of time and the date by which the Administrative Benefit Committee expects to render the benefit determination.

(c) Within sixty (60) days following the date the claimant receives written notice of the denial of the claim, the claimant may request the OCN Committee to review the denial. For purposes of this section, any action required or authorized to be taken by the claimant may be taken by a representative authorized in writing by the claimant to represent the claimant.

(d)     The OCN Committee shall afford the claimant a full and fair review of the decision denying the claim and shall:

1. Provide, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim;
2. Permit the claimant to submit written comments, documents, records and other information relating to the claim; and
3. Provide a review that takes into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial determination.

(e)     The decision on review by the OCN Committee shall be in writing and shall be issued within sixty (60) days following receipt of the request for review. The period for decision may be extended to a date not later than one hundred twenty (120) days after such receipt if the Committee determines that special circumstances require extension. If special circumstances require an extension of time, the claimant shall be furnished written notice prior to the termination of the initial sixty-day period explaining the special circumstances that require an extension of time and the date by which the Committee expects to render its decision on review.

Article XI
Confidentiality and Noncompetition ProvisionsMiscellaneous

11.1 By receiving a benefit under this Plan, a Participant agrees never directly or indirectly to disclose to any third party or use for such Participant's own personal benefit any confidential information or trade secret of the Company except and to the extent (a) disclosure is ordered by a court of competent jurisdiction or (b) the information otherwise becomes public through no action of the Participant.

11.2 By receiving a benefit under this Plan, a Participant further agrees that for a period of one (1) year following termination of employment with the Company for any reason, the Participant will not, without the specific written permission of the Company, be directly employed in, or otherwise provide services in any capacity to, any business or enterprise (including but not limited to the Participant's own business or enterprise) that engages in direct competition with the Company in any state in which the Company is at the time of the Participant's termination of employment either carrying on business or actively negotiating to enter business.

11.3 The OCN Committee (or its delegate) in its sole discretion has the authority to interpret and administer this Article XI and to determine whether a business is in competition with the Company as described in Section 11.2. In addition, a terminated Participant may request the OCN Committee to determine in advance whether a specific contemplated business or enterprise would be in competition with the Company for purposes of Section 11.2, and a response shall be provided to the Participant within a reasonable time after all relevant information is provided to enable the OCN Committee to make its determination.

11.4 If the OCN Committee determines that a terminated Participant who is receiving or has received benefits under this Plan is, within one (1) year following termination of employment and without the specific written permission of the Company, directly employed in, or otherwise providing services in any capacity to, a business or enterprise that engages in direct competition with the Company in any state in which the Company is at the time of the Participant's termination of employment either carrying on business or actively negotiating to enter business, then (a) all payments to the Participant under this Plan shall cease, (b) the Participant shall forfeit all rights to any further payments under the Plan, and (c) the Participant shall be responsible for repaying to the Plan any payments already made to the Participant that represent (i) amounts paid or payable with regard to any period for which the Participant was in competition with the Company as described herein and/or (ii) any amounts already p aid that related to any future benefit that has been accelerated, in each case without regard to any payroll taxes withheld from the payment received by the Participant.

11.5 As a condition to receiving payments under the Plan, the OCN Committee may require that Participant to enter into a separate confidentiality and/or noncompetition agreement in a form acceptable to the Company.

Article XII
Designation of Beneficiary

12.1 A Participant may designate a Beneficiary to receive benefits due under the Plan, if any, upon the Participant's death. Designation of a Beneficiary shall be made by execution of a form approved or accepted by the Administrative Benefit Committee. In the absence of an effective Beneficiary designation, a Participant's surviving spouse, if any, and if none, the Participant's estate, shall be the Beneficiary.

12.2 A Participant may change a prior Beneficiary designation made under Section 12.1 by a subsequent execution of a new Beneficiary designation form. The change in Beneficiary will be effective upon receipt by the Administrative Benefit Committee or its designee.

Article XIII
Miscellaneous

13.1 The Plan shall inure to the benefit of, and shall be binding upon, Dominion Resources, Inc. and its successors and assigns, and upon a Participant, a Beneficiary, and either of their assigns, heirs, executors and administrators.

13.2 To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia, without regard to its choice of law provisions.

13.3 Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural.

IN WITNESS WHEREOF, this instrument has been executed this 29th day of October, 2003.

DOMINION RESOURCES, INC.

 By /s/ Anne M. Grier________________________

Title:_Vice President - Human Resources__________

EX-10.3 6 ex103.htm EXHIBIT 10.3

Exhibit 10.3

DOMINION RESOURCES, INC.

EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

As Amended and Restated
Effective October 17, 2003

DOMINION RESOURCES, INC.
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

Purpose

The Board of Directors of Virginia Electric and Power Company determined that adoption of the Executive Supplemental Retirement Plan would assist it in attracting and retaining those employees whose judgment, abilities and experience will contribute to its continued progress. On May 19, 1983, Virginia Electric and Power Company became a wholly-owned subsidiary of Dominion Resources, Inc. The Plan was amended to reflect the reorganization of Virginia Electric and Power Company and the Plan was adopted by Dominion Resources, Inc. The Plan was amended further, effective as of October 21, 1983, to require sixty (60) months of service to be eligible for retirement benefits and to assure Participants who have attained age fifty-five (55) and who have sixty (60) months of service with the Company, or who die or become Totally and Permanently Disabled, of their benefits, so long as they remain elected officers at the time of their separation from service. The Plan was amended further, effective as of Septembe r 1, 1996, to add a vesting schedule for Participants under age 55, to change the form and timing of benefit payments, and to coordinate payments with changes in a previously established trust. The Plan was again completely amended and restated effective July 8, 2002 and subsequently amended and restated effective September 19, 2003.

Article I
Definitions

As defined herein, the following phrases or terms shall have the indicated meanings:

1.1 "Administrative Benefit Committee" means the Administrative Benefit Committee appointed to manage and administer the Plan in accordance with the provisions of Article XI hereof.

1.2 "Affiliate" means any entity that is (i) a member of a controlled group of corporations as defined in Section 1563(a) of the Code, determined without regard to Code Sections 1563(a)(4) and 1563(e)(3)(C), of which Dominion Resources, Inc. is a member according to Code Section 414(b); (ii) an unincorporated trade or business that is under common control with Dominion Resources, Inc., as determined according to Code Section 414(c); or (iii) a member of an affiliated service group of which Dominion Resources, Inc. is a member according to Code Section 414(m).

1.3 "Beneficiary" means the individual, individuals, entity, entities or the estate of a Participant which, in accordance with the provisions of Article V, is entitled to receive the benefits payable under the Plan, if any, upon the Participant's death.

1.4 "Cash Incentive Plan" means any short term incentive plan of Dominion Resources, Inc. or an Affiliate that the OCN Committee determines should be taken into account for purposes of this Plan.

1.5 "Change in Control" means with regard to each Participant at any time an event that constitutes a "Change in Control" for purposes of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. as in effect at that time.

1.6 "Code" means the Internal Revenue Code of 1986, as amended.

1.7 "Company" means Dominion Resources, Inc., its predecessor, a subsidiary or an Affiliate.

1.8 "Final Compensation" means, with respect to a specified Participant as of a specified date, the sum of (i) the Participant's annual base salary rate then in effect and (ii) the Participant's Incentive Compensation Amount. For purposes of this definition, all components of Final Compensation are calculated without regard to any elections by the Participant to defer any amount that otherwise would have been paid to the Participant for the relevant period.

1.9 "Incentive Compensation Amount" means the target amount that may be paid to a Participant under the Cash Incentive Plan with regard to the year as of which the determination is being made. If a Participant participates in more than one Cash Incentive Plan during a year, the Participant's "Incentive Compensation Amount" will be the greatest of the target amounts designated under any plan for that year.

1.10 "OCN Committee" means the Organization, Compensation and Nominating Committee of Dominion Resources, Inc.

1.11 "Participant" means an elected officer of Dominion Resources, Inc. or an Affiliate who is designated by the OCN Committee to participate in the Plan in accordance with Article II.

1.12 "Plan" means the Dominion Resources, Inc. Executive Supplemental Retirement Plan.

1.13 "Potential Change in Control" means with regard to each Participant at any time an event that constitutes a "Potential Change in Control" for purposes of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. as in effect at that time.

1.14 "Retirement" and "Retire" mean severance from employment with the Company at or after the attainment of fifty-five (55) years of age and the completion of sixty (60) months of service with the Company.

1.15 "Totally and Permanently Disabled" means a condition that renders a Participant eligible to receive long term disability benefits under the Company's long term disability plan that covers the Participant.

Article II
Participation

An elected officer of Dominion Resources, Inc. or an Affiliate will become a Participant in the Plan upon his or her designation as a Participant by the OCN Committee. The OCN Committee may change its designation of any individual officer as a Participant at any time; provided, however, that in any event an individual shall remain a Participant only so long as the individual remains an elected officer. The employer of a Participant will be a designated employer under the Plan.

Article III
Benefits

Subject to the provisions of Articles VII and VIII, a Participant (or the Participant's Beneficiary, if applicable) shall be entitled to benefits under this Plan as follows:

3.1 (a) If a Participant continues in the employ of the Company beyond age fifty-five (55) and after completing sixty (60) months of service, such Participant shall upon Retirement be entitled to an annual benefit equal to Twenty-Five Percent (25%) of the Participant's Final Compensation, payable in equal monthly installments for a period of one hundred twenty (120) months.

(b)  If a participant becomes Totally and Permanently Disabled prior to Retirement, regardless of such Participant's age or months of service, the Participant shall be entitled to receive a benefit equal to the amount described in Section 3.1(a).

(c)  If a Participant dies while still employed by the Company, regardless of such Participant's age or months of service, the Participant's Beneficiary shall be entitled to receive a benefit equal to the amount described in Section 3.1(a). If a Participant dies after benefit payments have commenced under Section 3.1(a) or 3.1(b), as applicable, but before receiving one hundred twenty (120) monthly payments, the remainder of such payments will be made monthly to the Participant's Beneficiary determined in accordance with Article V.

(d)  If a Participant has completed sixty (60) months of service with the Company, upon his severance from employment with the Company before the attainment of fifty-five (55) years of age, the Participant shall be entitled to a benefit equal to the benefit computed under Section 3.1(a) multiplied by the following fraction (not greater than one):

Participant's completed months of service since becoming a Participant
Total months from the date on which the individual became a Participant to
the Participant's attainment of fifty-five (55) years of age.

In calculating months of service, partial months shall be disregarded. The actuarial equivalent of the benefit under this Section 3.1(d) shall be paid in a single lump sum payment. The actuarial equivalent shall be determined as provided in Section 3.2. Payment shall be made on the first day of the month following the Participant's severance from employment with the Company or as soon thereafter as administratively practicable.

3.2 (a) In lieu of the benefits described in Section 3.1(a) or 3.1(b), as applicable, a Participant may elect to receive the actuarial equivalent of the benefits (i) over a period certain which is more than ten (10) years but not greater than sixteen (16) years, or (ii) as a single lump sum payment. The actuarial equivalent of the benefits provided under Section 3.1(a) or 3.1(b) shall be computed using actuarial factors, including interest rates, as determined by the Administrative Benefit Committee. If a Participant who makes an effective election under subsection (i) above dies prior to receiving the total actuarial equivalent of the benefits described in Section 3.1(a) or 3.1(b), as applicable, the balance of such actuarial equivalent shall be paid monthly to the Participant's Beneficiary determined in accordance with Article V. If a Participant who makes an effective election under subsection (ii) above to receive benefits in a single lump sum dies prior to receiving the payment, the lump sum be nefit shall be paid to the Participant's Beneficiary determined in accordance with Article V.

(b) Effective December 1, 2001, if a Participant elects to receive benefits in a single lump sum payment under Section 3.2(a), the Participant may elect to defer payment of such benefits by electing to roll over the amount of the benefits to the Dominion Resources, Inc. Executives' Deferred Compensation Plan. Payment of benefits rolled over to the Dominion Resources, Inc. Executives' Deferred Compensation Plan shall be determined under the distribution provisions of that plan.

(c) Effective January 1, 2003, if a Participant elects to receive benefits in a single lump sum payment under Section 3.2(a), the Participant may elect to defer payment of such benefits by electing to roll over the amount of the benefits to the Dominion Security Option Plan. Payment of benefits rolled over to the Dominion Security Option Plan shall be determined under the distribution provisions of that plan.

(d) The Participant must make the election under Section 3.2(a), 3.2(b) or 3.2(c) either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one (1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion. Upon the denial of a Participant's election, the Participant shall receive the benefits provided under the Plan in the form that is otherwise payable absent the election. Notwithstanding the foregoing, effective December 1, 2001 for distributions prior to June 1, 2002, the Participant may elect the rollover option as described in Section 3.2(b) (regardless of whether the Participant has previously made an election to receive benefits under Section 3.2(a)), and such election shall be effective ten (10) days after the receipt of such election by the Administrative Benefit Committee.

3.3 A Beneficiary receiving benefits described in Section 3.1 or Section 3.2 may designate a beneficiary who will be entitled to receive the remaining benefits due the Beneficiary after the Beneficiary's death. Designation of a beneficiary under this Section 3.3 shall be made in accordance with Article V of the Plan.

3.4 Payment of the benefits described in Sections 3.1 and 3.2 shall commence on (or as soon as practicable after) the first day of the month next following the Retirement, other termination of employment, or death of the Participant, whichever is applicable; provided, however, that payment of the benefit described in Section 3.1(b) shall commence on (or as soon as practicable after) the first day of the month next following the Administrative Benefit Committee's determination of the Participant's Total and Permanent Disability.

3.5 It is not intended that a Participant or Beneficiary receive duplicate benefits under this Plan. Anything herein to the contrary notwithstanding, therefore, the following provisions shall apply after a Participant has received a payment of any benefits under this Plan:

(a) If a Participant ceases to be employed by the Company, receives a distribution of part or all of the benefits payable under this Plan, and is subsequently reemployed by the Company, the amount of any benefit subsequently payable to the Participant from this Plan shall be appropriately adjusted to reflect the earlier distribution.

(b) If a Participant has received an immediate lump sum payment of all benefits due to the Participant under this Plan, the Participant's Beneficiary shall not be entitled to receive any benefit under Article III or otherwise under this Plan.

(c) Any adjustment under this Section 3.5 shall be made in accordance with rules established by the Administrative Benefit Committee and applied in a uniform and nondiscriminatory manner.

3.6 All payments under the Plan shall be subject to any applicable payroll and withholding taxes.

Article IV
Coordination of Benefits

Any amount payable to a Participant or a Beneficiary under the Plan may be paid in part or in whole from any trust which is maintained by or on behalf of Dominion Resources, Inc. or an Affiliate or to which Dominion Resources, Inc or an Affiliate contributes, including without limitation any so-called "rabbi" or "secular" trust established from time to time. Dominion Resources, Inc. shall have the complete discretion to determine the source of any payment due under the Plan to any Participant or Beneficiary.

Article V
Designation of Beneficiary

5.1 A Participant may designate a Beneficiary to receive benefits due under the Plan, if any, upon the Participant's death. Designation of a Beneficiary shall be made by execution of a form approved or accepted by the Administrative Benefit Committee. In the absence of an effective Beneficiary designation, a Participant's surviving spouse, if any, and if none, the Participant's estate, shall be the Beneficiary.

5.2 A Participant may change a prior Beneficiary designation made under Section 5.1 by a subsequent execution of a new Beneficiary designation form. The change in Beneficiary will be effective upon receipt by the Administrative Benefit Committee or its designee.

5.3 A beneficiary designation or a change in beneficiary designation by a Beneficiary pursuant to Section 3.3 shall be governed by Sections 5.1 and 5.2 as if "Beneficiary" were substituted for "Participant" and "beneficiary" were substituted for "Beneficiary" therein.

Article VI
Guarantees

The Company has only a contractual obligation to make payments of the benefits described in Article III. All benefits paid by the Company are to be satisfied solely out of the general corporate assets of the Company, which assets shall remain subject at all times to the claims of its creditors. No assets of the Company will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan.

Article VII
Termination of Employment

7.1 The Plan does not in any way limit the right of the Company at any time and for any reason to terminate either a Participant's employment or a Participant's status as an officer. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company and a Participant.

7.2 Except as otherwise provided in Section 7.3, a Participant (a) who is removed or not reelected as an officer or (b) whose employment with the Company terminates for any reason other than death or Total and Permanent Disability before the Participant has completed sixty (60) months of service with the Company, shall immediately cease to be a Participant under this Plan and shall forfeit all rights under this Plan. In no event shall an individual who was a Participant but who is not an officer of a designated employer at the time of such individual's death, Retirement, Total and Permanent Disability, or other termination of employment with the Company be entitled to any benefit under the Plan. A Participant on authorized leave of absence from the Company shall not be deemed to have terminated employment or to lose the status of Participant solely as a result of such leave of absence.

7.3 Anything herein to the contrary notwithstanding, if a Participant is in the employ of a Company on the date of a Change in Control or a Potential Change in Control relating to that Company, the provisions of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. shall control (a) the Participant's subsequent participation in this Plan and (b) the eligibility for, computation of, and payment of any benefits under this Plan to the Participant.

7.4 A Participant who ceases to be an employee of the Company and who is subsequently reemployed by the Company shall not accrue any additional benefits for periods during which he or she is not a Participant.

Article VII
Termination, Amendment or Modification of Plan

8.1 Except as otherwise specifically provided, Dominion Resources, Inc. reserves the right to amend, modify or terminate this Plan, wholly or partially, at any time and from time to time by action of its Board of Directors or its delegate; provided, however, that no such amendment, modification or termination may decrease the benefit of a Participant (or Beneficiary, if applicable) where (a) the Participant has already terminated employment at a time when a benefit is payable under the Plan or (b) the Participant has already completed sixty (60) months of service with the Company as of the date of the change and remains an elected officer of a designated employer; and further provided that with respect to a Participant who is in the employ of a Company on the date of a Change in Control or a Potential Change in Control relating to that Company, the provisions of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. shall apply to limit the ability of Dominion Resources, Inc. to amend, modify or terminate this Plan with regard to the affected Participant unless the Participant agrees to such amendment, modification or termination in writing.

8.2 Section 8.1 notwithstanding, no action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby, which notice shall be given not less than thirty (30) days prior to such action.

8.3 Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to Dominion Resources, Inc., such notice shall be addressed to the corporate offices and sent to the attention of the Corporate Secretary. If notice is to be given to a Participant, such notice shall be addressed to the Participant's last known address.

8.4 Except as provided in Sections 7.3 and 8.1, upon the termination of this Plan, the Plan shall no longer be of any further force or effect and neither Dominion Resources, Inc. nor any Participant or Beneficiary shall have any further obligation or right under this Plan.

8.5 The rights of any individual who was a Participant and whose designation as a Participant is revoked or rescinded by the OCN Committee shall cease upon such action.

Article IX
Other Benefits and Agreements

Except as provided in Article IV with regard to the coordination of benefit payments, the benefits provided for a Participant and the Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating.

Article X
Restrictions on Transfer of Benefits

No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the OCN Committee, shall cease and terminate, and, in such event, the OCN Committee may hold or apply the same or any part thereof for the benefit of such Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the OCN Committee may deem proper.

Article XI
Administration of the Plan

11.1 The Plan shall be administered by the Administrative Benefit Committee, which shall have the discretionary authority to interpret the terms of the Plan and to decide factual and other questions relating to the Participant and the Participant's benefits, including without limitation questions relating to eligibility for, calculation of, and payment of benefits under the Plan. Subject to the provisions of the Plan, the Administrative Benefit Committee may adopt such rules and regulations as it may deem necessary or desirable to carry out the purposes of the Plan. The Administrative Benefit Committee's interpretation and construction of any provision of the Plan shall be final, conclusive and binding upon the Company and upon Participants and their Beneficiaries.

11.2 Dominion Resources, Inc. shall indemnify and save harmless each member of the Administrative Benefit Committee and each member of the OCN Committee against any and all expenses and liabilities arising out of membership on the respective Committee, excepting only expenses and liabilities arising out of the member's own willful misconduct. Expenses against which a member of the OCN Committee or the Administrative Benefit Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled.

11.3 In addition to the powers hereinabove specified, the Administrative Benefit Committee shall have the specific discretionary authority to compute and certify the amount and kind of benefits from time to time payable to Participants and their Beneficiaries under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant is Totally and Permanently Disabled so as to be entitled to a benefit under Section 3.1(b).

11.4 To enable the Administrative Benefit Committee to perform its functions, the Company shall supply full and timely information to the Administrative Benefit Committee on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Administrative Benefit Committee may require.

11.5 Any responsibility or authority given under this Plan to either the Administrative Benefit Committee or the OCN Committee may be delegated by the respective committee. Any such delegation shall be in writing and shall be prospectively revocable at any time.

11.6 (a) Every Participant, retired Participant, or Beneficiary of a Participant shall be entitled to file with the Administrative Benefit Committee a claim for benefits under the Plan. The claim is required to be in writing. For purposes of this section, any action required or authorized to be taken by the claimant may be taken by a representative authorized in writing by the claimant to represent the claimant.

(b) If the claim is denied by the Administrative Benefit Committee, in whole or in part, the claimant shall be furnished written notice of the denial of the claim within ninety (90) days after the Administrative Benefit Committee's receipt of the claim or within one hundred eighty (180) days after such receipt if special circumstances require an extension of time. If special circumstances require an extension of time, the claimant shall be furnished written notice prior to the termination of the initial ninety-day period explaining the special circumstances that require an extension of time and the date by which the Administrative Benefit Committee expects to render the benefit determination.

(c) Within sixty (60) days following the date the claimant receives written notice of the denial of the claim, the claimant may request the OCN Committee to review the denial. For purposes of this section, any action required or authorized to be taken by the claimant may be taken by a representative authorized in writing by the claimant to represent the claimant.

(d)     The OCN Committee shall afford the claimant a full and fair review of the decision denying the claim and shall:

1. Provide, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim;
2. Permit the claimant to submit written comments, documents, records and other information relating to the claim; and
3. Provide a review that takes into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial determination.

(e)       The decision on review by the OCN Committee shall be in writing and shall be issued within sixty (60) days following receipt of the request for review. The period for decision may be extended to a date not later than one hundred twenty (120) days after such receipt if the Committee determines that special circumstances require extension. If special circumstances require an extension of time, the claimant shall be furnished written notice prior to the termination of the initial sixty-day period explaining the special circumstances that require an extension of time and the date by which the Committee expects to render its decision on review.

Article XII

Confidentiality and Noncompetition Provisions

12.1 By receiving a benefit under this Plan, a Participant agrees never directly or indirectly to disclose to any third party or use for such Participant's own personal benefit any confidential information or trade secret of the Company except and to the extent (a) disclosure is ordered by a court of competent jurisdiction or (b) the information otherwise becomes public through no action of the Participant.

12.2 By receiving a benefit under this Plan, a Participant further agrees that for a period of one (1) year following termination of employment with the Company for any reason, the Participant will not, without the specific written permission of the Company, be directly employed in, or otherwise provide services in any capacity to, any business or enterprise (including but not limited to the Participant's own business or enterprise) that engages in direct competition with the Company in any state in which the Company is at the time of the Participant's termination of employment either carrying on business or actively negotiating to enter business.

12.3 The OCN Committee (or its delegate) in its sole discretion has the authority to interpret and administered this Article XII and to determine whether a business is in competition with the Company as described in Section 12.2. In addition, a terminated Participant may request the OCN Committee to determine in advance whether a specific contemplated business or enterprise would be in competition with the Company for purposes of Section 12.2, and a response shall be provided to the Participant within a reasonable time after all relevant information is provided to enable the OCN Committee to make its determination.

12.4 If the OCN Committee determines that a terminated Participant who is receiving or has received benefits under this Plan is, within one (1) year following termination of employment and without the specific written permission of the Company, directly employed in, or otherwise providing services in any capacity to, a business or enterprise that engages in direct competition with the Company in any state in which the Company is at the time of the Participant's termination of employment either carrying on business or actively negotiating to enter business, then (a) all payments to the Participant under this Plan shall cease, (b) the Participant shall forfeit all rights to any further payments under the Plan, and (c) the Participant shall be responsible for repaying to the Plan any payments already made to the Participant that represent (i) amounts paid or payable with regard to any period for which the Participant was in competition with the Company as described herein and/or (ii) any amounts already p aid that related to any future benefit that has been accelerated, in each case without regard to any payroll taxes withheld from the payment received by the Participant.

12.5 As a condition to receiving payments under the Plan, the OCN Committee may require that Participant to enter into a separate confidentiality and/or noncompetition agreement in a form acceptable to the Company.

Article XIII
Miscellaneous

13.1 The Plan shall inure to the benefit of, and shall be binding upon, Dominion Resources, Inc. and its successors and assigns, and upon a Participant, a Beneficiary, and either of their assigns, heirs, executors and administrators.

13.2 To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia, without regard to its choice of law provisions.

13.3 Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural.

IN WITNESS WHEREOF, this instrument has been executed this 29th day of October, 2003.

DOMINION RESOURCES, INC.

 By_/s/ Anne M. Grier_______________________

Title:_Vice President - Human Resources________

EX-12.1 7 ex121.htm EXHIBIT 12.1

Exhibit 12.1

Virginia Electric and Power Company
Computation of Ratio of Earnings to Fixed Charges
(millions of dollars)

			Years Ended
			12 months ended Sept. 30, 2003	2002	2001	2000	1999	1998
Earnings, as defined:
	Earnings before income taxes and minority interests in consolidated subsidiaries		$ 1,201	$1,198	$733	$  837	$  743	$ 387
	Fixed charges included in the determination of net income		290	304	311	303	297	325
		Total earnings, as defined	$ 1,491	$ 1,502	$ 1,043	$ 1,140	$ 1,040	$ 712
	Fixed charges, as defined:
		Interest charges	$ 299	$ 311	$ 320	$ 297	$ 290	$ 319
		Rental interest factor	10	10	10	6	7	6
		Total fixed charges, as defined	$ 309	$ 321	$ 330	$ 303	$ 297	$ 325
Ratio of Earnings to Fixed Charges			4.83	4.68	3.16	3.76	3.50	2.19

EX-12.2 8 ex122.htm EXHIBIT 12.2

Exhibit 12.2

Virginia Electric and Power Company
Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends
(millions of dollars)

			Years Ended
			12 months ended Sept. 30, 2003	2002	2001	2000	1999	1998
Earnings, as defined:
	Earnings before income taxes and minority interests in consolidated subsidiaries		$ 1,201	$  1,198	$  733	$  837	$   743	$ 387
	Fixed charges included in the determination of net income		290	304	310	303	297	325
		Total earnings, as defined	$ 1,491	$ 1,502	$ 1,043	$ 1,140	$ 1,040	$ 712
	Fixed charges, as defined:
		Interest charges	$ 299	$ 311	$ 320	$ 297	$ 290	$ 319
		Preference security dividend requirements of consolidated subsidiaries	22	25	38	54	57	61
		Rental interest factor	10	10	10	6	7	6
		Total fixed charges, as defined	$ 331	$ 346	$ 368	$ 357	$ 354	$ 386
Ratio of Earnings to Fixed Charges and Preferred Dividends			4.51	4.34	2.83	3.19	2.94	1.85

EX-31.1 9 ex311.htm EXHIBIT 31.1

Exhibit 31.1

CERTIFICATIONS

I, Thomas F. Farrell, II, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ Thomas F. Farrell, II               Thomas F. Farrell, II President and Chief Executive Officer

EX-31.2 10 ex312.htm EXHIBIT 31.2

Exhibit 31.2

CERTIFICATIONS

I, Jay L. Johnson, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ Jay L. Johnson                  Jay L. Johnson President and Chief Executive Officer

EX-31.3 11 ex313.htm EXHIBIT 31.3

Exhibit 31.3

CERTIFICATIONS

I, Paul D. Koonce, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ Paul D. Koonce                 Paul D. Koonce Chief Executive Officer-Transmission

EX-31.4 12 ex314.htm EXHIBIT 31.4

Exhibit 31.4

CERTIFICATIONS

I, Mark F. McGettrick, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ Mark F. McGettrick                Mark F. McGettrick President and Chief Executive Officer-Generation

EX-31.5 13 ex315.htm EXHIBIT 31.5

Exhibit 31.5

CERTIFICATIONS

I, G. Scott Hetzer, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ G. Scott Hetzer                 G. Scott Hetzer Senior Vice President and Treasurer (Principal Financial Officer)

EX-32 14 ex32.htm EXHIBIT 32

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Virginia Electric and Power Company (the Company), certify that:

1. the Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 (the "Report") of the Company to which this certification is an exhibit fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)).
2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of September 30, 2003 and for the period then ended.

        /s/ Thomas F. Farrell, II                                 
Thomas F. Farrell, II
President and Chief Executive Officer
November 7, 2003

        /s/ Jay L. Johnson                                        
Jay L. Johnson
President and Chief Executive Officer
November 7, 2003

        /s/ Paul D. Koonce                                         
Paul D. Koonce
Chief Executive Officer-Transmission
November 7, 2003

        /s/ Mark F. McGettrick                                    
Mark F. McGettrick
President and Chief Executive Officer-Generation
November 7, 2003

        /s/ G. Scott Hetzer                                          
G. Scott Hetzer
Senior Vice President and Treasurer
(Principal Financial Officer)
November 7, 2003

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Virginia Electric and Power Company. and will be retained by Virginia Electric and Power Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99 15 ex99.htm EXHIBIT 99

Exhibit 99

VIRGINIA ELECTRIC AND POWER COMPANY
CONDENSED CONSOLIDATED EARNINGS STATEMENT
(Unaudited)

	Nine Months Ended September 30, 2003	Three Months Ended December 31, 2002
	(millions)
Operating Revenue	$4,244	$1,126
Operating Expenses	3,076	873
Income from operations	1,168	253
Other income	57	2
Interest and related charges	208	71
Income before income taxes	1,017	184
Income taxes	377	55
Income before cumulative effect of changes in accounting principle	640	129
Cumulative effect of changes in accounting principle (net of income taxes of $51)	84	-
Net income	724	129
Preferred dividends	12	2
Balance available for common stock	$  712	$  127

The condensed consolidated earnings statement for the nine months ended September 30, 2003 reflects the adoption of two new accounting standards, effective January 1, 2003. These standards are Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations, and Emerging Issues Task Force Issue No. 02-03, Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities. The condensed consolidated earnings statement for the three months ended December 31, 2002, which was prepared under different accounting policies regarding the accounting matters covered by the aforementioned new standards, may not combined with the condensed consolidated earnings statement for the nine months ended September 30, 2003, under generally accepted accounting principles.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

Exhibit 10.1

$1,250,000,000

364-DAY 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,
as Administrative Agent,

BARCLAYS BANK PLC,
as Syndication Agent,

and

BANK OF AMERICA, N.A.,
THE BANK OF NOVA SCOTIA AND
CITIBANK, N.A.,
as Co-Documentation Agents 

 ____________________________________

J.P. MORGAN SECURITIES INC. AND
BARCLAYS CAPITAL,
as Joint Lead Arrangers and Joint Bookrunners

Dated as of May 29, 2003

Table of Contents
	Page
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS	1
1.1   Definitions	1
1.2   Computation of Time Periods; Other Definitional Provisions.	15
1.3   Accounting Terms.	15
1.4   Time.	16
SECTION 2. LOANS	16
2.1   Revolving Loan Commitment.	16
2.2   Method of Borrowing for Revolving Loans	19
2.3   Funding of Revolving Loans	20
2.4   Minimum Amounts of Revolving Loans	21
2.5   Reductions of Revolving Loan Commitment	21
2.6   Notes	21
SECTION 3. PAYMENTS	22
3.1   Interest	22
3.2   Prepayments	22
3.3   Payment in Full at Maturity	23
3.4   Fees	23
3.5   Place and Manner of Payments	24
3.6   Pro Rata Treatment	24
3.7   Computations of Interest and Fees	24
3.8   Sharing of Payments.	25
3.9   Evidence of Debt	26
3.10   Conversion Option	26
SECTION 4. ADDITIONAL PROVISIONS REGARDING LOANS	27
4.1   Eurodollar Loan Provisions.	27
4.2   Capital Adequacy	28
4.3   Compensation	29
4.4   Taxes	29
4.5   Mitigation; Mandatory Assignment.	31
SECTION 5. CONDITIONS PRECEDENT	32
5.1   Closing Conditions	32
5.2   Conditions to Loans	34
SECTION 6. REPRESENTATIONS AND WARRANTIES	34
6.1   Organization and Good Standing.	34
6.2   Due Authorization	35
6.3   No Conflicts	35
6.4   Consents	35
6.5   Enforceable Obligations	35
6.6   Financial Condition	36
6.7   No Default	36
6.8   Indebtedness	36
6.9   Litigation	36
6.10   Taxes	36
6.11   Compliance with Law	37
6.12   ERISA	37
6.13   Use of Proceeds	37
6.14   Government Regulation	37
6.15   Solvency	38
SECTION 7. AFFIRMATIVE COVENANTS	38
7.1   Information Covenants	38
7.2   Preservation of Existence and Franchises	39
7.3   Books and Records	40
7.4   Compliance with Law	40
7.5   Payment of Taxes.	40
7.6   Insurance	40
7.7   Performance of Obligations	40
7.8   ERISA	41
7.9   Use of Proceeds	41
7.10   Audits/Inspections	41
7.11   Total Funded Debt to Capitalization	42
SECTION 8. NEGATIVE COVENANTS	42
8.1   Nature of Business	42
8.2   Consolidation and Merger	42
8.3   Sale or Lease of Assets	43
8.4   Limitation on Liens	43
8.5   Fiscal Year	44
SECTION 9. EVENTS OF DEFAULT	44
9.1   Events of Default	44
9.2   Acceleration; Remedies.	46
9.3   Allocation of Payments After Event of Default	47
SECTION 10. AGENCY PROVISIONS	48
10.1   Appointment	48
10.2   Delegation of Duties	48
10.3   Exculpatory Provisions	48
10.4   Reliance on Communications	49
10.5   Notice of Default	50
10.6   Non-Reliance on Administrative Agent and Other Lenders	50
10.7   Indemnification	50
10.8   Administrative Agent in Its Individual Capacity	51
10.9   Successor Administrative Agent	51
SECTION 11. MISCELLANEOUS	52
11.1   Notices	52
11.2   Right of Set-Off; Adjustments	52
11.3   Benefit of Agreement	53
11.4   No Waiver; Remedies Cumulative	56
11.5   Payment of Expenses, etc.	56
11.6   Amendments, Waivers and Consents	57
11.7   Counterparts; Telecopy	58
11.8   Headings	58
11.9   Defaulting Lender	58
11.10   Survival of Indemnification and Representations and Warranties	58
11.11   GOVERNING LAW	58
11.12 WAIVER OF JURY TRIAL	59
11.13   Severability	59
11.14   Entirety	59
11.15   Binding Effect	59
11.16   Submission to Jurisdiction	59
11.17   Confidentiality	60
11.18   Designation of SPVs	61

SCHEDULES

Schedule 1.1A Commitment Percentages

Schedule 1.1B Eligible Dealers
Schedule 6.8 Indebtedness
Schedule 11.1 Notices

EXHIBITS

Exhibit 2.1(b)(ii) Form of Competitive Bid Request
Exhibit 2.2(a) Form of Notice of Borrowing
Exhibit 2.2(c) Form of Notice of Conversion/Continuation
Exhibit 2.6(a) Form of Revolving Loan Note
Exhibit 2.6(b) Form of Competitive Bid Loan Note
Exhibit 5.1(c) Form of Closing Certificate
Exhibit 5.1(f) Form of Legal Opinion
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 11.3 Form of Assignment Agreement

Page 1

364-DAY
CREDIT AGREEMENT

364-DAY CREDIT AGREEMENT (this "Credit Agreement"), dated as of May 29, 2003 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, a New York banking corporation, as administrative agent for the Lenders hereunder (in such capacity, the "Administrative Agent"), BARCLAYS BANK PLC, as Syndication Agent, and BANK OF AMERICA, N.A., THE BANK OF NOVA SCOTIA and CITIBANK, N.A., 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 Base Rate Interest Margin for the relevant Borrower.

"Adjusted Eurodollar Rate" means with respect to any Borrower the Eurodollar Rate plus the Eurodollar Rate Interest Margin for the relevant Borrower.

"Administrative Agent" means JPMorgan Chase Bank 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.

Page 2

"Asset Swap Spread" for any Borrower on any day means the amount in basis points resulting from the conversion by the Administrative Agent of the Price of the applicable Benchmark Bond (if four or more price quotes are received) into an asset swap spread using the Bloomberg "YAS" screen as follows: The Price will be entered in the "PRICE" field, the appropriate settlement date (which will be the third Business Day after the date such Price is determined) will be entered into the "SETTLE" field, and "I52" will be entered in the "CRV#" field. The resulting amount in the "ASSET SWAP" field, rounded to the nearest basis point, is the Asset Swap Spread. If fewer than four quotes are obtained, the Asset Swap Spread for such day will be equal to the applicable Ceiling for such Borrower. If the Bloomberg YAS function shall not be available, the Administrative Agent will solicit spot mid swap rates of a maturity that matches the maturity of the applicable Benchmark Bond ("Spot Mid Swap Rates") from J .P. Morgan Securities Inc. and two other Eligible Dealers. The Asset Swap Spread for such day will be equal to the implied yield derived from the Price minus the average of the three Spot Mid Swap Rates, rounded to the nearest basis point.

"Average Asset Swap Spread" for any Interest Period for any Eurodollar Revolving Loan means the arithmetic average of the two daily Asset Swap Spreads resulting from the Pricing Polls for the applicable Notice Date.

"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 Interest Margin" means for any day an interest margin equal to the Ceiling for the relevant Borrower minus 100 basis points per annum.

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

"Benchmark Bond" means the DRI Benchmark Bond, the VaPower Benchmark Bond or the CNG Benchmark Bond, as applicable.

If (a) any Benchmark Bond shall no longer be outstanding for any reason, including maturity, redemption or repurchase, (b) any Borrower shall issue a new senior, unsecured, non-credit-enhanced obligation having liquidity and tenor deemed more acceptable to the Administrative Agent, (c) the Administrative Agent shall receive a written request from any Borrower requesting that the Administrative Agent replace such Borrower's Benchmark Bond with another Acceptable Obligation of that Borrower, and the Administrative Agent so agrees in its sole discretion or (d) the Administrative Agent shall determine that, as a result of changes in the liquidity of any Benchmark Bond, price quotes for a Benchmark Bond are not consistently available, and if in any such case one or more other (i.e. other than the applicable Benchmark Bond) acceptable debt securities of any Borrower ("Acceptable Obligations") shall be outstanding for which price quotes are likely, in the judgment of the Administrative Agent, to be consis tently available, then the Administrative Agent, in consultation with that Borrower, will replace that Benchmark Bond with another Acceptable Obligation of that Borrower. If the Administrative Agent shall determine that no Acceptable Obligation is outstanding for a Borrower, the Eurodollar Rate Interest Margin for that Borrower will equal the Ceiling.

Page 3

"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.

"Ceiling" means for any day for any Borrower the sum of the Floor plus the Maximum Spread Adjustment for such Borrower, in each case based on such Borrower's Ratings and as set forth in the definition of Interest Margin.

"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.

"Closing Date" means the date hereof.

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

"CNG Benchmark Bond" means Consolidated Natural Gas' 6.25% Senior Notes due November 1, 2011 (CUSIP No. 209615BX0)

"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 Fee" has the meaning set forth in Section 3.4(a).

"Commitment Fee Rate" means, for Commitment Fees payable by DRI, the appropriate percentages, in each case, corresponding to the senior, unsecured, non-credit-enhanced obligations of DRI in effect from time to time as shown below:

Page 4

Category	Senior, Unsecured, Non-Credit-Enhanced Obligations of DRI	Commitment Fee
I.	≥A from S&P or	0.080%
	≥A2 from Moody's
II.	A- from S&P or	0.100%
	A3 from Moody's
III.	BBB+ from S&P or	0.125%
	Baa1 from Moody's
IV.	BBB from S&P or	0.150%
	Baa2 from Moody's
V.	BBB- from S&P or	0.175%
	Baa3 from Moody's
VI.	≤BB+ from S&P or	0.250%
	≤Ba1 from Moody's

Notwithstanding the above, if at any time there is a split in Ratings of one level, related to Categories I through V, between S&P and Moody's, the Commitment Fee in effect at any time will be determined based upon the higher rating, and if at any time there is a split in Ratings of two or more levels, related to Categories I through V, between S&P and Moody's, the Commitment Fee in effect at any time shall be determined based upon the Ratings level that is one level below the higher of the S&P or Moody's rating. If at any time either S&P or Moody's rates DRI at a Category VI level, the Commitment Fee in effect at any time will be based on Category VI levels.

Each Borrower shall deliver to the Administrative Agent (and the Administrative Agent shall notify each Lender), at the address set forth on Schedule 11.1, information regarding any change in its Ratings with respect to such Borrower within five Business Days of receipt of such information. The Administrative Agent may assume that Ratings remain in effect unless a Borrower notifies the Administrative Agent in writing that a Rating of a Borrower has changed.

Based on DRI's Ratings as of the Closing Date, Category III level pricing will apply as of the Closing Date.

Page 5

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

"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).

"Competitive Bid Request Fee" means $2500 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 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.

"Conversion Date" has the meaning set forth in Section 3.10 hereof.

"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.

Page 6

"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.

"DRI Benchmark Bond" means Dominion Resources, Inc.'s 6.25% Senior Notes due June 30, 2012 (CUSIP No. 25746UAJ8).

"Effective Date" has the meaning set forth in Section 11.15 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 during the existence and continuation of a Default or an Event of Default and (ii) neither the Borrowers nor any Affiliate or Subsidiary of the Borrowers shall qualify as an Eligible Assignee.

"Eligible Dealer" means the dealers listed on Schedule 1.1B, attached hereto, as such dealers may be replaced or added to with the consent of the Administrative Agent and DRI.

"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.

"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:

Page 7

"Eurodollar Rate" = Interbank Offered Rate
1 - Eurodollar Reserve Percentage

"Eurodollar Rate Interest Margin" for any Interest Period for a Eurodollar Revolving Loan means an interest margin equal to the greater of (a) the applicable Floor or (b) the applicable Average Asset Swap Spread, in each case for the relevant Borrower, provided that such interest margin shall in no event be greater than the Ceiling.

"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.

"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.

"Final Date" has the meaning set forth in Section 3.10 hereof.

"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.

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"Floor" for any day for any Borrower means the minimum Eurodollar Rate Interest Margin, based on such Borrower's Ratings, as set forth under the heading "Floor" in the table included in the definition of Interest Margin.

"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 11.18 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 relevan t 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; (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 let ters of credit or bankers' acceptances.

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"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 Margin" means, for Revolving Loans made to each Borrower, the appropriate percentages, in each case, corresponding to the senior, unsecured, non-credit-enhanced obligations of the relevant Borrower in effect from time to time as shown below:

Category	Senior, Unsecured, Non-Credit-Enhanced Obligations of Borrower	Floor	Maximum Spread Adjustment (prior to Conversion Date)	Maximum Spread Adjustment (after Conversion Date)
I.	≥A from S&P or	0.425%	1.00%	2.00%
	≥A2 from Moody's
II.	A- from S&P or	0.550%	1.00%	2.00%
	A3 from Moody's
III.	BBB+ from S&P or	0.750%	2.00%	4.00%
	Baa1 from Moody's
IV.	BBB from S&P or	0.875%	2.00%	4.00%
	Baa2 from Moody's
V.	BBB- from S&P or	1.125%	2.00%	4.00%
	Baa3 from Moody's
VI.	≤BB+ from S&P or	1.750%	5.00%	10.00%
	≤Ba1 from Moody's	Page 10

provided, that the Eurodollar Rate Interest Margin applicable to a Revolving Loan, once determined, shall remain set for the duration of the selected Interest Period.

Notwithstanding the above, if at any time there is a split in Ratings of one level, related to Categories I through V, between S&P and Moody's, the Floor and Maximum Spread Adjustment in effect at any time will be determined based upon the higher rating, and if at any time there is a split in Ratings of two or more levels, related to Categories I through V, between S&P and Moody's, the Floor and Maximum Spread Adjustment in effect at any time shall be determined based upon the Ratings level that is one level below the higher of the S&P or Moody's rating. If at any time either S&P or Moody's rates a Borrower at a Category VI level, the Floor and Maximum Spread Adjustment in effect at any time will be based on Category VI levels.

Each Borrower shall deliver to the Administrative Agent (and the Administrative Agent shall notify each Lender), at the address set forth on Schedule 11.1, information regarding any change in its Ratings with respect to such Borrower within five Business Days of receipt of such information. The Administrative Agent may assume that Ratings remain in effect unless a Borrower notifies the Administrative Agent in writing that a Rating of a Borrower has changed.

"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 borrowings) 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 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.

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"JPMCB" means JPMorgan Chase Bank.

"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 11.3.

"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.

"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 8.3 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 date 364 days after the Closing Date.

"Maximum Spread Adjustment" for any day for any Borrower means the percentage as set forth under the headings "Maximum Spread Adjustment" in the table included in the definition of Interest Margin.

"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.

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"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 Manditorily Convertible 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 Date" has the meaning set forth in Section 2.2(b) hereof.

"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).

"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 7.8 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.

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"Price" means, for any Benchmark Bond on any Business Day on which a Pricing Poll occurs, the Dollar price resulting from bid quotes solicited beginning at 2:00 p.m. (or such other time as may be set by the Administrative Agent) on such Business Day. If (a) five quotes are received, the Price for such Benchmark Bond for such day shall be the arithmetic average, as computed by the Administrative Agent, of the three quotes remaining after the highest and lowest quotes are excluded, or (b) four quotes are obtained, the Price for such Benchmark Bond for such day shall be the arithmetic average, as computed by the Administrative Agent, of the three quotes remaining after the lowest quote is excluded. The Administrative Agent agrees to solicit such quotes on each of the two Business Days immediately following a Notice Date; provided, that upon receipt by the Administrative Agent of written consent from the relevant Borrower, the Eurodollar Rate Interest Margin for such Borrower will equal the Ceil ing and no Pricing Poll shall be required.

"Pricing Poll" means the solicitation by the Administrative Agent on each of the two Business Days immediately following the Notice Date of Prices for the Benchmark Bonds from five Eligible Dealers as selected by DRI.

"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 11.3(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.

"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 times the Revolving Loan Commitment and (b) at any time after the termination of the Commitments, the outstanding amount of Loans owed to such Lender.

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"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 One Billion Two Hundred Fifty Million Dollars ($1,250,000,000), 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.

"Spot Mid Swap Rates" has the meaning set forth in the definition of "Asset Swap Spreads".

"SPV" has the meaning set forth in Section 11.18 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 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.

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"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, 2002, 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 t o 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.

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

"VaPower Benchmark Bond" means Virginia Electric and Power Company's 4.750% Senior Notes due March 1, 2013 (CUSIP No. 927804EU4).

"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.

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 7.1 (or, prior to the delivery of the first financial statements pursuant to Section 7.1, consistent with the financial statements described in Section 5.1(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 Adminis trative 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.

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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.

1. 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 period from the Closing Date to the Maturity Date (each a "Revolving Loan" and collectively the "Revolving Loans"); provided that (i) the sum of the aggregate amount of Revolving Loans 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 outstanding Revolving Loans 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.

2. Competitive Bid Loans Subfacility
1. 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 Competitive Bid Loan, such Lender's obligation to make its pro rata share of any Revolving Loan shall not be reduced thereby.

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2. 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 re quested. 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.

3. 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 Reque st. 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.

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4. Acceptance of Competitive Bids

Each Borrower may, in its sole discretion, subject only to the provisions of this subsection (iv), accept or refuse any 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 agg regate 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 th ereof, 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 o f 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.

5. 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.

6. 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.

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2.2  Method of Borrowing for Revolving Loans

1. 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 5.2 hereof.

2. 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) (the "Notice Date"), 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 5.2 hereof.

3. 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. Notwithstandin g 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 date 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.

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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 $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

1. 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.

2. 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.

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SECTION 3. PAYMENTS

3.1  Interest

1. Interest Rate
1. All Base Rate Loans made to a Borrower shall accrue interest at the Adjusted Base Rate with respect to such Borrower.
2. 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.
3. All Competitive Bid Loans shall accrue interest at the applicable Competitive Bid Rate with respect to each Competitive Bid Loan.
2. 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 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).

3. Interest Payments

Interest on Loans shall be due and payable in arrears on each Interest Payment Date.

3.2  Prepayments

1. 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. Any Loan outstanding after the Conversion Date, once prepaid, may not be reborrowed.

2. Mandatory Prepayments

If at any time the amount of Revolving Loans outstanding plus the aggregate amount of Competitive Bid Loans outstanding 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.

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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 9 hereof.

3.4  Fees 

1. Commitment Fees
1. 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 commitment fee for each day that will accrue on the unutilized Revolving Loan Commitment (i.e., the amount of the Revolving Loan Commitment over the outstanding aggregate principal amount of Revolving Loans) on such day according to the per annum percentages set forth under the heading "Commitment Fee" in the table included in the definition of "Commitment Fee Rate" (the "Commitment Fee").
2. The accrued Commitment Fees shall be due and payable in arrears on the first Business Day of each January, April, July and October (as well as on the Maturity Date and 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.
3. For purposes of calculating the Commitment Fees, outstanding Competitive Loans will be deemed to be zero.
2. Administrative Fees

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

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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. 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 Commitment 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

1. 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.
2. 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 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 redu ced 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. The Administrative Agent will deliver promptly, and in no event later than the end of the day one Business Day prior to the borrowing date specified in the Notice of Borrowing, a notice to the appropriate Borrower and each Lender setting forth the Average Asset Swap Spread, the Prices from each Eligible Dealer that were used in determining the Asset Swap Spreads, the two daily Asset Swap Spreads, the Spot Mid Swap Rates (if applicable) and the Base Rate Interest Margin or Eurodollar Rate Interest Margin applicable to the Loan.

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3.8  Sharing of Payments.

Each Lender agrees that, in the event that any Lender shall obtain payment in respect of any Loan 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 p articipation 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 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 t he Federal Funds Rate.

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3.9  Evidence of Debt

1. 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.
2. The Administrative Agent shall maintain the Register for each Borrower pursuant to Section 11.3(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.
3. 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.

3.10  Conversion Option

On the Maturity Date, each Borrower shall pay the entire outstanding principal balance of all Loans advanced to such Borrower (unless accelerated sooner pursuant to Section 9 hereof); provided that if such Borrower shall have delivered a notice to the Administrative Agent requesting a conversion of such Loans and an extension of the Maturity Date not earlier than 30 days but at least five Business Days prior to the Maturity Date (which notice shall be accompanied by a certificate signed by a Responsible Officer as to the matters specified in Section 5.2(b) and (c) hereof), then (a) the then outstanding principal amount of each Loan shall be aggregated on the Maturity Date (the "Conversion Date") into one Loan with one Interest Period, and each Lender's Commitment shall be reduced to an amount equal to the principal amount of such Lender's outstanding Loans on the Conversion Date and (b) the Loan shall become due and payable on the first anniversary o f the Maturity Date (the "Final Date"). In the event the Loans are converted on the Conversion Date, the term "Maturity Date" shall mean the Final Date. The conversion of the Loans on the Conversion Date shall be subject to, and shall constitute a representation and warranty of, the correctness as of the Conversion Date of the matters specified in Section 5.2 (b) and (c) hereof. The Administrative Agent shall promptly inform the Lenders of the receipt of the notice of conversion and the Conversion Date.

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SECTION 4. ADDITIONAL PROVISIONS REGARDING LOANS

4.1  Eurodollar Loan Provisions.

1. 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 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 reques t for conversion into or continuation of Base Rate Loans.
2. Change in Legality.
1. 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:
1. 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
2. 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.

3. 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 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 parties hereto.

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4.2  Capital Adequacy

If, after the date hereof, any Lender has determined that the adoption or effectiveness of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender (or its parent corporation) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's (or parent corporation's) capital or assets as a consequence of its commitments or obligations hereunder to any Borrower to a level below that which such Lender (or its parent corporation) could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender's (or parent corporation's) policies with respect to capital adequacy), then, upon notice from such Lender, the relevant Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender (or its parent corporation) for such reduction. Each determination by any such Lender of amounts owing under this Section 4.2 shall, absent manifest error, be conclusive and binding on the parties hereto.

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4.3  Compensation

Each Borrower shall compensate each Lender, upon its written request, for all reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by the Lender to fund its Eurodollar Loans to such Borrower) which such Lender may sustain:

1. if for any reason (other than a default by such Lender or the Administrative Agent) a borrowing of Eurodollar Loans or Absolute Rate Competitive Bid Loans to such Borrower does not occur on a date specified therefor in a Notice of Borrowing or Competitive Bid Request to such Borrower, as the case may be;
2. if any repayment, continuation or conversion of any Eurodollar Loan or Absolute Rate Competitive Bid Loan by such Borrower occurs on a date which is not the last day of an Interest Period applicable thereto, including, without limitation, in connection with any demand, acceleration, mandatory prepayment or otherwise (including any demand under this Section 4); or
3. if such Borrower fails to repay its Eurodollar Loans or Absolute Rate Competitive Bid Loan when required by the terms of this Credit Agreement.

Calculation of all amounts payable to a Lender under this Section 4.3 shall be made as though the Lender has actually funded its relevant Eurodollar Loan through the purchase of a Eurodollar deposit bearing interest at the Eurodollar Rate in an amount equal to the amount of that Loan, having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of that Lender to a domestic office of that Lender in the United States of America; provided, however, that each Lender may fund each of its Eurodollar Loans in any manner it sees fit and the foregoing assumption shall be utilized only for the calculation of amounts payable under this Section 4.3.

4.4  Taxes

1. Tax Liabilities Imposed on a Lender. Any and all payments by a Borrower hereunder or under any of the Credit Documents shall be made, in accordance with the terms hereof and thereof, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes measured by net income and franchise taxes imposed on any Lender by the jurisdiction under the laws of which such Lender is organized or transacting business or any political subdivision thereof (all such non-excluded taxes, being hereinafter referred to as "Taxes"). If such Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.4) such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions, (iii) such Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law, and (iv) such Borrower shall deliver to such Lender evidence of such payment to the relevant Governmental Authority.

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2. Other Taxes. In addition, each Borrower agrees to pay, upon notice from a Lender and prior to the date when penalties attach thereto, all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies of the United States or any state or political subdivision thereof or any applicable foreign jurisdiction that arise from any payment made hereunder by such Borrower or from the execution, delivery or registration of, or otherwise from such Borrower's participation with respect to, this Credit Agreement (collectively, the "Other Taxes").
3. Refunds. If a Lender or the Administrative Agent (as the case may be) shall become aware that it is entitled to claim a refund (or a refund in the form of a credit) (each, a "Refund") from a Governmental Authority (as a result of any error in the amount of Taxes or Other Taxes paid to such Governmental Authority or otherwise) of Taxes or Other Taxes which a Borrower has paid, or with respect to which a Borrower has paid additional amounts, pursuant to this Section 4.4, it shall promptly notify such Borrower of the availability of such Refund and shall, within 30 days after receipt of written notice by such Borrower, make a claim to such Governmental Authority for such Refund at such Borrower's expense if, in the judgment of such Lender or the Administrative Agent (as the case may be), the making of such claim will not be otherwise disadvantageous to it; provided that nothing in this subsection (c) shall be construed to require any Lender or the Administrative Agent to institute any administrative proceeding (other than the filing of a claim for any such Refund) or judicial proceeding to obtain such Refund.

If a Lender or the Administrative Agent (as the case may be) receives a Refund from a Governmental Authority (as a result of any error in the amount of Taxes or Other Taxes paid to such Governmental Authority or otherwise) of any Taxes or Other Taxes which have been paid by a Borrower, or with respect to which a Borrower has paid additional amounts pursuant to this Section 4.4, it shall promptly pay to such Borrower the amount so received (but only to the extent of payments made, or additional amounts paid, by such Borrower under this Section 4.4 with respect to Taxes or Other Taxes giving rise to such Refund), net of all reasonable out-of-pocket expenses (including the net amount of taxes, if any, imposed on such Lender or the Administrative Agent with respect to such Refund) of such Lender or Administrative Agent, and without interest (other than interest paid by the relevant Governmental Authority with respect to such Refund); provided, however, that such Borrower, upon the request of Len der or the Administrative Agent, agrees to repay the amount paid over to such Borrower (plus penalties, interest or other charges) to such Lender or the Administrative Agent in the event such Lender or the Administrative Agent is required to repay such Refund to such Governmental Authority. Nothing contained in this Section 4.4(c) shall require any Lender or the Administrative Agent to make available any of its tax returns (or any other information that it deems to be confidential or proprietary).

4. Foreign Lender. Each Lender (which, for purposes of this Section 4.4, shall include any Affiliate of a Lender that makes any Eurodollar Loan pursuant to the terms of this Credit Agreement) that is not a "United States person" (as such term is defined in Section 7701(a)(30) of the Code) shall submit to the Borrowers and the Administrative Agent on or before the Closing Date (or, in the case of a Person that becomes a Lender after the Closing Date by assignment, promptly upon such assignment), two duly completed and signed copies of (A) either (1) Form W-8BEN, or any applicable successor form, of the United States Internal Revenue Service entitling such Lender to a complete exemption from withholding on all amounts to be received by such Lender pursuant to this Credit Agreement and/or the Notes or (2) Form W-8ECI, or any applicable successor form, of the United States Internal Revenue Service relating to all amounts to be received by such Lender pursuant to this Credit Agreement and/or the Notes and , if applicable, (B) an Internal Revenue Service Form W-8BEN or W-9 entitling such Lender to receive a complete exemption from United States backup withholding tax. Each such Lender shall, from time to time after submitting either such form, submit to the Borrowers and the Administrative Agent such additional duly completed and signed copies of such forms (or such successor forms or other documents as shall be adopted from time to time by the relevant United States taxing authorities) as may be (1) reasonably requested in writing by the Borrowers or the Administrative Agent and (2) appropriate under then current United States laws or regulations. Upon the reasonable request of any Borrower or the Administrative Agent, each Lender that has not provided the forms or other documents, as provided above, on the basis of being a United States person shall submit to the Borrowers and the Administrative Agent a certificate to the effect that it is such a "United States person."

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4.5  Mitigation; Mandatory Assignment.

The Administrative Agent and each Lender shall use reasonable efforts to avoid or mitigate any increased cost or suspension of the availability of an interest rate under Sections 4.1 through 4.4 above to the greatest extent practicable (including transferring the Loans to another lending office or Affiliate of a Lender) unless, in the opinion of the Administrative Agent or such Lender, such efforts would be likely to have an adverse effect upon it. In the event a Lender makes a request to a Borrower for additional payments in accordance with Section 4.1, 4.2 or 4.4, then, provided that no Default or Event of Default with respect to such Borrower has occurred and is continuing at such time, such Borrower may, at its own expense (such expense to include any transfer fee payable to the Administrative Agent under Section 11.3(b) and any expense pursuant to Section 4 hereof) and in its sole discretion, require such Lender to transfer and assign in whole (but not in part), without recourse (in accordance with and subject to the terms and conditions of Section 11.3(b)), all of its interests, rights and obligations under this Credit Agreement to an Eligible Assignee which shall assume such assigned obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment); provided that (a) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority and (b) the Borrowers or such Eligible Assignee shall have paid to the assigning Lender in immediately available funds the principal of and interest accrued to the date of such payment on the portion of the Loans hereunder held by such assigning Lender and all other amounts owed to such assigning Lender hereunder, including amounts owed pursuant to Sections 4.1 through 4.4 hereof.

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SECTION 5. CONDITIONS PRECEDENT

5.1  Closing Conditions

The obligation of the Lenders to enter into the Credit Documents is subject to satisfaction of the following conditions (in form and substance acceptable to the Lenders):

1. Credit Documents. Receipt by the Administrative Agent of duly executed copies of: (i) this Credit Agreement and (ii) the other Credit Documents.
2. Corporate Documents. Receipt by the Administrative Agent of the following:
1. Charter Documents. Copies of the articles of incorporation or other charter documents of each Borrower certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation and certified by a secretary or assistant secretary of the relevant Borrower to be true and correct as of the Closing Date.
2. Bylaws. A copy of the bylaws of each Borrower certified by a secretary or assistant secretary of the relevant Borrower to be true and correct as of the Closing Date.
3. Resolutions. Copies of resolutions of the Board of Directors of each Borrower approving and adopting the Credit Documents, the transactions contemplated herein and therein and authorizing execution and delivery thereof, certified by a secretary or assistant secretary of the relevant Borrower to be true and correct and in force and effect as of the Closing Date.
4. Good Standing. Copies of (a) certificates of good standing, existence or its equivalent with respect to each Borrower certified as of a recent date by the appropriate Governmental Authorities of its jurisdiction of incorporation and each other jurisdiction in which the failure to so qualify and be in good standing would have a Material Adverse Effect on such Borrower and (b) to the extent available, a certificate indicating payment of all corporate franchise taxes certified as of a recent date by the appropriate Governmental Authorities of each Borrower's jurisdiction of incorporation and each other jurisdiction from which the failure to pay such franchise taxes would have a Material Adverse Effect on such Borrower.

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3. Closing Certificate. Receipt by the Administrative Agent of a certificate of each Borrower, dated the Closing Date, substantially in the form of Exhibit 5.1(c), executed by any Assistant Treasurer and the Secretary or any Assistant Secretary of such Borrower, and attaching the documents referred to in subsections 5.1(b).
4. Outstanding Facility. Each of (i) the Borrowers' $1,250,000,000 364-Day Credit Agreement, dated as of May 30, 2002, (ii) VaPower's $175,000,000 Credit Agreement, dated as of November 27, 2000 and (iii) VaPower's $21,600,000 Credit Agreement, dated as of November 25, 2002, shall have been terminated and all amounts owing thereunder shall have been paid in full.
5. Fees. The Lenders and the Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented.
6. Opinion of Counsel. Receipt by the Administrative Agent of an opinion, or opinions, satisfactory in form and content to the Administrative Agent and the Lenders, addressed to the Administrative Agent and each of the Lenders and dated as of the Closing Date, substantially in the form of Exhibit 5.1(f), from McGuireWoods LLP, legal counsel to the Borrowers.
7. Financial Statements. Receipt and approval by the Administrative Agent and the Lenders of the audited financial statements of each Borrower and its Consolidated Subsidiaries for each of the fiscal years ended as of December 31, 2001 and December 31, 2002 and the unaudited financial statements of each Borrower and its Consolidated Subsidiaries dated as of March 31, 2003.
8. Consents. Receipt by the Administrative Agent of a written representation from each Borrower that (i) all governmental, shareholder and third party consents (including Securities and Exchange Commission clearance) and approvals necessary or, in the reasonable opinion of the Administrative Agent, advisable in connection with the transactions contemplated hereby have been received and are in full force and effect and (ii) no condition or requirement of law exists which could reasonably be likely to restrain, prevent or impose any material adverse condition on the transactions contemplated hereby, and receipt by the Administrative Agent of copies of any required orders of the Virginia State Corporation Commission or any other state utilities commission approving the relevant Borrower's execution, delivery and performance of this Credit Agreement and the borrowings hereunder.
9. No Default; Representations and Warranties. As of the Closing Date (i) there shall exist no Default or Event of Default by any Borrower and (ii) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects.
10. Material Adverse Effect. No event or condition shall have occurred since the dates of the financial statements delivered pursuant to Section 5.1(g) above that has or would be likely to have a material adverse effect, after taking into account applicable insurance, if any, on (a) the business, assets, liabilities (actual or contingent), operations or condition (financial or otherwise) of the Borrowers and their respective Consolidated Subsidiaries taken as a whole, (b) the ability of the Borrowers to perform their respective obligations under this Credit Agreement or (c) the validity or enforceability of this Credit Agreement, any of the other Credit Documents, or the rights and remedies of the Lenders hereunder or thereunder.
11. Other. Receipt by the Lenders of such other documents, instruments, agreements or information as reasonably requested by any Lender.

The Administrative Agent shall provide written notice to the Borrowers and the Lenders upon the occurrence of the Effective Date (as defined in Section 11.15).

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5.2  Conditions to Loans

In addition to the conditions precedent stated elsewhere herein, the Lenders shall not be obligated to make new Loans to any Borrower unless:

1. Request. Such Borrower shall have timely delivered a duly executed and completed Notice of Borrowing or Competitive Bid Request, as applicable, in conformance with all the terms and conditions of this Credit Agreement.
2. Representations and Warranties. The representations and warranties made by such Borrower in or pursuant to the Credit Documents are true and correct in all material respects at and as if made as of the date of the funding of the Loans; provided, however, that the representation and warranty set forth in clause (ii) of the second paragraph of Section 6.6 hereof need not be true and correct as a condition to any borrowing utilized by the relevant Borrower in connection with the repayment of its commercial paper program or programs.
3. No Default. On the date of the funding of the Loans, no Default or Event of Default with respect to such Borrower has occurred and is continuing or would be caused by making the Loans.
4. Availability. Immediately after giving effect to the making of a Loan (and the application of the proceeds thereof), the sum of Loans outstanding shall not exceed the Revolving Loan Commitment.

The delivery of each Notice of Borrowing shall constitute a representation and warranty by such Borrower of the correctness of the matters specified in subsections (b), (c) and (d) above.

SECTION 6. REPRESENTATIONS AND WARRANTIES

Each Borrower, severally and not jointly, hereby represents and warrants to each Lender that:

6.1  Organization and Good Standing.

Such Borrower and each Material Subsidiary of each Borrower (other than any Material Subsidiary that is not a corporation) (a) is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (b) is duly qualified and in good standing as a foreign corporation authorized to do business in every jurisdiction where the failure to so qualify would have a Material Adverse Effect on such Borrower and (c) has the requisite corporate power and authority to own its properties and to carry on its business as now conducted and as proposed to be conducted. Each Material Subsidiary of such Borrower that is not a corporation (a) is a legal entity duly organized, existing and in good standing under the laws of its jurisdiction of organization, (b) is registered or qualified as an entity authorized to do business in every jurisdiction where the failure to be so registered or qualified would have a Material Adverse Effect on such Borrower and (c) has the re quisite power and authority to own its properties and to carry on its business as now conducted and as proposed to be conducted.

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6.2  Due Authorization

Such Borrower (a) has the requisite corporate power and authority to execute, deliver and perform this Credit Agreement and the other Credit Documents and to incur the obligations herein and therein provided for and (b) is duly authorized to, and has been authorized by all necessary corporate action, to execute, deliver and perform this Credit Agreement and the other Credit Documents.

6.3  No Conflicts

Neither the execution and delivery of the Credit Documents nor the consummation of the transactions contemplated therein, nor performance of and compliance with the terms and provisions thereof by such Borrower will (a) violate or conflict with any provision of its articles of incorporation or bylaws, (b) violate, contravene or materially conflict with any law (including without limitation, the Public Utility Holding Company Act of 1935, as amended (the "1935 Act")), regulation (including without limitation, Regulation U or Regulation X), order, writ, judgment, injunction, decree or permit applicable to it, (c) violate, contravene or materially conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which it is a party or by which it may be bound, the violation of which could have a Material Adverse Effect on such Borrower or (d) result in or require the creation of any Lien upon or with respect to its properties.

6.4  Consents

No consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required to be obtained or made by such Borrower in connection with such Borrower's execution, delivery or performance of this Credit Agreement or any of the other Credit Documents that has not been obtained or made.

6.5  Enforceable Obligations

This Credit Agreement and the other Credit Documents have been duly executed and delivered and constitute legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms, except as may be limited by bankruptcy or insolvency laws or similar laws affecting creditors' rights generally or by general equitable principles.

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6.6  Financial Condition

The financial statements provided to the Lenders pursuant to Section 5.1(g) and pursuant to Section 7.1(a) and (b) present fairly the financial condition, results of operations and cash flows of such Borrower and its Consolidated Subsidiaries as of the date stated therein.

In addition, (i) such financial statements were prepared in accordance with GAAP and, (ii) since the latest date of such financial statements, there have occurred no changes or circumstances which have had or would be reasonably expected to have a Material Adverse Effect on such Borrower.


6.7  No Default

Neither such Borrower nor any of its Material Subsidiaries is in default in any respect under any contract, lease, loan agreement, indenture, mortgage, security agreement or other agreement or obligation to which it is a party or by which any of its properties is bound which default would have or would be reasonably expected to have a Material Adverse Effect on such Borrower.

6.8  Indebtedness

As of the Closing Date, such Borrower has no Indebtedness except as disclosed in the financial statements referenced in Section 5.1(g) and on Schedule 6.8.

6.9  Litigation

Except as disclosed in such Borrower's Annual Report on Form 10-K for the year ended December 31, 2002 and such Borrower's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, there are no actions, suits or legal, equitable, arbitration or administrative proceedings, pending or, to the knowledge of such Borrower, threatened against such Borrower or a Material Subsidiary of such Borrower in which there is a reasonable possibility of an adverse decision which would have or would reasonably be expected to have a Material Adverse Effect on such Borrower.

6.10  Taxes

Such Borrower and each Material Subsidiary of such Borrower has filed, or caused to be filed, all material tax returns (federal, state, local and foreign) required to be filed by it and paid all amounts of taxes shown thereon to be due (including interest and penalties) and has paid all other taxes, fees, assessments and other governmental charges (including mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing by it, except for such taxes which are not yet delinquent or that are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with GAAP. Such Borrower is not aware of any proposed tax assessments against it or any of its Material Subsidiaries.

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6.11  Compliance with Law

Except as disclosed in such Borrower's Annual Report on Form 10-K for the year ended December 31, 2002 and such Borrower's Quarterly Report for the quarter ended March 31, 2003, such Borrower and each Material Subsidiary of such Borrower is in compliance with all laws, rules, regulations, orders and decrees applicable to it, or to its properties, unless such failure to comply would not have a Material Adverse Effect on such Borrower.

6.12  ERISA

1. No Reportable Event has occurred and is continuing with respect to any Plan of such Borrower; (b) no Plan of such Borrower has an accumulated funding deficiency determined under Section 412 of the Code; (c) no proceedings have been instituted, or, to the knowledge of such Borrower, planned to terminate any Plan of such Borrower; (d) neither such Borrower, nor any member of a Controlled Group including such Borrower, nor any duly-appointed administrator of a Plan of such Borrower has instituted or intends to institute proceedings to withdraw from any Multiemployer Pension Plan (as defined in Section 3(37) of ERISA); and (e) each Plan of such Borrower has been maintained and funded in all material respects in accordance with its terms and with the provisions of ERISA applicable thereto.

6.13  Use of Proceeds 

The proceeds of the Loans made to such Borrower hereunder will be used solely for the purposes specified in Section 7.9.

6.14  Government Regulation

1. None of the proceeds of the Loans made to such Borrower hereunder will be used for the purpose of purchasing or carrying any "margin stock" which violates Regulation U or Regulation X or for the purpose of reducing or retiring in violation of Regulation U or Regulation X any Indebtedness which was originally incurred to purchase or carry "margin stock" or for any other purpose which might constitute this transaction a "purpose credit" in violation of Regulation U or Regulation X.
2. As of the Closing Date, Dominion Resources and CNG each is a registered "holding company" within the meaning of that term under the 1935 Act. The issuance by such Borrower of the Notes, its incurrence of the Indebtedness contemplated by this Credit Agreement and the borrowing, repayment and reborrowing of Loans hereunder is permitted by the 1935 Act and requires no authorization or approval of any Governmental Authority other than such authorizations and approvals as have already been obtained.
3. Such Borrower is not an "investment company" registered or required to be registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and is not controlled by such a company, nor is otherwise subject to regulation under the Investment Company Act.

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6.15  Solvency

Such Borrower is and, after the consummation of the transactions contemplated by this Credit Agreement and the other Credit Documents, will be Solvent.

SECTION 7.  AFFIRMATIVE COVENANTS

Each Borrower, severally but not jointly, hereby covenants and agrees that so long as this Credit Agreement is in effect and until the Loans made to it, together with interest, fees and other obligations hereunder, have been paid in full and the Commitments hereunder shall have terminated:

7.1  Information Covenants

Such Borrower will furnish, or cause to be furnished, to the Administrative Agent and each Lender:

1. Annual Financial Statements. As soon as available, and in any event within 120 days after the close of each fiscal year of such Borrower, a Form 10-K, as required to be filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and the Exchange Act, which includes financial information required by such Form 10-K, such financial information to be in reasonable form and detail and audited by Deloitte & Touche or another independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent and whose opinion shall be to the effect that such financial statements have been prepared in accordance with GAAP (except for changes with which such accountants concur) and shall not be limited as to the scope of the audit or qualified in any respect.
2. Quarterly Financial Statements. As soon as available, and in any event within 60 days after the close of each of the first three fiscal quarters of such Borrower a Form 10-Q, as required to be filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and the Exchange Act, which includes the financial information required by such Form 10-Q, such financial information to be in reasonable form and detail and reasonably acceptable to the Administrative Agent, and accompanied by a certificate of the chief financial officer or treasurer of such Borrower to the effect that such quarterly financial statements fairly present in all material respects the financial condition of such Borrower and have been prepared in accordance with GAAP, subject to changes resulting from audit and normal year-end audit adjustments.
3. Officer's Certificate. At the time of delivery of the financial statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of the chief financial officer or treasurer of such Borrower, substantially in the form of Exhibit 7.1(c), (i) demonstrating compliance with the financial covenant contained in Section 7.11 by calculation thereof as of the end of each such fiscal period and (ii) stating that no Default or Event of Default by such Borrower exists, or if any such Default or Event of Default does exist, specifying the nature and extent thereof and what action such Borrower proposes to take with respect thereto.
4. Reports. Promptly upon transmission or receipt thereof, copies of any filings and registrations with, and reports to or from, the Securities and Exchange Commission, or any successor agency, and copies of all financial statements, proxy statements, notices and reports as Dominion Resources shall send to its shareholders.
5. Notices. Upon such Borrower obtaining knowledge thereof, such Borrower will give written notice to the Administrative Agent immediately of (i) the occurrence of an event or condition consisting of a Default or Event of Default by such Borrower, specifying the nature and existence thereof and what action such Borrower proposes to take with respect thereto and (ii) the occurrence of any of the following: (A) the pendency or commencement of any litigation, arbitral or governmental proceeding against such Borrower or a Material Subsidiary of such Borrower which, if adversely determined, is likely to have a Material Adverse Effect on such Borrower, (B) the institution of any proceedings against such Borrower or a Material Subsidiary of such Borrower with respect to, or the receipt of notice by such Person of potential liability or responsibility for violation, or alleged violation of any federal, state or local law, rule or regulation, the violation of which would likely have a Material Adverse Ef fect on such Borrower or (C) any notice or determination concerning the imposition of any withdrawal liability by a Multiemployer Plan against such Borrower or any of its ERISA Affiliates, the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA or the termination of any Plan of such Borrower.
6. Other Information. With reasonable promptness upon any such request, such other information regarding the business, properties or financial condition of such Borrower as the Administrative Agent or the Required Lenders may reasonably request.

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7.2  Preservation of Existence and Franchises

Such Borrower will do (and will cause each of its Material Subsidiaries to do) all things necessary to preserve and keep in full force and effect its existence, rights, franchises and authority; provided that nothing in this Section 7.2 shall prevent any transaction otherwise permitted under Section 8.2 or Section 8.3 or any change in the form of organization (by merger or otherwise) of any Material Subsidiary of any Borrower so long as such change shall not have an adverse effect on such Borrower's ability to perform its obligations hereunder.

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7.3  Books and Records

Such Borrower will keep (and will cause each of its Material Subsidiaries to keep) complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of GAAP (including the establishment and maintenance of appropriate reserves).

7.4  Compliance with Law

Such Borrower will comply (and will cause each of its Material Subsidiaries to comply) with all laws, rules, regulations and orders, and all applicable restrictions imposed by all Governmental Authorities, applicable to it and its property if noncompliance with any such law, rule, regulation, order or restriction would be reasonably expected to have a Material Adverse Effect on such Borrower.

7.5  Payment of Taxes.

Such Borrower will pay and discharge all taxes, assessments and governmental charges or levies imposed upon it, or upon its income or profits, or upon any of its properties, before they shall become delinquent; provided, however, that such Borrower shall not be required to pay any such tax, assessment, charge, levy, or claim which is being contested in good faith by appropriate proceedings and as to which adequate reserves therefor have been established in accordance with GAAP.

7.6  Insurance

Such Borrower will at all times maintain in full force and effect insurance (including worker's compensation insurance, liability insurance, casualty insurance and business interruption insurance) in such amounts, covering such risks and liabilities and with such deductibles or self-insurance retentions as are in accordance with normal industry practice.

7.7  Performance of Obligations

Such Borrower will perform (and will cause each of its Material Subsidiaries to perform) in all material respects all of its obligations under the terms of all material agreements, indentures, mortgages, security agreements or other debt instruments to which it is a party or by which it is bound.

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7.8  ERISA 

Such Borrower and each of its ERISA Affiliates will (a) at all times make prompt payment of all contributions (i) required under all employee pension benefit plans (as defined in Section 3(2) of ERISA) ("Pension Plans") and (ii) required to meet the minimum funding standard set forth in ERISA with respect to each of its Plans; (b) promptly upon request, furnish the Administrative Agent and the Lenders copies of each annual report/return (Form 5500 Series), as well as all schedules and attachments required to be filed with the Department of Labor and/or the Internal Revenue Service pursuant to ERISA, and the regulations promulgated thereunder, in connection with each of its Pension Plans for each Plan Year (as defined in ERISA); (c) notify the Administrative Agent immediately of any fact, including, but not limited to, any Reportable Event arising in connection with any of its Plans, which might constitute grounds for termination thereof by the PBGC or for the appointment by the appropriate United S tates District Court of a trustee to administer such Plan, together with a statement, if requested by the Administrative Agent, as to the reason therefor and the action, if any, proposed to be taken in respect thereof; and (d) furnish to the Administrative Agent, upon its request, such additional information concerning any of its Plans as may be reasonably requested. Such Borrower will not nor will it permit any of its ERISA Affiliates to (A) terminate a Plan if any such termination would have a Material Adverse Effect on such Borrower or (B) cause or permit to exist any Reportable Event under ERISA or other event or condition which presents a material risk of termination at the request of the PBGC if such termination would have a Material Adverse Effects.

7.9  Use of Proceeds

The proceeds of the Loans made to each Borrower hereunder may be used solely (a) to provide credit support for such Borrower's commercial paper, (b) for working capital of such Borrower and its Subsidiaries and (c) for other general corporate purposes.

7.10  Audits/Inspections

Upon reasonable notice, during normal business hours and in compliance with the reasonable security procedures of such Borrower, such Borrower will permit representatives appointed by the Administrative Agent or any Lender, including, without limitation, independent accountants, agents, attorneys, and appraisers to visit and inspect such Borrower's property, including its books and records, its accounts receivable and inventory, the Borrower's facilities and its other business assets, and to make photocopies or photographs thereof and to write down and record any information such representative obtains and shall permit any Lender or the Administrative Agent or its representatives to investigate and verify the accuracy of information provided to the Lenders and to discuss all such matters with the officers, employees and representatives of such Borrower.

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7.11  Total Funded Debt to Capitalization

The ratio of (a) Total Funded Debt to (b) Capitalization for such Borrower shall at all times be less than or equal to .65 to 1.00, in the case of Dominion Resources (on a consolidated basis), or .60 to 1.00, in the case of each of VaPower and CNG (each on a consolidated basis).


SECTION 8.  NEGATIVE COVENANTS

Each Borrower, severally but not jointly, hereby covenants and agrees that so long as this Credit Agreement is in effect and until the Loans, together with interest, fees and other obligations hereunder, have been paid in full and the Commitments hereunder shall have terminated:

8.1  Nature of Business

Such Borrower will not alter the character of its business from that conducted as of the Closing Date and activities reasonably related thereto and similar and related businesses; provided, however, that VaPower may transfer assets related to its electric power generation and marketing and trading operations to one or more Wholly-Owned Subsidiaries of DRI to the extent permitted under Section 8.3.

8.2  Consolidation and Merger

Such Borrower will not enter into any transaction of merger or consolidation or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); provided that notwithstanding the foregoing provisions of this Section 8.2, the following actions may be taken if, after giving effect thereto, no Default or Event of Default by such Borrower exists:

1. a Subsidiary of such Borrower may be merged or consolidated with or into any Borrower; provided that a Borrower shall be the continuing or surviving entity;
2. such Borrower may merge or consolidate with any other Person if either (i) such Borrower shall be the continuing or surviving entity or (ii) such Borrower shall not be the continuing or surviving entity and the entity so continuing or surviving (A) is an entity organized and duly existing under the law of any state of the United States and (B) executes and delivers to the Administrative Agent and the Lenders an instrument in form satisfactory to the Required Lenders pursuant to which it expressly assumes the Loans of such Borrower and all of the other obligations of such Borrower under the Credit Documents and procures for the Administrative Agent and each Lender an opinion in form satisfactory to the Required Lenders and from counsel satisfactory to the Required Lenders in respect of the due authorization, execution, delivery and enforceability of such instrument and covering such other matters as the Required Lenders may reasonably request; and
3. such Borrower may be merged or consolidated with or into any other Borrower.

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8.3  Sale or Lease of Assets

Such Borrower will not convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or substantially all of its business or assets whether now owned or hereafter acquired, it being understood and agreed that VaPower may transfer assets related to its electric power generation and marketing and trading operations to one or more Wholly-Owned Subsidiaries generally in accordance with a plan submitted to the Virginia State Corporation Commission, provided that (i) each such Wholly-Owned Subsidiary remains at all times a Wholly Owned Subsidiary of Dominion Resources and (ii) the Ratings of Dominion Resources and VaPower will not be lowered to less than BBB by S&P or Baa2 by Moody's in connection with or as a result of such transfer.

8.4  Limitation on Liens

In the case of VaPower, VaPower shall not, nor shall it permit any of its Material Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for (i) Liens permitted by the First Mortgage Bond Indenture and (ii) Liens created in the ordinary course of business.

In the case of CNG, if CNG shall pledge, mortgage or hypothecate, or permit any Lien upon, any property or assets at any time owned by CNG and by reason thereof CNG would under the Indenture be obligated to cause the Securities outstanding under the Indenture as from time to time in effect to be secured by such pledge, mortgage, hypothecation or other Lien, CNG shall concurrently make effective provision whereby the Loans outstanding hereunder will be equally and ratably secured with any and all other indebtedness thereby secured.

In the case of Dominion Resources, if Dominion Resources shall pledge as security for any indebtedness or obligations, or permit any Lien as security for Indebtedness or obligations upon, any capital stock owned by it on the date hereof or thereafter acquired, of any of its Material Subsidiaries, Dominion Resources will secure the outstanding Loans ratably with the indebtedness or obligations secured by such pledge, except for Liens incurred or otherwise arising in the ordinary course of business.

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8.5  Fiscal Year

Such Borrower will not change its fiscal year without prior notification to the Lenders.

SECTION 9.  EVENTS OF DEFAULT

9.1  Events of Default

An Event of Default with respect to a Borrower shall exist upon the occurrence and continuation of any of the following specified events with respect to such Borrower (each an "Event of Default"):

1. Payment. Such Borrower shall:
1. default in the payment when due of any principal of any of the Loans; or
2. default, and such default shall continue for three or more days, in the payment when due of any interest on the Loans or of any fees or other amounts owing hereunder, under any of the other Credit Documents or in connection herewith.
2. Representations. Any representation, warranty or statement made or deemed to be made by such Borrower herein, in any of the other Credit Documents, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove untrue in any material respect on the date as of which it was deemed to have been made.
3. Covenants. Such Borrower shall:
1. default in the due performance or observance of any term, covenant or agreement contained in Sections 7.2, 7.9, 7.11 or 8.1 through 8.5, inclusive; or
2. default in the due performance or observance by it of any term, covenant or agreement contained in Section 7.1(a), (b), (c) or (e) and such default shall continue unremedied for a period of five Business Days after the earlier of an officer of such Borrower becoming aware of such default or notice thereof given by the Administrative Agent; or
3. default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in subsections (a), (b), (c)(i), or (c)(ii) of this Section 9.1) contained in this Credit Agreement or any other Credit Document and such default shall continue unremedied for a period of at least 30 days after the earlier of an officer of such Borrower becoming aware of such default or notice thereof given by the Administrative Agent.

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4. Credit Documents. Any Credit Document shall fail to be in full force and effect with respect to such Borrower or to give the Administrative Agent and/or the Lenders the security interests, liens, rights, powers and privileges purported to be created thereby and relating to such Borrower.
5. Bankruptcy, etc. The occurrence of any of the following with respect to such Borrower or a Material Subsidiary of such Borrower (i) a court or governmental agency having jurisdiction in the premises shall enter a decree or order for relief in respect of such Borrower or a Material Subsidiary of such Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Borrower or a Material Subsidiary of such Borrower or for any substantial part of its property or ordering the winding up or liquidation of its affairs; or (ii) an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect is commenced against such Borrower or a Material Subsidiary of such Borrower and such petition remains unstayed and in effect for a period of 60 consecutive days; or (iii) such Borrower or a Material Su bsidiary of such Borrower shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or any substantial part of its property or make any general assignment for the benefit of creditors; or (iv) such Borrower or a Material Subsidiary of such Borrower shall admit in writing its inability to pay its debts generally as they become due or any action shall be taken by such Person in furtherance of any of the aforesaid purposes.
6. Defaults under Other Agreements. With respect to any Indebtedness (other than Indebtedness of such Borrower outstanding under this Credit Agreement) of such Borrower or a Material Subsidiary of such Borrower in a principal amount in excess of $25,000,000, (i) such Borrower or a Material Subsidiary of such Borrower shall (A) default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to any such Indebtedness, or (B) default (after giving effect to any applicable grace period) in the observance or performance of any covenant or agreement relating to such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or condition shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit, the holder or holders of such Indebtedness (or trustee or agent on behalf of such holders) to cause any such Indebtedness to become due prior to its stated maturity; or (ii) any such Indebtedness shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof; or (iii) any such Indebtedness matures and is not paid at maturity.
7. Judgments. One or more judgments, orders, or decrees shall be entered against such Borrower or a Material Subsidiary of such Borrower involving a liability of $25,000,000 or more, in the aggregate, (to the extent not paid or covered by insurance provided by a carrier who has acknowledged coverage) and such judgments, orders or decrees shall continue unsatisfied, undischarged and unstayed for a period ending on the first to occur of (i) the last day on which such judgment, order or decree becomes final and unappealable and, where applicable, with the status of a judicial lien or (ii) 30 days.
8. ERISA. (i) Such Borrower, or a Material Subsidiary of such Borrower or any member of the Controlled Group including such Borrower shall fail to pay when due an amount or amounts aggregating in excess of $20,000,000 which it shall have become liable to pay under Title IV of ERISA; or (ii) notice of intent to terminate a Plan or Plans of such Borrower which in the aggregate have unfunded liabilities in excess of $20,000,000 (individually and collectively, a "Material Plan") shall be filed under Title IV of ERISA by such Borrower or any member of the Controlled Group including such Borrower, any plan administrator or any combination of the foregoing; or (iii) the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan of such Borrower; or (iv) a condition shall exist by reason of which the PBGC would be entitled to obtain a decre e adjudicating that any Material Plan of such Borrower must be terminated; or (v) there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of the Controlled Group including such Borrower to incur a current payment obligation in excess of $20,000,000.
9. Change of Control. The occurrence of any Change of Control with respect to such Borrower.

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9.2  Acceleration; Remedies.

Upon the occurrence of an Event of Default with respect to any Borrower, and at any time thereafter unless and until such Event of Default has been waived by the Required Lenders or cured to the satisfaction of the Required Lenders, the Administrative Agent may with the consent of the Required Lenders, and shall, upon the request and direction of the Required Lenders, by written notice to such Borrower take any of the following actions without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against such Borrower, except as otherwise specifically provided for herein:

1. Termination of Commitments. Declare the Commitments with respect to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources) terminated whereupon the Commitments with respect to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources) shall be immediately terminated.
2. Acceleration of Loans. Declare the unpaid principal of and any accrued interest in respect of all Loans made to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources) and any and all other indebtedness or obligations of any and every kind owing by such Borrower (and, if such Borrower is either VaPower or CNG, then also by Dominion Resources) to any of the Lenders or the Administrative Agent hereunder to be due whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by such Borrower (and, if such Borrower is either VaPower or CNG, then also by Dominion Resources).
3. Enforcement of Rights. Enforce any and all rights and interests created and existing under the Credit Documents, including, without limitation, all rights of set-off, as against such Borrower.

Notwithstanding the foregoing, if an Event of Default specified in Section 9.1(e) shall occur, then the Commitments with respect to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources) shall automatically terminate and all Loans made to such Borrower (and, if such Borrower is either VaPower or CNG, then also to Dominion Resources), all accrued interest in respect thereof, all accrued and unpaid fees and other indebtedness or obligations owing by such Borrower (and, if such Borrower is either VaPower or CNG, then also by Dominion Resources) to the Lenders and the Administrative Agent hereunder shall immediately become due and payable without the giving of any notice or other action by the Administrative Agent or the Lenders.

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9.3  Allocation of Payments After Event of Default

Notwithstanding any other provisions of this Credit Agreement, after the occurrence and during the continuance of an Event of Default with respect to any Borrower, all amounts collected from such Borrower or received by the Administrative Agent or any Lender on account of amounts outstanding under any of the Credit Documents shall be paid over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation reasonable attorneys' fees other than the fees of in-house counsel) of the Administrative Agent or any of the Lenders in connection with enforcing the rights of the Lenders under the Credit Documents against such Borrower and any protective advances made by the Administrative Agent or any of the Lenders, pro rata as set forth below;

SECOND, to payment of any fees owed to the Administrative Agent or any Lender by such Borrower, pro rata as set forth below;

THIRD, to the payment of all accrued interest payable to the Lenders by such Borrower hereunder, pro rata as set forth below;

FOURTH, to the payment of the outstanding principal amount of the Loans of such Borrower, pro rata as set forth below;

FIFTH, to all other obligations which shall have become due and payable of such Borrower under the Credit Documents and not repaid pursuant to clauses "FIRST" through "FOURTH" above; and

SIXTH, the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

In carrying out the foregoing, (a) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category and (b) each of the Lenders shall receive an amount equal to its pro rata share (based on each Lender's Commitment Percentages) of amounts available to be applied.

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SECTION 10.  AGENCY PROVISIONS

10.1  Appointment

Each Lender hereby designates and appoints JPMCB as administrative agent of such Lender to act as specified herein and the other Credit Documents, and each such Lender hereby authorizes the Administrative Agent, as the agent for such Lender, to take such action on its behalf under the provisions of this Credit Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated by the terms hereof and of the other Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere herein and in the other Credit Documents, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or any of the other Credit Documents, or shall otherwise e xist against the Administrative Agent. The provisions of this Section are solely for the benefit of the Administrative Agent and the Lenders and no Borrower shall have any rights as a third party beneficiary of the provisions hereof. In performing its functions and duties under this Credit Agreement and the other Credit Documents, the Administrative Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for any Borrower.

10.2  Delegation of Duties

The Administrative Agent may execute any of its duties hereunder or under the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

10.3  Exculpatory Provisions

Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection herewith or in connection with any of the other Credit Documents (except for its or such Person's own gross negligence or willful misconduct), or responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by a Borrower contained herein or in any of the other Credit Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection herewith or in connection with the other Credit Documents, or enforceability or sufficiency therefor of any of the other Credit Documents, or for any failure of the Borrowers to perform their respective obligations hereunder or thereunder. The Administrative Agent shall not be responsible to any Le nder for the effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Credit Agreement, or any of the other Credit Documents or for any representations, warranties, recitals or statements made herein or therein or made by a Borrower in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by the Administrative Agent to the Lenders or by or on behalf of a Borrower to the Administrative Agent or any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or of the existence or possible existence of any Default or Event of Default or to inspect the properties, books or records of a Borrower. The Administrative Agent is not a trustee for the Lenders and owes no fiduciary duty to the Le nders. None of the Lenders identified on the facing page or signature pages of this Agreement as "Syndication Agent" or "Co-Documentation Agents" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such, nor shall they have or be deemed to have any fiduciary relationship with any Lender.

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10.4  Reliance on Communications

The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to a Borrower, independent accountants and other experts selected by the Administrative Agent with reasonable care). The Administrative Agent may deem and treat the Lenders as the owner of its interests hereunder for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent in accordance with Section 11.3(b). The Administrative Agent shall be fully justified in failing or refusing to take any action under this Credit Agreement or under a ny of the other Credit Documents unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any of the other Credit Documents in accordance with a request of the Required Lenders (or to the extent specifically provided in Section 11.6, all the Lenders) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders (including their successors and assigns).

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10.5  Notice of Default

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or the relevant Borrower referring to the Credit Document, describing such Default or Event of Default and stating that such notice is a "notice of default." In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be directed by the Required Lenders (or, to the extent specifically provided in Section 11.6, all the Lenders).

10.6  Non-Reliance on Administrative Agent and Other Lenders

Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Administrative Agent or any affiliate thereof hereinafter taken, including any review of the affairs of a Borrower, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of a Borrower and made its own decision to make its Loans hereunder and enter into this Credit Agreement. Each Lender also represents that it will, independently and without reliance u pon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of a Borrower. Except for (i) delivery of the Credit Documents and (ii) notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial or other conditions, prospects or creditworthiness of a Borrower which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorn eys-in-fact or Affiliates.

10.7  Indemnification

Each Lender agrees to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by a Borrower and without limiting the obligation of a Borrower to do so), ratably according to its Revolving Loan Commitment, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in its capacity as such in any way relating to or arising out of this Credit Agreement or the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities , obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent. If any indemnity furnished to the Administrative Agent for any purpose shall, in the opinion of the Administrative Agent, be insufficient or become impaired, the Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder and under the other Credit Documents.

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10.8  Administrative Agent in Its Individual Capacity

The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with a Borrower as though the Administrative Agent were not Administrative Agent hereunder. With respect to the Loans made by it, the Administrative Agent shall have the same rights and powers under this Credit Agreement as any Lender and may exercise the same as though they were not Administrative Agent, and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity.

10.9  Successor Administrative Agent

The Administrative Agent may, at any time, resign upon 30 days written notice to the Lenders. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment, within 30 days after the notice of resignation, then the retiring Administrative Agent shall select a successor Administrative Agent provided such successor is an Eligible Assignee (or if no Eligible Assignee shall have been so appointed by the retiring Administrative Agent and shall have accepted such appointment, then the Lenders shall perform all obligations of the retiring Administrative Agent until such time, if any, as a successor Administrative Agent shall have been so appointed and shall have accepted such appointment as provided for above). Upon the acceptance of any appointment as Administrative Agent hereunder by a successor, such successor Administrative A gent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations as Administrative Agent, as appropriate, under this Credit Agreement and the other Credit Documents and the provisions of this Section 10.9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Credit Agreement.

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SECTION 11.  MISCELLANEOUS

11.1  Notices

Except as otherwise expressly provided herein, all notices and other communications shall have been duly given and shall be effective (a) when delivered, (b) when transmitted via telecopy (or other facsimile device), (c) the Business Day following the day on which the same has been delivered prepaid (or pursuant to an invoice arrangement) to a reputable national overnight air courier service, or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective parties at the address or telecopy numbers set forth on Schedule 11.1, or at such other address as such party may specify by written notice to the other parties hereto.

Notices and other communications to any Lender hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or a Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

11.2  Right of Set-Off; Adjustments

In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default by a Borrower and the commencement of remedies described in Section 9.2, each Lender is authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of such Borrower against obligations and liabilities of such Borrower to the Lenders hereunder, under the Notes, the other Credit Documents or otherwise, irrespective of whether the Administrative Agent or the Lenders shall have made any demand hereunder and although such obligations, liabilities or cl aims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto. Each Borrower hereby agrees that any Person purchasing a participation in the Loans and Commitments to it hereunder pursuant to Section 11.3(c) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder.

Except to the extent that this Credit Agreement expressly provides for payments to be allocated to a particular Lender, if any Lender (a "Benefitted Lender") shall receive any payment of all or part of the obligations owing to it by a Borrower under this Credit Agreement, receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 9.1(e), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the obligations owing to such other Lender by such Borrower under this Credit Agreement, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collat eral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

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11.3  Benefit of Agreement.

1. Generally. This Credit Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided that a Borrower may not assign and transfer any of its interests (except as permitted by Section 8.2) without prior written consent of the Lenders; and provided further that the rights of each Lender to transfer, assign or grant participations in its rights and/or obligations hereunder shall be limited as set forth in this Section 11.3.
2. Assignments. Each Lender may assign all or a portion of its rights and obligations under this Credit Agreement (including, without limitation, all or a portion of its Loans, its Notes, and its Commitment); provided, however, that:
1. each such assignment shall be to an Eligible Assignee;
2. except (A) in the case of an assignment to another Lender or to an Affiliate of a Lender, (B) in the case of an assignment of all of a Lender's rights and obligations under this Credit Agreement, or (C) with the consent of the Administrative Agent and DRI (such consent by DRI (i) not to be unreasonably withheld and (ii) not being required during the existence of a Default or Event of Default), any such partial assignment shall be in an amount at least equal to $10,000,000 (or, if less, the remaining amount of the Commitment being assigned by such Lender) or an integral multiple of $5,000,000 in excess thereof;
3. each such assignment by a Lender shall be of a constant, and not varying, percentage of all of its rights and obligations under this Credit Agreement and the Notes; and
4. the parties to such assignment shall execute and deliver to the Administrative Agent for its acceptance an Assignment Agreement in substantially the form of Exhibit 11.3, together with a processing fee from the assignor of $4,000.

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Upon execution, delivery, and acceptance of such Assignment Agreement, the assignee thereunder shall be a party hereto and, to the extent of such assignment, have the obligations, rights, and benefits of a Lender hereunder and the assigning Lender shall, to the extent of such assignment, relinquish its rights and be released from its obligations under this Credit Agreement. Upon the consummation of any assignment pursuant to this Section 11.3(b), the assignor, the Administrative Agent and the relevant Borrower shall make appropriate arrangements so that, if required, new Notes are issued to the assignee. If the assignee is not incorporated under the laws of the United States of America or a State thereof, it shall deliver to such Borrower and the Administrative Agent certification as to exemption from deduction or withholding of taxes in accordance with Section 4.4.

By executing and delivering an assignment agreement in accordance with this Section 11.3(b), the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (A) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and the assignee warrants that it is an Eligible Assignee; (B) except as set forth in clause (A) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto or the financial condition of a Borrower or the performance or observance by such Borrower of any of its obligations under this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (C) such assignee represents and warrants that it is legally authorized to enter into such assignment agreement; (D) such assignee confirms that it has received a copy of this Credit Agreement, the other Credit Documents and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such assignment agreement; (E) such assignee will independently and without reliance upon the Administrative Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Credit Agreement and the other Credit Documents ; (F) such assignee appoints and authorizes the Administrative Agent to take such action on its behalf and to exercise such powers under this Credit Agreement or any other Credit Document as are delegated to the Administrative Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto; and (G) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Credit Agreement and the other Credit Documents are required to be performed by it as a Lender.

For avoidance of doubt, the parties to this Credit Agreement acknowledge that the provisions of this Section 11.3 concerning assignments relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including any pledge or assignment by a Lender to any Federal Reserve Bank in accordance with applicable law.

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3. Register. The Administrative Agent shall maintain a copy of each Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time by each Borrower (collectively, the "Registers"). The entries in the Registers shall be conclusive and binding for all purposes, absent manifest error, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the relevant Register as a Lender hereunder for all purposes of this Credit Agreement. The Registers shall be available for inspection by the Borrowers or any Lender at any reasonable time and from time to time upon reasonable prior notice.
4. Acceptance. Upon its receipt of an assignment agreement executed by the parties thereto, together with any Note subject to such assignment and payment of the processing fee, the Administrative Agent shall, if such Assignment Agreement has been completed and is in substantially the form of Exhibit 11.3, (i) accept such assignment agreement, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the parties thereto.
5. Participations. Each Lender may sell, transfer, grant or assign participations in all or any part of such Lender's interests and obligations hereunder; provided that (i) such selling Lender shall remain a "Lender" for all purposes under this Credit Agreement (such selling Lender's obligations under the Credit Documents remaining unchanged) and the participant shall not constitute a Lender hereunder, (ii) no such participant shall have, or be granted, rights to approve any amendment or waiver relating to this Credit Agreement or the other Credit Documents except to the extent any such amendment or waiver would (A) reduce the principal of or rate of interest on or fees in respect of any Loans in which the participant is participating, or (B) postpone the date fixed for any payment of principal (including extension of the Maturity Date or the date of any mandatory prepayment), interest or fees in respect of any Loans in which the participant is participating and (iii)  sub-participations by the participant (except to an Affiliate, parent company or Affiliate of a parent company of the participant) shall be permitted with the consent of the Borrowers (which, in each case, shall not be unreasonably withheld or delayed and shall not be required during the existence of a Default or Event of Default). In the case of any such participation, the participant shall not have any rights under this Credit Agreement or the other Credit Documents (the participant's rights against the selling Lender in respect of such participation to be those set forth in the participation agreement with such Lender creating such participation) and all amounts payable by such Borrower hereunder shall be determined as if such Lender had not sold such participation; provided, however, that such participant shall be entitled to receive additional amounts under Section 4 to the same extent that the Lender from which such participant acquired its participation would be entitled to the benefit of such cost protection provisions.
6. Payments. No Eligible Assignee, participant or other transferee of any Lender's rights shall be entitled to receive any greater payment under Section 4 than such Lender would have been entitled to receive with respect to the rights transferred, unless such transfer is made with the relevant Borrower's written consent.
7. Nonrestricted Assignments. Notwithstanding any other provision set forth in this Credit Agreement, any Lender may at any time assign and pledge all or any portion of its Loans and its Notes to any Federal Reserve Bank as collateral security pursuant to Regulation A and any operating circular issued by such Federal Reserve Bank. No such assignment shall release the assigning Lender from its obligations hereunder.
8. Information. Any Lender may furnish any information concerning a Borrower or any of its Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants) who is notified of the confidential nature of the information and agrees to use its reasonable best efforts to keep confidential all non-public information from time to time supplied to it.

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11.4  No Waiver; Remedies Cumulative

No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between a Borrower and the Administrative Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender would otherwise have. No notice to or demand on a Borrower in any case shall entitle such Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.

11.5  Payment of Expenses, etc.

Each Borrower agrees to: (a) pay all reasonable out-of-pocket costs and expenses of (i) the Administrative Agent in connection with the negotiation, preparation, execution and delivery and administration of this Credit Agreement and the other Credit Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees and expenses of outside legal counsel to the Administrative Agent) and any amendment, waiver or consent relating hereto and thereto including, but not limited to, any such amendments, waivers or consents resulting from or related to any work-out, renegotiation or restructure relating to the performance by such Borrower under this Credit Agreement and (ii) of the Administrative Agent and the Lenders in connection with enforcement of the Credit Documents and the documents and instruments referred to therein (including, without limitation, in connection with any such enforcement, the reasonable fees and disbursements of counsel fo r the Administrative Agent and each of the Lenders) against such Borrower; and (b) indemnify the Administrative Agent and each Lender and its Affiliates, their respective officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not the Administrative Agent or any Lender or its Affiliates is a party thereto) related to the entering into and/or performance of any Credit Document or the use of proceeds of any Loans (including other extensions of credit) hereunder or the consummation of any other transactions contemplated in any Credit Document by such Borrower, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such losses, liabilities, claims, damages or expenses to the extent incurred by reason of gross negligence or willful misconduct on the part of the Person to be indemnified).

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11.6  Amendments, Waivers and Consents

Neither this Credit Agreement nor any other Credit Document nor any of the terms hereof or thereof may be amended, changed, waived, discharged or terminated unless such amendment, change, waiver, discharge or termination is in writing and signed by the Required Lenders and the Borrowers; provided that no such amendment, change, waiver, discharge or termination shall without the consent of each Lender affected thereby:

1. extend the Maturity Date;
2. reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) thereon or fees hereunder;
3. reduce or forgive the principal amount of any Loan;
4. increase or extend the Commitment of a Lender over the amount thereof in effect (it being understood and agreed that a waiver of any Default or Event of Default or a waiver of any mandatory reduction in the Commitments shall not constitute a change in the terms of any Commitment of any Lender);
5. release a Borrower from its obligations under the Credit Documents or consent to the transfer or assignment of such obligations;
6. amend, modify or waive any provision of this Section or Section 3.6, 3.8, 9.1(a), 10.7, 11.2, 11.3 or 11.5; or
7. reduce any percentage specified in, or otherwise modify, the definition of Required Lenders.

Notwithstanding the above, no provisions of Section 10 may be amended or modified without the consent of the Administrative Agent.

Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above, each Lender is entitled to vote as such Lender sees fit on any reorganization plan that affects the Loans and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersede the unanimous consent provisions set forth herein.

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11.7  Counterparts; Telecopy

This Credit Agreement may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Credit Agreement to produce or account for more than one such counterpart. Delivery of executed counterparts by facsimile shall be effective as an original and shall constitute a representation that an original will be delivered.

11.8  Headings

The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Credit Agreement.

11.9  Defaulting Lender

Each Lender understands and agrees that if such Lender is a Defaulting Lender then it shall not be entitled to vote on any matter requiring the consent of the Required Lenders or to object to any matter requiring the consent of all the Lenders; provided, however, that all other benefits and obligations under the Credit Documents shall apply to such Defaulting Lender.

11.10  Survival of Indemnification and Representations and Warranties

All indemnities set forth herein and all representations and warranties made herein shall survive the execution and delivery of this Credit Agreement, the making of the Loans, and the repayment of the Loans and other obligations and the termination of the Commitments hereunder.

11.11  GOVERNING LAW

THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Each Borrower irrevocably consents to the service of process out of any competent court in any action or proceeding brought in connection with this Credit Agreement by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at its address for notices pursuant to Section 11.1, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of a Lender to serve process in any other manner permitted by law.

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11.12  WAIVER OF JURY TRIAL

EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

11.13  Severability

If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.

11.14  Entirety

This Credit Agreement together with the other Credit Documents represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated herein and therein.

11.15  Binding Effect

This Credit Agreement shall become effective at such time (the "Effective Date") when all of the conditions set forth in Section 5.1 have been satisfied or waived by the Lenders and this Credit Agreement shall have been executed by each of the Borrowers and the Administrative Agent, and the Administrative Agent shall have received copies (telefaxed or otherwise) which, when taken together, bear the signatures of each Lender, and thereafter this Credit Agreement shall be binding upon and inure to the benefit of each Borrower, the Administrative Agent and each Lender and their respective successors and permitted assigns.

11.16  Submission to Jurisdiction

Each Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Credit Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Credit Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Credit Agreement against any Borrower or its properties in the courts of any jurisdiction. Each Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Credit Agreement in any court referred to above. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Each of the Borrowers also hereby irrevocably and unconditionally waives any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

11.17  Confidentiality

Each of the Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by any Borrower pursuant to this Agreement that is designated by such Borrower as confidential; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Administrative Agent, any other Lender or any of its Affiliates, (b) subject to an agreement to comply with the provisions of this Section, to any actual or prospective Assignee or participant, (c) to its employees, directors, agents, attorneys and accountants or those of any of its affiliates, (d) upon the request or demand of any Governmental Authority, (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any requirement of law, (f) if required to do so in connection with any litigation or similar proceeding, (g) that has been publicly disclosed, (h) to the Nat ional Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender's investment portfolio in connection with ratings issued with respect to such Lender, or (i) in connection with the exercise of any remedy hereunder or under any other Credit Document. Notwithstanding anything herein to the contrary, any party subject to confidentiality obligations hereunder or under any other related document (and any employee, representative or other agent of such party) may disclose to any and all persons, without limitation of any kind, such party's U.S. federal income tax treatment and the U.S. federal income tax structure of the transactions contemplated by this Credit Agreement relating to such party and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. However, no such party shall disclose any information relating to such t ax treatment or tax structure to the extent nondisclosure is reasonably necessary in order to comply with applicable securities laws.

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11.18  Designation of SPVs

 
Notwithstanding anything to the contrary contained herein, any Lender, (a "Granting Lender") may grant to a special purpose funding vehicle (an "SPV"), identified as such in writing from time to time by such Granting Lender to the Administrative Agent and the Borrowers, the option to fund all or any part of any Loan that such Granting Lender would otherwise be obligated to fund pursuant to this Credit Agreement; provided that (i) nothing herein shall constitute a commitment by any SPV to fund any Loan, (ii) if an SPV elects not to exercise such option or otherwise fails to fund all or any part of such Loan, the Granting Lender shall be obligated to fund such Loan pursuant to the terms hereof, (iii) no SPV shall have any voting rights pursuant to Section 11.6 and (iv) with respect to notices, payments and other matters hereunder, the Borrowers, the Administrative Agent and the Lenders shall not be obligated to deal with an SPV, but may limit their communications and ot her dealings relevant to such SPV to the applicable Granting Lender. The funding of a Loan by an SPV hereunder shall utilize the Revolving Loan Commitment of the Granting Lender to the same extent that, and as if, such Loan were funded by such Granting Lender.

As to any Loans or portion thereof made by it, each SPV shall have all the rights that its applicable Granting Lender making such Loans or portion thereof would have had under this Credit Agreement; provided, however, that each SPV shall have granted to its Granting Lender an irrevocable power of attorney, to deliver and receive all communications and notices under this Agreement (and any related documents) and to exercise on such SPV's behalf, all of such SPV's voting rights under this Credit Agreement. No additional Note shall be required to evidence the Loans or portion thereof made by an SPV; and the related Granting Lender shall be deemed to hold its Note as agent for such SPV to the extent of the Loans or portion thereof funded by such SPV. In addition, any payments for the account of any SPV shall be paid to its Granting Lender as agent for such SPV.

Each party hereto hereby agrees that no SPV shall be liable for any indemnity or payment under this Agreement for which a Lender would otherwise be liable for so long as, and to the extent, the Granting Lender provides such indemnity or makes such payment. In furtherance of the foregoing, each party hereto hereby agrees (which agreements shall survive the termination of this Credit Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPV, it will not institute against, or join any other person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof.

In addition, notwithstanding anything to the contrary contained in this Credit Agreement, any SPV may (i) at any time and without paying any processing fee therefor, assign or participate all or a portion of its interest in any Loans to the Granting Lender or to any financial institutions providing liquidity and/or credit support to or for the account of such SPV to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancements to such SPV. This Section 11.17 may not be amended without the written consent of any Granting Lender affected thereby.

[Remainder of Page Intentionally Blank]

Each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and delivered as of the date first above written.

DOMINION RESOURCES, INC.,
as a Borrower

By:__s/ G. Scott Hetzer_________________
Name: G. Scott Hetzer
Title: Senior Vice President & Treasurer

VIRGINIA ELECTRIC AND POWER COMPANY,
as a Borrower

By:___/s/ G. Scott Hetzer__________
Name: G. Scott Hetzer
Title:     Senior Vice President & Treasurer

CONSOLIDATED NATURAL GAS COMPANY,
as a Borrower

By: ___/s/ G. Scott Hetzer_______________
Name: G. Scott Hetzer
Title:    Senior Vice President & Treasurer

JPMORGAN CHASE BANK, as Administrative Agent and as a Lender

By:___/s/ Robert M. Bowen, II___________
Name: Robert M. Bowen, II
Title:    Managing Director

ABN AMRO BANK N.V.

By:___/s/ John J. Mack___________
Name: John J. Mack
Title:    Senior Vice President

By:____/s/ Mark A. Wesselmann_________
Name: Mark A. Wesselmann
Title:    Vice President

BANK OF AMERICA, N.A.

By:____/s/ Wade B. Sample________
Name: Wade B. Sample
Title:     Managing Director

BANK ONE, NA

By:_____/s/ Jane A. Bek__________
Name: Jane A. Bek
Title:    Director

BARCLAYS BANK PLC

By:___/s/ Sydney G. Dennis________
Name: Sydney G. Dennis
Title:    Director

CITIBANK, N.A.

By:___/s/ J. Nicholas McKee_______
Name: J. Nicholas McKee
Title:    Managing Director

CREDIT SUISSE FIRST BOSTON

By:____/s/ S. William Fox_________
Name: S. William Fox
Title:    Director

By:____/s/ David Dodd_________
Name: David Dodd
Title:    Associate

DEUTSCHE BANK AG NEW YORK BRANCH

By:___/s/ Michael Keating_________
Name: Michael Keating
Title:    Managing Director

By:___/s/ Hans Narberhaus________
Name: Hans Narberhaus
Title:    Vice President

KBC-BANK

By:____/s/ Jean-Pierre Diels_________
Name: Jean-Pierre Diels
Title:    First Vice President

By:____/s/ Robert Snauffer__________
Name: Robert Snauffer
Title:    First Vice President

KEYBANK NATIONAL ASSOCIATION

By:____/s/ Sherrie I. Manson_______
Name: Sherrie I. Manson
Title:    Vice President

LEHMAN BROTHERS BANK, FSB

By:____/s/ Gary T. Taylor_________
Name: Gary T. Taylor
Title:    Vice President

MERRILL LYNCH BANK USA

By:___/s/ Louis Alder_____________
Name: Louis Alder
Title:    Vice President

MIZUHO CORPORATE BANK, LTD

By:____/s/ Jun Shimmachi________
Name: Jun Shimmachi
Title:    Vice President

MORGAN STANLEY BANK

By:____/s/ Jaap L. Tonckens_______
Name: Jaap L. Tonckens
Title:    Vice President

THE BANK OF NOVA SCOTIA

By:____/s/ Frank F. Sandler________
Name: Frank F. Sandler
Title:    Managing Director

THE BANK OF TOYKO-MITSUBISHI, LTD., NEW YORK BRANCH

By:___/s/ J. William Rhodes________
Name: J. William Rhodes
Title:    Authorized Signatory

UBS AG, CAYMAN ISLANDS BRANCH



By:___/s/ Thomas R. Salzano______
Name: Thomas R. Salzano
Title:    Banking Products Services, US

By:____/s/ Mildred V. Saint________
Name: Mildred V. Saint
Title:    Associate Director

UFJ BANK LIMITED



By:____/s/ John T. Feeney______________
Name: John T. Feeney
Title:    Vice President

WACHOVIA BANK, N.A.



By:___/s/ Lawrence P. Sullivan______
Name: Lawrence P. Sullivan
Title:    Vice President

WILLIAM STREET COMMITMENT CORPORATION

(Recourse only to assets of William Street Commitment Corporation)



By:___/s/ Jennifer M. Hill__________
Name: Jennifer M. Hill
Title: Vice President and Chief Financial Officer

EX-10.2

Exhibit 10.2 

DOMINION RESOURCES, INC.

RETIREMENT BENEFIT RESTORATION PLAN

As Amended and Restated
Effective October 17, 2003

DOMINION RESOURCES, INC.
RETIREMENT BENEFIT RESTORATION PLAN

Purpose

The Board of Directors of Dominion Resources, Inc. determined that the adoption of the Retirement Benefit Restoration Plan effective January 1, 1991, would assist it in attracting and retaining those employees whose judgment, abilities and experience would contribute to its continued progress. The Plan is intended to be a plan that is unfunded and maintained primarily for the purpose of providing deferred compensation for a "select group of management or highly compensated employees" (as such phrase is used in the Employee Retirement Income Security Act of 1974). The Plan was subsequently amended from time to time and was amended and restated effective July 8, 2002 and amended and restated effective September 19, 2003.

Article I
Definitions

As defined herein, the following phrases or terms shall have the indicated meanings:

1.1 "Administrative Benefit Committee" means the Administrative Benefit Committee of Dominion Resources, Inc., which shall manage and administer the Plan in accordance with the provisions of Article X.

1.2 "Affiliate" means any entity that is (i) a member of a controlled group of corporations as defined in Section 1563(a) of the Code, determined without regard to Code Sections 1563(a)(4) and 1563(e)(3)(C), of which Dominion Resources, Inc. is a member according to Code Section 414(b); (ii) an unincorporated trade or business that is under common control with Dominion Resources, Inc., as determined according to Code Section 414(c); or (iii) a member of an affiliated service group of which Dominion Resources, Inc. is a member according to Code Section 414(m).

1.3 "Beneficiary" means the individual, individuals, entity, entities or the estate of a Participant which, in accordance with the provisions of Article XII, is entitled to receive the benefits payable under the Plan, if any, upon the Participant's death.

1.4 "Change in Control" means with regard to each Participant at any time an event that constitutes a "Change in Control" for purposes of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. as in effect at that time.

1.5 "Code" means the Internal Revenue Code of 1986, as amended.

1.6 "Company" means Dominion Resources, Inc., its predecessor, a subsidiary or an Affiliate.

1.7 "Eligible Employee" means an individual (i) who is employed by Dominion Resources, Inc. or an Affiliate, (ii) who is a member of management or a highly compensated employee, and (iii) whose Retirement Plan benefit is or has been reduced or limited by Code Section 401(a)(17), Code Section 415, or both.

1.8 "OCN Committee" means the Organization, Compensation and Nominating Committee of the Board of Directors of Dominion Resources, Inc.

1.9 "Participant" means an Eligible Employee who is designated by the OCN Committee to participate in the Plan.

1.10 "Plan" means the Dominion Resources, Inc. Retirement Benefit Restoration Plan.

1.11 "Potential Change in Control" means with regard to each Participant at any time an event that constitutes a "Potential Change in Control" for purposes of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. as in effect at that time.

1.12 "Retirement" and "Retire" mean a Participant's termination of employment with the Company at a time when the Participant is entitled to begin receiving an immediate annuity benefit under the Retirement Plan (regardless of whether the Participant actually elects to begin receiving an immediate annuity benefit); provided, however, that a Participant who is continuing to accrue benefits under the Retirement Plan shall in no event be considered "Retired" for purposes of this Plan. A terminating Participant who has a contractual agreement with the Company to be treated as a retiree shall be treated as Retired for purposes of this Plan.

1.13 "Retirement Plan" means with regard to each Participant a defined benefit pension plan that is qualified under Code Section 401(a), that is maintained by Dominion Resources, Inc. or an Affiliate, and in which the Participant participates.

1.14 "Totally and Permanently Disabled" means a condition that renders a Participant eligible to receive long term disability benefits under the Company's long term disability plan that covers the Participant.

Article II
Participation

An Eligible Employee who is designated to participate in the Plan by the OCN Committee shall become a Participant in the Plan as of the date specified by the OCN Committee. A Participant who is an employee of the Company shall continue to participate in the Plan until such date as the OCN Committee may declare that he or she is no longer a Participant or until the date that he or she is no longer an Eligible Employee. Except as otherwise specifically provided herein, a Participant whose employment with the Company terminates for any reason shall immediately cease to participate in the Plan and shall forfeit all rights to any benefits under the Plan.

Article III
Benefits

Subject to the provisions of Articles VI and VII, a Participant (or the Participant's Beneficiary, if applicable) shall be entitled to benefits under this Plan as follows:

3.1 (a) A Participant who Retires shall be entitled to a monthly benefit under the Plan equal to the difference between (y) and (z) below where:

            (y) = the monthly benefit that would have been payable to the Participant under the Retirement Plan but for the application of the limits set forth in Code Sections 401(a)(17) and 415; and

            (z) = the monthly benefit that the Participant is entitled to receive under the Retirement Plan.

(b) Except as otherwise specifically provided, all benefits under Section 3.1(a) shall be computed and paid at the same time and in the same annuity form as the Participant's annuity benefit is determined and paid under the Retirement Plan; provided, however, that if the Participant elects to receive an immediate lump sum payment of part of his or her benefit under the Retirement Plan, the Participant may also elect to have the corresponding portion of the Participant's benefits under this Plan be computed and paid in an immediate lump sum. Any such election shall be made in accordance with the same rules and within the same time period described in Section 3.1(c). Upon a Participant's death, no further benefits shall be payable under this Plan except as provided in Section 3.3.

(c) In lieu of receiving benefits under this Plan at the same time and in the same annuity form as the annuity benefit payable under the Retirement Plan, a Participant may elect to receive an immediate single lump sum payment equal to the actuarial equivalent of the entire benefit otherwise payable under this Plan. The Participant must make the election of a single lump sum payment either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one (1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion. Upon the denial of a Participant's election, the Participant shall receive the benefits provided under the Plan in the form that is otherwise payable absent the election. The actuarial equivalent of any lump sum benefit payable under this Section 3.1(c) shall be computed using actuarial factors, including interest rates, as determined by the Administrative B enefit Committee.

(d) Effective December 1, 2001, a Participant who is to receive a benefit under this Section 3.1 in a single lump sum payment may elect to defer payment of such lump sum benefit by electing to roll over the amount to the Dominion Resources, Inc. Executives' Deferred Compensation Plan. Payment of benefits rolled over to the Dominion Resources, Inc. Executives' Deferred Compensation Plan shall be determined under the distribution provisions of that plan. For distributions prior to June 1, 2002, the Participant may elect the rollover option (regardless of whether the Participant has previously made an election with respect to the payment of the benefit under this Section 3.1), and such election shall be effective ten (10) days after the receipt of such election by the Administrative Benefit Committee. For distributions on or after June 1, 2002, the election of the rollover option must be made either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one ( 1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion.

(e) Effective January 1, 2003, a Participant who is to receive a benefit under this Section 3.1 in a single lump sum payment may elect to defer payment of such lump sum benefit by electing to roll over the amount to the Dominion Security Option Plan. Payment of benefits rolled over to the Dominion Security Option Plan shall be determined under the distribution provisions of that plan. The election of the rollover option must be made either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one (1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion.

3.2 If a Participant becomes Totally and Permanently Disabled prior to Retirement and while the Participant is still employed with the Company, the Participant shall be entitled to receive a benefit calculated and paid in the manner set forth in Section 3.1; provided, however, that except to the extent a benefit is paid under the Retirement Plan, no benefit shall be payable under this Plan to a Totally and Permanently Disabled Participant as long as the Participant continues to accrue service for any purpose under the Retirement Plan.

3.3 (a) Subject to the provisions of Section 3.4, if a Participant dies before the commencement of benefit payments under this Plan and if the Participant's Beneficiary is entitled to receive a benefit under the Retirement Plan after the Participant's death, the Beneficiary shall be entitled to a monthly benefit under this Plan equal to one hundred percent (100%) of the benefit that would have been payable to the Participant under Section 3.1 if the Participant had Retired on his or her date of death. The amount payable under this Section 3.3(a) shall be determined as of the date of the Participant's death. The benefits payable under this Section 3.3(a) shall be paid at the same time and in the same form as the benefit payable to the Beneficiary under the Retirement Plan.

(b)     In lieu of a Beneficiary receiving benefits in the form provided in Section 3.3(a), a Participant may elect for the Beneficiary to receive an immediate single lump sum payment equal to the actuarial equivalent of the entire benefit otherwise payable under Section 3.3(a). The Participant must make the election of a single lump sum payment for the Beneficiary either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one (1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion. Upon the denial of a Participant's election, the Beneficiary shall receive the benefits provided under the Plan in the form that is otherwise payable absent the election. The actuarial equivalent lump sum benefit payable under this Section 3.3(b) shall be computed using actuarial factors, including interest rates, as determined by the Admini strative Benefit Committee. Payment of the benefit shall be made as soon as administratively practicable after the Participant's death.

(c)     Subject to the provisions of Section 3.4, if a Participant dies before the commencement of benefit payments under this Plan, and if the Participant's Beneficiary is not entitled to a benefit under the Retirement Plan, the Beneficiary shall receive an immediate single lump sum payment equal to the actuarial equivalent of one hundred percent (100%) of the benefit that would have been payable to the Participant under Section 3.1 if the Participant had Retired on his or her date of death The actuarial equivalent lump sum benefit payable under this Section 3.3(c) shall be computed using actuarial factors, including interest rates, as determined by the Administrative Benefit Committee. Payment of the benefit shall be made as soon as administratively practicable after the Participant's death.

(d)     If a Participant dies after the commencement of benefit payments under this Plan, the Participant's Beneficiary shall be entitled to the continuation of the form of benefit elected by the Participant under Section 3.1, but only if the form of benefit provides for payment of a benefit to the Beneficiary after the Participant's death. The payment of the benefit to the Beneficiary under this Section 3.3(d) shall begin as of the date of the Participant's death.

3.4 It is not intended that a Participant or Beneficiary receive duplicate benefits under this Plan. Anything herein to the contrary notwithstanding, therefore, the following provisions shall apply after a Participant has received a payment of any benefits under this Plan:

(a) If a Participant ceases to be employed by the Company, receives a lump sum distribution of part or all of the benefits payable under this Plan, and is subsequently reemployed by the Company, the amount of any benefit subsequently payable to the Participant from this Plan shall be appropriately adjusted to reflect the earlier distribution.

(b) If a Participant has already received a lump sum distribution of part or all of the benefits payable under this Plan, the amount of any benefit payable under this Plan to the Participant's Beneficiary shall be appropriately adjusted to reflect the earlier distribution. If the Participant has received an immediate lump sum payment of all benefits due to the Participant under this Plan, the Participant's Beneficiary shall not be entitled to receive any benefit under Section 3.3 or otherwise under this Plan.

(c) Any adjustment under this Section 3.4 shall be made in accordance with rules established by the Administrative Benefit Committee and applied in a uniform and nondiscriminatory manner.

3.5 All payments under the Plan shall be subject to any applicable payroll and withholding taxes.

Article IV
Coordination of Benefit Payments

Any amount payable to a Participant or a Beneficiary under the Plan may be paid in part or in whole from any trust which is maintained by or on behalf of Dominion Resources, Inc. or an Affiliate or to which Dominion Resources, Inc or an Affiliate contributes, including without limitation any so-called "rabbi" or "secular" trust established from time to time. Dominion Resources, Inc. shall have the complete discretion to determine the source of any payment due under the Plan to any Participant or Beneficiary.

Article V
Guarantees

The Company has only a contractual obligation to make payments of the benefits described in Article III. All benefits paid by the Company are to be satisfied solely out of the general corporate assets of the Company, which assets shall remain subject at all times to the claims of its creditors. No assets of the Company will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan.

Article VI
Termination of Employment

6.1 The Plan does not in any way limit the right of the Company at any time and for any reason to terminate either a Participant's employment or a Participant's status as an Eligible Employee. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company and a Participant.

6.2 Except as otherwise provided in Section 6.3, a Participant (a) who ceases to be an Eligible Employee while remaining employed by the Company or (b) whose employment with the Company terminates for any reason other than death, Retirement, or Total and Permanent Disability, shall in either case immediately cease to be a Participant under this Plan and shall forfeit all rights under this Plan. In no event shall an individual who as a Participant but who is not a Participant at the time of such individual's death, Retirement, or Total and Permanent Disability, be entitled to any benefit under the Plan. A Participant on authorized leave of absence from the Company shall not be deemed to terminate employment or to lose the status of an Eligible Employee solely as a result of such leave of absence.

6.3 Anything herein to the contrary notwithstanding, if a Participant is in the employ of a Company on the date of a Change in Control or a Potential Change in Control relating to that Company, the provisions of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. shall control (a) the Participant's subsequent participation in this Plan and (b) the eligibility for, computation of, and payment of any benefits under this Plan to the Participant.

Article VII
Termination, Amendment or Modification of Plan

7.1 Except as otherwise specifically provided, Dominion Resources, Inc. reserves the right to amend, modify or terminate this Plan, wholly or partially, at any time and from time to time by action of its Board of Directors or its delegate; provided, however, that:

(a) No such amendment, modification or termination may decrease the benefit that has already been earned by a Participant as of the date of the change, including without limitation any benefit determined by reference to a market based adjustment to a Participant's base salary;

(b) No action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby, which notice shall be given not less than thirty (30) days prior to such action; and

(c) If a Participant is in the employ of a Company on the date of a Change in Control or a Potential Change in Control relating to that Company, the provisions of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. shall apply to limit the ability of Dominion Resources, Inc. to amend, modify or terminate this Plan with regard to the affected Participant unless the Participant agrees to such amendment, modification or termination in writing.

7.2 Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to Dominion Resources, Inc., such notice shall be addressed to the corporate offices and sent to the attention of the Corporate Secretary. If notice is to be given to a Participant, such notice shall be addressed to the Participant's last known address.

7.3 Except as otherwise provided in Sections 6.3 and 7.1, upon the termination of this Plan, the Plan shall no longer be of any further force or effect and neither Dominion Resources, Inc. nor any Participant or Beneficiary shall have any further obligation or right under this Plan.

7.4 The rights of any individual who was a Participant and whose designation as a Participant is revoked or rescinded by the OCN Committee shall cease upon such action.

Article VIII
Other Benefits and Agreements

Except as provided in Article IV with regard to the coordination of benefit payments, the benefits provided for a Participant and the Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating.

Article IX
Restrictions on Transfer of Benefits

No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the OCN Committee, shall cease and terminate, and, in such event, the OCN Committee may hold or apply the same or any part thereof for the benefit of such Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the OCN Committee may deem proper.

Article X
Administration of the Plan

10.1 The Plan shall be administered by the Administrative Benefit Committee, which shall have the discretionary authority to interpret the terms of the Plan and to decide factual and other questions relating to the Participant and the Participant's benefits, including without limitation questions relating to eligibility for, calculation of, and payment of benefits under the Plan. Subject to the provisions of the Plan, the Administrative Benefit Committee may adopt such rules and regulations as it may deem necessary or desirable to carry out the purposes of the Plan. The Administrative Benefit Committee's interpretation and construction of any provision of the Plan shall be final, conclusive and binding upon the Company and upon Participants and their Beneficiaries.

10.2 Dominion Resources, Inc. shall indemnify and save harmless each member of the Administrative Benefit Committee and each member of the OCN Committee against any and all expenses and liabilities arising out of membership on the respective Committee, excepting only expenses and liabilities arising out of the member's own willful misconduct. Expenses against which a member of the OCN Committee or the Administrative Benefit Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled.

10.3 In addition to the powers specified in Section 10.1 and other provisions of this Plan, the Administrative Benefit Committee shall have the specific discretionary authority to compute and certify the amount and kind of benefits from time to time payable to Participants and their Beneficiaries under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant is Totally and Permanently Disabled so as to be entitled to a benefit under Section 3.2.

10.4 To enable the Administrative Benefit Committee to perform its functions, the Company shall supply full and timely information to the Administrative Benefit Committee on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Administrative Benefit Committee may require.

10.5 Any responsibility or authority given under this Plan to either the Administrative Benefit Committee or the OCN Committee may be delegated by the respective committee. Any such delegation shall be in writing and shall be prospectively revocable at any time.

10.6 (a) Every Participant, retired Participant, or Beneficiary of a Participant shall be entitled to file with the Administrative Benefit Committee a claim for benefits under the Plan. The claim is required to be in writing. For purposes of this section, any action required or authorized to be taken by the claimant may be taken by a representative authorized in writing by the claimant to represent the claimant.

(b) If the claim is denied by the Administrative Benefit Committee, in whole or in part, the claimant shall be furnished written notice of the denial of the claim within ninety (90) days after the Administrative Benefit Committee's receipt of the claim or within one hundred eighty (180) days after such receipt if special circumstances require an extension of time. If special circumstances require an extension of time, the claimant shall be furnished written notice prior to the termination of the initial ninety-day period explaining the special circumstances that require an extension of time and the date by which the Administrative Benefit Committee expects to render the benefit determination.

(c) Within sixty (60) days following the date the claimant receives written notice of the denial of the claim, the claimant may request the OCN Committee to review the denial. For purposes of this section, any action required or authorized to be taken by the claimant may be taken by a representative authorized in writing by the claimant to represent the claimant.

(d)     The OCN Committee shall afford the claimant a full and fair review of the decision denying the claim and shall:

1. Provide, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim;
2. Permit the claimant to submit written comments, documents, records and other information relating to the claim; and
3. Provide a review that takes into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial determination.

(e)     The decision on review by the OCN Committee shall be in writing and shall be issued within sixty (60) days following receipt of the request for review. The period for decision may be extended to a date not later than one hundred twenty (120) days after such receipt if the Committee determines that special circumstances require extension. If special circumstances require an extension of time, the claimant shall be furnished written notice prior to the termination of the initial sixty-day period explaining the special circumstances that require an extension of time and the date by which the Committee expects to render its decision on review.

Article XI
Confidentiality and Noncompetition ProvisionsMiscellaneous

11.1 By receiving a benefit under this Plan, a Participant agrees never directly or indirectly to disclose to any third party or use for such Participant's own personal benefit any confidential information or trade secret of the Company except and to the extent (a) disclosure is ordered by a court of competent jurisdiction or (b) the information otherwise becomes public through no action of the Participant.

11.2 By receiving a benefit under this Plan, a Participant further agrees that for a period of one (1) year following termination of employment with the Company for any reason, the Participant will not, without the specific written permission of the Company, be directly employed in, or otherwise provide services in any capacity to, any business or enterprise (including but not limited to the Participant's own business or enterprise) that engages in direct competition with the Company in any state in which the Company is at the time of the Participant's termination of employment either carrying on business or actively negotiating to enter business.

11.3 The OCN Committee (or its delegate) in its sole discretion has the authority to interpret and administer this Article XI and to determine whether a business is in competition with the Company as described in Section 11.2. In addition, a terminated Participant may request the OCN Committee to determine in advance whether a specific contemplated business or enterprise would be in competition with the Company for purposes of Section 11.2, and a response shall be provided to the Participant within a reasonable time after all relevant information is provided to enable the OCN Committee to make its determination.

11.4 If the OCN Committee determines that a terminated Participant who is receiving or has received benefits under this Plan is, within one (1) year following termination of employment and without the specific written permission of the Company, directly employed in, or otherwise providing services in any capacity to, a business or enterprise that engages in direct competition with the Company in any state in which the Company is at the time of the Participant's termination of employment either carrying on business or actively negotiating to enter business, then (a) all payments to the Participant under this Plan shall cease, (b) the Participant shall forfeit all rights to any further payments under the Plan, and (c) the Participant shall be responsible for repaying to the Plan any payments already made to the Participant that represent (i) amounts paid or payable with regard to any period for which the Participant was in competition with the Company as described herein and/or (ii) any amounts already p aid that related to any future benefit that has been accelerated, in each case without regard to any payroll taxes withheld from the payment received by the Participant.

11.5 As a condition to receiving payments under the Plan, the OCN Committee may require that Participant to enter into a separate confidentiality and/or noncompetition agreement in a form acceptable to the Company.

Article XII
Designation of Beneficiary

12.1 A Participant may designate a Beneficiary to receive benefits due under the Plan, if any, upon the Participant's death. Designation of a Beneficiary shall be made by execution of a form approved or accepted by the Administrative Benefit Committee. In the absence of an effective Beneficiary designation, a Participant's surviving spouse, if any, and if none, the Participant's estate, shall be the Beneficiary.

12.2 A Participant may change a prior Beneficiary designation made under Section 12.1 by a subsequent execution of a new Beneficiary designation form. The change in Beneficiary will be effective upon receipt by the Administrative Benefit Committee or its designee.

Article XIII
Miscellaneous

13.1 The Plan shall inure to the benefit of, and shall be binding upon, Dominion Resources, Inc. and its successors and assigns, and upon a Participant, a Beneficiary, and either of their assigns, heirs, executors and administrators.

13.2 To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia, without regard to its choice of law provisions.

13.3 Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural.

IN WITNESS WHEREOF, this instrument has been executed this 29th day of October, 2003.

DOMINION RESOURCES, INC.

 By /s/ Anne M. Grier________________________

Title:_Vice President - Human Resources__________

EX-10.3

Exhibit 10.3

DOMINION RESOURCES, INC.

EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

As Amended and Restated
Effective October 17, 2003

DOMINION RESOURCES, INC.
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

Purpose

The Board of Directors of Virginia Electric and Power Company determined that adoption of the Executive Supplemental Retirement Plan would assist it in attracting and retaining those employees whose judgment, abilities and experience will contribute to its continued progress. On May 19, 1983, Virginia Electric and Power Company became a wholly-owned subsidiary of Dominion Resources, Inc. The Plan was amended to reflect the reorganization of Virginia Electric and Power Company and the Plan was adopted by Dominion Resources, Inc. The Plan was amended further, effective as of October 21, 1983, to require sixty (60) months of service to be eligible for retirement benefits and to assure Participants who have attained age fifty-five (55) and who have sixty (60) months of service with the Company, or who die or become Totally and Permanently Disabled, of their benefits, so long as they remain elected officers at the time of their separation from service. The Plan was amended further, effective as of Septembe r 1, 1996, to add a vesting schedule for Participants under age 55, to change the form and timing of benefit payments, and to coordinate payments with changes in a previously established trust. The Plan was again completely amended and restated effective July 8, 2002 and subsequently amended and restated effective September 19, 2003.

Article I
Definitions

As defined herein, the following phrases or terms shall have the indicated meanings:

1.1 "Administrative Benefit Committee" means the Administrative Benefit Committee appointed to manage and administer the Plan in accordance with the provisions of Article XI hereof.

1.2 "Affiliate" means any entity that is (i) a member of a controlled group of corporations as defined in Section 1563(a) of the Code, determined without regard to Code Sections 1563(a)(4) and 1563(e)(3)(C), of which Dominion Resources, Inc. is a member according to Code Section 414(b); (ii) an unincorporated trade or business that is under common control with Dominion Resources, Inc., as determined according to Code Section 414(c); or (iii) a member of an affiliated service group of which Dominion Resources, Inc. is a member according to Code Section 414(m).

1.3 "Beneficiary" means the individual, individuals, entity, entities or the estate of a Participant which, in accordance with the provisions of Article V, is entitled to receive the benefits payable under the Plan, if any, upon the Participant's death.

1.4 "Cash Incentive Plan" means any short term incentive plan of Dominion Resources, Inc. or an Affiliate that the OCN Committee determines should be taken into account for purposes of this Plan.

1.5 "Change in Control" means with regard to each Participant at any time an event that constitutes a "Change in Control" for purposes of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. as in effect at that time.

1.6 "Code" means the Internal Revenue Code of 1986, as amended.

1.7 "Company" means Dominion Resources, Inc., its predecessor, a subsidiary or an Affiliate.

1.8 "Final Compensation" means, with respect to a specified Participant as of a specified date, the sum of (i) the Participant's annual base salary rate then in effect and (ii) the Participant's Incentive Compensation Amount. For purposes of this definition, all components of Final Compensation are calculated without regard to any elections by the Participant to defer any amount that otherwise would have been paid to the Participant for the relevant period.

1.9 "Incentive Compensation Amount" means the target amount that may be paid to a Participant under the Cash Incentive Plan with regard to the year as of which the determination is being made. If a Participant participates in more than one Cash Incentive Plan during a year, the Participant's "Incentive Compensation Amount" will be the greatest of the target amounts designated under any plan for that year.

1.10 "OCN Committee" means the Organization, Compensation and Nominating Committee of Dominion Resources, Inc.

1.11 "Participant" means an elected officer of Dominion Resources, Inc. or an Affiliate who is designated by the OCN Committee to participate in the Plan in accordance with Article II.

1.12 "Plan" means the Dominion Resources, Inc. Executive Supplemental Retirement Plan.

1.13 "Potential Change in Control" means with regard to each Participant at any time an event that constitutes a "Potential Change in Control" for purposes of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. as in effect at that time.

1.14 "Retirement" and "Retire" mean severance from employment with the Company at or after the attainment of fifty-five (55) years of age and the completion of sixty (60) months of service with the Company.

1.15 "Totally and Permanently Disabled" means a condition that renders a Participant eligible to receive long term disability benefits under the Company's long term disability plan that covers the Participant.

Article II
Participation

An elected officer of Dominion Resources, Inc. or an Affiliate will become a Participant in the Plan upon his or her designation as a Participant by the OCN Committee. The OCN Committee may change its designation of any individual officer as a Participant at any time; provided, however, that in any event an individual shall remain a Participant only so long as the individual remains an elected officer. The employer of a Participant will be a designated employer under the Plan.

Article III
Benefits

Subject to the provisions of Articles VII and VIII, a Participant (or the Participant's Beneficiary, if applicable) shall be entitled to benefits under this Plan as follows:

3.1 (a) If a Participant continues in the employ of the Company beyond age fifty-five (55) and after completing sixty (60) months of service, such Participant shall upon Retirement be entitled to an annual benefit equal to Twenty-Five Percent (25%) of the Participant's Final Compensation, payable in equal monthly installments for a period of one hundred twenty (120) months.

(b)  If a participant becomes Totally and Permanently Disabled prior to Retirement, regardless of such Participant's age or months of service, the Participant shall be entitled to receive a benefit equal to the amount described in Section 3.1(a).

(c)  If a Participant dies while still employed by the Company, regardless of such Participant's age or months of service, the Participant's Beneficiary shall be entitled to receive a benefit equal to the amount described in Section 3.1(a). If a Participant dies after benefit payments have commenced under Section 3.1(a) or 3.1(b), as applicable, but before receiving one hundred twenty (120) monthly payments, the remainder of such payments will be made monthly to the Participant's Beneficiary determined in accordance with Article V.

(d)  If a Participant has completed sixty (60) months of service with the Company, upon his severance from employment with the Company before the attainment of fifty-five (55) years of age, the Participant shall be entitled to a benefit equal to the benefit computed under Section 3.1(a) multiplied by the following fraction (not greater than one):

Participant's completed months of service since becoming a Participant
Total months from the date on which the individual became a Participant to
the Participant's attainment of fifty-five (55) years of age.

In calculating months of service, partial months shall be disregarded. The actuarial equivalent of the benefit under this Section 3.1(d) shall be paid in a single lump sum payment. The actuarial equivalent shall be determined as provided in Section 3.2. Payment shall be made on the first day of the month following the Participant's severance from employment with the Company or as soon thereafter as administratively practicable.

3.2 (a) In lieu of the benefits described in Section 3.1(a) or 3.1(b), as applicable, a Participant may elect to receive the actuarial equivalent of the benefits (i) over a period certain which is more than ten (10) years but not greater than sixteen (16) years, or (ii) as a single lump sum payment. The actuarial equivalent of the benefits provided under Section 3.1(a) or 3.1(b) shall be computed using actuarial factors, including interest rates, as determined by the Administrative Benefit Committee. If a Participant who makes an effective election under subsection (i) above dies prior to receiving the total actuarial equivalent of the benefits described in Section 3.1(a) or 3.1(b), as applicable, the balance of such actuarial equivalent shall be paid monthly to the Participant's Beneficiary determined in accordance with Article V. If a Participant who makes an effective election under subsection (ii) above to receive benefits in a single lump sum dies prior to receiving the payment, the lump sum be nefit shall be paid to the Participant's Beneficiary determined in accordance with Article V.

(b) Effective December 1, 2001, if a Participant elects to receive benefits in a single lump sum payment under Section 3.2(a), the Participant may elect to defer payment of such benefits by electing to roll over the amount of the benefits to the Dominion Resources, Inc. Executives' Deferred Compensation Plan. Payment of benefits rolled over to the Dominion Resources, Inc. Executives' Deferred Compensation Plan shall be determined under the distribution provisions of that plan.

(c) Effective January 1, 2003, if a Participant elects to receive benefits in a single lump sum payment under Section 3.2(a), the Participant may elect to defer payment of such benefits by electing to roll over the amount of the benefits to the Dominion Security Option Plan. Payment of benefits rolled over to the Dominion Security Option Plan shall be determined under the distribution provisions of that plan.

(d) The Participant must make the election under Section 3.2(a), 3.2(b) or 3.2(c) either (i) at least six (6) months prior to the commencement of the receipt of benefits or (ii) at least one (1) month prior to the commencement of the receipt of benefits if the election is approved by the Administrative Benefit Committee in its absolute discretion. Upon the denial of a Participant's election, the Participant shall receive the benefits provided under the Plan in the form that is otherwise payable absent the election. Notwithstanding the foregoing, effective December 1, 2001 for distributions prior to June 1, 2002, the Participant may elect the rollover option as described in Section 3.2(b) (regardless of whether the Participant has previously made an election to receive benefits under Section 3.2(a)), and such election shall be effective ten (10) days after the receipt of such election by the Administrative Benefit Committee.

3.3 A Beneficiary receiving benefits described in Section 3.1 or Section 3.2 may designate a beneficiary who will be entitled to receive the remaining benefits due the Beneficiary after the Beneficiary's death. Designation of a beneficiary under this Section 3.3 shall be made in accordance with Article V of the Plan.

3.4 Payment of the benefits described in Sections 3.1 and 3.2 shall commence on (or as soon as practicable after) the first day of the month next following the Retirement, other termination of employment, or death of the Participant, whichever is applicable; provided, however, that payment of the benefit described in Section 3.1(b) shall commence on (or as soon as practicable after) the first day of the month next following the Administrative Benefit Committee's determination of the Participant's Total and Permanent Disability.

3.5 It is not intended that a Participant or Beneficiary receive duplicate benefits under this Plan. Anything herein to the contrary notwithstanding, therefore, the following provisions shall apply after a Participant has received a payment of any benefits under this Plan:

(a) If a Participant ceases to be employed by the Company, receives a distribution of part or all of the benefits payable under this Plan, and is subsequently reemployed by the Company, the amount of any benefit subsequently payable to the Participant from this Plan shall be appropriately adjusted to reflect the earlier distribution.

(b) If a Participant has received an immediate lump sum payment of all benefits due to the Participant under this Plan, the Participant's Beneficiary shall not be entitled to receive any benefit under Article III or otherwise under this Plan.

(c) Any adjustment under this Section 3.5 shall be made in accordance with rules established by the Administrative Benefit Committee and applied in a uniform and nondiscriminatory manner.

3.6 All payments under the Plan shall be subject to any applicable payroll and withholding taxes.

Article IV
Coordination of Benefits

Any amount payable to a Participant or a Beneficiary under the Plan may be paid in part or in whole from any trust which is maintained by or on behalf of Dominion Resources, Inc. or an Affiliate or to which Dominion Resources, Inc or an Affiliate contributes, including without limitation any so-called "rabbi" or "secular" trust established from time to time. Dominion Resources, Inc. shall have the complete discretion to determine the source of any payment due under the Plan to any Participant or Beneficiary.

Article V
Designation of Beneficiary

5.1 A Participant may designate a Beneficiary to receive benefits due under the Plan, if any, upon the Participant's death. Designation of a Beneficiary shall be made by execution of a form approved or accepted by the Administrative Benefit Committee. In the absence of an effective Beneficiary designation, a Participant's surviving spouse, if any, and if none, the Participant's estate, shall be the Beneficiary.

5.2 A Participant may change a prior Beneficiary designation made under Section 5.1 by a subsequent execution of a new Beneficiary designation form. The change in Beneficiary will be effective upon receipt by the Administrative Benefit Committee or its designee.

5.3 A beneficiary designation or a change in beneficiary designation by a Beneficiary pursuant to Section 3.3 shall be governed by Sections 5.1 and 5.2 as if "Beneficiary" were substituted for "Participant" and "beneficiary" were substituted for "Beneficiary" therein.

Article VI
Guarantees

The Company has only a contractual obligation to make payments of the benefits described in Article III. All benefits paid by the Company are to be satisfied solely out of the general corporate assets of the Company, which assets shall remain subject at all times to the claims of its creditors. No assets of the Company will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan.

Article VII
Termination of Employment

7.1 The Plan does not in any way limit the right of the Company at any time and for any reason to terminate either a Participant's employment or a Participant's status as an officer. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company and a Participant.

7.2 Except as otherwise provided in Section 7.3, a Participant (a) who is removed or not reelected as an officer or (b) whose employment with the Company terminates for any reason other than death or Total and Permanent Disability before the Participant has completed sixty (60) months of service with the Company, shall immediately cease to be a Participant under this Plan and shall forfeit all rights under this Plan. In no event shall an individual who was a Participant but who is not an officer of a designated employer at the time of such individual's death, Retirement, Total and Permanent Disability, or other termination of employment with the Company be entitled to any benefit under the Plan. A Participant on authorized leave of absence from the Company shall not be deemed to have terminated employment or to lose the status of Participant solely as a result of such leave of absence.

7.3 Anything herein to the contrary notwithstanding, if a Participant is in the employ of a Company on the date of a Change in Control or a Potential Change in Control relating to that Company, the provisions of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. shall control (a) the Participant's subsequent participation in this Plan and (b) the eligibility for, computation of, and payment of any benefits under this Plan to the Participant.

7.4 A Participant who ceases to be an employee of the Company and who is subsequently reemployed by the Company shall not accrue any additional benefits for periods during which he or she is not a Participant.

Article VII
Termination, Amendment or Modification of Plan

8.1 Except as otherwise specifically provided, Dominion Resources, Inc. reserves the right to amend, modify or terminate this Plan, wholly or partially, at any time and from time to time by action of its Board of Directors or its delegate; provided, however, that no such amendment, modification or termination may decrease the benefit of a Participant (or Beneficiary, if applicable) where (a) the Participant has already terminated employment at a time when a benefit is payable under the Plan or (b) the Participant has already completed sixty (60) months of service with the Company as of the date of the change and remains an elected officer of a designated employer; and further provided that with respect to a Participant who is in the employ of a Company on the date of a Change in Control or a Potential Change in Control relating to that Company, the provisions of the Employment Continuity Agreement between the Participant and Dominion Resources, Inc. shall apply to limit the ability of Dominion Resources, Inc. to amend, modify or terminate this Plan with regard to the affected Participant unless the Participant agrees to such amendment, modification or termination in writing.

8.2 Section 8.1 notwithstanding, no action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby, which notice shall be given not less than thirty (30) days prior to such action.

8.3 Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to Dominion Resources, Inc., such notice shall be addressed to the corporate offices and sent to the attention of the Corporate Secretary. If notice is to be given to a Participant, such notice shall be addressed to the Participant's last known address.

8.4 Except as provided in Sections 7.3 and 8.1, upon the termination of this Plan, the Plan shall no longer be of any further force or effect and neither Dominion Resources, Inc. nor any Participant or Beneficiary shall have any further obligation or right under this Plan.

8.5 The rights of any individual who was a Participant and whose designation as a Participant is revoked or rescinded by the OCN Committee shall cease upon such action.

Article IX
Other Benefits and Agreements

Except as provided in Article IV with regard to the coordination of benefit payments, the benefits provided for a Participant and the Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating.

Article X
Restrictions on Transfer of Benefits

No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the OCN Committee, shall cease and terminate, and, in such event, the OCN Committee may hold or apply the same or any part thereof for the benefit of such Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the OCN Committee may deem proper.

Article XI
Administration of the Plan

11.1 The Plan shall be administered by the Administrative Benefit Committee, which shall have the discretionary authority to interpret the terms of the Plan and to decide factual and other questions relating to the Participant and the Participant's benefits, including without limitation questions relating to eligibility for, calculation of, and payment of benefits under the Plan. Subject to the provisions of the Plan, the Administrative Benefit Committee may adopt such rules and regulations as it may deem necessary or desirable to carry out the purposes of the Plan. The Administrative Benefit Committee's interpretation and construction of any provision of the Plan shall be final, conclusive and binding upon the Company and upon Participants and their Beneficiaries.

11.2 Dominion Resources, Inc. shall indemnify and save harmless each member of the Administrative Benefit Committee and each member of the OCN Committee against any and all expenses and liabilities arising out of membership on the respective Committee, excepting only expenses and liabilities arising out of the member's own willful misconduct. Expenses against which a member of the OCN Committee or the Administrative Benefit Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled.

11.3 In addition to the powers hereinabove specified, the Administrative Benefit Committee shall have the specific discretionary authority to compute and certify the amount and kind of benefits from time to time payable to Participants and their Beneficiaries under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant is Totally and Permanently Disabled so as to be entitled to a benefit under Section 3.1(b).

11.4 To enable the Administrative Benefit Committee to perform its functions, the Company shall supply full and timely information to the Administrative Benefit Committee on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Administrative Benefit Committee may require.

11.5 Any responsibility or authority given under this Plan to either the Administrative Benefit Committee or the OCN Committee may be delegated by the respective committee. Any such delegation shall be in writing and shall be prospectively revocable at any time.

11.6 (a) Every Participant, retired Participant, or Beneficiary of a Participant shall be entitled to file with the Administrative Benefit Committee a claim for benefits under the Plan. The claim is required to be in writing. For purposes of this section, any action required or authorized to be taken by the claimant may be taken by a representative authorized in writing by the claimant to represent the claimant.

(b) If the claim is denied by the Administrative Benefit Committee, in whole or in part, the claimant shall be furnished written notice of the denial of the claim within ninety (90) days after the Administrative Benefit Committee's receipt of the claim or within one hundred eighty (180) days after such receipt if special circumstances require an extension of time. If special circumstances require an extension of time, the claimant shall be furnished written notice prior to the termination of the initial ninety-day period explaining the special circumstances that require an extension of time and the date by which the Administrative Benefit Committee expects to render the benefit determination.

(c) Within sixty (60) days following the date the claimant receives written notice of the denial of the claim, the claimant may request the OCN Committee to review the denial. For purposes of this section, any action required or authorized to be taken by the claimant may be taken by a representative authorized in writing by the claimant to represent the claimant.

(d)     The OCN Committee shall afford the claimant a full and fair review of the decision denying the claim and shall:

1. Provide, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim;
2. Permit the claimant to submit written comments, documents, records and other information relating to the claim; and
3. Provide a review that takes into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial determination.

(e)       The decision on review by the OCN Committee shall be in writing and shall be issued within sixty (60) days following receipt of the request for review. The period for decision may be extended to a date not later than one hundred twenty (120) days after such receipt if the Committee determines that special circumstances require extension. If special circumstances require an extension of time, the claimant shall be furnished written notice prior to the termination of the initial sixty-day period explaining the special circumstances that require an extension of time and the date by which the Committee expects to render its decision on review.

Article XII

Confidentiality and Noncompetition Provisions

12.1 By receiving a benefit under this Plan, a Participant agrees never directly or indirectly to disclose to any third party or use for such Participant's own personal benefit any confidential information or trade secret of the Company except and to the extent (a) disclosure is ordered by a court of competent jurisdiction or (b) the information otherwise becomes public through no action of the Participant.

12.2 By receiving a benefit under this Plan, a Participant further agrees that for a period of one (1) year following termination of employment with the Company for any reason, the Participant will not, without the specific written permission of the Company, be directly employed in, or otherwise provide services in any capacity to, any business or enterprise (including but not limited to the Participant's own business or enterprise) that engages in direct competition with the Company in any state in which the Company is at the time of the Participant's termination of employment either carrying on business or actively negotiating to enter business.

12.3 The OCN Committee (or its delegate) in its sole discretion has the authority to interpret and administered this Article XII and to determine whether a business is in competition with the Company as described in Section 12.2. In addition, a terminated Participant may request the OCN Committee to determine in advance whether a specific contemplated business or enterprise would be in competition with the Company for purposes of Section 12.2, and a response shall be provided to the Participant within a reasonable time after all relevant information is provided to enable the OCN Committee to make its determination.

12.4 If the OCN Committee determines that a terminated Participant who is receiving or has received benefits under this Plan is, within one (1) year following termination of employment and without the specific written permission of the Company, directly employed in, or otherwise providing services in any capacity to, a business or enterprise that engages in direct competition with the Company in any state in which the Company is at the time of the Participant's termination of employment either carrying on business or actively negotiating to enter business, then (a) all payments to the Participant under this Plan shall cease, (b) the Participant shall forfeit all rights to any further payments under the Plan, and (c) the Participant shall be responsible for repaying to the Plan any payments already made to the Participant that represent (i) amounts paid or payable with regard to any period for which the Participant was in competition with the Company as described herein and/or (ii) any amounts already p aid that related to any future benefit that has been accelerated, in each case without regard to any payroll taxes withheld from the payment received by the Participant.

12.5 As a condition to receiving payments under the Plan, the OCN Committee may require that Participant to enter into a separate confidentiality and/or noncompetition agreement in a form acceptable to the Company.

Article XIII
Miscellaneous

13.1 The Plan shall inure to the benefit of, and shall be binding upon, Dominion Resources, Inc. and its successors and assigns, and upon a Participant, a Beneficiary, and either of their assigns, heirs, executors and administrators.

13.2 To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia, without regard to its choice of law provisions.

13.3 Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural.

IN WITNESS WHEREOF, this instrument has been executed this 29th day of October, 2003.

DOMINION RESOURCES, INC.

 By_/s/ Anne M. Grier_______________________

Title:_Vice President - Human Resources________

EX-12.1

Exhibit 12.1

Virginia Electric and Power Company
Computation of Ratio of Earnings to Fixed Charges
(millions of dollars)

			Years Ended
			12 months ended Sept. 30, 2003	2002	2001	2000	1999	1998
Earnings, as defined:
	Earnings before income taxes and minority interests in consolidated subsidiaries		$ 1,201	$1,198	$733	$  837	$  743	$ 387
	Fixed charges included in the determination of net income		290	304	311	303	297	325
		Total earnings, as defined	$ 1,491	$ 1,502	$ 1,043	$ 1,140	$ 1,040	$ 712
	Fixed charges, as defined:
		Interest charges	$ 299	$ 311	$ 320	$ 297	$ 290	$ 319
		Rental interest factor	10	10	10	6	7	6
		Total fixed charges, as defined	$ 309	$ 321	$ 330	$ 303	$ 297	$ 325
Ratio of Earnings to Fixed Charges			4.83	4.68	3.16	3.76	3.50	2.19

EX-12.2

Exhibit 12.2

Virginia Electric and Power Company
Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends
(millions of dollars)

			Years Ended
			12 months ended Sept. 30, 2003	2002	2001	2000	1999	1998
Earnings, as defined:
	Earnings before income taxes and minority interests in consolidated subsidiaries		$ 1,201	$  1,198	$  733	$  837	$   743	$ 387
	Fixed charges included in the determination of net income		290	304	310	303	297	325
		Total earnings, as defined	$ 1,491	$ 1,502	$ 1,043	$ 1,140	$ 1,040	$ 712
	Fixed charges, as defined:
		Interest charges	$ 299	$ 311	$ 320	$ 297	$ 290	$ 319
		Preference security dividend requirements of consolidated subsidiaries	22	25	38	54	57	61
		Rental interest factor	10	10	10	6	7	6
		Total fixed charges, as defined	$ 331	$ 346	$ 368	$ 357	$ 354	$ 386
Ratio of Earnings to Fixed Charges and Preferred Dividends			4.51	4.34	2.83	3.19	2.94	1.85

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Thomas F. Farrell, II, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ Thomas F. Farrell, II               Thomas F. Farrell, II President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Jay L. Johnson, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ Jay L. Johnson                  Jay L. Johnson President and Chief Executive Officer

EX-31.3

Exhibit 31.3

CERTIFICATIONS

I, Paul D. Koonce, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ Paul D. Koonce                 Paul D. Koonce Chief Executive Officer-Transmission

EX-31.4

Exhibit 31.4

CERTIFICATIONS

I, Mark F. McGettrick, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ Mark F. McGettrick                Mark F. McGettrick President and Chief Executive Officer-Generation

EX-31.5

Exhibit 31.5

CERTIFICATIONS

I, G. Scott Hetzer, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2003
	/s/ G. Scott Hetzer                 G. Scott Hetzer Senior Vice President and Treasurer (Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Virginia Electric and Power Company (the Company), certify that:

1. the Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 (the "Report") of the Company to which this certification is an exhibit fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)).
2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of September 30, 2003 and for the period then ended.

        /s/ Thomas F. Farrell, II                                 
Thomas F. Farrell, II
President and Chief Executive Officer
November 7, 2003

        /s/ Jay L. Johnson                                        
Jay L. Johnson
President and Chief Executive Officer
November 7, 2003

        /s/ Paul D. Koonce                                         
Paul D. Koonce
Chief Executive Officer-Transmission
November 7, 2003

        /s/ Mark F. McGettrick                                    
Mark F. McGettrick
President and Chief Executive Officer-Generation
November 7, 2003

        /s/ G. Scott Hetzer                                          
G. Scott Hetzer
Senior Vice President and Treasurer
(Principal Financial Officer)
November 7, 2003

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Virginia Electric and Power Company. and will be retained by Virginia Electric and Power Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99

Exhibit 99

VIRGINIA ELECTRIC AND POWER COMPANY
CONDENSED CONSOLIDATED EARNINGS STATEMENT
(Unaudited)

	Nine Months Ended September 30, 2003	Three Months Ended December 31, 2002
	(millions)
Operating Revenue	$4,244	$1,126
Operating Expenses	3,076	873
Income from operations	1,168	253
Other income	57	2
Interest and related charges	208	71
Income before income taxes	1,017	184
Income taxes	377	55
Income before cumulative effect of changes in accounting principle	640	129
Cumulative effect of changes in accounting principle (net of income taxes of $51)	84	-
Net income	724	129
Preferred dividends	12	2
Balance available for common stock	$  712	$  127

The condensed consolidated earnings statement for the nine months ended September 30, 2003 reflects the adoption of two new accounting standards, effective January 1, 2003. These standards are Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations, and Emerging Issues Task Force Issue No. 02-03, Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities. The condensed consolidated earnings statement for the three months ended December 31, 2002, which was prepared under different accounting policies regarding the accounting matters covered by the aforementioned new standards, may not combined with the condensed consolidated earnings statement for the nine months ended September 30, 2003, under generally accepted accounting principles.