8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report: August 16, 2002

(Date of earliest event reported)

VIRGINIA ELECTRIC AND POWER COMPANY

(Exact name of registrant as specified in its charter)

Virginia	1-2255	54-0418825
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

One James River Plaza

701 East Cary Street

Richmond, Virginia 23219

(804) 819-2000

(Address including zip code, and telephone number, including area code, of registrant’s principal executive offices)

(Former name or former address, if changed since last report.)

Item 5.    Other Events

On August 16, 2002, Virginia Electric and Power Company (the Company) and Virginia Power Capital Trust II (Trust II) entered into an underwriting agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and UBS Warburg LLC, as representatives of the underwriters named in the underwriting agreement, for the sale of 15,400,000 7.375% Trust Preferred Securities (liquidation amount $25 per Trust Preferred Security) of Trust II. The Trust Preferred Securities are a portion of the $2 billion aggregate amount of securities that were registered by the Company and Trust II under a registration statement on Form S-3 under Rule 415 of the Securities Act of 1933, as amended, which registration statement was declared effective on July 31, 2002 (File No. 333-96973). A copy of the underwriting agreement including exhibits thereto, is filed as Exhibit 1.1 to this Form 8-K. Copies of the instruments defining the rights of the holders of the Trust Preferred Securities are filed as Exhibits 4.1 through 4.9 to this Form 8-K.

Item 7.    Financial Statements and Exhibits

Exhibits

1.1	Underwriting Agreement, dated August 16, 2002, between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and UBS Warburg LLC, as Representatives of the underwriters named in the Underwriting Agreement (filed herewith)
4.1	Certificate of Trust of Trust II (incorporated herein by reference to Exhibit 4(xi) of the Company’s Registration Statement on Form S-3 No. 333-38510 as filed on June 2, 2000)
4.2	Trust Agreement of Trust II (incorporated herein by reference to Exhibit 4(xii) of the Company’s Registration Statement on Form S-3 No. 333-38510 as filed on June 2, 2000)
4.3	Form of Amended and Restated Trust Agreement of Trust II (filed herewith)
4.4	Form of Certificate Evidencing the 7.375% Trust Preferred Securities (contained in Exhibit A to the Amended and Restated Trust Agreement of Trust II, the form of which is filed as Exhibit 4.3 hereto)
4.5	Subordinated Note Indenture, dated as of August 1, 1995, between the Company and JPMorgan Chase Bank (formerly Chemical Bank), as trustee (incorporated herein by reference to Exhibit 4(a) of the Company’s Registration Statement on Form S-3 No. 333-20561 as filed on January 28, 1997)
4.6	Form of Second Supplemental Indenture to Subordinated Note Indenture (filed herewith)
4.7	Form of 7.375% Junior Subordinated Note (contained in Exhibit A to the Second Supplemental Indenture, the form of which is filed as Exhibit 4.6 hereto)

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4.8	Form of Guarantee Agreement (filed herewith)
4.9	Form of Agreement as to Expenses and Liabilities (filed herewith)
8.1	Tax opinion of McGuireWoods LLP with respect to the Trust Preferred Securities (filed herewith)
12.1	Computation of Ratio of Earnings to Fixed Charges (incorporated herein by reference to Exhibit 12.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002 filed August 7, 2002)
23.1	Consent of McGuireWoods LLP is included in the tax opinion filed as Exhibit 8.1.

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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 POWER COMPANY Registrant
By:	/s/ JAMES P. CARNEY
	James P. Carney Assistant Treasurer

Date:    August 20, 2002

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EXHIBIT INDEX

1.1	Underwriting Agreement, dated August 16, 2002, between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and UBS Warburg LLC, as Representatives of the underwriters named in the Underwriting Agreement (filed herewith)
4.1	Certificate of Trust of Trust II (incorporated herein by reference to Exhibit 4(xi) of the Company’s Registration Statement on Form S-3 No. 333-38510 as filed on June 2, 2000)
4.2	Trust Agreement of Trust II (incorporated herein by reference to Exhibit 4(xii) of the Company’s Registration Statement on Form S-3 No. 333-38510 as filed on June 2, 2000)
4.3	Form of Amended and Restated Trust Agreement of Trust II (filed herewith)
4.4	Form of Certificate Evidencing the 7.375% Trust Preferred Securities (contained in Exhibit A to the Amended and Restated Trust Agreement of Trust II, the form of which is filed as Exhibit 4.3 hereto)
4.5	Subordinated Note Indenture, dated as of August 1, 1995, between the Company and JPMorgan Chase Bank (formerly Chemical Bank), as trustee (incorporated herein by reference to Exhibit 4(a) of the Company’s Registration Statement on Form S-3 No. 333-20561 as filed on January 28, 1997)
4.6	Form of Second Supplemental Indenture to Subordinated Note Indenture (filed herewith)
4.7	Form of 7.375% Junior Subordinated Note (contained in Exhibit A to the Second Supplemental Indenture, the form of which is filed as Exhibit 4.6 hereto)
4.8	Form of Guarantee Agreement (filed herewith)
4.9	Form of Agreement as to Expenses and Liabilities (filed herewith)
8.1	Tax opinion of McGuireWoods LLP with respect to the Trust Preferred Securities (filed herewith)
12.1	Computation of Ratio of Earnings to Fixed Charges (incorporated herein by reference to Exhibit 12.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002 filed August 7, 2002)
23.1	Consent of McGuireWoods LLP is included in the tax opinion filed as Exhibit 8.1.

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EX-1.1

Exhibit 1.1

15,400,000 7.375% Trust Preferred Securities

VIRGINIA POWER CAPITAL TRUST II

Guaranteed by

VIRGINIA ELECTRIC AND POWER COMPANY

UNDERWRITING AGREEMENT

August 16, 2002

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

Morgan Stanley & Co. Incorporated

UBS Warburg LLC

    for themselves and as Representatives for the Underwriters

    named in Schedule I, attached to the Underwriting Agreement

c/o Merrill Lynch, Pierce, Fenner & Smith

                           Incorporated

Merrill Lynch World Headquarters

4 World Financial Center

New York, New York 10080

Ladies and Gentlemen:

Virginia Power Capital Trust II (the Trust), a statutory business trust created under the Business Trust Act (the Delaware Act) of the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Sections 3801 et seq.) and Virginia Electric and Power Company, a Virginia corporation (the Company) (the Company and, together with the Trust, the Offerors), confirm their agreement (the Agreement) with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, UBS Warburg LLC and each of the other Underwriters named in Schedule I (collectively, including the Representatives, the Underwriters), with respect to the issue and sale by the Trust and the purchase by the Underwriters, acting severally and not jointly, of the respective number set forth opposite their names in Schedule I of the 15,400,000 7.375% Trust Preferred Securities (liquidation amount of $25 per security) of the Trust (the Initial Trust Preferred Securities). Solely for the purpose of covering overallotments in the sale of the Initial Trust Preferred Securities, the Trust further proposes to grant to the Underwriters the right to purchase up to an additional 600,000 Trust Preferred Securities (the Option Trust Preferred Securities and, together with the Initial Trust Preferred Securities, the Trust Preferred Securities), as provided in Section 3 of this Agreement. The terms of the Trust Preferred Securities are specified in Schedule II hereto. The Trust Preferred Securities will be fully and unconditionally guaranteed by the Company (the Trust

Preferred Securities Guarantee), to the extent described in the Prospectus (as defined below), with respect to distributions and payments upon liquidation, redemption and otherwise pursuant to the Guarantee Agreement (the Guarantee Agreement), to be dated as of August 23, 2002, between the Company and JPMorgan Chase Bank, as Trustee (the Guarantee Trustee). The Trust Preferred Securities issued in book-entry form will be issued to Cede & Co., as nominee of The Depository Trust Company (DTC), pursuant to a letter of representations, to be dated on or prior to a Closing Date (as defined in Section 4 herein) (the DTC Agreement), among the Trust, the Guarantee Trustee and DTC.

The entire proceeds from the sale of the Trust Preferred Securities will be combined with the entire proceeds from the sale by the Trust to the Company of its common securities (the Common Securities), and will be used by the Trust to purchase $396,907,225 of 7.375% Junior Subordinated Notes, due July 30, 2042 (the Subordinated Notes) issued by the Company. The Trust Preferred Securities and the Common Securities will be issued pursuant to the Trust Agreement, dated as of May 26, 2000, as amended and restated by the Amended and Restated Trust Agreement of Virginia Power Capital Trust II, to be dated as of August 23, 2002 (the Trust Agreement), among the Company, as sponsor, James P. Carney and G. Scott Hetzer, as administrative trustees (the Administrative Trustees), JPMorgan Chase Bank, as property trustee (the Property Trustee), and Chase Manhattan Bank USA, National Association (as successor to Chase Manhattan Bank Delaware), as Delaware trustee (the Delaware Trustee and, together with the Property Trustee, the Administrative Trustees, and the Indenture Trustee, as defined below, the Trustees). The Subordinated Notes will be issued pursuant to an indenture dated as of August 1, 1995, as supplemented and as to be further supplemented by a Second Supplemental Indenture dated as of August 1, 2002 (collectively, the Indenture), between the Company and JPMorgan Chase Bank (formerly known as Chemical Bank), as trustee (the Indenture Trustee). The Trust and the Company shall enter into an Agreement as to Expenses and Liabilities (the Expenses Agreement) to be dated as of August 23, 2002, pursuant to which the Company shall pay, under certain circumstances, the Obligations (as defined in the Expenses Agreement) of the Trust.

The Trust Preferred Securities, the Trust Preferred Securities Guarantee and the Subordinated Notes may be collectively referred to herein as the “Securities.” The Indenture, the Trust Agreement and the Guarantee Agreement, the Expenses Agreement, the DTC Agreement and this Agreement may be referred to herein collectively as the “Operative Documents.” The term “Underwriters” as used herein shall be deemed to mean the several persons, firms or corporations (including the Representatives hereinafter mentioned) named in Schedule I hereto, and the term “Representatives” as used herein shall be deemed to mean the Representatives to whom this Agreement is addressed. If there shall be only one person, firm or corporation named as an addressee above, the term “Representatives” as used herein shall mean that person, firm or corporation. If there shall be only one person, firm or corporation named in Schedule I hereto, the term “Underwriters” as used herein shall mean that person, firm or corporation. All obligations of the Underwriters hereunder are several and not joint. Unless otherwise stated, any action under or in respect of this Agreement taken by the Representatives will be binding upon all the Underwriters.

The Offerors understand that the Underwriters propose to make a public offering of the Trust Preferred Securities (as guaranteed by the Trust Preferred Securities Guarantee) on the terms and in the manner set forth herein and agree that the Underwriters may resell, subject to the conditions set forth herein, all or a portion of the Trust Preferred Securities.

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SECTION 1.  Representations and Warranties.    The Offerors jointly and severally represent and warrant to each Underwriter as of the date hereof and as of any Closing Date, as defined in Section 4, and agree with each Underwriter as follows:

(a)  A registration statement, No. 333-96973 on Form S-3 for the registration of the Securities and certain other securities of the Company under the Securities Act of 1933, as amended (the Securities Act), heretofore filed with the Securities and Exchange Commission (the Commission) has become effective. The registration statement, including all exhibits thereto, as amended through the date hereof, is hereinafter referred to as the “Registration Statement”; the prospectus dated July 31, 2002, relating to the Securities and other securities included in the Registration Statement, which prospectus is now proposed to be supplemented by a prospectus supplement relating to the Securities to be filed with the Commission under the Securities Act, as so supplemented, is hereinafter referred to as the “Prospectus”. As used herein, the terms “Registration Statement” and “Prospectus” include all documents (including any Current Report on Form 8-K) incorporated therein by reference, and shall include any documents (including any Current Report on Form 8-K) filed after the date of such Registration Statement or Prospectus and incorporated therein by reference from the date of filing of such incorporated documents (collectively, the Incorporated Documents).

(b)  No order suspending the effectiveness of the Registration Statement or otherwise preventing or suspending the use of the Prospectus has been issued by the Commission and is in effect and no proceedings for that purpose are pending before or, to the knowledge of the Offerors, threatened by the Commission. The Registration Statement and the Prospectus comply in all material respects with the provisions of the Securities Act, the Securities Exchange Act of 1934, as amended (the Securities Exchange Act), the Trust Indenture Act of 1939, as amended (the Trust Indenture Act), and the rules, regulations and releases of the Commission (the Rules and Regulations) and, neither the Registration Statement on the date it was declared effective (the Effective Date) nor the Prospectus on the date hereof contained or contains an untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and, on any Closing Date (as defined below), the Registration Statement and the Prospectus (including any amendments and supplements thereto) will conform in all respects to the requirements of the Securities Act, the Trust Indenture Act and the Rules and Regulations, and neither of such documents will include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; provided, that the foregoing representations and warranties in this Section 1(b) shall not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon information furnished herein or in writing to an Offeror by the Underwriters or on the Underwriters’ behalf through the Representatives for use in the Registration Statement or Prospectus or the part of the Registration Statement which constitutes the Trustee’s Statement of Eligibility under the Trust Indenture Act; and provided, further, that the foregoing representations and warranties are given on the basis that any statement contained in an Incorporated Document shall be deemed not to be contained in the Registration Statement or Prospectus if the statement has been modified or superseded by any statement in a subsequently filed Incorporated Document or in the Registration Statement or Prospectus or in any amendment or supplement thereto.

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(c)  Except as reflected in, or contemplated by, the Registration Statement and Prospectus (exclusive of any amendments or supplements after the date hereof), since the respective most recent dates as of which information is given in the Registration Statement and Prospectus (exclusive of any amendments or supplements after the date hereof), there has not been any material adverse change or event which would result in a material adverse effect on the condition of the Company and its subsidiaries taken as a whole, financial or otherwise (a Company Material Adverse Effect) and there has not been any material adverse change or event which would result in a material adverse effect on the condition of the Trust, financial or otherwise (a Trust Material Adverse Effect). The Company and its subsidiaries taken as a whole has no material contingent financial obligation which is not disclosed in the Registration Statement and the Prospectus. The Trust has no material contingent financial obligation which is not disclosed in the Registration Statement and the Prospectus.

(d)  Deloitte & Touche LLP who have certified certain of the Company’s financial statements filed with the Commission and incorporated by reference in the Registration Statement are independent public accountants as required by the Securities Act and the Rules and Regulations relating to the Securities Act.

(e)  There are no Significant Subsidiaries of the Company as such term is defined in Rule 1-02 of Regulation S-X.

(f)  The Trust has been duly created and is validly existing and in good standing as a business trust under the Delaware Act with the power and authority to own property and to conduct its business as described in the Registration Statement and Prospectus and to enter into and perform its obligations under this Agreement and the Trust Agreement; the Trust is and will be classified for United States Federal income tax purposes as a grantor trust and not as an association taxable as a corporation. The Trust does not have any consolidated or unconsolidated Significant Subsidiaries as such term is defined in Rule 1-02 of Regulation S-X, and will be treated as a consolidated subsidiary of the Company pursuant to generally accepted accounting principles. The Trust is not required to be authorized to do business in any jurisdiction other than the State of Delaware. The Trust is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not result in a Trust Material Adverse Effect.

(g)  The Common Securities have been duly authorized by the Trust Agreement and, when issued and delivered by the Trust to the Company against payment therefor as set forth in the Trust Agreement, will be validly issued and, subject to the terms of the Trust Agreement, fully paid and non-assessable undivided beneficial interests in the assets of the Trust. The issuance of the Common Securities is not subject to preemptive or other similar rights. On any Closing Date, all of the issued and outstanding Common Securities of the Trust will be directly owned by the Company free and clear of any security interest, mortgage, pledge, lien, claim, encumbrance or equitable right.

(h)  The Trust Preferred Securities have been duly authorized by the Trust Agreement and, when issued and delivered against payment therefor as provided herein, will be

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validly issued and, subject to the terms of the Trust Agreement, fully paid and non-assessable undivided beneficial interests in the assets of the Trust. Subject to the terms of the Trust Agreement, the holders of the Trust Preferred Securities, as beneficial owners of Trust Preferred Securities of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware except that the holders of the Trust Preferred Securities may be obligated to provide (a) indemnity or security in connection with, and pay taxes or governmental charges arising from, transfers or exchanges of Trust Preferred Securities certificates and the issuance of replacement Trust Preferred Securities certificates, and (b) security and indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and powers under the Trust Agreement.

(i)  The Guarantee Agreement, the Trust Agreement, the Subordinated Notes, the Expenses Agreement and the Indenture have each been duly authorized by the Company and when validly executed and delivered by the Company and, in the case of the Guarantee Agreement, by the Guarantee Trustee, in the case of the Trust Agreement, by the Trustees thereto, in the case of the Indenture, by the Indenture Trustee, and in the case of the Subordinated Notes, when validly issued by the Company and duly authenticated and delivered by the Indenture Trustee, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law); the Subordinated Notes when validly issued by the Company and duly authenticated and delivered by the Indenture Trustee, will be entitled to the benefits of the Indenture.

(j)  The execution, delivery and performance of the Operative Documents, the Common Securities and the Trust Preferred Securities by the Trust and the consummation of the transactions contemplated in the Operative Documents, the Common Securities, the Trust Preferred Securities and in the Registration Statement (including the issuance and sale of the Common Securities and the Trust Preferred Securities by the Trust and the use of the proceeds from the sale of the Common Securities and the Trust Preferred Securities as described in the Prospectus under the caption “Use of Proceeds”) by the Trust and compliance by the Trust with its obligations under the Operative Documents, the Common Securities and Trust Preferred Securities do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Trust pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, to which the Trust is a party or by which it or any of them may be bound, or to which any of the property or assets of the Trust is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not result in a Trust Material Adverse Effect), nor will such action contravene any provision of applicable law, the Trust Agreement or the certificate of trust of the Trust, or any agreement or other instrument binding upon the Trust, the effect of which is a Trust Material Adverse Effect, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Trust. The Trust

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is not a party to or otherwise bound by any material agreement other than those described in the Prospectus.

(k)  The execution, delivery and performance of the Operative Documents and the Subordinated Notes by the Company and the consummation of the transactions contemplated in the Operative Documents, the Subordinated Notes and the Registration Statement (including the issuance and sale of the Subordinated Notes and the use of the proceeds from the sale of the Subordinated Notes as described in the Prospectus under the caption “Use of Proceeds”) by the Company and compliance by the Company with its obligations under the Operative Documents and the Subordinated Notes do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, to which the Company or any subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any subsidiary is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a Company Material Adverse Effect), nor will such action result in any violation of the provisions of the charter or bylaws of the Company or any subsidiary, or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any subsidiary or any of their respective properties, assets or operations, and the Company has full power and authority to authorize, issue and sell the Subordinated Notes and authorize and issue the Trust Preferred Securities Guarantee as contemplated by this Agreement.

(l)  Each of the Company and the Trust is not, and following consummation of the transactions contemplated by the Operative Documents will not be, an “investment company” or a company “controlled” by an “investment company” which is required to be registered under the Investment Company Act of 1940, as amended (the 1940 Act).

SECTION 2.  Offering.    The Underwriters have advised the Company that the Underwriters propose to make an offering of the Initial Trust Preferred Securities purchased by the Underwriters for sale on the terms set forth in the Prospectus and at the price specified in Schedule II hereto.

SECTION 3.  Purchase and Public Offering.

(a)  On the basis of the representations and warranties herein contained, but subject to the terms and conditions in this Agreement set forth, the Trust agrees to sell to each Underwriter, and each Underwriter, severally and not jointly, agrees to purchase from the Trust, at a price of $25 per Trust Preferred Security, at a place and time hereinafter specified, the number of Initial Trust Preferred Securities set forth in Schedule I opposite the name of such Underwriter, plus any additional Initial Trust Preferred Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 9 hereof.

(b)  The Offerors hereby grant options to the Underwriters to purchase from them up to 600,000 Option Trust Preferred Securities on the same terms and conditions as the

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Initial Trust Preferred Securities; provided, however, that such options may be exercised only for the purpose of covering any overallotments which may be made by them in the sale of the Initial Trust Preferred Securities. No Option Trust Preferred Securities shall be sold or delivered unless the Initial Trust Preferred Securities previously have been, or simultaneously are, sold and delivered. The options are exercisable on behalf of the several Underwriters by the Representatives, at any time, and from time to time, before the expiration of 30 days from the date of this Agreement (or, if such 30^th day shall be a Saturday or Sunday or holiday, on the next day thereafter when the New York Stock Exchange is open for trading), for the purchase of all or part of the Option Trust Preferred Securities covered thereby, by notice given by the Representatives to the Company and the Trust in the manner provided in Section 12 hereof, setting forth the number of Option Trust Preferred Securities as to which the Underwriters are exercising the options, and the date of delivery of said Option Trust Preferred Securities, which date shall not be more than five business days after such notice unless otherwise agreed to by the parties. The Representatives may terminate the options at any time, as to any unexercised portion thereof, by giving written notice to the Company and the Trust to such effect. The Representatives shall make such allocation of the Option Trust Preferred Securities among the Underwriters as may be required to eliminate purchases of fractional Trust Preferred Securities.

(c)  The Underwriters agree to make a public offering of their respective Trust Preferred Securities specified in Schedule I hereto at the initial public offering price specified in Schedule II hereto. It is understood that after such initial offering the several Underwriters reserve the right to vary the offering price and further reserve the right to withdraw, cancel or modify such offering without notice.

SECTION 4.  Time and Place of Closing.    Deliveries of certificates for the Initial Trust Preferred Securities, and payment therefor by the Representatives for the accounts of the several Underwriters shall be made at the time, place and date specified in Schedule II or such other time, place and date as the Representatives and the Company may agree upon in writing signed by the Representatives and the Offerors (the First Closing Date). The date and time the Option Trust Preferred Securities are delivered and paid for are sometimes referred to as the “Second Closing Date”, and the First Closing Date and the Second Closing Date are sometimes each referred to as a “Closing Date”.

Payment for the Trust Preferred Securities purchased by the Underwriters shall be made to the Trust by wire transfer of immediately available funds, against delivery for the respective accounts of the Underwriters of certificates for the Trust Preferred Securities. Certificates for the Trust Preferred Securities shall be in definitive or global form and in such denominations as the Underwriters may request in writing at least one business day before any Closing Date. It is understood that each Underwriter has authorized each of the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Trust Preferred Securities which it has agreed to purchase. The certificates representing the Trust Preferred Securities shall be registered in the name of Cede & Co. pursuant to the DTC Agreement and shall be made available for examination by the Underwriters not later than 12:00 P.M. on the last business day prior to any Closing Date.

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As compensation to the Underwriters for their commitments hereunder and in view of the fact that the proceeds of the sale of the Trust Preferred Securities will be used to purchase Subordinated Notes of the Company (which purchase was arranged by the Underwriters), the Company hereby agrees to pay on any Closing Date to the Representatives by wire transfer in immediately available funds, for the accounts of the several Underwriters, $0.7875 per Trust Preferred Security to be delivered hereunder on that Closing Date.

SECTION 5.  Covenants of the Offerors.    The Company and the Trust jointly and severally agree to the following with each of the Underwriters:

(a)  If the Representatives so request, the Offerors, on or prior to any Closing Date, will deliver to the Representatives conformed copies of the Registration Statement as originally filed, including all exhibits, any related preliminary prospectus supplement, the Prospectus and all amendments and supplements to each such document, in each case as soon as available and in such quantities as are reasonably requested by the Representatives. The Representatives will be deemed to have made such a request for copies for each of the several Underwriters and Troutman Sanders LLP, counsel to the Underwriters, with respect to any such documents that are not electronically available through the Commission’s EDGAR filing system.

(b)  The Company will pay all expenses in connection with (i) the preparation and filing by it of the Registration Statement and the Prospectus, (ii) the preparation, issuance and delivery of the Securities, (iii) any fees and expenses of the Trustees, (iv) the printing and delivery to the Underwriters, in reasonable quantities, of copies of the Registration Statement and the Prospectus (each as originally filed and as subsequently amended), and (v) the fees and expenses incurred in connection with the listing of the Trust Preferred Securities and, if applicable, the Subordinated Notes, on the New York Stock Exchange. In addition, the Company will pay the reasonable out of pocket fees and disbursements of Underwriters’ outside counsel, Troutman Sanders LLP, in connection with the qualification of the Securities under state securities or blue sky laws or investment laws (if and to the extent such qualification is required by the Underwriters or the Company).

(c)  If, during the time when a prospectus relating to the Securities is required to be delivered under the Securities Act, any event shall occur as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Securities Act, the Company promptly will (i) notify the Underwriters to suspend solicitation of purchases of the Trust Preferred Securities and (ii) at its expense, prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. During the period specified above, the Company will continue to prepare and file with the Commission on a timely basis all documents or amendments required under the Securities Exchange Act and the applicable rules and regulations of the Commission thereunder; provided, that the Company shall not file such documents or amendments without also furnishing copies thereof to the Representatives and Troutman Sanders LLP. Any such documents or amendments which are electronically available through the Commission’s EDGAR filing system shall be deemed to have been furnished by the Company to the Representatives and Troutman Sanders LLP.

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(d)  The Company will advise the Representatives promptly of any proposal to amend or supplement the Registration Statement or the Prospectus and will afford the Representatives a reasonable opportunity to comment on any such proposed amendment or supplement; and the Company will also advise the Representatives promptly of the filing of any such amendment or supplement and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement or of any part thereof and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued.

(e)  The Company will make generally available to its security holders, as soon as it is practicable to do so, an earnings statement of the Company (which need not be audited) in reasonable detail, covering a period of at least 12 months beginning within three months after the effective date of the Registration Statement, which earnings statement shall satisfy the requirements of Section 11(a) of the Securities Act.

(f)  The Offerors will furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Representatives may designate; provided, however, that the Offerors shall not be required in any state to qualify as a foreign corporation or business entity, or to file a general consent to service of process, or to submit to any requirements which either of them deems unduly burdensome.

(g)  Fees and disbursements of Troutman Sanders LLP, who is acting as counsel for the Underwriters (exclusive of fees and disbursements of such counsel which are to be paid as set forth in Section 5(b)), shall be paid by the Underwriters; provided, however, that if this Agreement is terminated in accordance with the provisions of Sections 6 or 7 hereof, the Company shall reimburse the Representatives for the account of the Underwriters for the amount of such fees and disbursements.

(h)  During a period of thirty (30) days beginning on the date of this Agreement, the Company and the Trust will not offer, sell, contract to sell or otherwise dispose of any Trust Preferred Securities, any other beneficial interest in the assets of the Trust, any Subordinated Notes, or any other securities of the Trust or any other similar debt securities of the Company which are substantially similar to the Trust Preferred Securities or the Subordinated Notes, without the prior written consent of the Representatives.

(i)  The Company will use its best efforts to cause the Trust Preferred Securities to be listed on the New York Stock Exchange, subject to official notice of issuance. If the Trust Preferred Securities are exchanged for Subordinated Notes, the Company will use its reasonable best efforts to effect the listing of the Subordinated Notes on any exchange on which the Trust Preferred Securities are then listed.

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SECTION 6.  Conditions of Underwriters’ Obligations; Termination by the Underwriters.

(a)  The obligations of the Underwriters to purchase and pay for the Trust Preferred Securities on any Closing Date shall be subject to the following conditions on such Closing Date:

(i)  No stop order suspending the effectiveness of the Registration Statement shall be in effect on such Closing Date and no proceedings for that purpose shall be pending before, or to the knowledge of the Offerors threatened by, the Commission on such date. The Representatives shall have received, prior to payment for the Trust Preferred Securities, a certificate dated such Closing Date and signed by the President or any Vice President of the Company and an Administrative Trustee of the Trust to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before or, to the knowledge of the Company or the Trust, threatened by the Commission.

(ii)  On such Closing Date, an order or orders of the State Corporation Commission of Virginia authorizing the issuance and sale of the Securities of the Company and the Trust, as applicable, shall be in full force and effect.

(iii)  On such Closing Date the Representatives shall receive, on behalf of the several Underwriters, the opinions of Troutman Sanders LLP, counsel to the Underwriters; McGuireWoods LLP, counsel to the Company and special tax counsel to the Company; the Company’s General Counsel; Richards, Layton & Finger, P.A., special Delaware counsel to the Offerors; Richards, Layton & Finger, P.A., counsel to Chase Manhattan Bank USA, National Association (as successor to Chase Manhattan Bank Delaware), as Delaware Trustee under the Trust Agreement; and Cravath, Swaine & Moore, counsel to the Indenture Trustee, the Guarantee Trustee and the Property Trustee; each such opinion being substantially in the forms attached hereto as Schedules III, IV, V, VI, VII and VIII, as applicable, and all in form and substance satisfactory to the Representatives.

(iv)  The Representatives shall have received letters from Deloitte & Touche LLP, dated the date of this Agreement and dated such Closing Date, with respect to the Company and containing statements and information of the type ordinarily included in accountants’ SAS 71 “comfort letters” to underwriters.

(v)  Subsequent to the execution of this Agreement and prior to such Closing Date, (A) except as reflected in, or contemplated by, the Registration Statement and the Prospectus (exclusive of amendments or supplements after the date hereof), there shall not have occurred (1) any change in the senior debt of the Company or any securities of the Trust (other than a decrease in the aggregate principal amount thereof outstanding), (2) any material adverse change in the general affairs, financial condition or earnings of the Trust or the Company and its subsidiaries taken as a whole, or (3) any material transaction entered into by the Trust or the Company other than a transaction in the ordinary course of business, the effect of which in each such case in the reasonable judgment of the Representatives is so material and so adverse that it makes it impracticable to

10

proceed with the public offering or delivery of the Securities on the terms and in the manner contemplated in the Prospectus and this Agreement; or (B) there shall not have occurred (1) a downgrading in the rating accorded to any of the Company’s junior subordinated notes or junior subordinated debentures or any of the securities of the Trust, or securities that are pari passu to the Junior Subordinated Notes or the Trust Preferred Securities, by any “nationally recognized statistical rating organization” (as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act) and no such organization shall have given any notice of any intended or potential downgrading or of any review for a possible change with possible negative implications in its ratings of such securities, (2) any general suspension of trading in securities on the New York Stock Exchange or any limitation on prices for such trading or any restrictions on the distribution of securities established by the New York Stock Exchange or by the Commission or by any federal or state agency or by the decision of any court, (3) a suspension of trading of any securities of the Company or the Trust on the New York Stock Exchange, (4) a banking moratorium declared either by federal or New York State authorities, (5) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by the United States Congress or any other substantial national or international calamity or crisis resulting in the declaration of a national emergency, or if there has occurred any material adverse change in the financial markets; provided, the effect of such outbreak, escalation, declaration, calamity, crisis or material adverse change shall, in the reasonable judgment of the Representatives, make it impracticable to proceed with the public offering or delivery of the Securities on the terms and in the manner contemplated in the Prospectus and in this Agreement.

(vi)  On such Closing Date, the representations and warranties of the Offerors in this Agreement shall be true and correct as if made on and as of such date, and the Offerors shall have performed all obligations and satisfied all conditions required of it under this Agreement; and, at such Closing Date, the Representatives shall have received certificates to such effect signed by the President or any Vice President of the Company and an Administrative Trustee of the Trust.

(vii)  All legal proceedings to be taken in connection with the issuance and sale of the Securities shall have been satisfactory in form and substance to Troutman Sanders LLP.

(viii)  A Special Event as defined in the Amended and Restated Trust Agreement shall not have occurred and be continuing.

(b)  In case any of the conditions specified above in Section 6(a) shall not have been fulfilled, this Agreement may be terminated by the Representatives upon mailing or delivering written notice thereof to the Company; provided, however, that in case the conditions specified in subsections 6(a)(v) and (vi) shall not have been fulfilled, this Agreement may not be so terminated by the Representatives unless Underwriters who have agreed to purchase in the aggregate 50% or more of the total number of Trust Preferred

11

Securities shall have consented to such termination and the aforesaid notice shall so state. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 8 and Sections 5(b), 5(g) and 6(c) hereof.

(c)  If this Agreement shall be terminated by the Representatives pursuant to Section 6(b) above or because of any failure or refusal on the part of the Offerors to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Offerors shall be unable to perform its obligations under this Agreement, then in any such case, the Company will reimburse the Underwriters, severally, for all out-of-pocket expenses (in addition to the fees and disbursements of their outside counsel as provided in Section 5(g)) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder and, upon such reimbursement, the Company shall be absolved from any further liability hereunder, except as provided in Section 5(b) and Section 8.

SECTION 7.  Conditions of the Obligation of the Company.    The obligation of the Offerors to deliver the Securities shall be subject to the conditions set forth in the first sentence of Section 6(a)(i) and in Section 6(a)(ii). In case said conditions shall not have been fulfilled, this Agreement may be terminated by the Offerors by mailing or delivering written notice thereof to the Representatives. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 5(b), 5(g), 8 and 9 hereof.

SECTION 8.  Indemnification and Contribution.    (a)  Each Offeror agrees, jointly and severally, to indemnify and hold harmless each Underwriter, its officers and directors and each person who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Securities Exchange Act, or any other statute or common law and to reimburse each such Underwriter and controlling person for any legal or other expenses (including, to the extent hereinafter provided, reasonable outside counsel fees) incurred by them in connection with investigating or defending any such losses, claims, damages, or liabilities, or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus, or in either such document as amended or supplemented (if any amendments or supplements thereto shall have been furnished), or any preliminary Prospectus (if and when used prior to the date hereof), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided that the foregoing agreement, insofar as it relates to any preliminary Prospectus, shall not inure to the benefit of any Underwriter (or to the benefit of any person who controls such Underwriter) on account of any losses, claims, damages or liabilities arising out of the sale of any of the Trust Preferred Securities by such Underwriter to any person if it shall be established that a copy of the Prospectus, excluding any documents incorporated by reference (as supplemented or amended, if the Company shall have made any supplements or amendments which have been furnished to the Representatives), shall not have been sent or given by or on behalf of such Underwriter to such person at or prior to the written confirmation of the sale to such person in any case where such delivery is required by the Securities Act and the Offerors satisfied their obligations pursuant to

12

Section 5(a) hereof, if the misstatement or omission leading to such loss, claim, damage or liability was corrected in the Prospectus (excluding any documents incorporated by reference) as amended or supplemented, and such correction would have cured the defect giving rise to such loss, claim, damage, or liability; and provided further, however, that the indemnity agreement contained in this Section 8(a) shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of or based upon any such untrue statement or alleged untrue statement, or any such omission or alleged omission, if such statement or omission was made in reliance upon information furnished herein or otherwise in writing to Offerors by or on behalf of any Underwriter for use in the Registration Statement or any amendment thereto, in the Prospectus or any supplement thereto, or in any preliminary Prospectus. The indemnity agreement of the Offerors contained in this Section 8(a) and the representations and warranties of the Offerors contained in Section 1 hereof shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any such controlling person, and shall survive the delivery of the Trust Preferred Securities.

(b)  The Company agrees to indemnify the Trust against all loss, liability, claim, damage and expense whatsoever, as due from the Trust under Section 8(a).

(c)  Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Offerors, their officers and directors, and each person who controls any of the foregoing within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Securities Exchange Act, or any other statute or common law and to reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable outside counsel fees) incurred by them in connection with investigating or defending any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus, or in either such document as amended or supplemented (if any amendments or supplements thereto shall have been furnished), or any preliminary Prospectus (if and when used prior to the date hereof), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished herein or in writing to the Offerors by or on behalf of such Underwriter for use in the Registration Statement or the Prospectus or any amendment or supplement to either thereof, or any preliminary Prospectus. The indemnity agreement of the respective Underwriters contained in this Section 8(c) shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Offerors or any such controlling person, and shall survive the delivery of the Trust Preferred Securities.

(d)  Each of the Offerors and each of the Underwriters agrees that, upon the receipt of notice of the commencement of any action against either of the Offerors or any of its officers, directors, or any person controlling either of the Offerors, or against such Underwriter or controlling person as aforesaid, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such

13

indemnifying party or parties from any liability which it or they may have to the indemnified party otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given, such indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party (or parties) and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action, and such defendant or defendants shall bear the fees and expenses of any additional outside counsel retained by them; provided that, if the defendants (including impleaded parties) in any such action include both the indemnified party and the indemnifying party (or parties) and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party (or parties), the indemnified party shall have the right to select separate counsel to assert such legal defenses and to participate otherwise in the defense of such action on behalf of such indemnified party. The indemnifying party shall bear the reasonable fees and expenses of outside counsel retained by the indemnified party if (i) the indemnified party shall have retained such counsel in connection with the assertion of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to one local counsel), representing the indemnified parties under Section 8(a) or 8(b), as the case may be, who are parties to such action), (ii) the indemnifying party shall have elected not to assume the defense of such action, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the commencement of the action, or (iv) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. Notwithstanding the foregoing sentence, an indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent (such consent not to be unreasonably withheld), but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which indemnification may be sought hereunder (whether or not the indemnified party is an actual or potential party to such a proceeding), unless such settlement (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (ii) does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any indemnified party.

(e)  If the indemnification provided for in this Section 8(a) or 8(b) is unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Offerors, on the one hand, and of the Underwriters, on the other, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations, including relative benefit. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged

14

omission to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading relates to information supplied by the Offerors on the one hand or by you on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Offerors and you agree that it would not be just and equitable if contribution pursuant to this Section 8(e) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 8(e). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this Section 8(e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations under this Section 8(e) to contribute are several in proportion to their respective underwriting obligations and not joint. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

SECTION 9.  Termination.    If any one or more of the Underwriters shall fail or refuse to purchase the Trust Preferred Securities which it or they have agreed to purchase hereunder, and the total number of the Trust Preferred Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the total number of the Trust Preferred Securities, then the other Underwriters shall be obligated severally in the proportions which the number of Trust Preferred Securities set forth opposite their respective names in Schedule I bears to the aggregate underwriting obligations of all non-defaulting Underwriters, or in such other proportions as the Underwriters may specify, to purchase the Trust Preferred Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase. If any Underwriter or Underwriters shall so fail or refuse to purchase Trust Preferred Securities and the total number of the Trust Preferred Securities with respect to which such default occurs is more than one-tenth of the total number of the Trust Preferred Securities and arrangements satisfactory to the Underwriters and the Company for the purchase of such Trust Preferred Securities are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter (except as provided in Section 5(g) and Section 8) or of the Company (except as provided in Section 5(b) and Section 8). In any such case not involving a termination, either the Representatives or the Company shall have the right to postpone a Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this Section 9 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

SECTION 10.  Representations, Warranties and Agreements to Survive Delivery.    All representations, warranties and agreements contained in this Agreement or contained in certificates of officers of the Company and/or the Trust submitted pursuant hereto shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any controlling person of any Underwriter, or by or on behalf of the Company and/or the Trust, and shall survive delivery of the Securities.

15

SECTION 11.  Miscellaneous.    The validity and interpretation of this Agreement shall be governed by the laws of the State of New York. This Agreement shall inure to the benefit of the Company, the Trust, the Underwriters and, with respect to the provisions of Section 8 hereof, each controlling person and each officer and director of the Company and the Trust referred to in Section 8, and their respective successors, assigns, executors and administrators. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. The term “successors” as used in this Agreement shall not include any purchaser, as such, of any of the Trust Preferred Securities from any of the several Underwriters.

SECTION 12.  Notices.    All communications hereunder shall be in writing and if to the Underwriters shall be mailed, faxed or delivered to the Representatives at the address set forth on Schedule II hereto; or if to the Company shall be mailed, faxed or delivered to it, attention of Treasurer, Virginia Electric and Power Company, 120 Tredegar Street, Richmond, Virginia 23219 (facsimile number: (804) 819-2211) or if to the Trust or the Administrative Trustees, shall be mailed, faxed or delivered to it or them, attention of Treasurer, Virginia Electric and Power Company, 120 Tredegar Street, Richmond, Virginia 23219, (facsimile number: (804) 819-2211).

Please sign and return to us a counterpart of this letter, whereupon this letter will become a binding agreement between the Company, the Trust and the several Underwriters in accordance with its terms.

15-A

Very truly yours,

VIRGINIA POWER CAPITAL TRUST II
By:	VIRGINIA ELECTRIC AND POWER COMPANY, as sponsor

By:	/s/    JAMES P. CARNEY
	James P. Carney Assistant Treasurer

VIRGINIA ELECTRIC AND POWER COMPANY
By:	/s/    JAMES P. CARNEY
	James P. Carney Assistant Treasurer

16

Agreed, this 16th day of August, 2002

Merrill Lynch, Pierce, Fenner & Smith

             Incorporated

Morgan Stanley & Co. Incorporated

UBS Warburg LLC

Each acting severally on behalf of itself and for the

several Underwriters named herein

By: MERRILL LYNCH, PIERCE, FENNER & SMITH                          INCORPORATED

By:	/s/    ROBERT CRAIG
	Robert Craig Managing Director

By: MORGAN STANLEY & CO. INCORPORATED        

By:	/s/    HAROLD J. HENDERSHOT III
	Harold J. Hendershot III Executive Director

By: UBS WARBURG LLC         

By:	/s/    KIMBERLY BLUE
	Kimberly Blue Managing Director

By:	/s/    SCOTT D. WHITNEY
	Scott D. Whitney Director

17

SCHEDULE I

Underwriter	Number of Initial Trust Preferred Securities
Merrill Lynch, Pierce, Fenner & Smith Incorporated	1,948,000
Morgan Stanley & Co. Incorporated	1,946,000
UBS Warburg LLC	1,946,000
A.G. Edwards & Sons, Inc.	1,940,000
Lehman Brothers Inc.	1,940,000
Salomon Smith Barney Inc.	1,940,000
Wachovia Securities, Inc.	1,940,000
McDonald Investments Inc.	650,000
RBC Dain Rauscher Inc.	50,000
Banc of America Securities LLC	50,000
Bear, Stearns & Co. Inc.	50,000
Charles Schwab & Co., Inc.	50,000
CIBC World Markets Corp.	50,000
Deutsche Bank Securities Inc.	50,000
H&R BLOCK Financial Advisors, Inc.	50,000
HSBC Securities (USA) Inc.	50,000
Legg Mason Wood Walker, Incorporated	50,000
Prudential Securities Incorporated	50,000
Quick & Reilly, Inc.	50,000
Raymond James & Associates, Inc.	50,000
TD Securities (USA) Inc.	50,000
U.S. Bancorp Piper Jaffray Inc.	50,000
Wells Fargo Securities, LLC	50,000
ABN AMRO Incorporated	25,000
Advest, Inc.	25,000
BB&T Capital Markets, a Division of Scott & Stringfellow, Inc.	25,000
C. L. King & Associates, Inc.	25,000
D. A. Davidson & Co.	25,000
Fahnestock & Co. Inc.	25,000
Fifth Third Securities, Inc.	25,000
Janney Montgomery Scott LLC	25,000
J.J.B. Hilliard, W. L. Lyons, Inc.	25,000
Mesirow Financial, Inc.	25,000
Morgan Keegan & Company, Inc.	25,000
Parker/Hunter Incorporated	25,000
Robert W. Baird & Co. Incorporated	25,000
Stifel, Nicolaus & Company, Incorporated	25,000
SunTrust Capital Markets, Inc.	25,000
SWS Securities, Inc.	25,000
TOTAL:	15,400,000

I-1

SCHEDULE II

Title of Security:  7.375% Trust Preferred Securities (liquidation amount $25 per security)

Distribution Rate on Trust Preferred Securities:  7.375%

Coupon on Subordinated Notes:  7.375%

Total Number of Initial Trust Preferred Securities Being Purchased:  15,400,000

Price to Public Per Trust Preferred Security:  $25

Total Price to Public:  $385,000,000

Underwriting Commissions Per Trust Preferred Security:  $0.7875

Total of Underwriting Commissions:  $12,127,500

Proceeds to the Trust Per Trust Preferred Security:  $25

Total Proceeds to the Trust:  $385,000,000

Time of Delivery:  August 23, 2002, 10:00 A.M.

Closing Location:    One James Center

                         901 East Cary Street

                         Richmond, Virginia 23219

The Trust Preferred Securities will be available for inspection by the

Representatives at:

                         One James Center

                         901 East Cary Street

                         Richmond, Virginia 23219

II-1

Address for Notices to the Underwriters:

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

Merrill Lynch World Headquarters

4 World Financial Center

New York, New York 10080

Attn:  Robert D. Craig, Managing Director

Facsimile number: 212-449-8636

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Attn:  Bradford Hart, Executive Director

Facsimile number: 212-761-0781

UBS Warburg LLC

299 Park Avenue

New York, New York 10171

Attn:  Russell D. Robertson, Managing Director

Facsimile number: 212-821-6451

with a copy of any notice pursuant to Section 8(d) also sent to:

Troutman Sanders LLP

1111 East Main Street

Richmond, Virginia 23219

Attention:  F. Claiborne Johnston, Jr., Esquire

Facsimile number: (804) 697-1339

II-2

SCHEDULE III

PROPOSED FORM OF OPINION

OF

TROUTMAN SANDERS LLP

Bank of America Center

1111 East Main Street

Richmond, Virginia 23219

RE: VIRGINIA POWER CAPITAL TRUST II

Guaranteed By

VIRGINIA ELECTRIC AND POWER COMPANY

15,400,000 7.375% Trust Preferred Securities

August 23, 2002

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

Morgan Stanley & Co. Incorporated

UBS Warburg LLC

    for themselves and as Representatives for the Underwriters

    named in Schedule I, attached to the Underwriting Agreement

c/o Merrill Lynch, Pierce, Fenner & Smith

                           Incorporated

Merrill Lynch World Headquarters

4 World Financial Center

New York, New York 10080

Ladies and Gentlemen:

We have acted as your counsel in connection with the purchase by you, acting severally and not jointly, from Virginia Power Capital Trust II, of an aggregate of 15,400,000 of 7.375% Trust Preferred Securities (liquidation amount of $25 per security) of the Trust pursuant to the terms of the Underwriting Agreement dated August 16, 2002 (the Underwriting Agreement).

III-1

This letter is being delivered to you pursuant to the Underwriting Agreement. All terms not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement.

We have examined originals, or copies certified to our satisfaction of such corporate records of the Company and the Trust, indentures, agreements and other instruments, certificates of public officials, certificates of officers and representatives of the Company, of the Trust and of each of the Trustees, and other documents, as we have deemed necessary as a basis for the opinions hereinafter expressed. As to various questions of fact material to such opinions, we have, when relevant facts were not independently established, relied upon certifications by officers of the Company, the Trust, the Trustees and other appropriate persons and statements contained in the Registration Statement hereinafter mentioned. All legal proceedings taken as of the date hereof in connection with the transactions contemplated by the Underwriting Agreement have been satisfactory to us.

In addition, we attended the closing held today at the offices of McGuireWoods LLP, One James Center, Richmond, Virginia, at which the Company and the Trust satisfied the conditions contained in Section 7 of the Underwriting Agreement that are required to be satisfied as of the Closing Date.

Based upon the foregoing, and having regard to legal considerations that we deem relevant, we are of the opinion that:

1.  The Company is a corporation duly incorporated and existing as a corporation in good standing under the laws of Virginia, and has the corporate power to transact its business as described in the Prospectus.

2.  No approval or consent by any public regulatory body, other than those required under the Securities Act and the Rules and Regulations and an authorization by the State Corporation Commission of Virginia, all of which have been obtained, is legally required in connection with the sale of the Securities as contemplated by the Underwriting Agreement (except to the extent that compliance with the provisions of securities or blue sky laws of certain states may be required in connection with the sale of the Securities in such states) and the carrying out of the provisions of the Underwriting Agreement.

3.  The Underwriting Agreement has been duly authorized by all necessary corporate action and has been duly executed and delivered by the Company.

4.  The Trust Agreement has been duly authorized by all necessary corporate action of the Company and has been duly executed and delivered by the Company, the Administrative Trustees, the Property Trustee and the Delaware Trustee and has been duly qualified under the Trust Indenture Act, and constitutes a valid and binding obligation of the Company, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law).

III-2

5.  The Indenture has been duly authorized, executed and delivered by the Company and has been duly qualified under the Trust Indenture Act and constitutes a valid and binding obligation of the Company, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law).

6.  The Expenses Agreement has been duly authorized by all necessary corporate action of the Company and has been duly executed and delivered by the Company and the Trust and constitutes a valid and binding obligation of the Company, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law).

7.  The Guarantee Agreement has been duly authorized by all necessary corporate action of the Company and has been duly executed and delivered by the Company and the Guarantee Trustee and constitutes a valid and binding obligation of the Company, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law).

8.  The Subordinated Notes have been duly authorized and executed by the Company and, when authenticated by the Indenture Trustee in accordance with, and in the form contemplated by, the Indenture and issued, delivered and paid for as provided in the Underwriting Agreement, will have been duly and validly issued under the Indenture and will constitute valid and binding obligations of the Company entitled to the benefits provided by the Indenture, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law).

9.  The Registration Statement (Reg. No. 333-96973) with respect to the Securities filed pursuant to the Securities Act, has become effective and remains in effect at this date, and the Prospectus may lawfully be used for the purposes specified in the Securities Act in connection with the offer for sale and the sale of Securities in the manner therein specified.

10.  The Registration Statement (which includes the Incorporated Documents) and the Prospectus (excepting the financial statements and schedules and other financial or statistical information contained or incorporated therein by reference, any pro forma financial information and notes thereto and the Statement of Eligibility of the Trustee filed on Form T-1 under the Trust Indenture Act included or incorporated by reference into the Registration Statement or the Prospectus, and as to which we express no belief) appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act, and to the applicable rules and regulations of the Commission thereunder.

III-3

11.  As to the statements relating to the Securities contained in the Prospectus under DESCRIPTION OF DEBT SECURITIES, ADDITIONAL TERMS OF THE JUNIOR SUBORDINATED NOTES, DESCRIPTION OF TRUST PREFERRED SECURITIES, DESCRIPTION OF GUARANTEE, and RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE GUARANTEE AND THE JUNIOR SUBORDINATED NOTES HELD BY THE TRUST as all or any of them have been supplemented by the statements under SPECIFIC TERMS OF THE TRUST PREFERRED SECURITIES and SPECIFIC TERMS OF THE JUNIOR SUBORDINATED NOTES, in the Prospectus Supplement dated August 16, 2002 are accurate and do not omit any material fact required to be stated therein or necessary to make such statements not misleading.

We have not undertaken to determine independently the accuracy or completeness of the statements contained or incorporated by reference in the Registration Statement or in the Prospectus, and as to the statistical statements in the Registration Statement (which includes statistical statements in the Incorporated Documents), we have relied solely on the officers of the Company. We accordingly assume no responsibility for the accuracy or completeness of the statements made in the Registration Statement except as stated above in regard to the text under the captions in the opinion in the preceding paragraph. We note that the Incorporated Documents were prepared and filed by the Company without our participation. We have, however, participated in conferences with counsel for and representatives of the Company and the Trust in connection with the preparation of the Registration Statement, the Prospectus as it was initially issued and as has been supplemented or amended, and we have reviewed the Incorporated Documents and such of the corporate records of the Company and the Trust as we deemed advisable. None of the foregoing disclosed to the lawyers in this firm who have given substantive legal attention to representation of the Underwriters in connection with the issuance and sale of the Securities, or in representation of other underwriters or agents in connection with other securities matters involving the Company and/or its affiliates, any information that gives us reason to believe that the Registration Statement contained on the date the Registration Statement became effective, or the Prospectus contained on the date it was issued or the date it was supplemented or amended, or that the Registration Statement or the Prospectus (in all cases, excepting the financial statements and schedules and other financial information contained or incorporated therein by reference, any pro forma financial information and notes thereto, and the Statement of Eligibility of the Trustee filed on Form T-1 under the Trust Indenture Act, included or incorporated by reference into the Registration Statement or the Prospectus, as to which we express no belief) contains on the date hereof, any untrue statement of a material fact or omitted on said date or now omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The foregoing assurance is given on the basis that any statement contained in an Incorporated Document shall be deemed not to be contained in the Registration Statement or Prospectus if the statement has been modified or superseded by any statement in a subsequently filed Incorporated Document or in the Registration Statement or Prospectus.

We do not purport to express an opinion on any laws other than those of the Commonwealth of Virginia, the State of New York and the United States of America. In rendering the foregoing opinions, we have, with your consent, relied solely upon the opinion of

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Richards, Layton & Finger, P.A., dated the date hereof and addressed to you. This opinion may not be relied upon by, nor may copies be delivered to, any person without our prior written consent.

Very truly yours,

TROUTMAN SANDERS LLP

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SCHEDULE IV

PROPOSED FORM OF OPINION

OF

MCGUIREWOODS LLP

One James Center

901 East Cary Street

Richmond, Virginia 23219

RE: VIRGINIA POWER CAPITAL TRUST II

Guaranteed By

VIRGINIA ELECTRIC AND POWER COMPANY

15,400,000 7.375% Trust Preferred Securities

August 23, 2002

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

Morgan Stanley & Co. Incorporated

UBS Warburg LLC

    for themselves and as Representatives for the Underwriters

    named in Schedule I, attached to the Underwriting Agreement

c/o Merrill Lynch, Pierce, Fenner & Smith

                           Incorporated

Merrill Lynch World Headquarters

4 World Financial Center

New York, New York 10080

Ladies and Gentlemen:

The arrangements for issuance of 15,400,000 7.375% Trust Preferred Securities (liquidation amount $25 per security) (the Trust Preferred Securities) of Virginia Power Capital Trust II (the Trust), pursuant to an Underwriting Agreement dated August 16, 2002, by and among the Trust, Virginia Electric and Power Company (the Company) and the Underwriters listed on Schedule I as attached thereto (the Underwriting Agreement), have been taken under our supervision as counsel for the Company and the Trust. Terms not otherwise defined herein have the meanings set forth in the Underwriting Agreement.

We have examined originals, or copies certified to our satisfaction, of such corporate records of the Company and the Trust, indentures, agreements, and other instruments, certificates of public officials, certificates of officers and representatives of the Company, of the

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Trust and each of the Trustees, and other documents, as we have deemed it necessary to require as a basis for the opinions hereinafter expressed. As to various questions of fact material to such opinions, we have, when relevant facts were not independently established, relied upon certifications by officers of the Company, the Trust, the Trustees and other appropriate persons and statements contained in the Registration Statement hereinafter mentioned. All legal proceedings taken as of the date hereof in connection with the transactions contemplated by the Underwriting Agreement have been satisfactory to us.

With respect to the opinions hereinafter expressed that are dependent upon Delaware law, we are relying upon the opinion dated the date hereof rendered to you by Richards, Layton & Finger, P.A., as special Delaware counsel to the Company and the Trust (the Richards Layton Opinion), and our opinions in this regard are subject to the exceptions, qualifications and assumptions set forth in the following paragraphs in the Richards Layton Opinion: B (except with respect to the Company and the Administrative Trustees, provided that we have also assumed the legal capacity of the Administrative Trustees, and provided further that we have not made the assumption set forth in paragraph B (viii)), C(iii), D (except with regard to the execution of the Operative Documents by the Company and the Administrative Trustees) and F.

Based upon the foregoing, and having regard for legal considerations that we deem relevant, we are of the opinion that:

1.  No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign (other than those required under the Securities Act and the Rules and Regulations and an authorization by the State Corporation Commission of Virginia, all of which have been obtained, or as may be required under the securities or blue sky laws of the various states) is necessary or required in connection with the due authorization, execution and delivery of the Underwriting Agreement or the due execution, delivery or performance of the Operative Documents or for the offering, issuance, sale or delivery of the Securities.

2.  The Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized, executed, and delivered by, and constitutes a valid and binding obligation of, the Company, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

3.  The Trust Agreement has been duly qualified under the Trust Indenture Act and has been duly authorized, executed, and delivered by, and constitutes a valid and binding obligation of, the Company, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

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4.  The Guarantee Agreement has been duly qualified under the Trust Indenture Act and each of the Trust Preferred Securities Guarantee and the Expenses Agreement has been duly authorized, executed, and delivered by, and constitutes a valid and binding obligation of, the Company, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

5.  The Subordinated Notes have been duly authorized and executed by the Company and, when authenticated by the Indenture Trustee in accordance with, and in the form contemplated by, the Indenture and issued, delivered and paid for in accordance with the Underwriting Agreement, will have been duly and validly issued under the Indenture and will constitute valid and binding obligations of the Company entitled to the benefits provided by the Indenture, in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

6.  The Securities and the Operative Documents, when the Trust Preferred Securities are delivered pursuant to the Underwriting Agreement, conform to the descriptions thereof contained in the Registration Statement and the Prospectus.

7.  The Common Securities have been duly authorized by the Trust Agreement and (subject to the terms of the Trust Agreement), when issued and delivered by the Trust to the Company against payment therefor as described in the Trust Agreement, will be validly issued, fully paid and non-assessable undivided beneficial interests in the assets of the Trust; and the issuance of the Common Securities is not subject to preemptive or other similar rights.

8.  The Trust Preferred Securities have been duly authorized by the Trust Agreement and (subject to the terms of the Trust Agreement) when delivered to and paid for by the Representatives pursuant to the Underwriting Agreement, will be validly issued, fully paid and non-assessable undivided beneficial interests in the assets of the Trust; the holders of the Trust Preferred Securities will (subject to the terms of the Trust Agreement) be entitled to the same limit of personal liability under Delaware law as is extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; and the issuance of the Trust Preferred Securities is not subject to preemptive or other similar rights.

9.  The Registration Statement (Reg. No. 333-96973) with respect to the Securities filed pursuant to the Securities Act, has become effective and remains in effect at this date, and the Prospectus may lawfully be used for the purposes specified in the Securities Act in connection with the offer for sale and the sale of the Securities in the manner therein specified.

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10.  The Registration Statement and the Prospectus appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act, and to the applicable rules and regulations of the Commission thereunder (except that we express no comment or belief with respect to the historical or pro forma financial statements and schedules and other financial or statistical information contained in the Registration Statement or Prospectus).

11.  We are of the opinion that the statements relating to the Operative Documents and the Securities contained in the Prospectus under DESCRIPTION OF DEBT SECURITIES, ADDITIONAL TERMS OF JUNIOR SUBORDINATED NOTES, DESCRIPTION OF TRUST PREFERRED SECURITIES, DESCRIPTION OF GUARANTEE, and RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE GUARANTEE AND THE JUNIOR SUBORDINATED NOTES HELD BY THE TRUST as all or any of them have been supplemented by the statements under SPECIFIC TERMS OF THE TRUST PREFERRED SECURITIES and SPECIFIC TERMS OF THE JUNIOR SUBORDINATED NOTES, in the Prospectus Supplement dated August 16, 2002 are substantially accurate and do not omit any material fact required to be stated therein or necessary to make such statements not misleading.

12.  With regard to the discussion in the Prospectus Supplement under the caption MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES, we are of the opinion that under current United States federal income tax law, although the discussion does not purport to discuss all possible United States federal income tax consequences of the purchase, ownership and disposition of the Subordinated Notes, (i) the Subordinated Notes will be classified for United States federal income tax purposes as indebtedness of the Company; (ii) the Trust will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation; and (iii) such discussion constitutes a fair and accurate summary of the matters discussed therein in all material respects. In rendering the aforementioned tax opinion, we have considered the current provisions of the Internal Revenue Code of 1986, as amended, Treasury regulations promulgated thereunder, judicial decisions and Internal Revenue Service rulings, all of which are subject to change, which changes may be retroactively applied. A change in the authorities upon which our opinion is based could affect our conclusions. There can be no assurance, moreover, that any of the opinions expressed herein will be accepted by the Internal Revenue Service, or, if challenged, by a court.

We have participated in conferences with officers and other representatives of the Company and the Trust and representatives of the Underwriters at which the contents of the Registration Statement and the Prospectus were discussed and we have consulted with officers and other employees of the Company and the Trust to inform them of the disclosure requirements of the Securities Act. We have examined various reports, records, contracts and other documents of the Company and the Trust and orders and instruments of public officials, which our investigation led us to deem pertinent. In addition, we attended the due diligence meetings with representatives of the Company and the Trust and the closing at which the Company and the Trust satisfied the conditions contained in Section 6 of the Underwriting Agreement. We have not, however, undertaken to make any independent review of the other

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records of the Company and the Trust which our investigation did not lead us to deem pertinent. As to the statistical statements in the Registration Statement, we have relied solely on the officers of the Company. We accordingly assume no responsibility for the accuracy or completeness of the statements made in the Registration Statement, except as stated above in regard to the captions in the opinion in paragraph nos. 11 and 12 herein. But such conferences, consultation, examination and attendance disclosed to us no information with respect to such other matters that gives us reason to believe that the Registration Statement contained on the date the Registration Statement became effective, or the Prospectus contained on the date it was issued, or that the Registration Statement or the Prospectus (in each case, except with respect to the financial statements and schedules and other financial information contained or incorporated by reference in the Registration Statement or the Prospectus) contains on the date hereof, any untrue statement of a material fact or omitted on such date or omits on the date hereof to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The foregoing assurance is provided on the basis that any statement contained in an Incorporated Document shall be deemed not to be contained in the Registration Statement or Prospectus if the statement has been modified or superseded by any statement in a subsequently filed Incorporated Document or in the Registration Statement or Prospectus.

We are members of the bars of the Commonwealth of Virginia and the State of New York. We do not purport to express an opinion on any laws other than those of the Commonwealth of Virginia, the State of New York and the United States of America and, to the extent set forth herein, the laws of the State of Delaware. This opinion may not be relied upon by, nor may copies be delivered to, any person without our prior written consent.

Yours very truly,

MCGUIREWOODS LLP

IV-5

SCHEDULE V

PROPOSED FORM OF OPINION

OF

GENERAL COUNSEL OF

VIRGINIA ELECTRIC AND POWER COMPANY

120 Tredegar Street

Richmond, VA 23219

RE: VIRGINIA POWER CAPITAL TRUST II

Guaranteed By

VIRGINIA ELECTRIC AND POWER COMPANY

15,400,000 7.375% Trust Preferred Securities

August 23, 2002

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

Morgan Stanley & Co. Incorporated

UBS Warburg LLC

    for themselves and as Representatives for the Underwriters

    named in Schedule I, attached to the Underwriting Agreement

c/o Merrill Lynch, Pierce, Fenner & Smith

                           Incorporated

Merrill Lynch World Headquarters

4 World Financial Center

New York, New York 10080

Ladies and Gentlemen:

The arrangements for issuance of 15,400,000 7.375% Trust Preferred Securities (liquidation amount $25 per security) (the Trust Preferred Securities), of Virginia Power Capital Trust II (the Trust) as guaranteed by Virginia Electric and Power Company (the Company), pursuant to an Underwriting Agreement dated August 16, 2002, by and among the Trust, the Company and the Underwriters listed on Schedule I as attached thereto (the Underwriting Agreement), have been taken under my supervision as Vice President and General Counsel of

V-1

the Company. Terms not otherwise defined herein have the meanings set forth in the Underwriting Agreement.

As Vice President and General Counsel of the Company, I have general responsibility over the attorneys within the Company’s Legal Department responsible for rendering legal counsel to the Company regarding corporate, financial, securities, and other matters. I am generally familiar with the organization, business and affairs of the Company. I am also familiar with the proceedings taken and proposed to be taken by the Company in connection with the offering and sale of the Trust Preferred Securities, and I have examined such corporate records, certificates and other documents and such questions of the law as I have considered necessary or appropriate for the purposes of this opinion. In addition, I have responsibility for supervising lawyers who may have been asked by me or others to review legal matters arising in connection with the offering and sale of the Trust Preferred Securities. Accordingly, some of the matters referred to herein have not been handled personally by me, but I have been made familiar with the facts and circumstances and the applicable law, and the opinions herein expressed are my own or are opinions of others in which I concur.

On this basis I am of the opinion that:

1.  The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of Virginia, and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under the Underwriting Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not result in a Company Material Adverse Effect.

2.  The Underwriting Agreement has been duly authorized, executed and delivered by the Offerors.

3.  There are no actions, suits or proceedings pending or, to the best of my knowledge, threatened, to which the Trust, the Company or one of their subsidiaries is a party or to which any of the Trust’s, the Company’s or any of their subsidiaries’ properties is subject other than any proceedings described in the Prospectus and proceedings which I believe are not likely to have a material adverse effect on the power or ability of each of the Company and the Trust to perform its obligations under the Operative Agreements or to consummate the transactions contemplated thereby or by the Prospectus.

I am a member of the Bar of the Commonwealth of Virginia and I do not purport to express an opinion on any laws other than those of the Commonwealth of Virginia and the United States of America. This opinion may not be relied upon by, nor may copies be delivered

V-2

to, any person without our prior written consent. I do not undertake to advise you of any changes in the opinions expressed herein resulting from matters that may hereinafter arise or that may hereinafter be brought to my attention.

Yours very truly,

GENERAL COUNSEL

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SCHEDULE VI

PROPOSED FORM OF OPINION

OF

RICHARDS, LAYTON & FINGER, P.A.

SPECIAL DELAWARE COUNSEL FOR THE COMPANY

AND VIRGINIA POWER CAPITAL TRUST II

One Rodney Square

P. O. Box 551

Wilmington, DE 19899

RE: VIRGINIA POWER CAPITAL TRUST II

Guaranteed By

VIRGINIA ELECTRIC AND POWER COMPANY

15,400,000 7.375% Trust Preferred Securities

August 23, 2002

Virginia Electric and Power Company

120 Tredegar Street

Richmond, Virginia 23219

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Morgan Stanley & Co. Incorporated

UBS Warburg LLC

    for themselves and as Representatives for the Underwriters

    named in Schedule I, attached to the Underwriting Agreement

c/o Merrill Lynch, Pierce, Fenner & Smith 60

                           Incorporated

Merrill Lynch World Headquarters

4 World Financial Center

New York, New York 10080

Ladies and Gentlemen:

We have acted as special Delaware counsel for Virginia Electric and Power Company, a Delaware corporation (the “Corporation”), and Virginia Power Capital Trust II, a

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Delaware business trust (the “Trust”), in connection with the matters set forth herein. At your request, this opinion is being furnished to you.

For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following:

(a)  The Certificate of Trust of the Trust, (the “Certificate of Trust”), as filed with the office of the Secretary of State of the State of Delaware (the “Secretary of State”) on May 26, 2000 (the “Certificate”);

(b)  The Trust Agreement, dated as of May 26, 2000, by and between Chase Manhattan Bank USA, National Association (as successor to Chase Manhattan Bank Delaware), a Delaware corporation (the “Delaware Trustee”), G. Scott Hetzer (the “Trustee”) and the Corporation, as amended and restated by the Amended and Restated Trust Agreement, dated as of August 23, 2002 (collectively referred to as the “Trust Agreement”), by and among the Corporation, as Sponsor, JPMorgan Chase Bank, as Property Trustee, the Delaware Trustee, the Administrative Trustees of the Trust named therein (the “Administrative Trustees,” together with the Property Trustee and the Delaware Trustee, the “Trustees”), and the holders from time to time, of undivided beneficial interests in the assets of the Trust (including Exhibits A and B thereto);

(c)  The Prospectus, dated July 31, 2002, as supplemented by the Prospectus Supplement dated August 16, 2002 (collectively, the “Prospectus”), relating to the 7.375% Trust Preferred Securities, of the Trust, representing undivided beneficial interests in the assets of the Trust (each, a “Trust Preferred Security” and, collectively, the “Trust Preferred Securities”);

(d)  The Underwriting Agreement, dated August 16, 2002 (the “Underwriting Agreement”), by and among the Corporation, the Trust and the Underwriters listed on Schedule I as attached thereto (the “Underwriters”); and

(e)  A Certificate of Good Standing for the Trust, dated August             , 2002, 2001, obtained from the Secretary of State.

Capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement. The Trust Preferred Securities and the Common Securities are hereinafter collectively referred to as the “Trust Securities.”

For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (e) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (e) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects.

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Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that:

1.  The Trust has been duly created and is validly existing in good standing as a business trust under the Business Trust Act and all filings required under the laws of the State of Delaware with respect to the creation and valid existence of the Trust as a business trust have been made.

2.  Under the Trust Agreement and the Business Trust Act, the Trust has the trust power and authority to own property and conduct its business, as described in the Prospectus.

3.  The Trust Agreement constitutes a valid and binding agreement of the Corporation and the Trustees, and is enforceable against the Corporation and the Trustees, in accordance with its terms.

4.  Under the Trust Agreement and the Business Trust Act, the Trust has the trust power and authority to (A) execute and deliver the Underwriting Agreement, and to perform its obligations thereunder, (B) issue and perform its obligations under the Trust Securities, and (C) purchase and hold the Junior Subordinated Notes.

5.  Under the Trust Agreement and the Business Trust Act, the execution and delivery by the Trust of the Underwriting Agreement, and the performance by the Trust of its obligations thereunder, have been duly authorized by all necessary trust action on the part of the Trust.

6.  The Trust Preferred Securities have been duly authorized by the Trust Agreement. The Trust Preferred Securities, when duly executed and authenticated in accordance with the Trust Agreement and delivered against payment therefor in accordance with the Trust Agreement and the Underwriting Agreement, will be validly issued and, subject to the qualifications set forth herein, fully paid and nonassessable undivided preferred beneficial interests in the assets of the Trust and will entitle the Holders of Trust Preferred Securities to the benefits of the Trust Agreement. The Holders of Trust Preferred Securities, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the Holders of Trust Preferred Securities may be obligated, pursuant to the Trust Agreement, (i) to provide indemnity and security in connection with and pay taxes or governmental charges arising from transfers of certificates evidencing the Trust Preferred Securities (the “Trust Preferred Security Certificates”) and the issuance of replacement Trust Preferred Security Certificates, and (ii) to provide security and indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and powers under the Trust Agreement.

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7.  The Common Securities have been duly authorized by the Trust Agreement and, when duly executed and delivered to the Corporation in accordance with the Trust Agreement, will be validly issued undivided beneficial interests in the assets of the Trust and entitled to the benefits of the Trust Agreement.

8.  Under the Business Trust Act and the Trust Agreement, the issuance of the Trust Securities is not subject to preemptive rights.

9.  The issuance and sale of the Trust Securities by the Trust, the purchase by the Trust of the Junior Subordinated Notes, the execution, delivery and performance of the Underwriting Agreement by the Trust, the consummation by the Trust of the transactions contemplated thereby and the compliance by the Trust with its obligations thereunder do not violate (A) any provisions of the Certificate or the Trust Agreement, or (B) any applicable Delaware law.

10.  No authorization, approval, consent or order of any Delaware court or Delaware governmental authority or Delaware agency is required to be obtained by the Trust solely in connection with the issuance and sale of the Trust Securities or the performance of its obligations under the Underwriting Agreement or the Trust Agreement.

11.  We have reviewed the statements in the Prospectus under the caption “The Trust” and, insofar as they contain statements of Delaware law, such statements are fairly presented.

The foregoing opinions are subject to the following exceptions, qualifications and assumptions:

A.  We are admitted to practice law in the State of Delaware and we do not hold ourselves out as being experts on the law of any other jurisdiction. This opinion is limited to the laws of the State of Delaware currently in effect. We express no opinion with respect to (i) federal laws, including without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 1939, as amended, and the Investment Company Act of 1940, as amended, (ii) state securities or blue sky laws or (iii) laws, rules and regulations relating to the particular nature of the Trust assets.

B.  We have assumed (i) except to the extent provided in paragraph 1 above, the valid existence of each party to the documents examined by us under the laws of the jurisdiction governing its organization, (ii) the legal capacity of natural persons who are signatories to the documents examined by us, (iii) except to the extent provided in paragraphs 2 and 4 above, that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (iv) except to the extent provided in paragraphs 5, 6 and 7 above, that each of the parties to the documents examined by us has duly authorized, executed and delivered such documents,(v) that the Trust Agreement constitutes the entire agreement among the parties thereto with respect to the subject matter thereof, including, without limitation, the creation, operation and termination

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of the Trust, and that the Trust Agreement and the Certificate are in full force and effect and have not been amended, (vi) the receipt by each Person to whom a Trust Preferred Security is to be issued by the Trust (the “Trust Preferred Security Holders”) of a certificate in the form attached as Exhibit A to the Trust Agreement evidencing ownership of such Trust Preferred Security in the name of such Person and the payment for the Trust Preferred Security acquired by it, in accordance with the Trust Agreement, and as described in the Prospectus, (vii) that the Trust Preferred Securities are issued and sold to the Trust Preferred Security Holders in accordance with the Trust Agreement, and as described in the Prospectus, (viii) the receipt by the Person to whom a Common Security is to be issued by the Trust (the “Common Security Holder”) of a certificate in the form attached as Exhibit B to the Trust Agreement evidencing ownership of such Common Security in the name of such Person and the payment for the Common Security acquired by it, in accordance with the Trust Agreement, and as described in the Prospectus, (ix) that the Common Securities are issued and sold to the Common Security Holder in accordance with the Trust Agreement, and as described in the Prospectus, and (x) that the Trust derives no income from or connected with sources within the State of Delaware and has no assets, activities (other than having a trustee and filing documents with the Secretary of State) or employees in the State of Delaware.

C.  The opinion expressed in paragraph 3 above regarding enforceability, is subject to (i) applicable bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation, fraudulent transfer and other similar laws relating to or affecting the rights and remedies of creditors generally, (ii) principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of applicable public policy on the enforceability of provisions relating to indemnification or contribution.

D.  We have assumed that all signatures on documents examined by us are genuine, that all documents submitted to us as originals are authentic, and that all documents submitted to us as copies conform with the originals, which facts we have not independently verified.

E.  We have not participated in the preparation of the Prospectus and assume no responsibility for its contents.

F.  To the extent that Section 13.2 of the Trust Agreement provides that the Trust Agreement is governed by laws other than the laws of the State of Delaware, we express no opinion concerning Section 13.2 of the Trust Agreement or the effect of Section 13.2 of the Trust Agreement on the Trust Agreement.

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We consent to your relying as to matters of Delaware law upon this opinion in connection with the Underwriting Agreement. We also consent to McGuireWoods LLP relying as to matters of Delaware law upon this opinion in connection with opinions to be rendered by them on the date hereof pursuant to the Underwriting Agreement. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person for any purpose.

Very truly yours,

RICHARDS, LAYTON & FINGER, P.A.

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SCHEDULE VII

PROPOSED FORM OF OPINION

OF

RICHARDS, LAYTON & FINGER, P.A.

COUNSEL TO CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION

(as successor to CHASE MANHATTAN BANK DELAWARE)

One Rodney Square

P. O. Box 551

Wilmington, DE 19899

RE: VIRGINIA POWER CAPITAL TRUST II

Guaranteed By

VIRGINIA ELECTRIC AND POWER COMPANY

15,400,000 7.375% Trust Preferred Securities

August 23, 2002

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Morgan Stanley & Co. Incorporated

    for themselves and as Representatives for the Underwriters

    named in Schedule I, attached to the Underwriting Agreement

c/o Merrill Lynch, Pierce, Fenner & Smith

                           Incorporated

Merrill Lynch World Headquarters

4 World Financial Center

New York, New York 10080

c/o Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Ladies and Gentlemen:

We have acted as counsel to Chase Manhattan Bank USA, National Association (as successor to Chase Manhattan Bank Delaware), a national banking association (“CMBD”), in connection with the formation of Virginia Power Capital Trust II, a business trust existing under

VII-1

the laws of the State of Delaware (the “Trust”) pursuant to the Trust Agreement, dated as of May 26, 2000, by and between CMBD, not in its individual capacity but solely as trustee (the “Trustee”), and Virginia Electric and Power Company (the “Company”), as amended and restated pursuant to an Amended and Restated Trust Agreement of Virginia Power Capital Trust II, dated as of August 23, 2002, among the Company, the Trustee, JPMorgan Chase Bank, as Property Trustee, the Administrative Trustees named therein and the holders from time to time of the undivided beneficial interests in the assets of the Trust (the “Trust Agreement”). This opinion is being delivered to you pursuant to Section 6(d) of the Underwriting Agreement, dated August 16, 2002 (the “Underwriting Agreement”), among Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, UBS Warburg LLC, the several Underwriters named in Schedule I thereto, Virginia Electric and Power Company and the Trust, pursuant to which the 15,400,000 7.375% Trust Preferred Securities of the Trust will be sold. All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Underwriting Agreement.

We have examined an original or a copy of the Trust Agreement. We have also examined originals or copies of such other documents and such corporate records, certificates and other statements of governmental officials and corporate officers and other representatives of the corporations or entities referred to herein as we have deemed necessary or appropriate for the purposes of the opinions expressed herein. Moreover, as to certain facts material to the opinions expressed herein, we have relied upon the representations and warranties contained in the documents referred to in this paragraph.

Based upon the foregoing and upon an examination of such questions of law as we have deemed necessary or appropriate, and subject to the assumptions, exceptions and qualifications set forth below, we advise you that, in our opinion:

1.  CMBD is duly incorporated, validly existing in good standing as a banking corporation under the federal laws of the United States of America and has the power and authority to execute, deliver and perform its obligations under the Trust Agreement.

2.  The Trust Agreement has been duly authorized, executed and delivered by CMBD and constitutes a legal, valid and binding obligation of CMBD, enforceable against CMBD, in accordance with its terms.

3.  The execution and delivery of, and performance of the terms of, the Trust Agreement by CMBD does not conflict with or constitute a breach of or default under the charter or by-laws of CMBD.

4.  No consent, approval or authorization of, or registration, declaration or filing with, any court or governmental agency or body having jurisdiction in the premises is required under Delaware law for the execution, delivery or performance by CMBD of the Trust Agreement.

The foregoing opinions are subject to the following exceptions, qualification and assumptions:

VII-2

(A)  We are admitted to practice law in the State of Delaware and we do not hold ourselves out as being experts on the law of any other jurisdiction. The foregoing opinions are limited to the laws of the State of Delaware and the federal laws of the United States of America governing the banking and trust powers of CMBD (except that we express no opinion with respect to (i) state securities or blue sky laws and (ii) federal securities laws, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 1939, as amended, and the Investment Company Act of 1940, as amended), and we have not considered and express no opinion on the laws, rules and regulations of any other jurisdiction.

(B)  The foregoing opinions regarding enforceability are subject to (i) applicable bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation, fraudulent transfer or conveyance and similar laws relating to and affecting the rights and remedies of creditors generally, (ii) principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of federal or state securities laws on the enforceability of provisions relating to indemnification or contribution.

(C)  We have assumed the due authorization, execution and delivery by each of the parties thereto, other than CMBD, of the Trust Agreement, and that each of such parties has the full power, authority and legal right to execute, deliver and perform such document.

(D)  We have assumed that all signatures (other than those of CMBD) on documents examined by us are genuine, that all documents submitted to us as originals are authentic, and that all documents submitted to us as copies or specimens conform with the originals, which facts we have not independently verified.

This opinion may be relied upon by you in connection with the matters set forth herein, and without our prior written consent, may not be furnished or quoted to, or relied upon by, any other person or entity for any purpose.

Very truly yours,

RICHARDS, LAYTON & FINGER, P.A.

VII-3

SCHEDULE VIII

PROPOSED FORM OF OPINION

OF

CRAVATH SWAINE & MOORE

COUNSEL FOR THE INDENTURE TRUSTEE, THE GUARANTEE TRUSTEE

AND THE PROPERTY TRUSTEE

World Wide Plaza

825 8th Avenue

New York, New York 10019

RE: VIRGINIA POWER CAPITAL TRUST II

Guaranteed By

VIRGINIA ELECTRIC AND POWER COMPANY

15,400,000 7.375% Trust Preferred Securities

August 23, 2002

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Morgan Stanley & Co. Incorporated

UBS Warburg LLC

    for themselves and as Representatives for the Underwriters

    named in Schedule I, attached to the Underwriting Agreement

c/o Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Merrill Lynch World Headquarters

4 World Financial Center

New York, New York 10080

Dear Ladies and Gentlemen:

We have acted as counsel to JPMorgan Chase Bank (the “Bank”) in connection with (a) the Indenture, dated as of August 1, 1995, as heretofore supplemented (the “Original Indenture”), between Virginia Electric and Power Company (the “Company”) and the Bank, as

VIII-1

Trustee, (b) the Second Supplemental Indenture, dated as of August 1, 2002 (together with the Original Indenture, herein called the “Indenture”), between the Company and the Bank, as Trustee, (c) the Guarantee Agreement, dated as of August 23, 2002 (the “Guarantee Agreement”), between the Company, as Guarantor, and the Bank, as Trustee, and (d) the Amended and Restated Trust Agreement of Virginia Power Capital Trust II, dated as of August 23, 2002 (the “Trust Agreement”), among the Company, as Sponsor, the Bank, as Property Trustee, Chase Manhattan Bank USA, National Association (successor to Chase Manhattan Bank Delaware), as Delaware Trustee, and James P. Carney and G. Scott Hetzer, as Administrative Trustees.

In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, records and other instruments as we have deemed necessary or appropriate for the purpose of this opinion, including copies of the Indenture, the Guarantee Agreement, the Trust Agreement and certain resolutions adopted by the Board of Directors of the Bank.

Based upon the foregoing, we are of opinion that:

(i)  the Bank has been duly incorporated and is validly existing as a banking corporation in good standing under the laws of the State of New York;

(ii)  the Bank has the corporate trust power and authority to execute, deliver and perform its duties under the Indenture, the Guarantee Agreement and the Trust Agreement, has duly executed and delivered the Indenture, the Guarantee Agreement and the Trust Agreement, and, insofar as the laws governing the trust powers of the Bank are concerned and assuming due authorization, execution and delivery thereof by the other parties thereto, each of the Indenture, the Guarantee Agreement and the Trust Agreement constitutes a legal, valid and binding agreement of the Bank, enforceable against the Bank in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors’ rights generally from time to time in effect and to general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law;

(iii)  the execution, delivery and performance by the Bank of the Indenture, the Guarantee Agreement and the Trust Agreement do not conflict with or constitute a breach of the charter or bylaws of the Bank; and

(iv)  no approval, authorization or other action by, or filing with, any governmental authority of the United States of America or the State of New York having jurisdiction over the trust powers of the Bank is required in connection with the execution and delivery by the Bank of the Indenture, the Guarantee Agreement or the Trust Agreement or the performance by the Bank of its duties thereunder, except such as have been obtained, taken or made.

We are admitted to practice only in the State of New York, and we express no opinion as to matters governed by any laws other than the laws of the State of New York and the

VIII-2

Federal law of the United States of America. We are furnishing this opinion to you solely for your benefit. This opinion is not to be relied upon by any other person or used, circulated, quoted or otherwise referred to for any other purpose.

Very truly yours,

CRAVATH SWAINE & MOORE

VIII-3

EX-4.3

Exhibit 4.3

AMENDED AND RESTATED TRUST AGREEMENT

OF VIRGINIA POWER CAPITAL TRUST II

Dated as of August 23, 2002

By and Among

VIRGINIA ELECTRIC AND POWER COMPANY,

as Sponsor,

JPMORGAN CHASE BANK,

as Property Trustee,

CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,

as Delaware Trustee,

and

THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

CROSS REFERENCE TABLE*

Section of Trust Indenture Act of 1939, as Amended	Section of Agreement
310(a)	6.3
310(b)	6.3(c); 6.3(d)
310(c)	Inapplicable
311(a)	2.2(b)
311(b)	2.2(b)
311(c)	Inapplicable
312(a)	2.2(a)
312(b)	2.2(b)
312(c)	Inapplicable
313(a)	2.3
313(b)	2.3
313(c)	2.3
313(d)	2.3
314(a)	2.4
314(b)	Inapplicable
314(c)	2.5
314(d)	Inapplicable
314(e)	2.5
314(f)	Inapplicable
315(a)	3.9(b); 3.10(a)
315(b)	2.7(a)
315(c)	3.9(a)
315(d)	3.9(b)
316(a)	2.6; 7.5(b); 7.6(c)
316(b)	Inapplicable
316(c)	Inapplicable
317(a)	3.16
317(b)	Inapplicable
318(a)	2.1(c)

* THIS CROSS-REFERENCE TABLE DOES NOT CONSTITUTE PART OF THE AGREEMENT AND SHALL NOT HAVE ANY BEARING UPON THE INTERPRETATION OF ANY OF ITS TERMS OR PROVISIONSs.

i

TABLE OF CONTENTS

		Page
ARTICLE 1—INTERPRETATION AND DEFINITIONS		1
	SECTION 1.1 Interpretation and Definitions	1
ARTICLE 2—TRUST INDENTURE ACT		9
	SECTION 2.1      Trust Indenture Act; Application	9
	SECTION 2.2      Lists of Holders of Securities	9
	SECTION 2.3      Reports by the Property Trustee	10
	SECTION 2.4      Periodic Reports to the Property Trustee	10
	SECTION 2.5      Evidence of Compliance with Conditions Precedent	10
	SECTION 2.6      Trust Enforcement Events; Waiver	10
	SECTION 2.7      Trust Enforcement Event; Notice	12
ARTICLE 3—ORGANIZATION		12
	SECTION 3.1      Name and Organization	12
	SECTION 3.2      Office	13
	SECTION 3.3      Purpose	13
	SECTION 3.4      Authority	13
	SECTION 3.5      Title to Property of the Trust	14
	SECTION 3.6      Powers and Duties of the Administrative Trustees	14
	SECTION 3.7      Prohibition of Actions by the Trust and the Trustees	16
	SECTION 3.8      Powers and Duties of the Property Trustee	17
	SECTION 3.9      Certain Duties and Responsibilities of the Property Trustee	19
	SECTION 3.10    Certain Rights of Property Trustee	21
	SECTION 3.11    Delaware Trustee	23
	SECTION 3.12    Execution of Documents	23
	SECTION 3.13    Not Responsible for Recitals or Issuance of Securities	24
	SECTION 3.14    Duration of Trust	24
	SECTION 3.15    Mergers	24
	SECTION 3.16    Property Trustee May File Proofs of Claim	26
ARTICLE 4—SPONSOR		26
	SECTION 4.1    Responsibilities of the Sponsor	26
	SECTION 4.2    Indemnification and Fees and Expenses of the Trustees	27
ARTICLE 5—TRUST COMMON SECURITIES HOLDER		27
	SECTION 5.1    Junior Subordinated Note Issuer's Purchase of Common Securities	27
	SECTION 5.2    Covenants of the Common Securities Holder	28

ii

ARTICLE 6—TRUSTEES		28
	SECTION 6.1      Number of Trustees	28
	SECTION 6.2      Delaware Trustee; Eligibility	28
	SECTION 6.3      Property Trustee; Eligibility	29
	SECTION 6.4      Qualifications of Administrative Trustees and Delaware Trustee Generally	29
	SECTION 6.5      Initial Administrative Trustees	30
	SECTION 6.6      Appointment, Removal and Resignation of Trustees.	30
	SECTION 6.7      Vacancies among Trustees	31
	SECTION 6.8      Effect of Vacancies	31
	SECTION 6.9      Meetings	32
	SECTION 6.10    Delegation of Power	32
	SECTION 6.11    Merger, Conversion, Consolidation or Succession to Business	32
ARTICLE 7—TERMS OF SECURITIES		33
	SECTION 7.1      General Provisions Regarding Securities	33
	SECTION 7.2      Distributions	35
	SECTION 7.3      Redemption of Securities	36
	SECTION 7.4      Redemption Procedures	37
	SECTION 7.5      Voting Rights of Trust Preferred Securities	38
	SECTION 7.6      Voting Rights of Common Securities	41
	SECTION 7.7      Paying Agent	42
	SECTION 7.8      Listing	42
	SECTION 7.9      Transfer of Securities	43
	SECTION 7.10    Mutilated, Destroyed, Lost or Stolen Certificates	44
	SECTION 7.11    Deemed Security Holders	44
	SECTION 7.12    Global Securities	45
	SECTION 7.13    Option	47
	SECTION 7.14    Cancellation	48
ARTICLE 8—DISSOLUTION AND TERMINATION OF TRUST		48
	SECTION 8.1      Dissolution and Termination of Trust	48
	SECTION 8.2      Liquidation Distribution Upon Dissolution of the Trust	49
ARTICLE 9 l—IMITATION OF LIABILITY OF HOLDERS OF SECURITIES, DELAWARE TRUSTEES OR OTHERS		49
	SECTION 9.1      Liability	49
	SECTION 9.2      Exculpation	50
	SECTION 9.3      Fiduciary Duty	50
	SECTION 9.4      Indemnification	51
	SECTION 9.5      Outside Businesses	54

iii

ARTICLE 10 ACCOUNTING		54
	SECTION 10.1    Fiscal Year	54
	SECTION 10.2    Certain Accounting Matters	54
	SECTION 10.3    Banking	55
	SECTION 10.4    Withholding	55
ARTICLE 11—AMENDMENTS AND MEETINGS		56
	SECTION 11.1    Amendments	56
	SECTION 11.2    Meetings of the Holders of Securities; Action by Written Consent	57
ARTICLE 12—REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE		59
	SECTION 12.1    Representations and Warranties of the Property Trustee	59
	SECTION 12.2    Representations and Warranties of the Delaware Trustee	60
ARTICLE 13—MISCELLANEOUS		60
	SECTION 13.1    Notices	60
	SECTION 13.2    Governing Law	61
	SECTION 13.3    Intention of the Parties	61
	SECTION 13.4    Headings	61
	SECTION 13.5    Successors and Assigns	62
	SECTION 13.6    Partial Enforceability	62
	SECTION 13.7    Counterparts	62

Exhibits
EXHIBIT A	FORM OF TRUST PREFERRED SECURITY CERTIFICATE
EXHIBIT B	FORM OF COMMON SECURITY CERTIFICATE

iv

AMENDED AND RESTATED TRUST AGREEMENT

This AMENDED AND RESTATED TRUST AGREEMENT (the “Trust Agreement”), dated as of August 23, 2002 is entered into by and among (i) Virginia Electric and Power Company, a Virginia corporation, as sponsor (the “Sponsor”), (ii)(a) JPMorgan Chase Bank, a New York banking corporation, as Property Trustee, (b) Chase Manhattan Bank USA, National Association, a national association, as Delaware Trustee, and (c) G. Scott Hetzer, an individual, and James P. Carney, an individual, each of whose address is 120 Tredegar Street, Richmond, Virginia 23219 (each an “Administrative Trustee” and, collectively, the “Administrative Trustees” and, together with the Property Trustee and the Delaware Trustee, the “Trustees”, all not in their individual capacities, but solely as Trustees) and (iii) the several Holders as hereinafter defined.

RECITALS

WHEREAS, the Delaware Trustee and the Sponsor established Virginia Power Capital Trust II (the “Trust”), a business trust under the Business Trust Act (as defined, together with other capitalized terms, herein) pursuant to a Trust Agreement dated as of May 26, 2000 (the “Original Trust Agreement”) and a Certificate of Trust (the “Certificate of Trust”) filed with the Secretary of State of the State of Delaware on May 26, 2000;

WHEREAS, the sole purpose of the Trust shall be to issue and sell certain securities representing undivided beneficial ownership interests in the assets of the Trust, to invest the proceeds from such sales in the Junior Subordinated Notes issued by the Junior Subordinated Note Issuer and to engage in only those activities necessary or incidental thereto; and

WHEREAS, the parties hereto, by this Trust Agreement, amend and restate each and every term and provision of the Original Trust Agreement;

NOW, THEREFORE, it being the intention of the parties hereto to continue the Trust as a business trust under the Business Trust Act and that this Trust Agreement constitute the governing instrument of such business trust, the Trustees hereby declare that all assets contributed to the Trust be held in trust for the benefit of the Holders, from time to time, of the Securities representing undivided beneficial ownership interests in the assets of the Trust issued hereunder, subject to the provisions of this Trust Agreement.

ARTICLE 1

INTERPRETATION AND DEFINITIONS

SECTION 1.1  Interpretation and Definitions.    Unless the context otherwise requires:

(a)  capitalized terms used in this Trust Agreement but not defined in the preamble above have the meanings assigned to them in this Section 1.1;

(b)  a term defined anywhere in this Trust Agreement has the same meaning throughout;

(c)  all references to “the Trust Agreement” or “this Trust Agreement” are to this Trust Agreement as modified, supplemented or amended from time to time;

(d)  all references in this Trust Agreement to Articles, Sections, Recitals and Exhibits are to Articles and Sections of, or Recitals and Exhibits to, this Trust Agreement unless otherwise specified;

(e)  unless otherwise defined in this Trust Agreement, a term defined in the Trust Indenture Act has the same meaning when used in this Trust Agreement; and

(f)  a reference to the singular includes the plural and vice versa and a reference to any masculine form of a term shall include the feminine form of a term, as applicable.

(g)  the following terms have the following meanings:

“ADDITIONAL TAX SUMS” has the meaning specified in Section 7.1 of the Second Supplemental Indenture to the Indenture.

“ADMINISTRATIVE TRUSTEE” means any Trustee other than the Property Trustee and the Delaware Trustee.

“AFFILIATE” of any specified Person shall mean any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.

“AUTHORIZED OFFICER” of a Person means any Person that is authorized to bind such Person.

“BANKRUPTCY EVENT” means, with respect to any Person:

(a)  the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or of any substantial part of its property or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or

(b)  the institution by such Person of proceedings to be adjudicated bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any

2

applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt, or the taking of corporate action by such Person in furtherance of any such action.

“BENEFICIAL OWNER” means, for Trust Preferred Securities represented by a Global Security, the Person who acquires an interest in the Trust Preferred Securities which is reflected on the records of the Depositary through the Depositary Participants.

“BUSINESS DAY” means any day, other than a Saturday or Sunday, that is not a day on which banking institutions in the Borough of Manhattan, The City of New York or Richmond, Virginia are authorized or required by law, regulation or executive order to close, or a day on which the Corporate Trust Office or the Indenture Trustee’s principal corporate office is closed for business.

“BUSINESS TRUST ACT” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time, or any successor legislation.

“CERTIFICATE” means a Common Security Certificate or a Trust Preferred Security Certificate.

“CERTIFICATE OF TRUST” has the meaning specified in the Recitals hereto.

“CLOSING DATE” means the date or dates on which the Trust Preferred Securities are issued and sold.

“CODE” means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation. A reference to a specific section of the Code refers not only to such specific section but also to any corresponding provision of any federal tax statute enacted after the date of this Trust Agreement, as such specific section or corresponding provision is in effect on the date of application of the provisions of this Trust Agreement containing such reference.

“COMMISSION” means the Securities and Exchange Commission or any successor thereto.

“COMMON SECURITY” has the meaning specified in Section 7.1.

“COMMON SECURITY CERTIFICATE” means a definitive certificate in fully registered form representing one or more Common Securities, substantially in the form of Exhibit B hereto.

“COMMON SECURITIES HOLDER” means Virginia Electric and Power Company, in its capacity as purchaser and holder of all of the Common Securities issued by the Trust.

3

“CORPORATE TRUST OFFICE” means the office of the Property Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Trust Agreement is located at 450 West 33rd Street, 15^th Floor, New York, NY 10001.

“COVERED PERSON” means (a) any officer, director, shareholder, partner, member, representative, employee or agent of (i) the Trust or (ii) the Trust’s Affiliates; and (b) any Holder.

“DELAWARE TRUSTEE” means the Trustee meeting the eligibility requirements set forth in Section 6.2.

“DEPOSITARY” means, with respect to Securities issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities.

“DEPOSITARY PARTICIPANT” means a member of, or participant in, the Depositary.

“DIRECT ACTION” has the meaning specified in Section 3.8(e).

“DISTRIBUTION” means a distribution payable to Holders of Securities in accordance with Section 7.2.

“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation.

“FIDUCIARY INDEMNIFIED PERSON” has the meaning set forth in Section 9.4(b).

“FISCAL YEAR” has the meaning specified in Section 10.1.

“GLOBAL SECURITY” means a fully registered, global Trust Preferred Security Certificate.

“GUARANTEE” means the Guarantee Agreement, to be dated as of August 23, 2002, of the Sponsor in respect of the Securities.

“HOLDER” means any holder of Securities, as registered on the books and records of the Trust; provided, however, that in determining whether the Holders of the requisite Liquidation Amount of Trust Preferred Securities have voted on any matter provided for in this Trust Agreement, then for the purpose of such determination only (and not for any other purpose hereunder), if the Trust Preferred Securities remain in the form of one or more Global Securities and if the Depositary which is the holder of such Global Securities has sent an omnibus proxy to the Trust assigning voting rights to Depositary Participants to whose accounts the Trust Preferred Securities are credited on the record date, the term “Holders” shall mean such Depositary Participants acting at the direction of the Beneficial Owners.

“INDEMNIFIED PERSON” means a Junior Subordinated Note Issuer Indemnified Person or a Fiduciary Indemnified Person.

4

“INDENTURE” means the Subordinated Note Indenture, dated as of August 1, 1995, between the Junior Subordinated Note Issuer and JPMorgan Chase Bank (formerly known as Chemical Bank), as Trustee, as supplemented and amended by a Second Supplemental Indenture, to be dated as of August 1, 2002 and as further amended or supplemented by any other indenture supplemental thereto pursuant to which the Junior Subordinated Notes are to be issued to the Property Trustee.

“INDENTURE EVENT OF DEFAULT” has the meaning given to the term “Event of Default” in the Indenture.

“INDENTURE TRUSTEE” means JPMorgan Chase Bank, in its capacity as trustee under the Indenture until a successor is appointed thereunder, and thereafter means such successor trustee.

“INVESTMENT COMPANY” means an investment company as defined in the Investment Company Act and the regulations promulgated thereunder.

“INVESTMENT COMPANY ACT” means the Investment Company Act of 1940, as amended from time to time, or any successor legislation.

“INVESTMENT COMPANY EVENT” means the receipt by the Trust of an opinion of a nationally recognized independent counsel (an “Investment Company Act Opinion”), to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a “Change in 1940 Act Law”), there is more than an insubstantial risk that the Trust is or will be considered an “investment company” that is required to be registered under the Investment Company Act, which Change in 1940 Act Law becomes effective on or after the initial Closing Date.

“JUNIOR SUBORDINATED NOTES” shall mean the 7.375% Junior Subordinated Notes due July 30, 2042 to be issued by the Junior Subordinated Note Issuer under the Indenture and to be purchased by the Trust and held by the Property Trustee.

“JUNIOR SUBORDINATED NOTE ISSUER” shall mean Virginia Electric and Power Company, a Virginia corporation, in its capacity as issuer of the Junior Subordinated Notes under the Indenture.

“JUNIOR SUBORDINATED NOTE ISSUER INDEMNIFIED PERSON” shall mean (A) any Administrative Trustee, (B) any Affiliate of any Administrative Trustee, (C) any officers, directors, shareholders, members, partners, employees, representatives or agents of any Administrative Trustee or any Affiliate thereof or (D) any officer, employee or agent of the Trust or its Affiliates.

“LEGAL ACTION” has the meaning specified in Section 3.6(g).

“LIQUIDATION AMOUNT” means the stated amount of $25 per Security.

“LIST OF HOLDERS” has the meaning specified in Section 2.2(a).

5

“MAJORITY IN LIQUIDATION AMOUNT” means, except as provided in the terms of the Trust Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Securities, voting together as a single class, or, as the context may require, Holders of outstanding Trust Preferred Securities or Holders of outstanding Common Securities, voting separately as a class, who are the record owners of more than 50% of the aggregate Liquidation Amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class.

“NEW YORK STOCK EXCHANGE” means the New York Stock Exchange, Inc. or any successor thereto.

“OFFICERS’ CERTIFICATE” means, with respect to any Person, a certificate signed on behalf of such Person by two Authorized Officers of such Person. Any Officers’ Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement (other than pursuant to Section 2.4) shall include:

(a)  a statement that each officer signing the Officers’ Certificate has read the covenant or condition and the definitions relating thereto;

(b)  a brief statement of the nature and scope of the examination or investigation undertaken by each officer on behalf of such Person in rendering the Officers’ Certificate;

(c)  a statement that each such officer has made such examination or investigation as, in such officer’s opinion, is necessary to enable such officer on behalf of such Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d)  a statement as to whether, in the opinion of each such officer acting on behalf of such Person, such condition or covenant has been complied with; provided, that the term “Officers’ Certificate”, when used with reference to Administrative Trustees who are natural persons shall mean a certificate signed by two or more of the Administrative Trustees which otherwise satisfies the foregoing requirements.

“OPTION” has the meaning specified in Section 7.13(a).

“PAYING AGENT” has the meaning specified in Section 7.7.

“PAYMENT AMOUNT” has the meaning specified in Section 7.2(c).

“PERSON” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

“PROPERTY ACCOUNT” has the meaning specified in Section 3.8(c).

6

“PROPERTY TRUSTEE” means the Trustee meeting the eligibility requirements set forth in Section 6.3.

“PRO RATA” means pro rata to each Holder of Securities according to the aggregate Liquidation Amount of the Securities held by the relevant Holder in relation to the aggregate Liquidation Amount of all Securities outstanding.

“QUORUM” means a majority of the Administrative Trustees or, if there are only two Administrative Trustees, both of them.

“REDEMPTION/DISTRIBUTION NOTICE” has the meaning specified in Section 7.4(a) hereto.

“REDEMPTION PRICE” means the Liquidation Amount of the Securities to be redeemed, which amount will equal (i) the redemption price paid by the Junior Subordinated Note Issuer to repay or redeem, in whole or in part, the Junior Subordinated Notes held by the Trust plus an amount equal to accumulated and unpaid Distributions on such Securities through the date of their redemption or (ii) such lesser amount as will be received by the Trust in respect of the Junior Subordinated Notes so repaid or redeemed.

“RELATED PARTY” means, with respect to the Sponsor, any direct or wholly owned subsidiary of the Sponsor or any Person that owns, directly or indirectly, 100% of the outstanding voting securities of the Sponsor.

“RESPONSIBLE OFFICER” means, with respect to the Property Trustee, any officer with direct responsibility for the administration of this Trust Agreement and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer’s knowledge of and familiarity with the particular subject.

“SECURITIES” means the Common Securities and the Trust Preferred Securities.

“SECURITIES ACT” means the Securities Act of 1933, as amended from time to time, or any successor legislation.

“SPECIAL EVENT” means a Tax Event or an Investment Company Event.

“SPONSOR” means Virginia Electric and Power Company, a Virginia corporation, or any successor entity in a transaction involving the Sponsor that is permitted by Article Eight of the Indenture and pursuant to which the successor agrees in writing to perform the Sponsor’s obligations hereunder.

“SUCCESSOR DELAWARE TRUSTEE” has the meaning specified in Section 6.6(b).

“SUCCESSOR ENTITY” has the meaning specified in Section 3.15(b)(i).

“SUCCESSOR PROPERTY TRUSTEE” has the meaning specified in Section 6.6(b).

“SUCCESSOR SECURITY” has the meaning specified in Section 3.15(b)(i)b.

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“SUPER MAJORITY” has the meaning specified in Section 2.6(a)(ii).

“TAX EVENT” means the receipt by the Trust of an opinion of independent tax counsel experienced in such matters (“Tax Event Opinion”), to the effect that, as a result of (a) any amendment to, change in or announced prospective change in the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or (b) any official administrative written decision, action, pronouncement, or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which proposed change, pronouncement, decision or action is announced on or after the initial Closing Date, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days of the date of such opinion, subject to the United States federal income tax with respect to income received or accrued on the Junior Subordinated Notes, (ii) interest payable to the Trust by the Junior Subordinated Note Issuer on the Junior Subordinated Notes is not, or within 90 days of the date of such opinion will not be, deductible, in whole or in part, by the Junior Subordinated Note Issuer for United States federal income tax purposes, or (iii) the Trust is, or will be within 90 days of the date of such opinion, subject to a material amount of other taxes, duties or other governmental charges.

“10% IN LIQUIDATION AMOUNT” means, except as provided in the terms of the Trust Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Securities, voting together as a single class, or, as the context may require, Holders of outstanding Trust Preferred Securities or Holders of outstanding Common Securities, voting separately as a class, who are the record owners of 10% or more of the aggregate Liquidation Amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class.

“TRANCHE” means Securities issued after the initial Closing Date, which are of the same series as the Securities and have identical terms as the Securities, except for aggregate amount, the price at which Securities are sold to the public and the date of issuance.

“TREASURY REGULATIONS” means the income tax regulations, including temporary and proposed regulations, promulgated under the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“TRUST ENFORCEMENT EVENT” in respect of the Securities means (i) an Indenture Event of Default has occurred and is continuing in respect of the Junior Subordinated Notes or (ii) the voluntary or involuntary dissolution, winding up or termination of the Trust, except in connection with (A) the distribution of the Junior Subordinated Notes to the holders of the Securities, (B) the redemption of all of the Securities and (C) mergers, consolidations or amalgamations of the Trust permitted by this Trust Agreement.

“TRUST INDENTURE ACT” means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation.

“TRUST PREFERRED SECURITY” has the meaning specified in Section 7.1.

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“TRUST PREFERRED SECURITY CERTIFICATE” means a definitive certificate in fully registered form representing one or more Trust Preferred Securities, substantially in the form of Exhibit A.

“TRUSTEE” or “TRUSTEES” means each Person who has signed this Trust Agreement as a trustee, so long as such Person shall continue as a trustee in accordance with the terms hereof, and all other Persons who may from time to time be duly appointed, qualified and serving as Trustees in accordance with the provisions hereof, and references herein to a Trustee or the Trustees shall refer to such Person or Persons solely in their capacity as trustees hereunder.

“TRUST PROPERTY” means (i) the Junior Subordinated Notes, (ii) any cash on deposit in, or owing to the Property Account (as defined in Section 3.8(c)(i) herein) and (iii) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to this Trust Agreement.

ARTICLE 2

TRUST INDENTURE ACT

SECTION 2.1  Trust Indenture Act; Application.

(a)  This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions.

(b)  The Property Trustee shall be the only Trustee which is a Trustee for the purposes of the Trust Indenture Act.

(c)  If and to the extent that any provision of this Trust Agreement conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

(d)  The application of the Trust Indenture Act to this Trust Agreement shall not affect the Trust’s classification as a grantor trust for United States federal income tax purposes and shall not affect the nature of the Securities as equity securities representing undivided beneficial ownership interests in the assets of the Trust.

SECTION 2.2  Lists of Holders of Securities.

(a)  Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide the Property Trustee at any time when the Property Trustee is not also acting as Security Registrar for the Securities (i) except while the Trust Preferred Securities are represented by one or more Global Securities, at least five Business Days prior to the date for payment of Distributions, a list, in such form as the Property Trustee may reasonably require, of the names and addresses of the Holders of the Securities (“List of Holders”) as of the record date relating to the payment of such Distributions, and (ii) at any other time, within 30 days of receipt by the Trust of a written request from the Property Trustee for a List of Holders, as of a date no more than 15 days before such List of Holders is given to the Property Trustee; provided that neither

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the Sponsor nor the Administrative Trustees on behalf of the Trust shall be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Property Trustee by the Sponsor and the Administrative Trustees on behalf of the Trust. The Property Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it or which it receives in the capacity as Paying Agent (if acting in such capacity), provided that the Property Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders.

(b)  The Property Trustee shall comply with its obligations under, and shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

SECTION 2.3  Reports by the Property Trustee.

Within 60 days after May 15 of each year (commencing with the year of the first anniversary of the initial issuance of the Trust Preferred Securities), the Property Trustee shall provide to the Holders of the Trust Preferred Securities such reports as are required by Section 313(a) of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Property Trustee shall also comply with the other requirements of Section 313 of the Trust Indenture Act. The Sponsor shall promptly notify the Property Trustee when the Trust Preferred Securities are listed on any stock exchange.

SECTION 2.4  Periodic Reports to the Property Trustee.

Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if any) and the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act, provided that such compliance certificate shall be delivered on or before 120 days after the end of each calendar year of the Sponsor.

SECTION 2.5  Evidence of Compliance with Conditions Precedent.

Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers’ Certificate.

SECTION 2.6  Trust Enforcement Events; Waiver.

(a)  The Holders of a Majority in Liquidation Amount of the Trust Preferred Securities may, by vote or written consent, on behalf of the Holders of all of the Trust Preferred Securities, waive any past Trust Enforcement Event in respect of the Trust Preferred Securities and its consequences, provided that, if the underlying Indenture Event of Default:

(i)  is not waivable under the Indenture, the Trust Enforcement Event under the Trust Agreement shall also not be waivable; or

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(ii)  requires the consent or vote of the Holders of greater than a majority in principal amount of the Junior Subordinated Notes (a “Super Majority”) to be waived under the Indenture, the related Trust Enforcement Event under the Trust Agreement may only be waived by the vote or written consent of the Holders of at least the proportion in Liquidation Amount of the Trust Preferred Securities that the relevant Super Majority represents of the aggregate principal amount of the Junior Subordinated Notes outstanding.

The foregoing provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Trust Agreement and the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such default shall cease to exist, and any Trust Enforcement Event with respect to the Trust Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Trust Agreement and the Trust Preferred Securities, but no such waiver shall extend to any subsequent or other Trust Enforcement Event with respect to the Trust Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Trust Preferred Securities of a Trust Enforcement Event with respect to the Trust Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Common Securities of any such Trust Enforcement Event with respect to the Common Securities for all purposes of this Trust Agreement without any further act, vote, or consent of the Holders of the Common Securities.

(b)  The Holders of a Majority in Liquidation Amount of the Common Securities may, by vote or written consent, on behalf of the Holders of all of the Common Securities, waive any past Trust Enforcement Event in respect of the Common Securities and its consequences, provided that, if the underlying Indenture Event of Default:

(i)  is not waivable under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Trust Enforcement Event under the Trust Agreement as provided below in this Section 2.6(b), the Trust Enforcement Event under the Trust Agreement shall also not be waivable; or

(ii)  requires the consent or vote of a Super Majority to be waived under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Trust Enforcement Event under the Trust Agreement as provided below in this Section 2.6(b), the Trust Enforcement Event under the Trust Agreement may only be waived by the vote or written consent of the Holders of at least the proportion in Liquidation Amount of the Common Securities that the relevant Super Majority represents of the aggregate principal amount of the Junior Subordinated Notes outstanding; provided further, each Holder of Common Securities will be deemed to have waived any Trust Enforcement Event and all Trust Enforcement Events with respect to the Common Securities and the consequences thereof until all Trust Enforcement Events with respect to the Trust Preferred Securities have been cured, waived or otherwise eliminated, and until such Trust Enforcement Events with respect to the Trust Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the Holders of the Trust Preferred Securities and only the Holders of the Trust Preferred Securities will have the right to direct the Property Trustee in accordance with the terms of the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such

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Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this Trust Agreement and the Securities, as permitted by the Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon such cure, waiver or other elimination, any such default shall cease to exist and any Trust Enforcement Event with respect to the Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Trust Agreement, but no such waiver shall extend to any subsequent or other Trust Enforcement Event with respect to the Common Securities or impair any right consequent thereon.

(c)  A waiver of an Indenture Event of Default by the Property Trustee at the direction of the Holders of the Trust Preferred Securities constitutes a waiver of the corresponding Trust Enforcement Event with respect to the Trust Preferred Securities under this Trust Agreement. The foregoing provisions of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Trust Agreement and the Securities, as permitted by the Trust Indenture Act.

SECTION 2.7  Trust Enforcement Event; Notice.

(a)  The Property Trustee shall, within 90 days after the occurrence of a Trust Enforcement Event actually known to a Responsible Officer of the Property Trustee, transmit by mail, first class postage prepaid, to the Holders of the Securities, notices of all such defaults with respect to the Securities, unless such defaults have been cured before the giving of such notice (the term “defaults” for the purposes of this Section 2.7(a) and (b) being hereby defined to be an Indenture Event of Default, not including any periods of grace provided for therein and irrespective of the giving of any notice provided therein); provided that, except for a default in the payment of principal of (or premium, if any) or interest on any of the Junior Subordinated Notes, the Property Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Property Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Securities.

(b)  The Property Trustee shall not be deemed to have knowledge of any default except:

(i)  a default under Sections 501(1) and (3) of the Indenture; or

(ii)  any default as to which the Property Trustee shall have received written notice pursuant to Section 3.10(a)(xiv) or of which a Responsible Officer of the Property Trustee charged with the administration of this Trust Agreement shall have actual knowledge.

ARTICLE 3

ORGANIZATION

SECTION 3.1  Name and Organization.

The Trust hereby continued is named “Virginia Power Capital Trust II” as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Securities, the Property Trustee and the Delaware Trustee. The Trust’s activities

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may be conducted under the name of the Trust or any other name deemed advisable by the Administrative Trustees.

SECTION 3.2  Office.

The address of the principal office of the Trust is c/o Virginia Electric and Power Company, 120 Tredegar Street, Richmond, Virginia 23219. On ten (10) Business Days’ written notice to the Holders of Securities, the Property Trustee and the Delaware Trustee, the Administrative Trustees may designate another principal office.

SECTION 3.3  Purpose.

The exclusive purposes and functions of the Trust are (a) to issue and sell Securities, including, from time to time, Tranches thereof, and use the gross proceeds from such sale to acquire the Junior Subordinated Notes, and (b) except as otherwise limited herein, to engage in only those other activities necessary or incidental thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments, pledge any of its assets or otherwise undertake (or permit to be undertaken) any activity that would cause the Trust not to be classified as a grantor trust for United States federal income tax purposes.

By the acceptance of this Trust, none of the Trustees, the Sponsor, the Holders of the Trust Preferred Securities or Common Securities or the Beneficial Owners will take any position for United States federal income tax purposes which is contrary to the classification of the Trust as a grantor trust.

SECTION 3.4  Authority.

Subject to the limitations provided in this Trust Agreement and to the specific duties of the Property Trustee, the Administrative Trustees shall have exclusive authority to carry out the purposes of the Trust. An action taken by the Administrative Trustees in accordance with their powers shall constitute the act of and serve to bind the Trust and an action taken by the Property Trustee on behalf of the Trust in accordance with its powers shall constitute the act of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set forth in this Trust Agreement.

(a)  Except as expressly set forth in this Trust Agreement and except if a meeting of the Administrative Trustees is called with respect to any matter over which the Administrative Trustees have power to act, any power of the Administrative Trustees may be exercised by, or with the consent of, any one such Administrative Trustee.

(b)  Unless otherwise determined by the Administrative Trustees, and except as otherwise required by the Business Trust Act or applicable law, any Administrative Trustee is authorized to execute on behalf of the Trust any documents which the Administrative Trustees have the power and authority to cause the Trust to execute pursuant to Section 3.6(b), provided, that the registration statements referred to in Section 3.6(b)(ii), including any amendments thereto, shall be signed by or on behalf of a majority of the Administrative Trustees; and

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(c)  Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purposes of signing any documents which the Administrative Trustees have power and authority to cause the Trust to execute pursuant to Section 3.6.

SECTION 3.5  Title to Property of the Trust.

Except as provided in Section 3.8 with respect to the Junior Subordinated Notes and the Property Account or as otherwise provided in this Trust Agreement, legal title to all assets of the Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the assets of the Trust, but shall have an undivided beneficial ownership interest in the assets of the Trust.

SECTION 3.6  Powers and Duties of the Administrative Trustees.

The Administrative Trustees shall have the exclusive power, duty and authority to cause the Trust to engage in the following activities:

(a)  issue and sell the Trust Preferred Securities (including, from time to time, Tranches thereof) and the Common Securities (including, from time to time, Tranches thereof) in accordance with this Trust Agreement; provided, however, that the Trust may issue no more than one series of Trust Preferred Securities and no more than one series of Common Securities, and, provided further, that there shall be no interests in the Trust other than the Securities, and the issuance of Securities (including Tranches) shall be limited to simultaneous issuance of both Preferred Securities and Common Securities on each Closing Date;

(b)  in connection with each issue and sale of the Trust Preferred Securities, at the direction of the Sponsor, to:

(i)  execute and file an application (including any amendments thereto), prepared by the Sponsor, to the New York Stock Exchange or any other national stock exchange or automated quotation system for listing of any Trust Preferred Securities, the Guarantee and the Junior Subordinated Notes; provided, however, that the Sponsor shall also have the authority to execute and file any such application or amendments;

(ii)  execute and file with the Commission one or more registration statements on the applicable forms prepared by the Sponsor, including any amendments thereto, pertaining to the Trust Preferred Securities, the Guarantee and the Junior Subordinated Notes; provided, however, that the Sponsor shall also have the authority to execute and file any such registration statement or amendments;

(iii)  execute and file any documents prepared by the Sponsor, or take any acts as determined by the Sponsor to be necessary, in order to qualify or register all or part of the Trust Preferred Securities in any State in which the Sponsor has determined to qualify or register such Trust Preferred Securities for sale; provided, however, that the Sponsor shall also have the authority to execute and file any such documents or take such acts; and

(iv)  negotiate the terms of and execute and enter into an underwriting agreement and other related agreements providing for the sale of the Trust Preferred Securities;

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provided, however, that the Sponsor shall also have the authority to execute and file any such documents or take such acts;

(c)  to acquire the Junior Subordinated Notes with the proceeds of each sale of the Trust Preferred Securities and the Common Securities; provided, however, that the Administrative Trustees shall cause legal title to the Junior Subordinated Notes to be held of record in the name of the Property Trustee for the benefit of the Holders of the Trust Preferred Securities and the Holders of the Common Securities;

(d)  to give the Sponsor and the Property Trustee prompt written notice of the occurrence of a Special Event; provided that the Administrative Trustees shall consult with the Sponsor before taking or refraining from taking any action in relation to any such Special Event;

(e)  to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including and with respect to, for the purposes of Section 316(c) of the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue relevant notices to the Holders of Trust Preferred Securities and Holders of Common Securities as to such actions and applicable record dates;

(f)  to take all actions and perform such duties as may be required of the Administrative Trustees pursuant to the terms of this Trust Agreement and the Securities;

(g)  to bring or defend, pay, collect, compromise, arbitrate, resort to legal action or otherwise adjust claims or demands of or against the Trust (“Legal Action”), unless pursuant to Section 3.8(e), the Property Trustee has the exclusive power to bring such Legal Action;

(h)  to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors and consultants to conduct only those services that the Administrative Trustees have authority to conduct directly, and to and pay reasonable compensation for such services;

(i)  to cause the Trust to comply with the Trust’s obligations under the Trust Indenture Act;

(j)  to give the certificate required by Section 314(a)(4) of the Trust Indenture Act to the Property Trustee, which certificate may be executed by any Administrative Trustee;

(k)  to incur expenses that are necessary or incidental to carry out any of the purposes of the Trust;

(l)  to act as, or appoint another Person to act as, registrar and transfer agent for the Securities;

(m)  to give prompt written notice to the Holders of the Securities of any notice received from the Junior Subordinated Note Issuer of its election to defer payments of interest on the Junior Subordinated Notes by extending the interest payment period under the Junior Subordinated Notes as authorized by the Indenture;

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(n)  to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust’s valid existence, rights, franchises and privileges as a statutory business trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Trust Preferred Securities and the Holders of the Common Securities or to enable the Trust to effect the purposes for which the Trust was created;

(o)  to take any action, not inconsistent with applicable law, that the Administrative Trustees determine in their discretion to be necessary or desirable in carrying out the purposes and functions of the Trust as set out in Section 3.3 or the activities of the Trust as set out in this Section 3.6, including, but not limited to:

(i)  causing the Trust not to be deemed to be an Investment Company required to be registered under the Investment Company Act;

(ii)  causing the Trust to be classified as a grantor trust for United States federal income tax purposes; and

(iii)  cooperating with the Junior Subordinated Note Issuer to ensure that the Junior Subordinated Notes will be treated as indebtedness of the Junior Subordinated Note Issuer for United States federal income tax purposes.

(p)  to take all action necessary to cause all applicable tax returns and tax information reports that are required to be filed with respect to the Trust to be duly prepared and filed by the Administrative Trustees, on behalf of the Trust;

(q)  to execute and deliver all documents or instruments, perform all duties and powers, and do all things for and on behalf of the Trust in all matters necessary or incidental to the foregoing; and

(r)  to cause to be delivered to the Property Trustee an Officer’s Certificate with respect to each issuance of a Tranche of Securities.

The Administrative Trustees shall exercise the powers set forth in this Section 3.6 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Administrative Trustees shall have no power to, and shall not, take any action that is inconsistent with the purposes and functions of the Trust set forth in Section 3.3.

Subject to this Section 3.6, the Administrative Trustees shall have none of the powers or the authority of the Property Trustee set forth in Section 3.8.

Any expenses incurred by the Administrative Trustees pursuant to this Section 3.6 shall be reimbursed by the Junior Subordinated Note Issuer.

SECTION 3.7  Prohibition of Actions by the Trust and the Trustees.

(a)  The Trust shall not, and none of the Trustees (including the Property Trustee) shall cause the Trust to, engage in any activity other than as required or authorized by this Trust

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Agreement. In particular, the Trust shall not and none of the Trustees (including the Property Trustee) shall cause the Trust to:

(i)  invest any proceeds received by the Trust from holding the Junior Subordinated Notes, but shall distribute all such proceeds to Holders of Securities pursuant to the terms of this Trust Agreement and of the Securities;

(ii)  acquire any assets other than as expressly provided herein;

(iii)  possess Trust Property for other than a Trust purpose;

(iv)  make any loans other than loans represented by the Junior Subordinated Notes or incur any indebtedness;

(v)  possess any power or otherwise act in such a way as to vary the Trust assets;

(vi)  possess any power or otherwise act in such a way as to vary the terms of the Securities in any way whatsoever (except to the extent expressly authorized in this Trust Agreement or by the terms of the Securities);

(vii)  issue any securities or other evidences of beneficial ownership of, or beneficial interest in, the Trust other than the Securities;

(viii)  other than as provided in this Trust Agreement or by the terms of the Securities, (A) direct the time, method and place of exercising any trust or power conferred upon the Indenture Trustee with respect to the Junior Subordinated Notes, (B) waive any past default that is waivable under the Indenture, (C) exercise any right to rescind or annul any declaration that the principal of all the Junior Subordinated Notes shall be due and payable, or (D) consent to any amendment, modification or termination of the Indenture or the Junior Subordinated Notes where such consent shall be required unless the Trust shall have received an opinion of counsel to the effect that such amendment or modification will not cause more than an insubstantial risk that the Trust will be deemed an Investment Company required to be registered under the Investment Company Act, or the Trust will not be classified as a grantor trust for United States federal income tax purposes;

(ix)  take any action inconsistent with the status of the Trust as a grantor trust for United States federal income tax purposes; or

(x)  revoke any action previously authorized or approved by vote of the Holders of the Trust Preferred Securities except pursuant to a subsequent vote of the Holders of the Trust Preferred Securities.

SECTION 3.8  Powers and Duties of the Property Trustee.

(a)  The legal title to the Junior Subordinated Notes shall be owned by and held of record in the name of the Property Trustee for the benefit of the Trust and the Holders of the Securities. The right, title and interest of the Property Trustee to the Junior Subordinated Notes

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shall vest automatically in each Person who may hereafter be appointed as Property Trustee in accordance with Section 6.6. Such vesting and cessation of title shall be effective whether or not conveyancing documents with regard to the Junior Subordinated Notes have been executed and delivered.

(b)  The Property Trustee shall not transfer its right, title and interest in the Junior Subordinated Notes to the Administrative Trustees or to the Delaware Trustee (if the Property Trustee does not also act as Delaware Trustee).

(c)  The Property Trustee shall:

(i)  establish and maintain a segregated non-interest bearing trust account (the “Property Account”) in the name of and under the exclusive control of the Property Trustee on behalf of the Holders of the Securities and, upon the receipt of payments of funds made in respect of the Junior Subordinated Notes held by the Property Trustee, deposit such funds into the Property Account and make payments to the Holders of the Trust Preferred Securities and Holders of the Common Securities from the Property Account in accordance with Section 7.2. Funds in the Property Account shall be held uninvested until disbursed in accordance with this Trust Agreement. The Property Account shall be an account that is maintained with a banking institution the rating on whose long-term unsecured indebtedness is at least equal to the rating assigned to the Trust Preferred Securities by a “nationally recognized statistical rating organization”, within the meaning of Rule 436(g)(2) under the Securities Act;

(ii)  engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Trust Preferred Securities and the Common Securities to the extent the Junior Subordinated Notes are redeemed or mature; and

(iii)  upon written notice of distribution issued by the Administrative Trustees in accordance with the terms of the Securities, engage in such ministerial activities as so directed and as shall be necessary or appropriate to effect the distribution of the Junior Subordinated Notes to Holders of Securities upon the occurrence of a Special Event.

(d)  The Property Trustee shall take all actions and perform such duties as may be specifically required of the Property Trustee pursuant to the terms of this Trust Agreement and the Securities.

(e)  Subject to Section 3.9(a), the Property Trustee may take any Legal Action which arises out of or in connection with a Trust Enforcement Event of which a Responsible Officer of the Property Trustee has actual knowledge or the Property Trustee’s duties and obligations under this Trust Agreement or the Trust Indenture Act; PROVIDED, HOWEVER, that if a Trust Enforcement Event has occurred and is continuing and such event is attributable to the failure of the Junior Subordinated Note Issuer to pay interest, principal or other required payments on the Junior Subordinated Notes on the date such interest, principal or other required payments are otherwise payable (or in the case of redemption, on the redemption date), then, any holder of the corresponding series of Trust Preferred Securities issued by the Trust shall have the right, upon the occurrence of a Trust Enforcement Event described above, to institute a suit directly against the Junior Subordinated Note Issuer (a “Direct Action”) for enforcement of payment to such

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holder of principal of (including premium, if any) and interest (including any Additional Interest, as defined in Section 2.5 of the Second Supplemental Indenture to the Indenture) on the Junior Subordinated Notes having a principal amount equal to the aggregate Liquidation Amount of such Trust Preferred Securities of the corresponding series held by such holder. Notwithstanding anything to the contrary in this Trust Agreement or the Indenture, the Junior Subordinated Note Issuer shall have the right to set-off any payment it is otherwise required to make under the Indenture in respect of any Trust Preferred Security to the extent the Junior Subordinated Note Issuer has heretofore made, or is currently on the date of such payment making, a payment under the Guarantee relating to such Trust Preferred Security.

(f)  The Property Trustee shall continue to serve as a Trustee until either:

(i)  the Trust has been completely liquidated and the proceeds of the liquidation distributed to the Holders of Securities pursuant to the terms of the Securities; or

(ii)  a Successor Property Trustee has been appointed and has accepted that appointment in accordance with Section 6.6.

(g)  The Property Trustee shall have the legal power to exercise all of the rights, powers and privileges of a holder of Junior Subordinated Notes under the Indenture and, if a Trust Enforcement Event actually known to a Responsible Officer of the Property Trustee occurs and is continuing, the Property Trustee may, for the benefit of Holders of the Securities, enforce its rights as holder of the Junior Subordinated Notes subject to the rights of the Holders pursuant to this Trust Agreement and the terms of the Securities.

(h)  Subject to this Section 3.8, the Property Trustee shall have none of the duties, liabilities, powers or the authority of the Administrative Trustees set forth in Section 3.6.

The Property Trustee shall exercise the powers set forth in this Section 3.8 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Property Trustee shall have no power to, and shall not, take any action that is inconsistent with the purposes and functions of the Trust set out in Section 3.3.

SECTION 3.9  Certain Duties and Responsibilities of the Property Trustee.

(a)  The Property Trustee, before the occurrence of any Trust Enforcement Event and after the curing of all Trust Enforcement Events that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Trust Agreement and no implied covenants shall be read into this Trust Agreement against the Property Trustee. In case a Trust Enforcement Event has occurred (that has not been cured or waived pursuant to Section 2.6) of which a Responsible Officer of the Property Trustee has actual knowledge, the Property Trustee shall exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

(b)  No provision of this Trust Agreement shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

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(i)  prior to the occurrence of a Trust Enforcement Event and after the curing or waiving of all such Trust Enforcement Events that may have occurred:

a.  the duties and obligations of the Property Trustee shall be determined solely by the express provisions of this Trust Agreement and the Property Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Trust Agreement, and no implied covenants or obligations shall be read into this Trust Agreement against the Property Trustee; and

b.  in the absence of bad faith on the part of the Property Trustee, the Property Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Property Trustee and conforming to the requirements of this Trust Agreement; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Property Trustee, the Property Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Trust Agreement;

(ii)  the Property Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts;

(iii)  the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement;

(iv)  no provision of this Trust Agreement shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Trust Agreement or indemnity reasonably satisfactory to the Property Trustee against such risk or liability is not reasonably assured to it;

(v)  the Property Trustee’s sole duty with respect to the custody, safe-keeping and physical preservation of the Junior Subordinated Notes and the Property Account shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement and the Trust Indenture Act;

(vi)  the Property Trustee shall have no duty or liability for or with respect to the value, genuineness, existence or sufficiency of the Junior Subordinated Notes or the payment of any taxes or assessments levied thereon or in connection therewith;

(vii)  the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Sponsor. Money held by the Property

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Trustee need not be segregated from other funds held by it except in relation to the Property Account maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent otherwise required by law; and

(viii)  the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Sponsor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for any default or misconduct of the Administrative Trustees or the Sponsor.

SECTION 3.10  Certain Rights of Property Trustee.

(a)  Subject to the provisions of Section 3.9:

(i)  the Property Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties;

(ii)  any direction or act of the Sponsor or the Administrative Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers’ Certificate;

(iii)  whenever in the administration of this Trust Agreement, the Property Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers’ Certificate which, upon receipt of such request, shall be promptly delivered by the Sponsor or the Administrative Trustees;

(iv)  the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any re-recording, re-filing or registration thereof;

(v)  the Property Trustee may consult with counsel of its choice or other experts and the advice or opinion of such counsel and experts with respect to legal matters or advice within the scope of such experts’ area of expertise shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion, such counsel may be counsel to the Property Trustee or the Sponsor or any of its Affiliates, and may include any of its employees. The Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction;

(vi)  the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Property Trustee security and indemnity, reasonably satisfactory to the Property Trustee, against the costs, expenses (including attorneys’ fees and expenses and the expenses of the Property Trustee’s agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such

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reasonable advances as may be requested by the Property Trustee; provided that, nothing contained in this Section 3.10(a) shall be taken to relieve the Property Trustee, upon the occurrence of a Trust Enforcement Event, of its obligation to exercise the rights and powers vested in it by this Trust Agreement in the manner provided by Section 3.9(a);

(vii)  the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Property Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit;

(viii)  the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys and the Property Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(ix)  any action taken by the Property Trustee or its agents hereunder shall bind the Trust and the Holders of the Securities, and the signature of the Property Trustee or its agents alone shall be sufficient and effective to perform any such action and no third party shall be required to inquire as to the authority of the Property Trustee to so act or as to its compliance with any of the terms and provisions of this Trust Agreement, both of which shall be conclusively evidenced by the Property Trustee’s or its agent’s taking such action;

(x)  whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee (i) may request instructions from the Holders of the Securities which instructions may only be given by the Holders of the same proportion in Liquidation Amount of the Securities as would been entitled to direct the Property Trustee under the terms of the Securities in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in conclusively relying on or acting in or accordance with such instructions;

(xi)  except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement;

(xii)  the Property Trustee shall not be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Trust Agreement, except if such breach or failure is due to any gross negligence or willful misconduct of the Property Trustee.;

(xiii)  without prejudice to any other rights available to the Property Trustee under applicable law, when the Property Trustee incurs expenses or renders services in connection with a bankruptcy, such expenses (including the fees and expenses of its counsel) and

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the compensation for such services are intended to constitute expenses of administration under any bankruptcy law or law relating to creditors rights generally;

(xiv)  the Property Trustee shall not be charged with knowledge of a Trust Enforcement Event unless a Responsible Officer of the Property Trustee obtains actual knowledge of such event or the Property Trustee receives written notice of such event from Holders holding more than a Majority in Liquidation Amount of the Trust Preferred Securities; and

(b)  No provision of this Trust Agreement shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee shall be construed to be a duty.

SECTION 3.11  Delaware Trustee.

Notwithstanding any other provision of this Trust Agreement other than Section 6.2, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Administrative Trustees or the Property Trustee described in this Trust Agreement. Except as set forth in Section 6.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807(a) of the Business Trust Act. In the event the Delaware Trustee shall at any time be required to take any action or perform any duty hereunder with respect to the Trust, the Delaware Trustee shall be entitled to all of the same rights as the Property Trustee listed in Section 3.9(b) and Section 3.10. No implied covenants or obligations shall be read into this Trust Agreement against the Delaware Trustee. It is expressly understood and agreed by the parties hereto that in fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust (i) any agreements or instruments executed and delivered by Chase Manhattan Bank USA, National Association are executed and delivered not in its individual capacity but solely as Delaware Trustee under this Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements by Chase Manhattan Bank USA, National Association in its individual capacity but is made and intended for the purpose of binding only the Trust, and (iii) under no circumstances shall Chase Manhattan Bank USA, National Association in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Trust Agreement, except if such breach or failure is due to any gross negligence or willful misconduct of the Delaware Trustee.

SECTION 3.12  Execution of Documents.

Unless otherwise determined by the Administrative Trustees, and except as otherwise required by the Business Trust Act or applicable law, any Administrative Trustee is authorized to execute on behalf of the Trust any documents that the Administrative Trustees have the power

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and authority to execute pursuant to Section 3.6; provided that, the registration statements referred to in Section 3.6(b)(ii), including any amendments thereto, shall be signed by or on behalf of a majority of the Administrative Trustees.

SECTION 3.13  Not Responsible for Recitals or Issuance of Securities.

The recitals contained in this Trust Agreement and the Securities shall be taken as the statements of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the value or condition of the property of the Trust or any part thereof. The Trustees make no representations as to the validity or sufficiency of this Trust Agreement, the Securities, the Junior Subordinated Notes or the Indenture.

SECTION 3.14  Duration of Trust.

The Trust shall exist until terminated pursuant to the provisions of Article 8 hereof.

SECTION 3.15  Mergers.

(a)  The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any Person, except as described in Section 3.15(b) and (c) or Section 8.2.

(b)  The Trust may, at the request of the Sponsor and with the consent of the Administrative Trustees or, if there are more than two, a majority of the Administrative Trustees and without the consent of the Holders of the Securities, the Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties substantially as an entirety to a trust organized as such under the laws of any State; provided, that:

(i)  if the Trust is not the successor, such successor entity (the “Successor Entity”) either:

a.  expressly assumes all of the obligations of the Trust with respect to the Securities; or

b.  substitutes for the Trust Preferred Securities other securities having substantially the same terms as the Trust Preferred Securities (the “Successor Securities”) so long as the Successor Securities rank the same as the Trust Preferred Securities rank in priority with respect to Distributions and payments upon liquidation, redemption and otherwise;

(ii)  if the Trust is not the successor Entity, the Sponsor expressly appoints a trustee of such Successor Entity that possesses the same powers and duties as the Property Trustee as the holder of the Junior Subordinated Notes;

(iii)  the Trust Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities

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exchange or with any other or organization on which the Trust Preferred Securities are then listed or quoted;

(iv)  such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Trust Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization;

(v)  such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Trust Preferred Securities (including any Successor Securities) in any material respect, other than with respect to any dilution of the Holders’ interest in the new entity;

(vi)  such Successor Entity has a purpose substantially identical to that of the Trust;

(vii)  prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease the Sponsor has received an opinion of independent counsel to the Trust experienced in such matters to the effect that:

a.  such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Trust Preferred Securities (including any Successor Securities) in any material respect, other than with respect to any dilution of the Holders’ interest in the new entity;

b.  following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease neither the Trust nor the Successor Entity will be required to register as an Investment Company; and

c.  following such merger, consolidation, amalgamation or replacement, the Trust (or the Successor Entity) will continue to be classified as a grantor trust for United States federal income tax purposes;

(viii)  the Sponsor or any permitted successor or assignee owns all of the common securities and guarantees the obligations of such Successor Entity under the Successor Securities at least to the extent provided by the Guarantee; and

(ix)  such Successor Entity expressly assumes all of the obligations of the Trust with respect to the Trustees.

(c)  Notwithstanding Section 3.15(b), the Trust shall not, except with the consent of Holders of 100% in aggregate Liquidation Amount of the Securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to, any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it, if in the opinion of a nationally recognized tax counsel experienced in such matters, such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or Successor Entity to be classified as other

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than a grantor trust for United States federal income tax purposes and each Holder of the Securities not to be treated as owning an undivided interest in the Junior Subordinated Notes.

SECTION 3.16  Property Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the Trust or any other obligor upon the Securities or the property of the Trust or of such other obligor or their creditors, the Property Trustee (irrespective of whether any Distributions on the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Property Trustee shall have made any demand on the Trust for the payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise:

(a)  to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Securities (or, if the Securities are original issue discount Securities, such portion of the Liquidation Amount as may be specified in the terms of such Securities) and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

(b)  to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee.

Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement adjustment or compensation affecting the Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding.

ARTICLE 4

SPONSOR

SECTION 4.1  Responsibilities of the Sponsor.

In connection with the issue and sale of the Trust Preferred Securities (including, from time to time, Tranches thereof), the Sponsor shall have the exclusive right and responsibility to engage in the following activities:

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(a)  to prepare for filing by the Trust with the Commission under the Securities Act or the Exchange Act one or more registration statements on the applicable forms, including any amendments thereto, pertaining to the Trust Preferred Securities, the Guarantee and the Junior Subordinated Notes;

(b)  to determine the States in which to take appropriate action to qualify or register for sale all or part of the Trust Preferred Securities and to do any and all such acts, other than actions which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such States;

(c)  to prepare for filing by the Trust an application to the New York Stock Exchange, Inc. or any other national stock exchange or the NASDAQ Stock Market for listing upon notice of issuance of any Trust Preferred Securities, the Guarantee and the Junior Subordinated Notes; and

(d)  to negotiate the terms of and to execute on behalf of the Trust an underwriting agreement and other related agreements providing for each sale of the Trust Preferred Securities.

SECTION 4.2  Indemnification and Fees and Expenses of the Trustees.    The Sponsor, in its capacity as Junior Subordinated Note Issuer, agrees

(a)  to pay to the Property Trustee and the Delaware Trustee from time to time such compensation as shall be agreed in writing with the Sponsor for all services rendered by them hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); and

(b)  to reimburse the Property Trustee and the Delaware Trustee upon request for all reasonable expenses, disbursements and advances incurred or made by such Trustee in accordance with any provision of this Trust Agreement (including the reasonable compensation and the reasonable expenses and disbursements of their duly authorized agents and counsel), except any such expense, disbursement or advance as may be attributable to their gross negligence or bad faith.

The provisions of this Section 4.2 shall survive the resignation or removal of the Delaware Trustee or the Property Trustee or the termination of this Trust Agreement.

ARTICLE 5

TRUST COMMON SECURITIES HOLDER

SECTION 5.1  Junior Subordinated Note Issuer’s Purchase of Common Securities.

On each applicable Closing Date, the Junior Subordinated Note Issuer will purchase all of the Common Securities issued by the Trust on such Closing Date, for an amount at least equal to 3% of the capital of the Trust at such time, at the same time as Trust Preferred Securities issued on such Closing Date are sold.

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The aggregate stated Liquidation Amount of Common Securities outstanding at any time shall not be less than 3% of the capital of the Trust.

SECTION 5.2  Covenants of the Common Securities Holder.

For so long as the Trust Preferred Securities remain outstanding, the Common Securities Holder will covenant (i) to maintain, directly or indirectly, 100% ownership of the Common Securities, (ii) to cause the Trust to remain a statutory business trust and not to voluntarily dissolve, wind up, liquidate or be terminated, except as permitted by this Trust Agreement, (iii) to use its commercially reasonable efforts to ensure that the Trust will not be an investment company for purposes of the Investment Company Act, and (iv) to take no action which would be reasonably likely to cause the Trust to be classified as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes.

ARTICLE 6

TRUSTEES

SECTION 6.1  Number of Trustees.

The number of Trustees initially shall be four, and:

(a)  at any time before the initial issuance of any Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees; and

(b)  after the initial issuance of Securities, the number of Trustees may be increased or decreased by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities or by written consent in lieu of such meeting; provided that the number of Trustees shall be at least three; and provided further that (i) the Delaware Trustee, in the case of a natural person, shall be a person who is a resident of the State of Delaware or that, if not a natural person, is an entity which has its principal place of business in the State of Delaware and otherwise meets the requirements of applicable law; (ii) at least one Administrative Trustee is an employee or officer of, or is affiliated with, the Sponsor; and (iii) one Trustee shall be the Property Trustee for so long as this Trust Agreement is required to qualify as an indenture under the Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it meets the applicable requirements.

SECTION 6.2  Delaware Trustee; Eligibility

If required by the Business Trust Act, one Trustee (which may be the Property Trustee) shall be:

(a)  a natural person who is a resident of the State of Delaware; or

(b)  if not a natural person, an entity which has its principal place of business in the State of Delaware, and otherwise meets the requirements of applicable law, provided that, if the Property Trustee has its principal place of business in the State of Delaware and otherwise meets

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the requirements of applicable law, then the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall have no application.

SECTION 6.3  Property Trustee; Eligibility.

(a)  There shall at all times be one Trustee (which may be the Delaware Trustee) which shall act as Property Trustee which shall:

(i)  not be an Affiliate of the Sponsor; and

(ii)  be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or other Person permitted by the Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust owners, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then for the purposes of this Section 6.3(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

(b)  If at any time the Property Trustee shall cease to be eligible to so act under Section 6.3(a), the Property Trustee shall immediately resign in the manner and with the effect set forth in Section 6.6(c).

(c)  If the Property Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee and the Holder of the Common Securities (as if it were the obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act, subject to the penultimate paragraph thereof.

(d)  The Guarantee, the Amended and Restated Trust Agreement of Virginia Power Capital Trust I dated as of August 31, 1995 among the Sponsor, JPMorgan Chase Bank (formerly known as Chemical Bank), as Property Trustee, Chase Manhattan Bank USA, National Association (successor to Chemical Bank Delaware), as Delaware Trustee and the Administrative Trustees named therein, and the Guarantee Agreement relating to Virginia Power Capital Trust I dated as of August 31, 1995 between the Sponsor, as Guarantor, and JPMorgan Chase Bank (formerly known as Chemical Bank), as Trustee, shall be deemed to be specifically described in this Trust Agreement for purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.

SECTION 6.4  Qualifications of Administrative Trustees and Delaware Trustee Generally.

Each Administrative Trustee and the Delaware Trustee (unless the Property Trustee also acts as Delaware Trustee) shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more Authorized Officers.

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SECTION 6.5  Initial Administrative Trustees.

The initial Administrative Trustees shall be: G. Scott Hetzer and James P. Carney, the business address of each of whom is c/o Virginia Electric and Power Company, 120 Tredegar Street, Richmond, Virginia 23219.

SECTION 6.6  Appointment, Removal and Resignation of Trustees.

(a)  Subject to Section 6.6(b), Trustees may be appointed or removed without cause at any time:

(i)  until the initial issuance of any Securities, by written instrument executed by the Sponsor;

(ii)  after the initial issuance of any Securities (but prior to the occurrence of an Indenture Event of Default), by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities or by written consent in lieu of such meeting; and

(iii)  after the initial issuance of the Trust Preferred Securities and the occurrence of an Indenture Event of Default, by vote of the Holders of a Majority in Liquidation Amount of the Trust Preferred Securities; provided, however, that the Administrative Trustees may still be appointed or removed without cause in such circumstance, by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities or by written consent in lieu of such meeting.

(b)  The Trustee that acts as Property Trustee shall not be removed in accordance with Section 6.6(a) until a successor Trustee possessing the qualifications to act as Property Trustee under Section 6.3(a) (a “Successor Property Trustee”) has been appointed and has accepted such appointment by written instrument executed by such Successor Property Trustee and delivered to the Administrative Trustees and the Sponsor. The Trustee that acts as Delaware Trustee shall not be removed in accordance with Section 6.6(a) until a successor Trustee possessing the qualifications to act as Delaware Trustee under Sections 6.2 and 6.4 (a “Successor Delaware Trustee”) has been appointed and has accepted such appointment by written instrument executed by such Successor Delaware Trustee and delivered to the Administrative Trustees and the Sponsor.

(c)  A Trustee appointed to office shall hold office until his or its successor shall have been appointed, until his death or its dissolution or until his or its removal or resignation. Any Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or upon such later date as is specified therein; provided, however, that:

(i)  No such resignation of the Trustee that acts as the Property Trustee shall be effective:

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a.  until a Successor Property Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Property Trustee and delivered to the Trust, the Sponsor and the resigning Property Trustee; or

b.  until the assets of the Trust have been completely liquidated and the proceeds thereof distributed to the holders of the Securities; and

(ii)  no such resignation of the Trustee that acts as the Delaware Trustee shall be effective until a Successor Delaware Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Delaware Trustee and delivered to the Trust, the Sponsor and the resigning Delaware Trustee.

(d)  The Holders of the Common Securities shall use their best efforts to promptly appoint a Successor Delaware Trustee or Successor Property Trustee, as the case may be, if the Property Trustee or the Delaware Trustee delivers an instrument of resignation in accordance with this Section 6.6.

(e)  If no Successor Property Trustee or Successor Delaware Trustee, as the case may be, shall have been appointed and accepted appointment as provided in this Section 6.6 within 60 days after delivery to the Sponsor and the Trust of an instrument of resignation or removal, the resigning or removed Property Trustee or Delaware Trustee, as applicable, may petition any court of competent jurisdiction for appointment of a Successor Property Trustee or Successor Delaware Trustee, as applicable. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as the case may be.

(f)  No Property Trustee or Delaware Trustee shall be liable for the acts or omissions to act of any Successor Property Trustee or Successor Delaware Trustee, as the case may be.

SECTION 6.7  Vacancies Among Trustees.

If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees is increased pursuant to Section 6.1, a vacancy shall occur. A resolution certifying the existence of such vacancy by the Administrative Trustees or, if there are more than two, a majority of the Administrative Trustees shall be conclusive evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 6.6.

SECTION 6.8  Effect of Vacancies.

The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 6.6, the Administrative Trustees in office, regardless of their number, shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement.

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SECTION 6.9  Meetings.

If there is more than one Administrative Trustee, meetings of the Administrative Trustees shall be held from time to time upon the call of any Administrative Trustee. Regular meetings of the Administrative Trustees may be held at a time and place fixed by resolution of the Administrative Trustees. Notice of any in-person meetings of the Administrative Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 48 hours before such meeting. Notice of any telephonic meetings of the Administrative Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 24 hours before a meeting. Notices shall contain a brief statement of the time, place and anticipated purposes of the meeting. The presence (whether in person or by telephone) of an Administrative Trustee at a meeting shall constitute a waiver of notice of such meeting except where an Administrative Trustee attends a meeting for the express purpose of objecting to the transaction of any activity on the ground that the meeting has not been lawfully called or convened. Unless provided otherwise in this Trust Agreement, any action of the Administrative Trustees may be taken at a meeting by vote of a majority of the Administrative Trustees present (whether in person or by telephone) and eligible to vote with respect to such matter, provided that a Quorum is present, or without a meeting by the unanimous written consent of the Administrative Trustees. In the event there is only one Administrative Trustee, any and all action of such Administrative Trustee shall be evidenced by a written consent of such Administrative Trustee.

SECTION 6.10  Delegation of Power.

(a)  Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any natural person over the age of 21 his, her or its power for the purpose of executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing.

(b)  The Administrative Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein.

SECTION 6.11  Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Property Trustee, the Delaware Trustee or any Administrative Trustee that is not a natural person may be merged or converted or with such Trustee may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of such Trustee shall be the successor of such Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.

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ARTICLE 7

TERMS OF SECURITIES

SECTION 7.1  General Provisions Regarding Securities.

(a)  The Administrative Trustees shall on behalf of the Trust issue one class of trust preferred securities representing undivided beneficial ownership interests in the assets of the Trust and one class of common securities representing undivided beneficial ownership interests in the assets of the Trust.

(i)  Trust Preferred Securities.    On the initial Closing Date, an Administrative Trustee, on behalf of the Trust, shall execute and deliver to the underwriters named in the underwriting agreement relating to such Trust Preferred Securities, a Trust Preferred Securities Certificate or Certificates, registered in the name of the initial Depositary or its nominee, in an initial aggregate amount of 15,400,000 Trust Preferred Securities. Pursuant to the procedures established in an Officer’s Certificate, the Trust may subsequently issue from time to time Tranches of Trust Preferred Securities. The Trust Preferred Securities issued on the initial Closing Date shall have an aggregate Liquidation Amount with respect to the assets of the Trust of Three Hundred Eighty-Five Million dollars ($385,000,000) with respect to the initial closing of the sale of Trust Preferred Securities. The Trust Preferred Securities and any subsequent Tranches thereof are hereby designated for identification purposes only as “Virginia Power Capital Trust II 7.375% Trust Preferred Securities” (the “Trust Preferred Securities”). The Trust Preferred Security Certificates evidencing the Trust Preferred Securities shall be substantially in the form of Exhibit A to this Trust Agreement, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange on which the Trust Preferred Securities are listed or quoted.

(ii)  Common Securities.    On the initial Closing Date, an Administrative Trustee, on behalf of the Trust, shall execute and deliver to the Sponsor, Common Securities Certificates registered in the name of the Sponsor, in an initial aggregate amount of 476,289 Common Securities. Pursuant to the procedures established in an Officer’s Certificate, the Trust may subsequently issue from time to time Tranches of Common Securities. The Common Securities of the Trust issued on the initial Closing Date shall have an aggregate Liquidation Amount with respect to the assets of the Trust of Eleven Million Nine Hundred Seven Thousand Two Hundred Twenty-Five dollars ($11,907,225). The Common Securities and any subsequent Tranches thereof are hereby designated for identification purposes only as “Virginia Power Capital Trust II 7.375% Common Securities” (the “Common Securities” and, together with the Trust Preferred Securities, the “Securities”). The Common Security Certificates evidencing the Common Securities shall be substantially in the form of Exhibit B to this Trust Agreement, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice.

(iii)  On the initial Closing Date, an Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase from the Sponsor, Junior Subordinated Notes registered in the name of the Property Trustee, on behalf of the Trust and the Holders and having an initial aggregate principal amount equal to Three Hundred Ninety-Six Million Nine Hundred Seven

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Thousand Two Hundred Twenty-Five dollars ($396,907,225). To the extent subsequent Tranches of Securities are issued, an Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase from the Sponsor on subsequent Closing Dates additional Junior Subordinated Notes registered in the name of the Property Trustee, on behalf of the Trust and the Holders having an aggregate principal amount equal to the aggregate Liquidation Amount of such Tranches of Securities.

(b)  Payment of Distributions on, and payment of the Redemption Price upon a redemption of, the Trust Preferred Securities and the Common Securities, as applicable, shall be made Pro Rata based on the Liquidation Amount of such Trust Preferred Securities and Common Securities; provided, however, that if on any date on which amounts payable on distribution or redemption, an Indenture Event of Default shall have occurred and be continuing, no payment of any Distribution on, or Redemption Price of, any of the Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions on all of the outstanding Trust Preferred Securities for all Distribution periods terminating on or prior thereto, or, in the case of amounts payable on redemption, the full amount of the Redemption Price for all of the outstanding Trust Preferred Securities then called for redemption, shall have been made or provided for, and all funds available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions on, or the Redemption Price of, the Trust Preferred Securities then due and payable. The Trust shall issue no securities or other interests in the assets of the Trust other than the Trust Preferred Securities and the Common Securities.

(c)  The Certificates shall be signed on behalf of the Trust by an Administrative Trustee. Such signature shall be the manual or facsimile signature of any present or any future Administrative Trustee. In case an Administrative Trustee of the Trust who shall have signed any of the Certificates shall cease to be such an Administrative Trustee before the Certificates so signed shall be delivered by the Trust, such Certificates nevertheless may be delivered as though the person who signed such Certificates had not ceased to be such an Administrative Trustee; and any Certificate may be signed on behalf of the Trust by any person who, at the actual date of execution of such Certificate, shall be an Administrative Trustee of the Trust, although at the date of the execution and delivery of the Trust Agreement such person was not such an Administrative Trustee. Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by their execution thereof, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements as the Administrative Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation of any stock exchange on which Securities may be listed, or to conform to usage.

A Certificate representing Trust Preferred Securities shall not be valid until authenticated by the manual signature of an authorized officer of the Property Trustee. Such signature shall be conclusive evidence that such Certificate has been authenticated under this Trust Agreement.

The Trust Preferred Security Certificates shall be dated their date of authentication.

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Upon a written order of the Trust signed by one Administrative Trustee, the Property Trustee shall (i) concurrently with the initial issuance of the Securities, authenticate the Certificates representing Trust Preferred Securities for original issue to be issued at that time and (ii) concurrently with each periodic issuance of Tranches, evidence the current number of outstanding Securities by endorsing Schedule A to each Certificate.

The Property Trustee may appoint an authenticating agent acceptable to the Trust to authenticate Certificates. An authenticating agent may authenticate Certificates whenever the Property Trustee may do so. Each reference in this Trust Agreement to authentication by the Property Trustee includes authentication by such agent. An authenticating agent has the same rights as the Property Trustee to deal with the Sponsor or an Affiliate of the Sponsor.

(d)  The consideration received by the Trust for each issuance of the Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust.

(e)  Except to the extent set forth in Section 9.1(b), upon each issuance of the Securities as provided in this Trust Agreement, the Securities so issued shall be deemed to be validly issued, fully paid and non-assessable undivided beneficial ownership interests in the assets of the Trust.

(f)  Every Person, by virtue of having become a Holder or a Trust Preferred Security Beneficial Owner in accordance with the terms of this Trust Agreement, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Trust Agreement and the terms of the Securities, the Guarantee, the Indenture and the Junior Subordinated Notes.

(g)  The holders of the Securities shall have no preemptive or similar rights.

(h)  To the extent the Trust issues additional Tranches, the Property Trustee shall (i) increase the number of Securities evidenced by each Certificate by appropriate endorsement on Schedule A to each Certificate and (ii) instruct the Depositary to credit the account of the purchaser of the Tranche of Trust Preferred Securities. The Sponsor agrees to make its Common Security Certificate available to the Property Trustee for purposes of the foregoing endorsement.

SECTION 7.2  Distributions.

(a)  Holders of Securities shall be entitled to receive cumulative cash Distributions at the rate per annum of 7.375% of the stated liquidation amount of $25 per Security. The amount of Distributions payable for any period shall be computed on the basis of a 360-day year of twelve 30-day months. The amount of Distributions payable for any period shorter than a full quarterly distribution period shall be computed on the basis of a 30-day month and for periods of less than a month, the actual number of days elapsed per 30-day month. Subject to Section 7.1(b), Distributions shall be made on the Trust Preferred Securities and the Common Securities on a Pro Rata basis. Distributions on the Securities shall, from the date of original issue, accrue and be cumulative and shall be payable quarterly, in arrears, on each January 30, April 30, July 30 and October 30, commencing October 30, 2002, when, as and if available for payment, by the Property Trustee, except as otherwise described below. Distributions are payable only to the extent that payments are made in respect of the Junior Subordinated Notes held by the Property

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Trustee and to the extent that the Trust has funds available for the payment of such Distributions in the Property Account.

(b)  Distributions not paid on the scheduled payment date will accumulate and compound quarterly at the rate of 7.375% per annum (“Compounded Distributions”). “Distributions” shall mean ordinary cumulative distributions together with any Compounded Distributions or any payment of Additional Tax Sums.

(c)  If and to the extent that the Junior Subordinated Note Issuer makes a payment of interest, premium and/or principal on the Junior Subordinated Notes held by the Property Trustee or any payment of Additional Tax Sums (the amount of any such payment being a “Payment Amount”), the Property Trustee shall and is directed, to the extent funds are available for that purpose, to make a Pro Rata distribution of the Payment Amount to Holders, subject to Section 7.1(b).

(d)  Distributions on the Securities shall be payable to the Holders thereof as they appear on the register of the Trust as of the close of business on the relevant record dates. While the Trust Preferred Securities are represented by one or more Global Securities, the relevant record dates shall be the close of business on the Business Day next preceding such Distribution payment date, unless a different regular record date is established or provided for the corresponding interest payment date on the Junior Subordinated Notes. The relevant record dates for the Common Securities shall be the same as for the Trust Preferred Securities. If the Trust Preferred Securities shall not continue to remain represented by one or more Global Securities, the relevant record dates for the Trust Preferred Securities will conform to rules of any securities exchange on which the Trust Preferred Securities are listed and if none, shall be selected by the Administrative Trustees and shall be more than 14 days but less than 60 days prior to the relevant payment dates. At all times, the Distribution payment dates shall correspond to the interest payment dates on the Junior Subordinated Notes. Distributions payable on any Securities that are not punctually paid on any Distribution payment date, as a result of the Junior Subordinated Note Issuer having failed to make a payment under the Junior Subordinated Notes, shall cease to be payable to the Person in whose name such Securities are registered on the relevant record date, and such defaulted Distribution will instead be payable to the Person in whose name such Securities are registered on the special record date or other specified date determined with respect to the related interest payment date pursuant to the Indenture. If any date on which Distributions are payable on the Securities is not a Business Day, then payment of the Distribution payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding day which is a Business Day, with the same force and effect as if made on such payment date.

(e)  In the event that there is any money or other property held by or for the Trust that is not accounted for hereunder, such property shall be distributed Pro Rata among the Holders of the Securities.

SECTION 7.3  Redemption of Securities.

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(a)  Upon the repayment or redemption, in whole or in part, of the Junior Subordinated Notes held by the Trust, whether at the stated maturity of the Junior Subordinated Notes or upon earlier redemption as provided in the Indenture, the proceeds from such repayment or redemption shall be simultaneously applied Pro Rata (subject to Section 7.1(b)) to redeem Securities having an aggregate Liquidation Amount equal to the aggregate principal amount of the Junior Subordinated Notes so repaid or redeemed at the Redemption Price. Holders shall be given not less than 30 nor more than 60 days notice of such redemption in accordance with Section 7.4.

(b)  On the date fixed for any distribution of Junior Subordinated Notes, upon dissolution of the Trust, (i) the Securities will no longer be deemed to be outstanding and (ii) certificates representing Securities will be deemed to represent the Junior Subordinated Notes having an aggregate principal amount equal to the stated Liquidation Amount of, and bearing accrued and unpaid interest equal to accrued and unpaid distributions on, such Securities until such certificates are presented to the Sponsor or its agent for transfer or reissuance.

(c)  Certificates called for redemption in whole must be surrendered to the Paying Agent in order to receive payment of the Redemption Price.

SECTION 7.4  Redemption Procedures.

(a)  Notice of any redemption of, or notice of distribution of Junior Subordinated Notes in exchange for, the Securities (a “Redemption/Distribution Notice”), which notice shall be irrevocable, will be given by the Trust by mail to each Holder of Securities to be redeemed or exchanged not fewer than 30 nor more than 60 days before the date fixed for redemption or exchange thereof which, in the case of a redemption, will be the date fixed for redemption of or the date of final maturity of the Junior Subordinated Notes. For purposes of the calculation of the date of redemption or exchange and the dates on which notices are given pursuant to this Section 7.4(a), a Redemption/Distribution Notice shall be deemed to be given on the day such notice is first mailed by first-class mail, postage prepaid, to Holders of Securities. Each Redemption/Distribution Notice shall be addressed to the Holders of Securities at the address of each such Holder appearing in the register of the Trust. No defect in the Redemption/Distribution Notice or in the mailing of either thereof with respect to any Holder shall affect the validity of the redemption or exchange proceedings with respect to any other Holder.

(b)  If fewer than all the outstanding Securities are to be so redeemed, the Common Securities and the Trust Preferred Securities will be redeemed Pro Rata (subject to Section 7.1(b)) and the Trust Preferred Securities to be redeemed will be redeemed as described in Section 7.4(c) below. The Trust may not redeem the Securities in part unless all accumulated and unpaid Distributions to the date of redemption have been paid in full on all Securities then outstanding. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Trust Preferred Securities shall relate, in the case of any Trust Preferred Security redeemed or to be redeemed only in part, to the portion of the aggregate Liquidation Amount of Trust Preferred Securities which has been or is to be redeemed.

(c)  Subject to the Trust’s fulfillment of the notice requirements set forth in Section 7.4(a) above, if Securities are to be redeemed, then (i) with respect to Trust Preferred Securities

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represented by one or more Global Securities, by 2:00 p.m., New York City time, on the redemption date (provided that the Junior Subordinated Note Issuer has paid the Property Trustee a sufficient amount of immediately available funds in connection with the related redemption or maturity of the Junior Subordinated Notes), the Property Trustee will deposit irrevocably with the Depositary or its nominee (or successor Clearing Agency or its nominee) funds sufficient to pay the applicable Redemption Price with respect to the Trust Preferred Securities and will give the Depositary irrevocable instructions and authority to pay the Redemption Price to the Holders of the Trust Preferred Securities and (ii) with respect to Securities not represented by one or more Global Securities (provided that the Junior Subordinated Note Issuer has paid the Property Trustee a sufficient amount of immediately available funds in connection with the related redemption or maturity of the Junior Subordinated Notes), the Paying Agent will pay the relevant Redemption Price to the Holders of such Securities by check mailed to the address of the relevant Holder appearing on the register of the Trust on the redemption date. If any date fixed for redemption of Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the next preceding day which is a Business Day. If payment of the Redemption Price in respect of any Securities is improperly withheld or refused and not paid either by the Property Trustee or by the Sponsor as guarantor pursuant to the Guarantee, Distributions on such Securities will continue to accrue at the then applicable rate from the original redemption date to the actual date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. For these purposes, the applicable Redemption Price shall not include Distributions which are being paid to Holders who were Holders on a relevant record date. If a Redemption/Distribution Notice shall have been given and funds deposited or paid as required, then immediately prior to the close of business on the date of such deposit or payment, Distributions will cease to accrue on the Securities called for redemption and all rights of Holders of such Securities so called for redemption will cease, except the right of the Holders to receive the Redemption Price, but without interest on such Redemption Price, and from and after the date fixed for redemption, such Securities will cease to be outstanding.

Neither the Administrative Trustees nor the Trust shall be required to register or cause to be registered the transfer of any Securities that have been called for redemption, except in the case of any Securities being redeemed in part, any portion thereof not to be redeemed.

(d)  Subject to the foregoing and applicable law (including, without limitation, United States federal securities laws), the Junior Subordinated Note Issuer or its subsidiaries may at any time and from time to time purchase outstanding Trust Preferred Securities by tender, in the open market or by private agreement.

SECTION 7.5  Voting Rights of Trust Preferred Securities.

(a)  Except as provided under Section 11.1 and this Article 7 and as otherwise required by the Business Trust Act, the Trust Indenture Act and other applicable law, the Holders of the Trust Preferred Securities shall have no voting rights.

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(b)  Subject to the requirement of the Property Trustee obtaining a tax opinion in certain circumstances set forth in Section 7.5(d) below, the Holders of a Majority in Liquidation Amount of the Trust Preferred Securities voting separately as a class have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or to direct the exercise of any trust or power conferred upon the Property Trustee under the Trust Agreement, including the right to direct the Property Trustee, as Holder of the Junior Subordinated Notes, to (i) exercise the remedies available to it under the Indenture as a Holder of the Junior Subordinated Notes; (ii) consent to any amendment or modification of the Indenture or the Junior Subordinated Notes where such consent shall be required; (iii) waive any past default and its consequences that is waivable under Section 513 of the Indenture; or (iv) cancel an acceleration of the principal of the Junior Subordinated Notes; provided, however, that if an Indenture Event of Default has occurred and is continuing, then the Holders of 25% of the aggregate Liquidation Amount of the Trust Preferred Securities may direct the Property Trustee to declare the principal of and interest on the Junior Subordinated Notes due and payable; provided, further, that where a consent or action under the Indenture would require the consent or act of the Holders of more than a majority of the aggregate principal amount of Junior Subordinated Notes affected thereby, only the Holders of the percentage of the aggregate stated Liquidation Amount of the Trust Preferred Securities which is at least equal to the percentage required under the Indenture may direct the Property Trustee to give such consent to take such action provided, further, that (subject to the provisions of Section 3.9) the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee shall determine that the action so directed would be unjustly prejudicial to the Holders of Trust Preferred Securities not taking part in such direction or if the Property Trustee, being advised by counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Property Trustee, in good faith, by its board of directors or trustees, executive committee, or a trust committee of directors or trustees, and/or Responsible Officers, shall determine that the action or proceeding so directed would involve the Property Trustee in personal liability.

(c)  If the Property Trustee fails to enforce its rights under the Junior Subordinated Notes after a Holder of Trust Preferred Securities has made a written request, such Holder of Trust Preferred Securities may, to the extent permitted by applicable law, institute a legal proceeding directly against the Junior Subordinated Note Issuer to enforce the Property Trustee’s rights under the Indenture without first instituting any legal proceeding against the Property Trustee or any other Person. In addition, if a Trust Enforcement Event has occurred and is continuing and such event is attributable to the failure of the Junior Subordinated Note Issuer to make any interest, principal or other required payments when due under the Indenture, then a Holder of Trust Preferred Securities may directly institute a Direct Action against the Junior Subordinated Note Issuer on or after the respective due date specified in the Junior Subordinated Notes.

(d)  Subject to section 2.7 the Property Trustee shall notify all Holders of the Trust Preferred Securities of any notice of any Indenture Event of Default received from the Junior Subordinated Note Issuer or the Indenture Trustee with respect to the Junior Subordinated Notes. Such notice shall state that such Indenture Event of Default also constitutes a Trust Enforcement Event. Except with respect to directing the time, method, and place of conducting a proceeding for a remedy, the Property Trustee shall be under no obligation to take any of the actions described in clauses 7.5(b)(i) and (ii) above unless the Property Trustee has obtained an opinion

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of independent tax counsel to the effect that the Trust will not fail to be classified as a grantor trust for United States federal income tax purposes as a result of such action.

(e)  In the event the consent of the Property Trustee, as the Holder of the Junior Subordinated Notes, is required under the Indenture with respect to any amendment or modification of the Indenture, the Property Trustee shall request the direction of the Holders of the Securities with respect to such amendment or modification and shall vote with respect to such amendment or modification as directed by not less than a majority in Liquidation Amount of the Securities voting together as a single class; provided, however, that where a consent under the Indenture would require the consent of the Holders of more than a majority of the aggregate principal amount of the Junior Subordinated Notes, the Property Trustee may only give such consent at the direction of the Holders of at least the same proportion in aggregate stated Liquidation Amount of the Securities. The Property Trustee shall not take any such action in accordance with the directions of the Holders of the Securities unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that the Trust will not be classified as other than a grantor trust for United States federal income tax purposes as a result of such action.

(f)  A waiver of an Indenture Event of Default with respect to the Junior Subordinated Notes will constitute a waiver of the corresponding Trust Enforcement Event.

(g)  Any required approval or direction of Holders of Trust Preferred Securities may be given at a separate meeting of Holders of Trust Preferred Securities convened for such purpose, at a meeting of all of the Holders of Securities or pursuant to written consent. The Administrative Trustees will cause a notice of any meeting at which Holders of Trust Preferred Securities are entitled to vote to be mailed to each Holder of record of Trust Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote and (iii) instructions for the delivery of proxies.

(h)  No vote or consent of the Holders of Trust Preferred Securities shall be required for the Trust to redeem and cancel Trust Preferred Securities or distribute Junior Subordinated Notes in accordance with this Trust Agreement and the terms of the Securities.

(i)  Notwithstanding that Holders of Trust Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Securities that are owned at such time by the Junior Subordinated Note Issuer, any Administrative Trustee or any entity directly or indirectly controlled by, or under direct or indirect common control with, the Junior Subordinated Note Issuer or any Administrative Trustee, shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if such Securities were not outstanding; PROVIDED, HOWEVER, that persons otherwise eligible to vote to whom the Junior Subordinated Note Issuer or any of its subsidiaries have pledged Trust Preferred Securities may vote or consent with respect to such pledged Trust Preferred Securities under any of the circumstances described herein.

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(j)  Subject to Sections 6.6(a) and 7.5(k), Holders of the Trust Preferred Securities shall have no rights to appoint or remove the Trustees, who may be appointed, removed or replaced solely by the Common Securities Holder.

(k)  Subject to the rights of the Holders of a Majority in Liquidated Amount of the Common Securities to appoint or remove Administrative Trustees as provided in Section 6.6(a)(iii), if an Indenture Event of Default has occurred and is continuing, the Trustees may be removed at such time only by a Majority in Liquidation Amount of the Trust Preferred Securities.

SECTION 7.6  Voting Rights of Common Securities.

(a)  Except as provided under Section 6.1(b), this Section 7.6 or Section 11.1 or as otherwise required by the Business Trust Act, the Trust Indenture Act or other applicable law or provided by the Trust Agreement, the Holders of the Common Securities will have no voting rights.

(b)  Subject to Sections 6.6(a) and 7.5(k), the Holders of the Common Securities shall be entitled, in accordance with Article 6 of this Trust Agreement, to vote to appoint, remove or replace any Trustee or to increase or decrease the number of Trustees.

(c)  Subject to Section 2.6 and only after all Trust Enforcement Events with respect to the Trust Preferred Securities have been cured, waived, or otherwise eliminated and subject to the requirement of the Property Trustee obtaining a tax opinion in certain circumstances set forth in this paragraph (c), the Holders of a Majority in Liquidation Amount of the Common Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or direct the exercise of any trust or power conferred upon the Property Trustee under this Trust Agreement, including the right to direct the Property Trustee, as Holder of the Junior Subordinated Notes, to (i) exercise the remedies available to it under the Indenture as a Holder of the Junior Subordinated Notes, (ii) consent to any amendment or modification of the Indenture or the Junior Subordinated Notes where such consent shall be required or (iii) waive any past default and its consequences that is waivable under Section 6.6 of the Indenture; provided, however, that where a consent or action under the Indenture would require the consent or act of the Holders of more than a majority of the aggregate principal amount of Junior Subordinated Notes affected thereby, only the Holders of the percentage of the aggregate stated Liquidation Amount of the Common Securities which is at least equal to the percentage required under the Indenture may direct the Property Trustee to have such consent or take such action, provided, further, that (subject to the provisions of Section 3.9) the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee shall determine that the action so directed would be unjustly prejudicial to the Holders of Common Securities not taking part in such direction or if the Property Trustee, being advised by counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Property Trustee, in good faith, by its board of directors or trustees, executive committee, or a trust committee of directors or trustees, and/or Responsible officers, shall determine that the action or proceeding so directed would involve the Property Trustee in personal liability Except with respect to directing the time, method, and place of conducting a proceeding for a remedy, the Property Trustee shall be under no obligation to take any of the actions described in clauses

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7.6(c)(i) and (ii) above unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that, as a result of such action, for United States federal income tax purposes the Trust will not fail to be classified as a grantor trust and each Holder will be treated as owning an undivided beneficial ownership interest in the Junior Subordinated Notes.

(d)  If the Property Trustee fails to enforce its rights under the Junior Subordinated Notes after a Holder of Common Securities has made a written request, such Holder of Common Securities may, to the extent permitted by applicable law, directly institute a legal proceeding directly against the Junior Subordinated Note Issuer to enforce the Property Trustee’s rights under the Junior Subordinated Notes without first instituting any legal proceeding against the Property Trustee or any other Person.

(e)  A waiver of an Indenture Event of Default with respect to the Junior Subordinated Notes will constitute a waiver of the corresponding Trust Enforcement Event.

(f)  Any required approval or direction of Holders of Common Securities may be given at a separate meeting of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of Securities or pursuant to written consent. The Administrative Trustees will cause a notice of any meeting at which Holders of Common Securities are entitled to vote to be mailed to each Holder of record of Common Securities. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote and (iii) instructions for the delivery of proxies.

(g)  No vote or consent of the Holders of the Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute Junior Subordinated Notes in accordance with the Trust Agreement and the terms of the Securities.

SECTION 7.7  Paying Agent.

The Trust shall maintain in the Borough of Manhattan, City of New York, State of New York, an office or agency where the Trust Preferred Securities may be presented for payment (“Paying Agent”). The Trust may appoint the Paying Agent and may appoint one or more additional paying agents in such other locations as it shall determine. The term “Paying Agent” includes any additional paying agent. The Trust may change any Paying Agent without prior notice to the Holders. The Trust shall notify the Property Trustee of the name and address of any Paying Agent not a party to this Trust Agreement. If the Trust fails to appoint or maintain another entity as Paying Agent, the Property Trustee shall act as such. The Trust or any of its Affiliates may act as Paying Agent. The Property Trustee shall initially act as Paying Agent for the Securities. In the event the Property Trustee shall no longer be the Paying Agent, the Administrative Trustees shall appoint a successor (which shall be a bank or trust company acceptable to the Junior Subordinated Note Issuer) to act as Paying Agent. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days’ written notice to the Property Trustee and the Junior Subordinated Note Issuer.

SECTION 7.8  Listing.

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The Sponsor shall use its best efforts to cause the Trust Preferred Securities to be listed for quotation on the New York Stock Exchange.

SECTION 7.9  Transfer of Securities.

(a)  Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in this Trust Agreement and in the terms of the Securities. To the fullest extent permitted by law, any transfer or purported transfer of any Security not made in accordance with this Trust Agreement shall be null and void.

(b)  (i)  Subject to this Article 7, the Trust Preferred Securities shall be freely transferable.

(ii)  The Holder of the Common Securities may not transfer the Common Securities except (A) in compliance with a consolidation, merger, sale, conveyance or lease of the Sponsor in compliance with Article Eight of the Indenture or (B) to the Sponsor or an Affiliate thereof in compliance with applicable law, including the Securities Act and applicable state securities and blue sky laws. To the fullest extent permitted by law, any attempted transfer of the Common Securities other than as set forth in the immediately preceding sentence shall be null and void.

(c)  The Trust shall cause to be kept at the Corporate Trust Office of the Property Trustee a register (the register maintained in such office being herein sometimes referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Trust shall provide for the registration of Trust Preferred Securities and of transfers of Trust Preferred Securities. The Property Trustee is hereby appointed “Security Registrar” for the purpose of registering Trust Preferred Securities and transfers of Trust Preferred Securities as herein provided.

(d)  Upon surrender for registration of transfer of any Security at an office or agency of the Trust designated for such purpose, the Trust shall execute, and in the case of Trust Preferred Securities the Property Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations and of a like aggregate principal amount.

(e)  At the option of the Holder, Securities may be exchanged for other Securities of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Trust shall execute, and in the case of Trust Preferred Securities the Property Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

(f)  Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Trust or the Property Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Trust and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

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(g)  No service charge shall be made for any registration of transfer or exchange of Securities, but the Trust may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities.

(h)  If the Securities are to be redeemed in part, the Trust shall not be required (A) to issue, register the transfer of or exchange any Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for redemption under Section 7.4 and ending at the close of business on the day of such mailing, or (B) to register the transfer or exchange of any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

SECTION 7.10  Mutilated, Destroyed, Lost or Stolen Certificates.

If:

(a)  any mutilated Certificates should be surrendered to the Administrative Trustees or the Property Trustee, or if the Administrative Trustees and the Property Trustee shall receive evidence to their satisfaction of the destruction, loss or theft of any Certificate; and

(b)  there shall be delivered to the Administrative Trustees and the Property Trustee such security or indemnity as may be required by them to keep each of the Trustees, the Sponsor and the Trust harmless, then, in the absence of notice that such Certificate shall have been acquired by a bona fide purchaser, any Administrative Trustee on behalf of the Trust shall execute and deliver and, with respect to Trust Preferred Securities Certificates, the Property Trustee shall authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like denomination. In connection with the issuance of any new Certificate under this Section 7.10, the Administrative Trustees may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the relevant Securities, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, destroyed, lost or stolen Certificates.

SECTION 7.11  Deemed Security Holders.

The Trustees may treat the Person in whose name any Certificate shall be registered on the register of the Trust as the sole holder of such Certificate and of the Securities represented by such Certificate for purposes of receiving Distributions (subject to Section 7.2(d)) and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Certificate or in the Securities represented by such Certificate on the part of any Person, whether or not the Trust shall have actual or other notice thereof.

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SECTION 7.12  Global Securities.

The Trust Preferred Securities may be issued in the form of one or more Global Securities. If the Trust Preferred Securities are to be issued in the form of one or more Global Securities, then an Administrative Trustee on behalf of the Trust shall execute and the Property Trustee shall authenticate and deliver one or more Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate Liquidation Amount of all of the Trust Preferred Securities to be issued in the form of Global Securities and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global Security or the nominee of such Depositary, and (iii) shall be delivered by the Property Trustee to such Depositary or pursuant to such Depositary’s instructions. Global Securities shall bear a legend substantially to the following effect:

This Trust Preferred Security is a Global Security within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of The Depository Trust Company, a New York corporation (the “Depositary”), or a nominee of the Depositary. This Trust Preferred Security is exchangeable for Trust Preferred Securities registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Trust Agreement and no transfer of this Trust Preferred Security (other than a transfer of this Trust Preferred Security as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary) may be registered except in limited circumstances.

Unless this Trust Preferred Security Certificate is presented by an authorized representative of the Depositary to Virginia Power Capital Trust II or its agent for registration of transfer, exchange or payment, and any Trust Preferred Security Certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of the Depositary (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.”

Trust Preferred Securities not represented by a Global Security issued in exchange for all or a part of a Global Security pursuant to this Section 7.12 shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Property Trustee. Upon execution and authentication, the Property Trustee shall deliver such Trust Preferred Securities not represented by a Global Security to the Persons in whose names such definitive Trust Preferred Securities are so registered.

At such time as all interests in Global Securities have been redeemed, repurchased or cancelled, such Global Securities shall be, upon receipt thereof, cancelled by the Property Trustee in accordance with standing procedures of the Depositary. At any time prior to such cancellation, if any interest in Global Securities is exchanged for Trust Preferred Securities not represented by a Global Security, redeemed, cancelled or transferred to a transferee who receives Trust Preferred Securities not represented by a Global Security therefor or any Trust Preferred Security not represented by a Global Security is exchanged or transferred for part of Global

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Securities, the principal amount of such Global Securities shall, in accordance with the standing procedures of the Depositary, be reduced or increased, as the case may be, and an endorsement shall be made on such Global Securities by the Property Trustee to reflect such reduction or increase.

The Trust and the Property Trustee may for all purposes, including the making of payments due on the Trust Preferred Securities, deal with the Depositary as the authorized representative of the Holders for the purposes of exercising the rights of Holders hereunder. The rights of the owner of any beneficial interest in a Global Security shall be limited to those established by law and agreements between such owners and depository participants provided, that no such agreement shall give any rights to any Person against the Trust or the Property Trustee without the written consent of the parties so affected. Multiple requests and directions from and votes of the Depositary as holder of Trust Preferred Securities in global form with respect to any particular matter shall not be deemed inconsistent to the extent they do not represent an amount of Trust Preferred Securities in excess of those held in the name of the Depositary or its nominee.

If at any time the Depositary for any Trust Preferred Securities represented by one or more Global Securities notifies the Trust that it is unwilling or unable to continue as Depositary for such Trust Preferred Securities or if at any time the Depositary for such Trust Preferred Securities shall no longer be eligible to act as such under the Exchange Act, the Trust shall appoint a successor Depositary with respect to such Trust Preferred Securities. If a successor Depositary for such Trust Preferred Securities is not appointed by the Trust within 90 days after the Trust receives such notice or becomes aware of such ineligibility, the Trust’s election that such Trust Preferred Securities be represented by one or more Global Securities shall no longer be effective and the Trust shall execute, and the Property Trustee will authenticate and deliver, Trust Preferred Securities in definitive registered form, in any authorized denominations, in an aggregate Liquidation Amount equal to the principal amount of the Global Security representing such Trust Preferred Securities in exchange for such Global Security.

The Trust may at any time and in its sole discretion determine that the Trust Preferred Securities issued in the form of one or more Global Securities shall no longer be represented by a Global Security. In such event the Trust shall execute, and the Property Trustee, shall authenticate and deliver, Trust Preferred Securities in definitive registered form, in any authorized denominations, in an aggregate Liquidation Amount equal to the principal amount of the Global Security representing such Trust Preferred Securities, in exchange for such Global Security.

Notwithstanding any other provisions of this Trust Agreement (other than the provisions set forth in Section 7.9), Global Securities may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

Subject to the second and third preceding paragraphs, interests of beneficial owners in a Global Security may be transferred or exchanged for Trust Preferred Securities not represented by a Global Security and Trust Preferred Securities not represented by a Global Security may be

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transferred or exchange for Global Securities in accordance with rules of the Depositary and the provisions of Section 7.9.

SECTION 7.13  Option.

(a)  The Administrative Trustees, on behalf of the Trust, and the Sponsor may grant to the underwriters who are underwriting any series of Trust Preferred Securities, an option (the “Option”) to purchase an additional liquidation amount of such series of Trust Preferred Securities on the terms and conditions specified in the underwriting agreement relating to such Trust Preferred Securities; PROVIDED, HOWEVER, the Option may only be granted if the following conditions are satisfied:

(i)  the Option, if exercised, may not result in the issue and sale of an aggregate liquidation amount of Trust Preferred Securities greater than that registered by the Sponsor and the Trust on the applicable registration statement or registration statements (including by a registration statement filed under Rule 462(b) under the Securities Act, if any), as the case may be, with the Commission under the Securities Act;

(ii)  the Option must result, if exercised, in the issuance and sale of Trust Preferred Securities to such underwriters and the issuance and sale of Common Securities to the Sponsor on a Pro Rata basis and not in contravention of any other provision of this Agreement or the Business Trust Act, consistent with Section 5.1; and

(iii)  the Trust Preferred Securities and the Common Securities issued and sold subject to the exercise of the Option, if any, must be of the same series and must bear the same CUSIP numbers as the series of Trust Preferred Securities and the Common Securities, respectively, which were initially issued and sold by the Trust and the Sponsor, respectively.

(b)  With respect to any issuance of Trust Preferred Securities and Common Securities following the exercise of the Option,

(i)  the designation the “7.375% Trust Preferred Securities” and, for all purposes under this Trust Agreement, the defined term the “Trust Preferred Securities” shall mean both the Trust Preferred Securities issued initially hereunder and any Trust Preferred Securities issued pursuant to the exercise of the Option; and

(ii)  the designation the “7.375% Common Securities” and, for all purposes under this Trust Agreement, the defined term the “Common Securities” shall mean both the Common Securities issued initially hereunder and any Common Securities issued pursuant to the requirement of Section 7.13(a)(ii) regarding the additional issuance of Common Securities on a Pro Rata basis if the Option is exercised.

(c)  If the Option set forth in Section 7.13(a) is exercised on a date other than the initial Closing Date, then the parties to the Trust Agreement shall cause there to occur a second closing for the consummation of the sale of the Trust Preferred Securities and Common Securities under substantially the same conditions that applied to the initial closing of the sale of such securities, including the following:

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(i)  the execution and delivery of a second Trust Preferred Security Certificate, or such additional Trust Preferred Security Certificates, as appropriate, which is, or are, as the case may be, substantially identical in all respects to the Trust Preferred Security Certificate issued initially; and

(ii)  the execution and delivery of a second Common Security Certificate, or such additional Common Security Certificates, as appropriate, which is, or are, as the case may be, substantially identical in all relevant respects to the Common Security Certificate issued initially.

SECTION 7.14  Cancellation.

All Certificates surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Property Trustee, be delivered to the Property Trustee and shall be promptly cancelled by it. No Certificates shall be executed or authenticated in lieu of or in exchange for any Certificates cancelled as provided in this Section, except as permitted by this Trust Agreement. All cancelled Certificates held by the Property Trustee shall be disposed of by it in accordance with its customary procedures.

ARTICLE 8

DISSOLUTION AND TERMINATION OF TRUST

SECTION 8.1  Dissolution and Termination of Trust.

(a)  The Trust shall dissolve upon the earliest of:

(i)  a Bankruptcy Event with respect to the Holder of the Common Securities or the Sponsor;

(ii)  the filing of a certificate of dissolution or its equivalent with respect to the Sponsor; the dissolution of the Trust after obtaining the consent of the Holders of at least a Majority in Liquidation Amount of the Securities to dissolve the Trust; or the revocation of the Sponsor’s charter and the expiration of 90 days after the date of revocation without a reinstatement thereof;

(iii)  the entry of a decree of judicial dissolution of the Sponsor or the Trust;

(iv)  the time when all of the Securities shall have been called for redemption and the amounts then due shall have been paid to the Holders in accordance with the terms of the Securities;

(v)  at the Sponsor’s election by notice and direction to the Property Trustee to distribute the Junior Subordinated Notes to the Holders of the Securities in exchange for all of the Securities; PROVIDED that the Sponsor will be required to obtain an opinion of an independent counsel that the distribution of the Junior Subordinated Notes will not be taxable to the Holders of the Trust Preferred Securities for United States federal income tax purposes; or

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(vi)  the time when all of the Administrative Trustees and the Sponsor shall have consented to dissolution of the Trust provided such action is taken before the issuance of any Securities.

(b)  as soon as is practicable after the occurrence of an event referred to in Section 8.1(a) and upon completion of the winding up and liquidation of the Trust, the Trustees shall terminate the Trust by filing a certificate of cancellation with the Secretary of State of the State of Delaware.

(c)  The provisions of Section 4.2 and Article 9 shall survive the termination of the Trust.

SECTION 8.2  Liquidation Distribution Upon Dissolution of the Trust.

(a)  In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Trust (each a “Liquidation”), the Holders of the Securities on the date of the Liquidation will be entitled to receive, out of the assets of the Trust available for distribution to Holders of Securities after satisfaction of the Trusts’ liabilities to creditors, if any, distributions in cash or other immediately available funds in an amount equal to the aggregate of the stated liquidation amount of $25 per Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the “Liquidation Distribution”), unless, in connection with such Liquidation, Junior Subordinated Notes in an aggregate stated principal amount equal to the aggregate stated Liquidation Amount of, with an interest rate identical to the distribution rate of, and accrued and unpaid interest equal to accumulated and unpaid Distributions on, such Securities shall be distributed on a Pro Rata basis to the Holders of the Securities in exchange for such Securities.

(b)  If, upon any such Liquidation, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on the Securities shall be paid on a Pro Rata basis. The Holders of the Common Securities will be entitled to receive distributions upon any such Liquidation Pro Rata with the Holders of the Trust Preferred Securities except that if an Indenture Event of Default has occurred and is continuing, the Trust Preferred Securities shall have a preference over the Common Securities with regard to such distributions.

ARTICLE 9

LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, DELAWARE

TRUSTEES OR OTHERS

SECTION 9.1  Liability.

(a)  Except as expressly set forth in this Trust Agreement, the Guarantee and the terms of the Securities, the Sponsor:

(i)  shall not be personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders of the Securities which shall be made solely from assets of the Trust; and

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(ii)  shall not be required to pay to the Trust or to any Holder of Securities any deficit upon dissolution of the Trust or otherwise.

(b)  Pursuant to Section 3803(a) of the Business Trust Act, the Holder of the Common Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; provided, however, the Holders of the Common Securities shall be liable for all of the debts and obligations of the Trust (other than with respect to the Securities) to the extent not satisfied out of the Trust’s assets.

(c)  Pursuant to Section 3803(a) of the Business Trust Act, the Holders of the Trust Preferred Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.

SECTION 9.2  Exculpation.

(a)  No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Trust Agreement or by law, except that, subject to section 3.11, an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect to such acts or omissions.

(b)  An Indemnified Person shall be fully protected in relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any Person as to matters the Indemnified Person reasonably believes are within such other Person’s professional or expert competence and who has if selected by such Indemnified Person, been selected by such Indemnified Person with reasonable care on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Securities might properly be paid.

SECTION 9.3  Fiduciary Duty.

(a)  To the extent that, at law or in equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an Indemnified Person acting under this Trust Agreement shall not be liable to the Trust or to another Covered Person for its good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity (other than the duties imposed on the Property Trustee under the Trust Indenture Act), are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person.

(b)  Unless otherwise expressly provided herein:

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(i)  whenever a conflict of interest exists or arises between any Covered Person and any Indemnified Person; or

(ii)  whenever this Trust Agreement or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder of Securities,

the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Trust Agreement or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise.

(c)  Whenever in this Trust Agreement an Indemnified Person is permitted or required to make a decision:

(i)  in its “discretion” or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or

(ii)  in its “good faith” or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Trust Agreement or by applicable law.

SECTION 9.4  Indemnification.

(a)  (i) The Junior Subordinated Note Issuer shall indemnify, to the full extent permitted by law, any Junior Subordinated Note Issuer Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Trust) by reason of the fact that he is or was a Junior Subordinated Notes Issuer Indemnified Person against expenses (including attorney fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Junior Subordinated Notes Issuer Indemnified Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

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(ii)  The Junior Subordinated Note Issuer shall indemnify, to the full extent permitted by law, any Junior Subordinated Notes Issuer Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that he is or was a Junior Subordinated Notes Issuer Indemnified Person against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Junior Subordinated Notes Issuer Indemnified Person shall have been adjudged to be liable to the Trust unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper.

(iii)  Any indemnification under paragraphs (i) and (ii) of this Section 9.4(a) (unless ordered by a court) shall be made by the Junior Subordinated Note Issuer only as authorized in the specific case upon a determination that indemnification of the Junior Subordinated Notes Issuer Indemnified Person is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraphs (i) and (ii). Such determination shall be made (1) by the Administrative Trustees by a majority vote of a quorum consisting of such Administrative Trustees who were not parties to such action, suit or proceeding, (2) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Administrative Trustees so directs, by independent legal counsel in a written opinion, or (3) by the Holders of the Common Securities of the Trust.

(iv)  Expenses (including attorneys’ fees) incurred by a Junior Subordinated Notes Issuer Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 9.4(a) shall be paid by the Junior Subordinated Note Issuer in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Junior Subordinated Debt- Securities Issuer Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Junior Subordinated Note Issuer as authorized in this Section 9.4(a). Notwithstanding the foregoing, no advance shall be made by the Junior Subordinated Note Issuer if a determination is reasonably and promptly made (i) by the Administrative Trustees by a majority vote of a quorum of disinterested Administrative Trustees, (ii) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Administrative Trustees so directs, by independent legal counsel in a written opinion or (iii) the Common Security Holder of the Trust, that, based upon the facts known to the Administrative Trustees, counsel or the Common Security Holder at the time such determination is made, such Junior Subordinated Notes Issuer Indemnified Person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Trust, or, with respect to any criminal proceeding, that such Junior Subordinated Notes Issuer Indemnified Person believed or had reasonable cause to believe his conduct was unlawful. In no event shall any advance be made in instances where the Administrative Trustees, independent legal counsel or

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Common Security Holder reasonably determine that such person deliberately breached his duty to the Trust or its Common or Trust Preferred Security Holders.

(v)  The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 9.4(a) shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors of the Junior Subordinated Note Issuer or Trust Preferred Security Holders of the Trust or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. All rights to indemnification under this Section 9.4(a) shall be deemed to be provided by a contract between the Junior Subordinated Note Issuer and each Junior Subordinated Notes Issuer Indemnified Person who serves in such capacity at any time while this Section 9.4(a) is in effect. Any repeal or modification of this Section 9.4(a) shall not affect any rights or obligations then existing.

(vi)  The Junior Subordinated Note Issuer or the Trust may purchase and maintain insurance on behalf of any person who is or was a Junior Subordinated Notes Issuer Indemnified Person against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Junior Subordinated Note Issuer would have the power to indemnify him against such liability under the provisions of this Section 9.4(a).

(vii)  For purposes of this Section 9.4(a), references to “the Trust” shall include, in addition to the resulting or surviving entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger, so that any person who is or was a director, trustee, officer or employee of such constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, officer, employee or agent of another entity, shall stand in the same position under the provisions of this Section 9.4(a) with respect to the resulting or surviving entity as he would have with respect to such constituent entity if its separate existence had continued.

(viii)  The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 9.4(a) shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a Junior Subordinated Notes Issuer Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a person. The obligation to indemnify as set forth in this Section 9.4(a) shall survive the resignation or removal of the Delaware Trustee or the Property Trustee or the termination of this Trust Agreement.

(b)  The Junior Subordinated Note Issuer agrees to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the Delaware Trustee, and (iv) any officers, directors, shareholders, members, partners, employees, representatives, custodians, nominees or agents of the Property Trustee or the Delaware Trustee (each of the Persons in (i) through (iv) being referred to as a “Fiduciary Indemnified Person”) for, and to hold each Fiduciary Indemnified Person harmless against, any loss, liability or expense incurred without gross negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses

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(including reasonable legal fees and expenses) of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 9.4(b) shall survive the resignation and removal of the Delaware Trustee or the Property Trustee and the dissolution of the Trust and the termination of this Trust Agreement. In addition, the Junior Subordinated Note Issuer has agreed in the Indenture to pay the fees and expenses of the Delaware Trustee and the Property Trustee.

SECTION 9.5  Outside Businesses

Subject to the provisions of Section 6.3, any Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the activities of the Trust, and the Trust and the Holders of Securities shall have no rights by virtue of this Trust Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the activities of the Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee or the Property Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Sponsor or its Affiliates.

ARTICLE 10

ACCOUNTING

SECTION 10.1  Fiscal Year.

The fiscal year (“Fiscal Year”) of the Trust shall be the calendar year, or such other year as is required by the Code.

SECTION 10.2  Certain Accounting Matters.

(a)  At all times during the existence of the Trust, the Administrative Trustees shall keep, or cause to be kept, full books of account, records and supporting documents, which shall reflect in reasonable detail, each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied. The Trust shall use the accrual method of accounting for United States federal income tax purposes. The books of account and the records of the Trust shall be examined by and reported upon as of the end of each Fiscal Year of the Trust by a firm of independent certified public accountants selected by the Administrative Trustees.

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(b)  The Administrative Trustees shall cause to be prepared and delivered to each of the Holders of Securities, within 90 days after the end of each Fiscal Year of the Trust, annual financial statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year, and the related statements of income or loss.

(c)  The Administrative Trustees shall cause to be duly prepared and delivered to each of the Holders of Securities, an annual United States federal income tax information statement, required by the Code, containing such information with regard to the Securities held by each Holder as is required by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any such statement at a later date, the Administrative Trustees shall endeavor to deliver all such statements within 30 days after the end of each Fiscal Year of the Trust.

(d)  The Administrative Trustees shall cause to be duly prepared and filed with the appropriate taxing authority, an annual United States federal income tax return, on a Form 1041 or such other form required by United States federal income tax law, and any other annual income tax returns required to be filed by the Administrative Trustees on behalf of the Trust with any state or local taxing authority.

SECTION 10.3  Banking.

The Trust shall maintain one or more bank accounts in the name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Junior Subordinated Notes held by the Property Trustee shall be made directly to the Property Account and no other funds of the Trust shall be deposited in the Property Account. The sole signatories for such accounts shall be designated by the Administrative Trustees; provided, however, that the Property Trustee shall designate the signatories for the Property Account.

SECTION 10.4  Withholding.

The Trust and the Administrative Trustees shall comply with all withholding requirements under United States federal, state and local law. The Trust shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an exemption from withholding with respect to each Holder, and any representations and forms as shall reasonably be requested by the Trust to assist it in determining the extent of, and in fulfilling, its withholding obligations. The Administrative Trustees shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any authority with respect to distributions or allocations to any Holder, the amount withheld shall be deemed to be a distribution in the amount of the withholding to the Holder. In the event of any claimed over withholding, Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Trust may reduce subsequent Distributions by the amount of such withholding.

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ARTICLE 11

AMENDMENTS AND MEETINGS

SECTION 11.1  Amendments.

(a)  Except as otherwise provided in this Trust Agreement or by any applicable terms of the Securities, this Trust Agreement may only be amended by a written instrument approved and executed by the Sponsor and (i) the Administrative Trustees (or, if there are more than two Administrative Trustees, a majority of the Administrative Trustees), (ii) the Property Trustee; and (iii) the Delaware Trustee if the amendment affects the rights, powers, duties, obligations or immunities of the Delaware Trustee.

(b)  No amendment shall be made, and any such purported amendment shall be void and ineffective:

(i)  unless, the Property Trustee shall have first received:

a.  an Officers’ Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Trust Agreement (including the terms of the Securities) and that all conditions precedent to the execution and delivery of such amendment have been satisfied; and

b.  an opinion of counsel (who may be counsel to the Sponsor or the Trust) that such amendment is permitted by, and conforms to, the terms of this Trust Agreement (including the terms of the Securities) and that all conditions precedent to the execution and delivery of such amendment have been satisfied; and

(ii)  to the extent the result of such amendment would be to:

a.  cause the Trust to be classified other than as a grantor trust for United States federal income tax purposes;

b.  reduce or otherwise adversely affect the powers of the Property Trustee in contravention of the Trust Indenture Act; or

c.  cause the Trust to be deemed to be an Investment Company required to be registered under the Investment Company Act.

(c)  If the Trust has issued any Securities that remain outstanding:

(i)  Any amendment that would (a) change the amount or timing of any distribution of the Securities or otherwise adversely affect the amount of any distribution required to be made in respect of the Securities as of a specified date or (b) restrict the right of a Holder of Securities to institute suit for the enforcement of any such payment on or after such date, will entitle the Holders of such Securities, voting together as a single class, to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of each of the Holders of the Securities affected thereby; and

56

(ii)  any amendment that would (a) adversely affect the powers, preferences or special rights of the Securities, whether by way of amendment to this Trust Agreement or otherwise or (b) result in the dissolution, winding-up or termination of the Trust other than pursuant to the terms of this Trust Agreement, will entitle the holders of the Securities voting together as a single class to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of 66 2/3% in Liquidation Amount of the Securities affected thereby; provided that, if any amendment or proposal referred to in clause (a) above would adversely affect only the Trust Preferred Securities or the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal.

(d)  This Section 11.1 shall not be amended without the consent of all of the Holders of the Securities.

(e)  Article 4 shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities.

(f)  The rights of the Holders of the Common Securities under Article 6 to increase or decrease the number of, and appoint and remove Trustees shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities.

(g)  Notwithstanding Section 11.1(c), this Trust Agreement may be amended without the consent of the Holders of the Securities, if such amendment does not adversely affect in any material respect the rights of the holders of the Securities, to:

(i)  cure any ambiguity;

(ii)  correct or supplement any provision in this Trust Agreement that may be defective or inconsistent with any other provision of this Trust Agreement or to make any other provisions with respect to matters or questions arising under this Trust Agreement that shall not be inconsistent with the other provisions of this Trust Agreement;

(iii)  add to the covenants, restrictions or obligations of the Sponsor;

(iv)  to conform to any change in Rule 3a-5 of the Investment Company Act or written change in interpretation or application of Rule 3a-5 of the Investment Company Act by any legislative body, court, government agency or regulatory authority; or

(v)  to modify, eliminate and add to any provision of this Trust Agreement to ensure that the Trust will be classified as a grantor trust for United States federal income tax purposes at all times that any Securities are outstanding or to ensure that the Trust will not be required to register as an Investment Company under the Investment Company Act.

(h)  Neither the Property Trustee nor the Delaware Trustee shall be required to sign any amendment that affects its rights, duties, obligations or immunities under this Trust Agreement or otherwise.

SECTION 11.2  Meetings of the Holders of Securities; Action by Written Consent

.

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(a)  Meetings of the Holders of any class of Securities may be called at any time by the Administrative Trustees (or as provided in the terms of the Securities) to consider and act on any matter on which Holders of such class of Securities are entitled to act under the terms of this Trust Agreement, the terms of the Securities or the rules of any stock exchange on which the Trust Preferred Securities are listed or admitted for trading. The Administrative Trustees shall call a meeting of the Holders of such class if directed to do so by the Holders of at least 10% in Liquidation Amount of such class of Securities. Such direction shall be given by delivering to the Administrative Trustees one or more calls in a writing stating that the signing Holders of Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of Securities calling a meeting shall specify in writing the Certificates held by the Holders of Securities exercising the right to call a meeting and only those Securities specified shall be counted for purposes of determining whether the required percentage set forth in the second sentence of this paragraph has been met.

(b)  Except to the extent otherwise provided in the terms of the Securities, the following provisions shall apply to meetings of Holders of Securities:

(i)  notice of any such meeting shall be given to all the Holders of Securities having a right to vote thereat at least 7 days and not more than 60 days before the date of such meeting. Whenever a vote, consent or approval of the Holders of Securities is permitted or required under this Trust Agreement or the rules of any stock exchange on which the Trust Preferred Securities are listed or admitted for trading, such vote, consent or approval may be given at a meeting of the Holders of Securities. Any action that may be taken at a meeting of the Holders of Securities may be taken without a meeting and without prior notice if a consent in writing setting forth the action so taken is signed by the Holders of Securities owning not less than the minimum amount of Securities in Liquidation Amount that would be necessary to authorize or take such action at a meeting at which all Holders of Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of Securities entitled to vote who have not consented in writing. The Administrative Trustees may specify that any written ballot submitted to the Security Holders for the purpose of taking any action without a meeting shall be returned to the Trust within the time specified by the Administrative Trustees;

(ii)  each Holder of a Security may authorize any Person to act for it by proxy on all matters in which a Holder of Securities is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Holder of Securities executing such proxy. Except as otherwise provided herein, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Holders of the Securities were stockholders of a Delaware corporation;

(iii)  each meeting of the Holders of the Securities shall be conducted by the Administrative Trustees or by such other Person that the Administrative Trustees may designate; and

58

(iv)  unless the Business Trust Act, this Trust Agreement, the terms of the Securities, the Trust Indenture Act or the listing rules of any stock exchange on which the Trust Preferred Securities are then listed for trading, otherwise provides, the Administrative Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Securities, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Holders of Securities, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote.

ARTICLE 12

REPRESENTATIONS OF PRO3PERTY TRUSTEE

AND DELAWARE TRUSTEE

SECTION 12.1  Representations and Warranties of the Property Trustee.

The Trustee that acts as initial Property Trustee represents and warrants to the Trust and to the Sponsor at the date of this Trust Agreement, and each Successor Property Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Property Trustee’s acceptance of its appointment as Property Trustee that:

(a)  the Property Trustee is a banking corporation, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Trust Agreement;

(b)  the Property Trustee satisfies the requirements set forth in Section 6.3(a);

(c)  the execution, delivery and performance by the Property Trustee of this Trust Agreement has been duly authorized by all necessary corporate action on the part of the Property Trustee. This Trust Agreement has been duly executed and delivered by the Property Trustee, and it constitutes a legal, valid and binding obligation of the Property Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors’ rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law);

(d)  the execution, delivery and performance of this Trust Agreement by the Property Trustee does not conflict with or constitute a breach of the articles of association or incorporation, as the case may be, or the by-laws (or other similar organizational documents) of the Property Trustee; and

(e)  no consent, approval or authorization of, or registration with or notice to, any State (which term, in the case of the initial Property Trustee, shall mean the State of New York) or federal banking authority having jurisdiction over the trust powers of the Property Trustee is required for the execution, delivery or performance by the Property Trustee of this Trust Agreement.

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SECTION 12.2  Representations and Warranties of the Delaware Trustee.

The Trustee that acts as initial Delaware Trustee represents and warrants to the Trust and to the Sponsor at the date of this Trust Agreement, and each Successor Delaware Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Delaware Trustee’s acceptance of its appointment as Delaware Trustee that:

(a)  the Delaware Trustee satisfies the requirements set forth in Section 6.2, satisfies Trust Section 3807 of the Business Trust Act and has the power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Trust Agreement and, if it is not a natural person, is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization;

(b)  the Delaware Trustee has been authorized to perform its obligations under the Certificate of Trust and this Trust Agreement. This Trust Agreement under Delaware law constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors’ rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law); and

(c)  no consent, approval or authorization of, or registration with or notice to, the State of Delaware or federal banking authority is required for the execution, delivery or performance by the Delaware Trustee of this Trust Agreement

ARTICLE 13

MISCELLANEOUS

SECTION 13.1  Notices.

All notices provided for in this Trust Agreement shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by registered or certified mail, as follows:

(a)  if given to the Trust, in care of the Administrative Trustees at the Trust’s mailing address set forth below (or such other address as the Trust may give notice of to the Property Trustee, the Delaware Trustee and the Holders of the Securities):

c/o Virginia Electric and Power Company

120 Tredegar Street

Richmond, Virginia 23219

(b)  if given to the Delaware Trustee, at the mailing address set forth below (or such other address as the Delaware Trustee may give notice of to the Administrative Trustees, the Property Trustee and the Holders of the Securities):

Chase Manhattan Bank USA, National Association

60

c/o JP Morgan Chase

500 Stanton Christiana Road

Building 4—3rd Floor

Newark, Delaware 19713

Attention: Institutional Trust Services

(c)  if given to the Property Trustee, at its Corporate Trust Office (or such other address as the Property Trustee may give notice of to the Administrative Trustees, the Delaware Trustee and the Holders of the Securities).

(d)  if given to the Sponsor or the Holder of the Common Securities, at the mailing address set forth below (or such other address as the Sponsor or Holder of the Common Securities may give notice of to the Property Trustee, the Delaware Trustee and the Trust):

Virginia Electric and Power Company

One James River Plaza

701 East Cary Street

Richmond, Virginia 23219

(e)  if given to any other Holder, at the address set forth on the Security Register.

All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver.

SECTION 13.2  Governing Law.

This Trust Agreement and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, provided that the immunities and standard of care of the Property Trustee in connection with the administration of its trusts hereunder shall be governed by and interpreted in accordance with the laws of the jurisdiction of its incorporation.

SECTION 13.3  Intention of the Parties.

It is the intention of the parties hereto that the Trust be classified for United States federal income tax purposes as a grantor trust. The provisions of this Trust Agreement shall be interpreted in a manner consistent with such classification.

SECTION 13.4  Headings.

Headings contained in this Trust Agreement are inserted for convenience of reference only and do not affect the interpretation of this Trust Agreement or any provision hereof.

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SECTION 13.5  Successors and Assigns.

Whenever in this Trust Agreement any of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included, and all covenants and agreements in this Trust Agreement by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether so expressed.

SECTION 13.6   Partial Enforceability

If any provision of this Trust Agreement, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Trust Agreement, or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby.

SECTION 13.7  Counterparts.

This Trust Agreement may contain more than one counterpart of the signature page and this Trust Agreement may be executed by the affixing of the signature of each of the Trustees and the Sponsor to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page.

[THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY; THE SIGNATURE PAGE FOLLOWS.]

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IN WITNESS WHEREOF, the undersigned have caused these presents to be executed as of the day and year first above written.

VIRGINIA ELECTRIC AND POWER. COMPANY, as Sponsor, as Common Securities Holder and as Junior Subordinated Note Issuer
By:
	Name: Title:

JPMORGAN CHASE BANK, as Property Trustee
By:
	Name: Title:

CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION as Delaware Trustee
By:
	Name: Title:

G. Scott Hetzer, as Administrative Trustee

James P. Carney, as Administrative Trustee

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EXHIBIT A

[IF THE TRUST PREFERRED SECURITY IS TO BE A GLOBAL SECURITY, INSERT THE FOLLOWING: THIS TRUST PREFERRED SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), OR A NOMINEE OF THE DEPOSITARY. THIS TRUST PREFERRED SECURITY IS EXCHANGEABLE FOR TRUST PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND NO TRANSFER OF THIS TRUST PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS TRUST PREFERRED SECURITY CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO VIRGINIA POWER CAPITAL TRUST II OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY TRUST PREFERRED SECURITY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

CERTIFICATE NO.                

NUMBER OF TRUST PREFERRED SECURITIES: As set forth on Schedule A hereto

CUSIP NO.                            

CERTIFICATE EVIDENCING 7.375% TRUST PREFERRED SECURITIES

OF

VIRGINIA POWERCAPITAL TRUST II

7.375% TRUST PREFERRED SECURITIES

(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)

FULLY AND UNCONDITIONALLY

GUARANTEED BY VIRGINIA ELECTRIC AND POWER COMPANY.

VIRGINIA POWER CAPITAL TRUST II, a statutory business trust created under the laws of the State of Delaware (the “Trust”), hereby certifies that                        (the “Holder”) is the registered owner of the number of Trust Preferred Securities of the Trust set forth on Schedule A hereto representing undivided beneficial ownership interests in the assets of the

Trust designated the “7.375% Trust Preferred Security” (liquidation amount $25 per Trust Preferred Security) (the “Trust Preferred Securities”). The Trust Preferred Securities are transferable on the register of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in the Trust Agreement (as defined below). The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Trust Preferred Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Trust Agreement of the Trust, dated as of August 23, 2002, as the same may be amended from time to time (the “Trust Agreement”), by and among VIRGINIA ELECTRIC AND POWER COMPANY, G. Scott Hetzer and James P. Carney, as Administrative Trustees, JPMorgan Chase Bank, as Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee and the Holders. Capitalized terms used herein but not defined shall have the meaning given them in the Trust Agreement. The Holder is entitled to the benefits of the Guarantee to the extent described therein. The Sponsor will provide a copy of the Trust Agreement, the Guarantee and the Indenture to a Holder without charge upon written request to the Sponsor at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Junior Subordinated Notes as indebtedness and the Trust Preferred Securities as evidence of undivided indirect beneficial ownership interests in the Junior Subordinated Notes.

IN WITNESS WHEREOF, the Trust has executed this certificate this                      day of August, 2002.

VIRGINIA POWER CAPITAL TRUST II
By:
	Name: Title: Administrative Trustee

CERTIFICATE OF AUTHENTICATION

This is one of the Trust Preferred Securities referred to in the within-mentioned Trust Agreement.

JPMORGAN CHASE BANK, as Property Trustee
By:
	Authorized Officer

SCHEDULE A

SCHEDULE OF ADJUSTMENTS

The initial number of Trust Preferred Securities evidenced by the Certificate to which this Schedule is attached is                     . The notations on the following table evidence increases in the number of Trust Preferred Securities evidenced by such Certificate.

Closing Date Increase in Number of Trust Preferred Securities Total Number of Trust Preferred Securities Outstanding After Increase Notation by Property Trustee

EXHIBIT B

TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE

CONDITIONS SET FORTH IN THE TRUST AGREEMENT

REFERRED TO BELOW.

CERTIFICATE NO.                    

NUMBER OF COMMON SECURITIES: As set forth on Schedule A hereto

CERTIFICATE EVIDENCING 7.375%COMMON SECURITIES

OF

VIRGINIA POWER CAPITAL TRUST II

7.375% COMMON SECURITIES

(LIQUIDATION AMOUNT $25 PER COMMON SECURITY)

VIRGINIA POWER CAPITAL TRUST II, a statutory business trust created under the laws of the State of Delaware (the “Trust”), hereby certifies that VIRGINIA ELECTRIC AND POWER COMPANY (the “Holder”) is the registered owner of the number of common securities of the Trust set forth on Schedule A hereto representing an undivided beneficial ownership interest in the assets of the Trust designated the “7.375% Common Securities” (liquidation amount $25 per Common Security) (the “Common Securities”). The Common Securities are not transferable and any attempted transfer thereof shall be void except as permitted by applicable law and by Section 7.9(b)(ii) of the Trust Agreement (as defined below). The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Trust Agreement of the Trust, dated as of August 23, 2002 (as the same may be amended from time to time, the “Trust Agreement”), by and among VIRGINIA ELECTRIC AND POWER COMPANY, as Sponsor, G. Scott Hetzer and James P. Carney, as Administrative Trustees, and, JPMorgan Chase Bank, as Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee, and the Holders. The Holder is entitled to the benefits of the Guarantee to the extent described therein. Capitalized terms used herein but not defined shall have the meaning given them in the Trust Agreement. The Sponsor will provide a copy of the Trust Agreement, the Guarantee and the Indenture to the Holder without charge upon written request to the Sponsor at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Junior Subordinated Notes as indebtedness and the Common Securities as evidence of an undivided indirect beneficial ownership interest in the Junior Subordinated Notes.

IN WITNESS WHEREOF, the Trust has executed this certificate this                     day of August, 2002.

VIRGINIA POWER CAPITAL TRUST II
By:
	Name: Title: Administrative Trustee

SCHEDULE A

SCHEDULE OF ADJUSTMENTS

The initial number of Common Securities evidenced by the Certificate to which this Schedule is attached is                 . The notations on the following table evidence increases in the number of Common Securities evidenced by such Certificate.

Closing Date Increase in Number of Common Securities Total Number of Common Securities Outstanding After Increase Notation by Property Trustee

EX-4.6

Exhibit 4.6

SECOND SUPPLEMENTAL INDENTURE

BETWEEN

VIRGINIA ELECTRIC AND POWER COMPANY

AND

JPMORGAN CHASE BANK

DATED AS OF AUGUST 1, 2002

7.375% JUNIOR SUBORDINATED NOTES

DUE JULY 30, 2042

TABLE OF CONTENTS

ARTICLE I—DEFINITIONS		2
1.1	Definition of Terms	2
ARTICLE II—GENERAL TERMS AND CONDITIONS OF THE JUNIOR SUBORDINATED NOTES		4
2.1	Designation and Principal Amount	4
2.2	Stated Maturity	5
2.3	Form and Payment; Minimum Transfer Restriction.	5
2.4	Exchange and Registration of Transfer of Junior Subordinated Notes; Restrictions on Transfers; Depositary	5
2.5	Interest.	7
2.6	Direct Action by Holders of Trust Preferred Securities	7
ARTICLE III—REDEMPTION OF THE JUNIOR SUBORDINATED NOTES		8
3.1	Tax Event or Investment Company Event Redemption	8
3.2	Optional Redemption by Company	8
3.3	Notice of Redemption	8
ARTICLE IV—EXTENSION OF INTEREST PAYMENT PERIOD		8
4.1	Extension of Interest Payment Period	8
4.2	Notice of Extension.	9
ARTICLE V—REMEDIES; DIRECT ACTION		10
5.1	Events of Default	10
5.2	Direct Action	10
ARTICLE VI—SATISFACTION AND DISCHARGE		11
6.1	Satisfaction and Discharge, Unclaimed Moneys	11
ARTICLE VII—ADDITIONAL COVENANT		12
7.1	Additional Tax Sums	12
7.2	Subordination	13
ARTICLE VIII—EXPENSES		13
8.1	Payment of Expenses	13
8.2	Payment Upon Resignation or Removal	14

ARTICLE IX—FORM OF JUNIOR SUBORDINATED NOTE		14
9.1	Form of Junior Subordinated Note	14
ARTICLE X—ORIGINAL ISSUE OF JUNIOR SUBORDINATED NOTES		14
10.1	Original Issue of Junior Subordinated Notes	14
ARTICLE XI—MISCELLANEOUS		15
11.1	Ratification of Indenture; Second Supplemental Indenture Controls	15
11.2	Trustee Not Responsible for Recitals	15
11.3	Governing Law	15
11.4	Separability	15
11.5	Counterparts	15
Exhibit A—Form of Junior Subordinated Note

SECOND SUPPLEMENTAL INDENTURE

SECOND SUPPLEMENTAL INDENTURE, dated as of August 1, 2002 (the “Second Supplemental Indenture”), between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia corporation (the “Company”), and JPMORGAN CHASE BANK (formerly known as Chemical Bank), as trustee (the “Trustee”), under the Indenture dated as of August 1, 1995 between the Company and the Trustee (the “Base Indenture” and, together with the First Supplemental Indenture dated as of August 1, 1995 and this Second Supplemental Indenture, the “Indenture”).

WHEREAS, the Company executed and delivered the Base Indenture to the Trustee to provide for the future issuance of the Company’s unsecured junior subordinated notes (the “Securities,” which term as used herein has the same meaning as the term “Junior Subordinated Notes” in the Base Indenture) to be issued from time to time in one or more series as might be determined by the Company under the Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Base Indenture;

WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a series of its Securities, to be known as its 7.375% Junior Subordinated Notes due July 30, 2042 (the “Junior Subordinated Notes”), the form and substance of such Junior Subordinated Notes and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this Second Supplemental Indenture;

WHEREAS, the Company desires that this series of Securities be originally issued on August 23, 2002 pursuant to the Indenture and the Underwriting Agreement (as defined below);

WHEREAS, Virginia Power Capital Trust II, a Delaware statutory business trust (the “Trust”), has offered to the purchasers (the “Underwriters”) named in Schedule I to the Underwriting Agreement (the “Underwriting Agreement”) dated August 16, 2002 among the Underwriters, the Trust and the Company, $385,000,000 aggregate liquidation amount of its 7.375% Trust Preferred Securities (the “Trust Preferred Securities”), representing undivided beneficial interests in the assets of the Trust and proposes to invest the proceeds from the sale of the Trust Preferred Securities, together with the proceeds of the sale by the Trust to the Company of $11,907,225 aggregate liquidation amount of its Common Securities, in $396,907,225 aggregate principal amount of the Junior Subordinated Notes; and

WHEREAS, the Company has requested that the Trustee execute and deliver this Second Supplemental Indenture and all requirements necessary to make this Second Supplemental Indenture a valid instrument in accordance with its terms, and to make the Junior Subordinated Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been performed, and the execution and delivery of this Second Supplemental Indenture has been duly authorized in all respects;

NOW, THEREFORE, in consideration of the purchase and acceptance of the Junior Subordinated Notes by the Underwriters, and for the purpose of setting forth, as provided in the Base Indenture, the form and substance of the Junior Subordinated Notes and the terms,

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provisions and conditions thereof, the Company covenants and agrees with the Trustee as follows:

ARTICLE I

DEFINITIONS

1.1  Definition of Terms.    For all purposes of this Second Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(a)  the terms which are defined in the Base Indenture have the same meanings when used in this Second Supplemental Indenture unless otherwise defined herein;

(b)  the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(c)  all other terms used herein which are defined in the Trust Indenture Act of 1939, as amended, whether directly or by reference therein, have the meanings assigned to them therein;

(d)  all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation; provided, that when two or more principles are so generally accepted, it shall mean that set of principles consistent with those in use by the Company;

(e)  a reference to a Section or Article is to a Section or Article of this Second Supplemental Indenture unless otherwise stated;

(f)  the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Second Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision;

(g)  headings are for convenience of reference only and do not affect interpretation; and

(h)  the following terms have the meanings given to them in the Trust Agreement: (i) Administrative Trustee, (ii) Business Day (iii) Delaware Trustee, (iv) Distributions, (v) Property Trustee, (vi) Tax Event and (vii) Investment Company Event.

“Additional Interest”

(i)  means, notwithstanding the definition set forth in the Base Indenture and with respect to any Securities issued under the Indenture on or after the date hereof, the interest, if any, that shall accrue on any interest on the Securities of any series the payment of which has not been made on the applicable

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interest payment date and which shall accrue at the rate per annum specified or determined as specified in such Security and

(ii)  with respect to the Junior Subordinated Notes has the meaning specified in Section 2.5.

“Additional Tax Sums” has the meaning specified in Section 7.1.

“Coupon Rate” has the meaning specified in Section 2.5(a).

“Definitive Junior Subordinated Note Certificates” means Junior Subordinated Notes issued in definitive, fully registered form.

“Extension Period” has the meaning specified in Section 4.1.

“Global Security” has the meaning specified in Section 2.4(a).

“Interest Payment Date” has the meaning specified in Section 2.5(a).

“Junior Subordinated Notes” has the meaning specified in the second recital to this Second Supplemental Indenture.

“Optional Redemption Price” has the meaning specified in Section 3.2.

“Record Date” has the meaning specified in Section 2.5(a).

“Senior Indebtedness” means with respect to the Company, notwithstanding the definition set forth in the Base Indenture and with respect to any Securities issued under the Indenture on or after the date hereof, (i) any indebtedness of the Company for borrowed or purchased money, whether or not evidenced by bonds, debentures, notes or other written instruments, (ii) obligations of the Company for reimbursement under letters of credit, banker’s acceptances, security purchase facilities or similar facilities issued for the account of the Company, (iii) any indebtedness or other obligations of the Company with respect to commodity contracts (including but not limited to contracts in the spot, forward and futures markets, options, and contracts for differences), interest rate commodity and currency swap agreements, cap, floor and collar agreements, currency spot and forward contracts, and other similar agreements or arrangements designed to protect against fluctuations in commodity prices, currency exchange or interest rates, (iv) all obligations of the Company as lessee which are capitalized in accordance with generally accepted accounting principles, and (v) any guarantees, endorsements (other than by endorsement of negotiable instruments for collection in the ordinary course of business) or other similar contingent obligations in respect of obligations of others of a type described in (i), (ii) or (iii) above, whether or not such obligation is classified as a liability on a balance sheet prepared in accordance with generally accepted accounting principles, in each case listed in (i), (ii), (iii), (iv) and (v) above whether outstanding on the date of execution of this Indenture or thereafter incurred, other than obligations ranking on a parity with the Securities or ranking junior to the Securities; provided, however, that “Senior Indebtedness” does not include (a) obligations to trade creditors or (b) any indebtedness of the Company to any of its Subsidiaries.

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“Special Event” has the meaning specified in Section 3.1.

“Special Event Redemption Price” has the meaning specified in Section 3.1.

“Stated Maturity” has the meaning specified in Section 2.2.

“Subsidiary” means with respect to any Securities issued under the Indenture on or after the date hereof any corporation (or the equivalent type of entity in other jurisdictions) more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

“Trust Preferred Securities” has the meaning specified in the fourth recital to this Second Supplemental Indenture.

“Trust” has the meaning specified in the fourth recital to this Second Supplemental Indenture.

“Trust Agreement” means the Amended and Restated Trust Agreement dated as of August 23, 2002 among the Company, as Sponsor, JPMorgan Chase Bank, as Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of the Trust.

“Underwriters” has the meaning specified in the fourth recital to this Second Supplemental Indenture.

“Underwriting Agreement” has the meaning specified in the fourth recital to this Second Supplemental Indenture.

ARTICLE II

GENERAL TERMS AND CONDITIONS OF THE

JUNIOR SUBORDINATED NOTES

2.1  Designation and Principal Amount.    There is hereby authorized one series of Junior Subordinated Notes, to be designated the “7.375% Junior Subordinated Notes due July 30, 2042,” in the initial aggregate principal amount of $396,907,225, which amount shall be as set forth in any written orders of the Company for the authentication and delivery of Junior Subordinated Notes pursuant to Section 302 of the Base Indenture and Section 10.1 hereof. Additional Junior Subordinated Notes without limitation as to amount, and without the consent of the holders of the then Outstanding Junior Subordinated Notes, may also be authenticated and delivered in the manner provided in Section 302 of the Base Indenture. Any such additional Junior Subordinated Notes will have the same Stated Maturity and other terms as those initially issued.

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2.2  Stated Maturity.    The stated maturity of the Junior Subordinated Notes is July 30, 2042, which may not be shortened or extended (the “Stated Maturity”).

2.3  Form and Payment; Minimum Transfer Restriction.

(a)  The Junior Subordinated Notes shall be issued to the Property Trustee in fully registered definitive form without coupons in minimum denominations of $25 and integral multiples of $25 in excess thereof. Principal and interest on the Junior Subordinated Notes issued in definitive form will be payable, the transfer of such Junior Subordinated Notes will be registrable and such Junior Subordinated Notes will be exchangeable for Junior Subordinated Notes bearing identical terms and provisions at the Corporate Trust Office of the Trustee; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered holder at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the registered holder of any Junior Subordinated Notes is the Property Trustee, the payment of the principal of and interest (including Additional Interest and Additional Tax Sums, if any) on such Junior Subordinated Notes held by the Property Trustee will be made at such place, or by wire transfer of immediately available funds to such account, as may be designated by the Property Trustee. The Security Register for the Junior Subordinated Notes shall be kept at the Corporate Trust Office of the Trustee and the Trustee is hereby appointed Security Registrar for the Junior Subordinated Notes.

(b)  The Junior Subordinated Notes may be transferred or exchanged only in minimum denominations of $25 and integral multiples of $25 in excess thereof, and any attempted transfer, sale or other disposition of Junior Subordinated Notes in a denomination other than an authorized denomination shall be deemed to be void and of no legal effect whatsoever. Any such transferee shall be deemed not to be the holder of such Junior Subordinated Notes for any purpose, including but not limited to the receipt of payments in respect of such Junior Subordinated Notes and such transferee shall be deemed to have no interest whatsoever in such Junior Subordinated Notes.

2.4  Exchange and Registration of Transfer of Junior Subordinated Notes; Restrictions on Transfers; Depositary.    If distributed to holders of Trust Preferred Securities pursuant to Section 8.2 of the Trust Agreement, the Junior Subordinated Notes will be issued to such holders in the same form as the Trust Preferred Securities that such Junior Subordinated Notes replace in accordance with the following procedures:

(a)  So long as Junior Subordinated Notes are eligible for book-entry settlement with the Depositary, or unless required by law, all Junior Subordinated Notes that are so eligible will be represented by one or more Junior Subordinated Notes in global form (a “Global Security”) registered in the name of the Depositary or the nominee of the Depositary. Except as provided in Section 2.4(c) below, beneficial owners of a Global Security shall not be entitled to have Definitive Certificates registered in their names, will not receive or be entitled to receive physical delivery of Definitive Junior Subordinated Note Certificates and will not be registered holders of such Global Security.

(b)  The transfer and exchange of beneficial interests in a Global Security shall be effected through the Depositary in accordance with the Indenture and the procedures and

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standing instructions of the Depositary and the Trustee shall make appropriate endorsements to reflect increases or decreases in principal amounts of such Global Security.

(c)  Notwithstanding any other provisions of the Indenture (other than the provisions set forth in this Section 2.4(c)), a Global Security may not be exchanged in whole or in part for Junior Subordinated Notes registered, and no transfer of a Global Security may be registered, in the name of any person other than the Depositary or a nominee thereof unless (i) such Depositary (A) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (B) has ceased to be a clearing agency registered as such under the Exchange Act and no successor Depositary has been appointed by the Company within 90 days after its receipt of such notice or its becoming aware of such ineligibility, (ii) there shall have occurred and be continuing an Event of Default, or any event which after notice or lapse of time or both would be an Event of Default under the Indenture, with respect to such Junior Subordinated Note, or (iii) the Company, in its sole discretion, instructs the Trustee to exchange such Global Security for a Junior Subordinated Note that is not a Global Security (in which case such exchange shall be effected by the Trustee).

The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Securities. Initially, any Global Securities shall be registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.

Definitive Junior Subordinated Notes issued in exchange for all or a part of a Global Security pursuant to this Section 2.4(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such definitive Junior Subordinated Notes to the Person in whose names such definitive Junior Subordinated Notes are so registered.

So long as Junior Subordinated Notes are represented by one or more Global Securities, (i) the registrar for the Junior Subordinated Notes and the Trustee shall be entitled to deal with the clearing agency for all purposes of the Indenture relating to such Global Securities as the sole holder of the Junior Subordinated Notes evidenced by such Global Securities and shall have no obligations to the holders of beneficial interests in such Global Securities; and (ii) the rights of the holders of beneficial interests in such Global Securities shall be exercised only through the clearing agency and shall be limited to those established by law and agreements between such holders and the clearing agency and/or the participants in the clearing agency.

At such time as all interests in a Global Security have been paid, redeemed, exchanged, repurchased or canceled, such Global Security shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and instructions of the Depositary. At any time prior to such cancellation, if any interest in a Global Security is exchanged for definitive Junior Subordinated Notes, redeemed by the Company pursuant to Article 3 or canceled, or transferred for part of a Global Security, the principal amount of such Global Security shall, in accordance with the standing procedures and instructions of the Depositary be reduced or increased, as the

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case may be, and an endorsement shall be made on such Global Security by, or at the direction of, the Trustee to reflect such reduction or increase.

(d)  If the Junior Subordinated Notes are distributed to holders of the Trust Preferred Securities pursuant to the terms of the Trust Agreement, the Company will use its reasonable best efforts to list the Junior Subordinated Notes on the New York Stock Exchange or such other stock exchange or other organization, if any, on which the Trust Securities are then listed.

2.5  Interest.

(a)  Each Junior Subordinated Note will bear interest at the rate of 7.375% per annum (the “Coupon Rate”) from August 23, 2002 until the principal thereof has been paid or duly provided for, and will bear interest (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the Coupon Rate (“Additional Interest”), compounded quarterly, payable (subject to the provisions of Article 4) quarterly in arrears on each January 30, April 30, July 30 and October 30 of each year (each, an “Interest Payment Date”), commencing on October 30, 2002 to the Person in whose name such Junior Subordinated Note is registered, subject to certain exceptions, at the close of business on the Record Date next preceding such Interest Payment Date. The “Record Date” for payment of interest will be the Business Day next preceding the Interest Payment Date, unless such Junior Subordinated Note is registered to a holder other than the Property Trustee or a nominee of the Depositary, in which case the Record Date for payment of interest will be the fifteenth calendar day preceding the applicable Interest Payment Date whether or not a Business Day. Until liquidation, if any, of the Trust, each Junior Subordinated Note will be held in the name of the Property Trustee in trust for the benefit of the holders of the Trust Preferred Securities.

(b)  The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Junior Subordinated Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the next preceding day which is a Business Day, with the same force and effect as if made on the date that such payment was originally payable.

(c)  The Company will also pay any Additional Tax Sums as additional distributions on the Junior Subordinated Notes if the Trust is required to pay any additional taxes, duties or other governmental charges as a result of a Tax Event.

2.6  Direct Action by Holders of Trust Preferred Securities.    In addition to any right of Direct Action granted under Section 3.8(e) of the Trust Agreement to the holders of Trust Preferred Securities, if the Property Trustee fails to enforce its rights under the Trust Agreement or the Indenture to the fullest extent permitted by law and subject to the terms of the Trust Agreement and the Indenture, then a holder of Trust Preferred Securities may directly institute a proceeding against the Company to enforce the Property Trustee’s rights under the

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Trust Agreement or the Indenture without first instituting a legal proceeding against the Property Trustee or any other Person.

ARTICLE III

REDEMPTION OF THE JUNIOR SUBORDINATED NOTES

3.1  Tax Event or Investment Company Event Redemption.    If a Tax Event or Investment Company Event (either, a “Special Event”) shall occur and be continuing, the Company may, at its option, redeem the Junior Subordinated Notes in whole (but not in part) within 90 days of the occurrence of such Special Event at a redemption price (the “Special Event Redemption Price”) equal to 100% of the principal amount of the Junior Subordinated Notes plus accrued and unpaid interest thereon to but excluding the redemption date. The Special Event Redemption Price shall be paid prior to 2:00 p.m., New York City time, on the date of such redemption, provided that the Company shall deposit with the Trustee an amount sufficient to pay the Special Event Redemption Price by 11:00 a.m., New York City time, on the date such Special Event Redemption Price is to be paid.

3.2  Optional Redemption by Company.    The Company shall have the option to redeem the Junior Subordinated Notes at any time on or after August 23, 2007, in whole or in part, at a redemption price (the “Optional Redemption Price”) equal to 100% of the principal amount of the Junior Subordinated Notes plus accrued and unpaid interest thereon to but excluding the redemption date; provided, however, that if a redemption in part would result in the delisting of the Trust Preferred Securities, the Company may redeem the Junior Subordinated Notes only in whole. The Optional Redemption Price shall be paid prior to 2:00 p.m., New York City time, on the date of such redemption, provided that the Company shall deposit with the Trustee an amount sufficient to pay the Optional Redemption Price by 11:00 a.m., New York City time, on the date such Optional Redemption Price is to be paid.

3.3  Notice of Redemption.    Subject to Article Eleven of the Base Indenture, notice of any redemption pursuant to this Article Eleven will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of Junior Subordinated Notes to be redeemed at such holder’s registered address. Unless the Company defaults in payment of the Special Event Redemption Price or the Optional Redemption Price, as the case may be, on and after the redemption date interest shall cease to accrue on such Junior Subordinated Notes called for redemption.

ARTICLE IV

EXTENSION OF INTEREST PAYMENT PERIOD

4.1  Extension of Interest Payment Period.    So long as no Event of Default under Section 501 of the Base Indenture has occurred and is continuing, the Company shall have the right, at any time during the term of the Junior Subordinated Notes, from time to time to defer the payment of interest by extending the interest payment period of such Junior Subordinated Notes for a period up to 20 consecutive quarters (an “Extension Period”), during which Extension Period the Company shall have the right to make partial payments of interest on any

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Interest Payment Date. No Extension Period shall end on a date other than an Interest Payment Date or extend beyond the Stated Maturity of the Junior Subordinated Notes. To the extent permitted by applicable law, interest, the payment of which has been deferred because of an Extension Period imposed pursuant to this Section 4.1, will bear Additional Interest compounded quarterly. At the end of the Extension Period, the Company shall pay all interest then accrued and unpaid on the Junior Subordinated Notes, including any Additional Interest and Additional Tax Sums, if applicable, to the holders of the Junior Subordinated Notes in whose names the Junior Subordinated Notes are registered in the Security Register on the first Record Date preceding the end of the Extension Period. Before the termination of any Extension Period, the Company may further extend such Extension Period, provided that such period together with all such further extensions thereof shall not exceed 20 consecutive quarters, or extend beyond the Stated Maturity. At any time following the termination of any Extension Period and upon the payment of any accrued and unpaid Additional Interest and Additional Tax Sums, if applicable, then due, the Company may elect to begin a new Extension Period, subject to the foregoing requirements. No interest shall be due and payable during an Extension Period, except at the end thereof.

During any such Extension Period, the Company shall not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company’s Capital Stock or (ii) make any payment of principal of or interest on or repay, repurchase or redeem any debt securities of the Company that rank on a parity with or junior to this Junior Subordinated Note or make any guarantee payments with respect to any Guarantee or other guarantee by the Company of the debt securities of any Subsidiary of the Company that by its terms ranks on a parity with or junior to this Junior Subordinated Note (other than (a) dividends or distributions in Common Stock, (b) any declaration of a dividend in connection with the implementation of a Rights Plan, the issuance of any Capital Stock or any class or series of preferred stock of the Company under any Rights Plan or the redemption or repurchase of any rights distributed pursuant to a Rights Plan, (c) payments under any Guarantee relating to the Trust Preferred Securities issued by the Trust and (d) purchases of Common Stock related to the issuance of Common Stock or rights under any of the Company’s benefit plans for its directors, officers, employees, consultants or advisors).

4.2  Notice of Extension.

(a)  If the Property Trustee is the only registered holder of the Junior Subordinated Notes at the time the Company elects to begin or extend an Extension Period, the Company shall give written notice to the Property Trustee, the Administrative Trustees and theTrustee of its election to begin or extend any Extension Period at least five Business Days prior to the earlier of (i) the next succeeding date on which Distributions on the Trust Preferred Securities issued by the Trust would have been payable but for the election to begin or extend such Extension Period or (ii) subject to applicable principles of federal securities law, the date the Administrative Trustees are required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of such Trust Preferred Securities of the record date or the date such Distributions are payable, but in any event not less than five Business Days prior to such record date. An Administrative Trustee shall give notice of the Company’s election to begin or extend an Extension Period to the holders of such Trust Preferred Securities.

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(b)  If the Property Trustee is not the only holder of the Junior Subordinated Notes at the time the Company elects to begin or extend an Extension Period, the Company shall give the holders of the Junior Subordinated Notes, the Administrative Trustees and the Trustee written notice of its election to begin or extend such Extension Period at least 10 Business Days prior to the earlier of (i) the next succeeding Interest Payment Date or (ii) subject to applicable principles of federal securities law, the date the Company is required to give notice of the record or payment date of such interest payment to any applicable self-regulatory organization or to holders of the Junior Subordinated Notes.

(c)  The quarter in which any notice is given pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20 consecutive quarters permitted in the maximum Extension Period permitted under Section 4.1.

ARTICLE V

REMEDIES; DIRECT ACTION

5.1  Events of Default.    Section 501(5) of the Base Indenture is amended and supplemented with respect to Securities issued under the Indenture on or after the date hereof by deleting the word “or” at the end of Section 501(5) and adding the following:

“unless the Trustee, or the Trustee and the Holders of a principal amount of Junior Subordinated Notes not less than the principal amount of Junior Subordinated Notes the Holders of which gave such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, that the Trustee or the Trustee and the Holders of such principal amount of Junior Subordinated Notes, as the case may be, shall be deemed to have agreed to an extension of such period if corrective action is initiated by the Company within such period and is being diligently pursued; or”

5.2  Direct Action.    Article Five of the Base Indenture is amended and supplemented, with respect to Securities issued under the Indenture on or after the date hereof, to add a new Section 516, which reads in its entirety as follows:

Section 516.  Direct Action.

In the case of Junior Subordinated Notes of a series issued to a Securities Trust, any holder of preferred securities that are part of the corresponding series of Trust Securities issued by such Securities Trust shall have the right, upon the occurrence of an Event of Default described in Sections 501 (1)-(3) of the Base Indenture with respect to such Junior Subordinated Notes, to institute a suit directly against the Company (a “Direct Action”) for enforcement of payment to such holder of principal of (including premium, if any) and interest (including any Additional Interest) on such Junior Subordinated Notes having a principal amount equal to the aggregate liquidation amount of such preferred securities of the corresponding series held by such holder. Notwithstanding any payments made to a holder of such preferred securities by the Company pursuant to a Direct Action initiated by such holder, the Company shall remain obligated to pay the principal of or interest due on such Junior Subordinated Notes, and

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the Company shall be subrogated to the rights of the holder of such preferred securities with respect to payments on the preferred securities to the extent of any payments made by the Company to such holder in any Direct Action.

ARTICLE VI

SATISFACTION AND DISCHARGE

6.1  Satisfaction and Discharge, Unclaimed Moneys.    Article Four of the Base Indenture is amended and supplemented with respect to Securities issued under the Indenture on or after the date hereof by deleting Article Four of the Base Indenture in its entirety, and substituting the following in lieu thereof:

ARTICLE FOUR

SATISFACTION AND DISCHARGE OF

INDENTURE, UNCLAIMED MONEYS

Section 401.  Satisfaction and Discharge of Indenture.

If (a) the Company shall deliver to the Trustee for cancellation all Junior Subordinated Notes of any series theretofore authenticated (other than any (i) Junior Subordinated Notes of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 304 and (ii) Junior Subordinated Notes of such series for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) and not theretofore canceled, or (b) all the Junior Subordinated Notes of such series not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit with the Trustee as trust funds the entire amount sufficient to pay at Maturity or upon redemption all of such Junior Subordinated Notes not theretofore canceled or delivered to the Trustee for cancellation, including principal and any interest due or to become due to such date of Maturity or redemption date, as the case may be, and if in either case the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to Junior Subordinated Notes of such series, then this Indenture shall cease to be of further effect with respect to Junior Subordinated Notes of such series, (except as to (i) remaining rights of registration of transfer, conversion, substitution and exchange and the Company’s right of optional redemption of Junior Subordinated Notes of such series, (ii) rights hereunder of holders to receive payments of principal of, and any interest on, the Junior Subordinated Notes of such series, and other rights, duties and obligations of the holders of Junior Subordinated Notes of such series as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee, and (iii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on demand of the Company, and at the cost and expense of the Company, shall execute proper instruments acknowledging

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satisfaction of and discharging this Indenture with respect to the Junior Subordinated Notes of such series. The Company hereby agrees to compensate the Trustee for any services thereafter reasonably and properly rendered and to reimburse the Trustee for any costs or expenses theretofore and thereafter reasonably and properly incurred by the Trustee in connection with this Indenture or the Junior Subordinated Notes of such series. Notwithstanding the satisfaction and discharge of this Indenture with respect to the Junior Subordinated Notes of any or all series, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to clause (b) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive.

If, subsequent to the date a discharge is effected pursuant to this Section 401, Additional Interest or Additional Tax Sums (in excess of that established as of the date such discharge is effected) become payable in respect of the series of Junior Subordinated Notes discharged, in order to preserve the benefits of the discharge established hereunder, the Company shall irrevocably deposit or cause to be irrevocably deposited in accordance with the provisions of this Section 401, within ten Business Days prior to the date the first payment in respect of any portion of such excess Additional Interest or Additional Tax Sums become due, such additional funds as are necessary to satisfy the provisions of this Section 401 as if a discharge were being effected as of the date of such subsequent deposit. Failure to comply with the requirements of this paragraph shall result in the termination of the benefits of the discharge established by this Section 401.

Section 402.  Application by Trustee of Funds Deposited for Payment of Securities.

Subject to the provisions of the last paragraph of Section 1003, all moneys deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to the holders of the particular Junior Subordinated Notes of such series, for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest.

ARTICLE VII

ADDITIONAL COVENANT

7.1  Additional Tax Sums.    Article Ten of the Base Indenture is amended and supplemented with respect to Securities issued under the Indenture on or after the date hereof by adding the following Section 1009:

Section 1009.  Additional Tax Sums.

In the case of the Junior Subordinated Notes of a series issued to a Securities Trust, so long as no Event of Default has occurred and is continuing and except as otherwise specified as contemplated by Article Two or Section 301, in the event that (i) a Securities Trust is the holder of all of the Outstanding Junior Subordinated Notes of such

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series, (ii) a Tax Event in respect of such Securities Trust shall have occurred and be continuing and (iii) the Company shall not have (a) redeemed the Junior Subordinated Notes of such series or (b) terminated such Securities Trust pursuant to the termination provisions of the related Trust Agreement, the Company shall pay to such Securities Trust (and any permitted successor or assign under the related Trust Agreement) for so long as such Securities Trust (or its permitted successor or assignee) is the registered holder of any Junior Subordinated Notes of such series, such additional amounts as may be necessary in order that the amount of distributions then due and payable by such Securities Trust on the related Trust Securities that at any time remain outstanding in accordance with the terms thereof shall not be reduced as a result of any additional taxes, duties and other governmental charges to which such Securities Trust has become subject as a result of such Tax Event (but not including withholding taxes imposed on holders of such Trust Securities) (the “Additional Tax Sums”). Whenever in this Indenture or the Junior Subordinated Notes there is a reference in any context to the payment of principal of or interest on the Junior Subordinated Notes, such reference shall be deemed to include payment of the Additional Tax Sums provided for in this paragraph to the extent that, in such context, Additional Tax Sums are, were or would be payable in respect thereof pursuant to the provisions of this Section and express reference to the payment of Additional Tax Sums (if applicable) in any provisions hereof shall not be construed as excluding Additional Tax Sums in those provisions hereof where such express reference is not made; provided, however, that the deferral of the payment of interest pursuant to the terms of any series of Junior Subordinated Notes shall not defer the payment of any Additional Tax Sums that may be then due and payable with respect to such series.

7.2  Subordination.    All references to Senior Indebtedness in the Base Indenture, to the extent relating to any Securities issued under the Indenture on or after the date hereof, shall have the meaning assigned to that term in Section 1.1 hereof.

ARTICLE VIII

EXPENSES

8.1  Payment of Expenses.    In connection with the offering, sale and issuance of the Junior Subordinated Notes to the Property Trustee and in connection with the offering, sale and issuance of the Trust Preferred Securities by the Trust, the Company, in its capacity as borrower with respect to the Junior Subordinated Notes, shall:

(a)  pay all costs and expenses relating to the offering, sale and issuance of the Junior Subordinated Notes, including commissions to the Underwriters payable pursuant to the Underwriting Agreement and compensation of the Trustee under the Indenture in accordance with the provisions of Section 607 of the Base Indenture;

(b)  pay all costs and expenses of the Trust (including, but not limited to, costs and expenses relating to the organization of the Trust, the fees and expenses of the Property Trustee and the Delaware Trustee, the costs and expenses relating to the operation of the Trust, including without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting

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equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the acquisition, financing, and disposition of Trust assets);

(c)  pay all costs and expenses related to the enforcement by the Property Trustee of the rights of the registered holders of the Trust Preferred Securities;

(d)  be primarily liable for any indemnification obligations arising with respect to the Trust Agreement and the Underwriting Agreement; and

(e)  pay any and all taxes and all liabilities, costs and expenses with respect to such taxes of the Trust (but not including withholding taxes imposed on holders of Trust Preferred Securities or Common Securities of the Trust).

8.2  Payment Upon Resignation or Removal.    Upon termination of this Second Supplemental Indenture or the Base Indenture or the removal or resignation of the Trustee pursuant to Section 610 of the Base Indenture, the Company shall pay to the Trustee all amounts owed to it under Section 607 of the Base Indenture accrued to the date of such termination, removal or resignation. Upon termination of the Trust Agreement or the removal or resignation of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to Section 6.6 of the Trust Agreement, the Company shall pay to the Delaware Trustee or the Property Trustee, and their respective counsel, as the case may be, all amounts owed to them under Sections 4.2 and 9.4(b) of the Trust Agreement accrued to the date of such termination, removal or resignation.

ARTICLE IX

FORM OF JUNIOR SUBORDINATED NOTE

9.1  Form of Junior Subordinated Notes.    The Junior Subordinated Notes and the Trustee’s Certificate of Authentication to be endorsed thereon are to be substantially in the form attached hereto as Exhibit A.

ARTICLE X

ORIGINAL ISSUE OF JUNIOR SUBORDINATED NOTES

10.1  Original Issue of Junior Subordinated Notes.    Junior Subordinated Notes in the initial aggregate principal amount of up to $396,907,225 may be executed by the Company and delivered to the Trustee for authentication by it in accordance with a Company Order, and the Trustee shall thereupon authenticate and deliver said Junior Subordinated Notes without any further corporate action by the Company. Additional Junior Subordinated Notes without limitation as to amount, and without the consent of the holders of the then Outstanding Junior Subordinated Notes, may also be authenticated and delivered in the manner provided in Section 302 of the Base Indenture. Any such additional Junior Subordinated Notes will have the same Stated Maturity and other terms as those initially issued.

14

ARTICLE XI

MISCELLANEOUS

11.1  Ratification of Indenture; Second Supplemental Indenture Controls.    The Indenture, as supplemented by this Second Supplemental Indenture, is in all respects ratified and confirmed, and this Second Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. The provisions of this Second Supplemental Indenture shall supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith.

11.2  Trustee Not Responsible for Recitals.    The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Second Supplemental Indenture.

11.3  Governing Law.    This Second Supplemental Indenture and each Junior Subordinated Note shall be governed by and construed in accordance with the internal laws of the State of New York.

11.4  Separability.    In case any one or more of the provisions contained in this Second Supplemental Indenture or in the Junior Subordinated Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Second Supplemental Indenture or of the Junior Subordinated Notes, but this Second Supplemental Indenture and the Junior Subordinated Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

11.5  Counterparts.    This Second Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

15

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed as of the date first above written.

VIRGINIA ELECTRIC AND POWER COMPANY
By:
	Name:
	Title:

JPMORGAN CHASE BANK, as Trustee
By:
	Name:
	Title:

16

EXHIBIT A

(FORM OF FACE OF JUNIOR SUBORDINATED NOTE)

[THIS JUNIOR SUBORDINATED NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS JUNIOR SUBORDINATED NOTE IS EXCHANGEABLE FOR JUNIOR SUBORDINATED NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS JUNIOR SUBORDINATED NOTE (OTHER THAN A TRANSFER OF THIS JUNIOR SUBORDINATED NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

UNLESS THIS JUNIOR SUBORDINATED NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY JUNIOR SUBORDINATED NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*

THE JUNIOR SUBORDINATED NOTES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A PRINCIPAL AMOUNT OF $25 OR ANY INTEGRAL MULTIPLE THEREOF. ANY TRANSFER, SALE OR OTHER DISPOSITION OF SUCH JUNIOR SUBORDINATED NOTES IN A BLOCK IN A DENOMINATION OTHER THAN AN AUTHORIZED DENOMINATION SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH JUNIOR SUBORDINATED NOTES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF PAYMENTS IN RESPECT OF SUCH JUNIOR SUBORDINATED NOTES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH JUNIOR SUBORDINATED NOTES.

* Insert in Global Junior Subordinated Notes.

17

VIRGINIA ELECTRIC AND POWER COMPANY

7.375% JUNIOR SUBORDINATED NOTE

DUE JULY 30, 2042

NUMBER	[up to] 1 $
Dated:	CUSIP NO:                                             ]

Registered Holder:

VIRGINIA ELECTRIC AND POWER COMPANY, a corporation duly organized and existing under the laws of the Commonwealth of Virginia (herein referred to as the “Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to the Registered Holder named above, the principal sum [of                                               Dollars($                ))]² [specified in the Schedule annexed hereto]³ on July 30, 2042, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debt. The Company further promises to pay to the registered Holder hereof as hereinafter provided (a) interest on said principal sum (subject to deferral as set forth herein) at the rate per annum specified in the title of this junior subordinated note (the “Junior Subordinated Note”), in like coin or currency, quarterly in arrears on each January 30, April 30, July 30 and October 30 (each an “Interest Payment Date”) commencing October 30, 2002, from the Interest Payment Date next preceding the date hereof to which interest has been paid or duly provided for (unless (i) no interest has yet been paid or duly provided for on this Junior Subordinated Note, in which case from August 23, 2002, or (ii) the date hereof is before an Interest Payment Date but after the related Record Date (as defined below), in which case from such following Interest Payment Date; provided, however, that if the Company shall default in payment of the interest due on such following Interest Payment Date, then from the next preceding Interest Payment Date to which interest has been paid or duly provided for), until the principal hereof is paid or duly provided for, plus (b) Additional Interest, as defined in the Indenture, to the extent permitted by applicable law, on any interest payment that is not made on the applicable Interest Payment Date, which shall accrue at the rate per annum specified in the title of this Junior Subordinated Note, compounded quarterly.

The interest so payable will, subject to certain exceptions provided in the Indenture hereinafter referred to, be paid to the person in whose name this Junior Subordinated Note is registered at the close of business on the Record Date next preceding such Interest Payment Date. The Record Date shall be the Business Day next preceding the Interest Payment Date, unless this Junior Subordinated Note is registered to a holder other than the Property Trustee or a nominee of The Depository Trust Company, in which case the Record Date will be the fifteenth

¹ Insert in Global Junior Subordinated Notes.

² Insert in all Junior Subordinated Notes other than Global Junior Subordinated Notes.

³ Insert in Global Junior Subordinated Notes.

18

calendar day preceding such Interest Payment Date whether or not a Business Day. This Junior Subordinated Note may be presented for payment of principal and interest at the principal corporate trust office of JPMorgan Chase Bank, as paying agent for the Company, maintained for that purpose in the Borough of Manhattan, The City of New York; provided, however, that payment of interest may be made at the option of the Company (i) by check mailed to such address of the person entitled thereto as the address shall appear on the Security Register of the Junior Subordinated Notes or (ii) by transfer to an account maintained by the Person entitled thereto as specified in the Security Register, provided that proper transfer instructions have been received by the Record Date. Interest on the Junior Subordinated Note will be computed on the basis of a 360-day year of twelve 30-day months.

So long as no Event of Default has occurred and is continuing, the Company shall have the right at any time during the term of this Junior Subordinated Note from time to time to defer payment of interest on this Junior Subordinated Note, for up to 20 consecutive quarterly interest payment periods with respect to each deferral period (each an “Extension Period”), during which Extension Periods the Company shall have the right to make partial payments of interest on any Interest Payment Date; provided, however, that no Extension Period shall end on a date other than an Interest Payment Date or extend beyond July 30, 2042. At the end of each Extension Period, the Company shall pay all interest then accrued and unpaid (together with any Additional Interest, if applicable, thereon to the extent permitted by applicable law, and Additional Tax Sums, if applicable). During any such Extension Period, the Company shall not, and shall cause any Subsidiary of the Company not to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company’s Capital Stock (which includes Common Stock and preferred stock) or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank on a parity with or junior to this Junior Subordinated Note or make any guarantee payments with respect to any Guarantee or other guarantee by the Company of the debt securities of any Subsidiary of the Company that by its terms ranks on a parity with or junior to this Junior Subordinated Note (other than (a) dividends or distributions in Common Stock, (b) any declaration of a dividend in connection with the implementation of a Rights Plan, the issuance of any Capital Stock or any class or series of preferred stock of the Company under any Rights Plan or the redemption or repurchase of any rights distributed pursuant to a Rights Plan, (c) payments under any Guarantee relating to the Trust Preferred Securities issued by the Trust and (d) purchases of Common Stock related to the issuance of Common Stock or rights under any of the Company’s benefit plans for its directors, officers, employees, consultants or advisors). Prior to the termination of any such Extension Period, the Company may further extend such Extension Period; provided, however, that no Extension Period shall exceed 20 consecutive quarterly periods or extend beyond July 30, 2042. At any time following the termination of any Extension Period and the payment of all accrued and unpaid interest (together with any Additional Interest and Additional Tax Sums, if applicable) then due, the Company may elect to begin a new Extension Period, subject to the above requirements. No interest shall be due and payable during an Extension Period except at the end thereof. If the Property Trustee is the only registered holder of the Junior Subordinated Notes of this series, the Company shall give written notice to the Property Trustee and the Trustee of its election to begin or extend any Extension Period at least five Business Days prior to the earlier of (i) the next succeeding date on which Distributions on the Trust Preferred Securities issued by the relevant Securities Trust would have been payable but for the election to begin or extend such Extension Period or (ii) the

19

date the Administrative Trustees are required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of such Trust Preferred Securities of the record date or the date such Distributions are payable, but in any event not less than five Business Days prior to such record date. An Administrative Trustee shall give notice of the Company’s election to begin or extend an Extension Period to the holders of such Trust Preferred Securities. If the Property Trustee is not the only holder of the Junior Subordinated Notes of this series at the time the Company elects to begin or extend an Extension Period, the Company shall give the holders of the Junior Subordinated Notes of this series and the Trustee written notice of its election to begin or extend such Extension Period at least 10 Business Days prior to the earlier of (i) the next succeeding Interest Payment Date or (ii) the date the Company is required to give notice of the record or payment date of such interest payment to any applicable self-regulatory organization or to holders of the Junior Subordinated Notes of this series.

The quarter in which any notice is given pursuant to the preceding paragraph shall be counted as one of the 20 consecutive quarters permitted in the maximum Extension Period.

This Junior Subordinated Note is issued pursuant to an Indenture, dated as of August 1, 1995 between the Company, as issuer, and JPMorgan Chase Bank (formerly known as Chemical Bank), a New York banking corporation, as trustee, as supplemented by a First Supplemental Indenture dated as of August 1, 1995 and a Second Supplemental Indenture dated as of August 1, 2002 (as supplemented or amended from time to time, the “Indenture”). Reference is made to the Indenture for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders (the word “Holder” or “Holders” meaning the registered holder or registered holders) of the Junior Subordinated Note. Capitalized terms used herein but not defined herein shall have the respective meanings assigned thereto in the Indenture. By acceptance of this Junior Subordinated Notes, the Holder hereof agrees to be bound by the provisions of the Indenture.

The Junior Subordinated Notes of this series shall have an initial aggregate principal amount of Three Hundred Ninety-Six Million Nine Hundred Seven Thousand Two Hundred Twenty-Five Dollars ($396,907,225).

The Junior Subordinated Notes evidenced by this Certificate may be transferred or exchanged only in minimum denominations of $25 and integral multiples of $25 in excess thereof, and any attempted transfer, sale or other disposition of Junior Subordinated Notes in a denomination other than an authorized denomination shall be deemed to be void and of no legal effect whatsoever.

The indebtedness of the Company evidenced by this Junior Subordinated Note, including the principal hereof and interest hereon, is, to the extent and in the manner set forth in the Indenture, subordinate and junior in right of payment to the Company’s obligations to Holders of Senior Indebtedness of the Company and each Holder of this Junior Subordinated Note, by acceptance hereof, agrees to and shall be bound by such provisions of the Indenture and all other provisions of the Indenture.

20

This Junior Subordinated Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by or on behalf of the Trustee under the Indenture.

IN WITNESS WHEREOF, VIRGINIA ELECTRIC AND POWER COMPANY has caused this instrument to be signed, manually or in facsimile, by its Chairman of the Board, or its President, or any Vice President under the corporate seal of Virginia Electric and Power Company attested by its Corporate Secretary or an Assistant Corporate Secretary

	VIRGINIA ELECTRIC AND POWER COMPANY
[SEAL]	By:
		Name: Title:
Attest:

By:
	Name: Title: [Assistant] Corporate Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities, of the series designated herein, referred to in the within-mentioned Indenture.

JPMORGAN CHASE BANK, as Trustee
By:
	Authorized Officer

21

REVERSE OF JUNIOR SUBORDINATED NOTE

As provided in and subject to the provisions in the Indenture, the Company shall have the right to redeem this Junior Subordinated Note, in whole or in part, at any time on or after August 23, 2007 at the Optional Redemption Price. In addition, upon the occurrence and during the continuation of a Special Event, the Company may, at its option, within 90 days of the occurrence of such Special Event, redeem this Junior Subordinated Note in whole (but not in part) at the Special Event Redemption Price.

In the case an Event of Default, as defined in the Indenture, with respect to the Junior Subordinated Notes of this series shall have occurred and be continuing, the principal of all of the Junior Subordinated Notes of this series may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

Any consent or waiver by the Holder of this Junior Subordinated Note given as provided in the Indenture shall be conclusive and binding upon such Holder and upon all future Holders of this Junior Subordinated Note and of any Junior Subordinated Note issued in exchange, registration of transfer, or otherwise in lieu hereof irrespective of whether any notation of such consent or waiver is made upon this Junior Subordinated Note or such other Junior Subordinated Notes. No reference herein to the Indenture and no provision of this Junior Subordinated Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Junior Subordinated Note, at the places, at the respective times, at the rate and in the coin or currency herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Junior Subordinated Note may be registered on the Security Register of the Junior Subordinated Notes of this series upon surrender of this Junior Subordinated Note for registration of transfer at the offices maintained by the Company or its agent for such purpose, duly endorsed by the Holder hereof or his attorney duly authorized in writing, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar duly executed by the Holder hereof or his attorney duly authorized in writing, but without payment of any charge other than a sum sufficient to reimburse the Company for any tax or other governmental charge incident thereto. Upon any such registration of transfer, a new Junior Subordinated Note or Junior Subordinated Notes of this series of authorized denomination or denominations for the same aggregate principal amount will be issued to the transferee in exchange herefor.

Prior to due presentment for registration of transfer of this Junior Subordinated Note, the Company, the Trustee, and any agent of the Company or the Trustee may deem and treat the person in whose name this Junior Subordinated Note shall be registered upon the Security Register of the Junior Subordinated Notes of this series as the absolute owner of this Junior Subordinated Note (whether or not this Junior Subordinated Note shall be overdue and notwithstanding any notation of ownership or other writing hereon) for the purpose of receiving payment of or on account of the principal hereof and, subject to the provisions on the face

22

hereof, interest due hereon and for all other purposes; and neither the Company nor the Trustee nor any such agent shall be affected by any notice to the contrary.

No recourse shall be had for the payment of the principal of or interest on this Junior Subordinated Note, or for any claim based hereon or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any stockholder, officer, director or employee, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as a part of the consideration for the issue hereof, expressly waived and released.

The Company and, by acceptance of this Junior Subordinated Note or a beneficial interest in this Junior Subordinated Note, each holder hereof and any person acquiring a beneficial interest herein, agree that for United States federal, state and local tax purposes it is intended that this Junior Subordinated Note constitute indebtedness.

This Junior Subordinated Note shall be governed by, and construed in accordance with, the internal laws of the State of New York.

23

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

(please insert Social Security or other identifying number of assignee)

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE

the within Junior Subordinated Note and all rights thereunder, hereby irrevocably constituting and appointing

agent to transfer said Junior Subordinated Note on the books of the Company, with full power of substitution in the premises.

Dated:                          ,         

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.

24

[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL NOTES AND

NOTES ISSUED TO THE PROPERTY TRUSTEE TO REFLECT

CHANGES IN PRINCIPAL AMOUNT]*

The initial principal amount of this Note is: $                    

Changes to Principal Amount of Global Note and Note issued to the Property Trustee

Date Principal Amount by which this Note is to be Decreased or Increased and the Reason for the Decrease or Increase Remaining Principal Amount of this Note Signature of Authorized Officer of Trustee

* Insert Schedule in Global Notes and Notes issued to the Property Trustee.

25

EX-4.8

Exhibit 4.8

GUARANTEE AGREEMENT

DATED AS OF AUGUST 23, 2002

BY AND BETWEEN

VIRGINIA ELECTRIC AND POWER COMPANY

AS GUARANTOR

AND

JPMORGAN CHASE BANK,

AS TRUSTEE

CROSS REFERENCE TABLE*

Section of Trust Indenture Act of 1939, as Amended	Section of Guarantee Agreement
310(a)	4.1(a)
310(b)	2.8; 4.1(c)
310(c)	Inapplicable
311(a)	2.2(b)
311(b)	2.2(b)
311(c)	Inapplicable
312(a)	2.2(a); 2.9
312(b)	2.2(b); 2.9
312(c)	2.9
313(a)	2.3
313(b)	2.3
313(c)	2.3
313(d)	2.3
314(a)	2.4
314(b)	Inapplicable
314(c)	2.5
314(d)	Inapplicable
314(e)	1.1; 2.5; 3.2
314(f)	Inapplicable
315(a)	3.1(d); 3.2(a)
315(b)	2.7(a)
315(c)	3.1(c)
315(d)	3.1(d)
315(e)	Inapplicable
316(a)	2.6; 5.4(a)
316(b)	5.3
316(c)	2.2
317(a)	2.10
317(b)	Inapplicable
318(a)	2.1(b)

* THIS CROSS-REFERENCE TABLE DOES NOT CONSTITUTE PART OF THE AGREEMENT AND SHALL NOT HAVE ANY BEARING UPON THE INTERPRETATION OF ANY OF ITS TERMS OR PROVISIONS.

TABLE OF CONTENTS

	Page
ARTICLE 1 INTERPRETATION AND DEFINITIONS	2
SECTION 1.1 Interpretation and Definitions	2
ARTICLE 2 TRUST INDENTURE ACT	5
SECTION 2.1 Trust Indenture Act; Application	5
SECTION 2.2 Lists of Holders of Securities	6
SECTION 2.3 Reports by Guarantee Trustee	6
SECTION 2.4 Periodic Reports to Guarantee Trustee	6
SECTION 2.5 Evidence of Compliance with Conditions Precedent	6
SECTION 2.6 Guarantee Event of Default; Waiver	7
SECTION 2.7 Guarantee Event of Default; Notice	7
SECTION 2.8 Conflicting Interests	7
SECTION 2.9 Disclosure of Information	7
SECTION 2.10 Guarantee Trustee May File Proofs of Claim	8
ARTICLE 3 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE	8
SECTION 3.1 Powers and Duties of Guarantee Trustee	8
SECTION 3.2 Certain Rights of Guarantee Trustee	9
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee	11
ARTICLE 4 GUARANTEE TRUSTEE	11
SECTION 4.1 Guarantee Trustee; Eligibility	11
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee	12
ARTICLE 5 GUARANTEE	13
SECTION 5.1 Guarantee	13
SECTION 5.2 Waiver of Notice and Demand	13
SECTION 5.3 Obligations Not Affected	13
SECTION 5.4 Rights of Holders	15
SECTION 5.5 Guarantee of Payment	15
SECTION 5.6 Subrogation	15
SECTION 5.7 Independent Obligations	16
ARTICLE 6 LIMITATION OF TRANSACTIONS; SUBORDINATION	16
SECTION 6.1 Limitation of Transactions	16
SECTION 6.2 Ranking	16
SECTION 6.3 Subordination of Common Securities	16
ARTICLE 7 TERMINATION	17
SECTION 7.1 Termination	17

i

ARTICLE 8 INDEMNIFICATION	17
SECTION 8.1 Exculpation	17
SECTION 8.2 Compensation, Expenses and Indemnification	17
ARTICLE 9 MISCELLANEOUS	18
SECTION 9.1 Successors and Assigns	18
SECTION 9.2 Amendments	18
SECTION 9.3 Notices	18
SECTION 9.4 Benefit	19
SECTION 9.5 Governing Law	19

ii

GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT (the “Guarantee”), dated as of August 23, 2002, is executed and delivered by VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia corporation (the “Guarantor”), and JPMORGAN CHASE BANK, a New York banking corporation, as trustee (the “Guarantee Trustee”), for the benefit of the Holders (as defined herein) from time to time of the Securities (as defined herein) of VIRGINIA POWER CAPITAL TRUST II, a Delaware statutory business trust (the “Trust”).

RECITALS

WHEREAS, pursuant to the Trust Agreement (as defined herein), the Trust is issuing on the date hereof $385,000,000 aggregate liquidation amount of trust preferred securities, having a liquidation amount of $25 per security and designated the “7.375% Trust Preferred Securities” of the Trust and may, from time to time, issue additional Tranches (as defined herein) of such securities in the future (the “Trust Preferred Securities”) and $11,907,225 aggregate liquidation amount of common securities, having a liquidation amount equal to approximately 3% of the total capital of the Trust and designated the “7.375% Common Securities” of the Trust and may, from time to time, issue additional Tranches (as defined herein) of such securities in the future (the “Common Securities” and, together with the Trust Preferred Securities, the “Initial Securities”);

WHEREAS, pursuant to the Trust Agreement, the Trust and Virginia Electric and Power Company, as Sponsor, have granted an Option (as defined in Section 7.13(a) of the Trust Agreement) to certain underwriters or initial purchasers, as the case may be, and such Option may be exercised on or within 30 days after the initial Closing Date (as defined in the Trust Agreement) such that an additional $15,000,000 aggregate liquidation amount of Trust Preferred Securities (the “Option Trust Preferred Securities”) and an additional $463,925 aggregate liquidation amount of Common Securities (together with the Initial Securities and the Option Preferred Securities, the “Securities”) may be issued and sold pursuant to Section 7.13 of the Trust Agreement on such initial or second Closing Date, as the case may be; provided that if the Option is not exercised by the underwriters or the initial purchasers, as the case may be, then the defined term the “Securities” shall mean only the Initial Securities;

WHEREAS, the Securities will be issued by the Trust and the proceeds thereof will be used to purchase the Junior Subordinated Notes of the Guarantor, which will be held by the Trust as trust assets;

WHEREAS, as incentive for the Holders to purchase the Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Guarantee, to pay to the Holders of the Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; and

WHEREAS, if a Trust Enforcement Event (as defined herein) has occurred and is continuing, the rights of holders of the Common Securities to receive Guarantee Payments (as defined herein) under this Guarantee are subordinated to the rights of Holders of Trust Preferred Securities to receive Guarantee Payments under this Guarantee;

NOW, THEREFORE, in consideration of the purchase by each Holder of Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of the Holders.

ARTICLE 1

INTERPRETATION AND DEFINITIONS

SECTION 1.1  Interpretation and Definitions.    In this Guarantee, unless the context otherwise requires:

(a)  capitalized terms used in this Guarantee but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1;

(b)  a term defined anywhere in this Guarantee has the same meaning throughout;

(c)  all references to “the Guarantee” or “this Guarantee” are to this Guarantee as modified, supplemented or amended from time to time;

(d)  all references in this Guarantee to Articles, Sections and Recitals are to Articles, Sections and Recitals of this Guarantee, unless otherwise specified;

(e)  unless otherwise defined in this Guarantee, a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee;

(f)  a reference to the singular includes the plural and vice versa and a reference to any masculine form of a term shall include the feminine form of a term, as applicable; and

(g)  the following terms have the following meanings:

“AFFILIATE” has the same meaning as given to that term in Rule 405 of the Securities Act of 1933, as amended, or any successor rule thereunder.

“BUSINESS DAY” has the meaning specified in the Trust Agreement.

“COMMON SECURITIES” has the meaning specified in the Recitals hereto.

“COVERED PERSON” means a Holder or beneficial owner of Securities.

2

“GLOBAL SECURITY” means a fully registered, global Trust Preferred Security representing the Trust Preferred Securities.

“GUARANTEE EVENT OF DEFAULT” means a default by the Guarantor on any of its payment obligations under this Guarantee.

“GUARANTEE PAYMENTS” means the following payments or distributions, without duplication, with respect to the Securities, to the extent not paid by or on behalf of the Trust: (i) any accumulated and unpaid Distributions (as defined in the Trust Agreement) that are required to be paid on such Securities to the extent the Trust has funds legally and immediately available therefor at the time, (ii) the Redemption Price, including all accumulated and unpaid Distributions to the date of redemption, with respect to any Securities called for redemption by the Trust, to the extent the Trust shall have funds legally and immediately available therefor at the time or (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Trust (other than in connection with the distribution of Junior Subordinated Notes to the Holders in exchange for Securities as provided in the Trust Agreement), the lesser of (a) the aggregate of the liquidation amount and all accumulated and unpaid Distributions on the Securities to the date of payment, to the extent the Trust has funds legally and immediately available therefor and (b) the amount of assets of the Trust remaining available for distribution to Holders in liquidation of the Trust (in either case, the “Liquidation Distribution”).

“GUARANTEE TRUSTEE” means JPMorgan Chase Bank, until a successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee and thereafter means each such Successor Guarantee Trustee.

“HOLDER” means any holder of Securities, as registered on the books and records of the Trust; provided, however, that, in determining whether the Holders of the requisite percentage of Trust Preferred Securities have given any request, notice, consent or waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of the Guarantor or any other obligor on the Trust Preferred Securities; and provided further that in determining whether the Holders of the requisite liquidation amount of Trust Preferred Securities have voted on any matter provided for in this Guarantee, then for the purpose of such determination only (and not for any other purpose hereunder), if the Trust Preferred Securities remain in the form of one or more Global Certificates (as defined in the Trust Agreement) and if the Depositary which is the holder of such Global Securities has sent an omnibus proxy to the Trust assigning voting rights to Depositary Participants (as defined in the Trust Agreement) to whose accounts the Trust Preferred Securities are credited on the record date, the term “Holders” shall mean such Depositary Participants acting at the direction of the Beneficial Owners (as defined in the Trust Agreement).

“INDEMNIFIED PERSON” means the Guarantee Trustee, any Affiliate of the Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Guarantee Trustee.

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“INDENTURE” means the Subordinated Note Indenture, dated as of August 1, 1995, by and between Virginia Electric and Power Company and JPMorgan Chase Bank (formerly known as Chemical Bank) as Trustee, as supplemented and amended by a First Supplemental Indenture dated as of August 1, 1995, a Second Supplemental Indenture dated as of August 1, 2002 and as further amended or supplemented by any other indenture supplemental thereto, pursuant to which the Junior Subordinated Notes are to be issued to the Property Trustee as defined in the Trust Agreement.

“JUNIOR SUBORDINATED NOTES” means the series of junior subordinated notes to be issued, from time to time, by Virginia Electric and Power Company designated the “7.375% Junior Subordinated Notes due July 30, 2042” held by the Property Trustee as defined in the Trust Agreement.

“LIST OF HOLDERS” has the meaning assigned to it in Section 2.2 hereof.

“MAJORITY IN LIQUIDATION AMOUNT” means, except as provided in the terms of the Trust Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Securities, voting together as a single class, or, as the context may require, Holders of outstanding Trust Preferred Securities or Holders of outstanding Common Securities, voting separately as a class, who are the record owners of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class. In determining whether the Holders of the requisite amount of Securities have voted, Securities which are owned by the Guarantor or any Affiliate of the Guarantor or any other obligor on the Securities shall be disregarded for the purpose of any such determination.

“OFFICERS’ CERTIFICATE” means, with respect to any Person, a certificate signed on behalf of such Person by two Authorized Officers (as defined in the Trust Agreement) of such Person. Any Officers’ Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee (other than pursuant to Section 314(a)(4) of the Trust Indenture Act) shall include:

(a)  a statement that each officer signing the Officers’ Certificate has read the covenant or condition and the definitions relating thereto;

(b)  a brief statement of the nature and scope of the examination or investigation undertaken by each officer on behalf of such Person in rendering the Officers’ Certificate;

(c)  a statement that each such officer has made such examination or investigation as, in such officer’s opinion, is necessary to enable such officer on behalf of such Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d)  a statement as to whether, in the opinion of each such officer acting on behalf of such Person, such condition or covenant has been complied with.

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“PERSON” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

“REDEMPTION PRICE” has the meaning specified in the Trust Agreement.

“RESPONSIBLE OFFICER” means, with respect to the Guarantee Trustee, any officer with direct responsibility for the administration of this Guarantee and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer’s knowledge of and familiarity with the particular subject.

“SECURITIES” has the meaning specified in the Recitals hereto.

“SUCCESSOR GUARANTEE TRUSTEE” means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.1.

“TRANCHE” has the meaning specified in the Trust Agreement.

“TRUST AGREEMENT” means the Amended and Restated Trust Agreement, dated as of August 23, 2002, as amended, modified or supplemented from time to time, among the trustees of the Trust named therein, the Guarantor, as sponsor, and the Holders, from time to time, of undivided beneficial ownership interests in the assets of the Trust.

“TRUST ENFORCEMENT EVENT” in respect of the Securities means an Event of Default (as defined in the Indenture) has occurred and is continuing in respect of the Junior Subordinated Notes.

“TRUST INDENTURE ACT” means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation.

“TRUST PREFERRED SECURITIES” has the meaning specified in the Recitals hereto, and shall include the trust preferred securities constituting Initial Securities and the Option Trust Preferred Securities.

ARTICLE 2

TRUST INDENTURE ACT

SECTION 2.1  Trust Indenture Act; Application.

(a)  This Guarantee is subject to the provisions of the Trust Indenture Act that are required to be part of this Guarantee and shall, to the extent applicable, be governed by such provisions.

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(b)  If and to the extent that any provision of this Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

SECTION 2.2  Lists of Holders of Securities.

(a)  The Guarantor shall provide the Guarantee Trustee (i) except while the Trust Preferred Securities are represented by one or more Global Securities at least one Business Day prior to the date for payment of Distributions, a list, in such form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders of the Securities (“List of Holders”) as of the record date relating to the payment of such Distributions, and (ii) at any other time, within 30 days of receipt by the Guarantor of a written request from the Guarantee Trustee for a List of Holders as of a date no more than 15 days before such List of Holders is given to the Guarantee Trustee, excluding from any such list names and addresses received by the Guarantee Trustee in its capacity as Security Registrar; provided that the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Guarantee Trustee by the Guarantor. The Guarantee Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it, provided that the Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders.

(b)  The Guarantee Trustee shall comply with its obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

SECTION 2.3  Reports by Guarantee Trustee.    Within 60 days after May 15 of each year (commencing with the year of the first anniversary of the initial issuance of the Securities), the Guarantee Trustee shall provide to the Holders of the Securities such reports as are required by Section 313(a) of the Trust Indenture Act (if any) in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with the other requirements of Section 313 of the Trust Indenture Act. The Guarantor shall promptly notify the Guarantee Trustee when the Securities are listed on any stock exchange.

SECTION 2.4  Periodic Reports to Guarantee Trustee.    The Guarantor shall provide to the Guarantee Trustee such documents, reports and information as required by Section 314(a) (if any) of the Trust Indenture Act and the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times required by Section 314(a) of the Trust Indenture Act, provided that such compliance certificate shall be delivered on or before 120 days after the end of each calendar year of the Guarantor.

SECTION 2.5  Evidence of Compliance With Conditions Precedent.    The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Guarantee that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any

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certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers’ Certificate.

SECTION 2.6  Guarantee Event of Default; Waiver.    The Holders of a Majority in Liquidation Amount of the Trust Preferred Securities may, by vote or written consent, on behalf of the Holders of all of the Trust Preferred Securities, waive any past Guarantee Event of Default and its consequences. Upon such waiver, any such Guarantee Event of Default shall cease to exist, and any Guarantee Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee, but no such waiver shall extend to any subsequent or other default or Guarantee Event of Default or impair any right consequent thereon.

SECTION 2.7  Guarantee Event of Default; Notice.

(a)  The Guarantee Trustee shall, within 90 days after the occurrence of a Guarantee Event of Default actually known to a Responsible Officer of the Guarantee Trustee, transmit by mail, first class postage prepaid, to the Holders of the Securities, notices of all such Guarantee Events of Default, unless such defaults have been cured before the giving of such notice; provided, that the Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Securities.

(b)  The Guarantee Trustee shall not be deemed to have knowledge of any Guarantee Event of Default unless the Guarantee Trustee shall have received written notice thereof from the Guarantor or a Holder or a Responsible Officer of the Guarantee Trustee charged with the administration of this Guarantee shall have obtained actual knowledge thereof.

SECTION 2.8  Conflicting Interests.    The Trust Agreement, the Amended and Restated Trust Agreement of Virginia Power Capital Trust I dated as of August 31, 1995, among the Guarantor, as Depositor, JPMorgan Chase Bank (formerly known as Chemical Bank), as Property Trustee, Chase Manhattan Bank USA, National Association (successor to Chemical Bank Delaware), as Delaware Trustee and the Administrative Trustees named therein, and the Guarantee Agreement relating to Virginia Power Capital Trust I dated as of August 31, 1995, between the Guarantor and JPMorgan Chase Bank (formerly known as Chemical Bank), as Guarantee Trustee shall be deemed to be specifically described in this Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.

SECTION 2.9  Disclosure of Information.    The disclosure of information as to the names and addresses of the Holders of the Securities in accordance with Section 312 of the Trust Indenture Act, regardless of the source from which such information was derived, shall not be deemed to be a violation of any existing law, or any law hereafter enacted which does not specifically refer to Section 312 of the Trust Indenture Act, nor shall the Guarantee Trustee be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act.

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SECTION 2.10  Guarantee Trustee May File Proofs of Claim.    Upon the occurrence of a Guarantee Event of Default, the Guarantee Trustee is hereby authorized to (a) recover judgment, in its own name and as trustee of an express trust, against the Guarantor for the whole amount of any Guarantee Payments remaining unpaid and (b) file such proofs of claim and other papers or documents as may be necessary or advisable in order to have its claims and those of the Holders of the Securities allowed in any judicial proceedings relative to the Guarantor, its creditors or its property.

ARTICLE 3

POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

SECTION 3.1  Powers and Duties of Guarantee Trustee.

(a)  This Guarantee shall be held by the Guarantee Trustee on behalf of the Trust for the benefit of the Holders of the Securities, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Securities exercising his or her rights pursuant to Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee in and to this Guarantee shall automatically vest in any Successor Guarantee Trustee, and such vesting and succession of title shall be effective whether or not conveyance documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee.

(b)  If a Guarantee Event of Default actually known to a Responsible Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee shall be entitled to enforce this Guarantee for the benefit of the Holders of the Securities.

(c)  The Guarantee Trustee, before the occurrence of any Guarantee Event of Default and after the curing of all Guarantee Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee, and no implied covenants shall be read into this Guarantee against the Guarantee Trustee. In case a Guarantee Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) and is actually known to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

(d)  No provision of this Guarantee shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i)  prior to the occurrence of any Guarantee Event of Default and after the curing or waiving of all such Guarantee Events of Default that may have occurred:

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(A)  the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee, and no implied covenants or obligations shall be read into this Guarantee against the Guarantee Trustee; and

(B)  in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee;

(ii)  the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made;

(iii)  the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Trust Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee; and

(iv)  no provision of this Guarantee shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee or if the Guarantee Trustee shall have reasonable grounds for believing that an indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk or liability is not reasonably assured to it under the terms of this Guarantee.

SECTION 3.2  Certain Rights of Guarantee Trustee.

(a)  Subject to the provisions of Section 3.1:

(i)  The Guarantee Trustee may conclusively rely, and shall be fully protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document

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believed by it to be genuine and to have been signed, sent or presented by the proper party or parties;

(ii)  Any direction or act of the Guarantor contemplated by this Guarantee shall be sufficiently evidenced by an Officers’ Certificate;

(iii)  Whenever, in the administration of this Guarantee, the Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers’ Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor;

(iv)  The Guarantee Trustee shall have no duty to see to any recording, filing or registration or any instrument (or any rerecording, refiling or re-registration thereof);

(v)  The Guarantee Trustee may consult with counsel, and the advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee from any court of competent jurisdiction;

(vi)  The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee such security and indemnity, reasonably satisfactory to the Guarantee Trustee, against the costs, expenses (including attorneys’ fees and expenses and the expenses of the Guarantee Trustee’s agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided, that nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence of a Guarantee Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee in the manner provided by Section 3.1(c);

(vii)  The Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit;

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(viii)  The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(ix)  Any action taken by the Guarantee Trustee or its agents hereunder shall bind the Holders, and the signature of the Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action. No third party shall be required to inquire as to the authority of the Guarantee Trustee to so act or as to its compliance with any of the terms and provisions of this Guarantee, both of which shall be conclusively evidenced by the Guarantee Trustee’s or its agent’s taking such action; and

(x)  Whenever in the administration of this Guarantee, the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request written instructions from the Holders of a Majority in Liquidation Amount of the Securities, (B) may refrain from enforcing such remedy or right or taking such other action until such written instructions are received and (C) shall be protected in conclusively relying on or acting in accordance with such written instructions.

(b)  No provision of this Guarantee shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Guarantee Trustee shall be unqualified or incompetent to act in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty.

SECTION 3.3  Not Responsible for Recitals or Issuance of Guarantee.    The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any responsibility for their correctness. The Guarantee Trustee makes no representations as to the validity or sufficiency of this Guarantee.

ARTICLE 4

GUARANTEE TRUSTEE

SECTION 4.1  Guarantee Trustee; Eligibility.

(a)  There shall be at all times a Guarantee Trustee which shall:

(i)  not be an Affiliate of the Guarantor; and

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(ii)  be a corporation organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia, or a corporation or other Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.1(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

(b)  If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c).

(c)  If the Guarantee Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act, subject to the penultimate paragraph thereof.

SECTION 4.2  Appointment, Removal and Resignation of Guarantee Trustee.

(a)  Subject to Section 4.2(b), unless a Guarantee Event of Default shall have occurred and be continuing, the Guarantee Trustee may be appointed or removed with or without cause at any time by the Guarantor. If a Guarantee Event of Default has occurred and is continuing, the Guarantee Trustee may be appointed or removed by the Holders of a Majority in Liquidation Amount of the Trust Preferred Securities.

(b)  The Guarantee Trustee shall not be removed in accordance with Section 4.2(a) until a Successor Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor.

(c)  The Guarantee Trustee appointed to office shall hold such office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee.

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(d)  If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of removal or resignation, the removed or resigning Guarantee Trustee may petition any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.

(e)  No Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Guarantee Trustee.

(f)  Upon termination of this Guarantee or removal or resignation of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to the Guarantee Trustee all amounts owing for fees and reimbursement of expenses which have accrued to the date of such termination, removal or resignation.

ARTICLE 5

GUARANTEE

SECTION 5.1  Guarantee.

The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Trust), as and when due, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert. The Guarantor’s obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Trust to pay such amounts to the Holders. Notwithstanding anything to the contrary herein, the Guarantor retains all of its rights under the Indenture to (i) extend the interest payment period on the Junior Subordinated Notes pursuant to Article IV of the Second Supplemental Indenture to the Indenture and the Guarantor shall not be obligated hereunder to make any Guarantee Payments during any Extension Period (as defined in the certificate evidencing the Junior Subordinated Notes) with respect to the Distributions (as defined in the Trust Agreement) on the Securities and (ii) redeem or prepay the Junior Subordinated Notes to the extent permitted by the Indenture.

SECTION 5.2  Waiver of Notice and Demand.

The Guarantor hereby waives notice of acceptance of this Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Trust or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands.

SECTION 5.3  Obligations not Affected.

The obligations, covenants, agreements and duties of the Guarantor under this Guarantee shall be absolute and unconditional and shall remain in full force and effect

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until the entire liquidation amount of all outstanding Securities shall have been paid and such obligation shall in no way be affected or impaired by reason of the happening from time to time of any event, including without limitation, the following, whether or not with notice to, or the consent of, the Guarantor:

(a)  The release or waiver, by operation of law or otherwise, of the performance or observance by the Trust of any express or implied agreement, covenant, term or condition relating to the Securities to be performed or observed by the Trust;

(b)  The extension of time for the payment by the Trust of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with the Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Junior Subordinated Notes permitted by the Indenture);

(c)  Any failure, omission, delay or lack of diligence on the part of the Property Trustee or the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Property Trustee or the Holders pursuant to the terms of the Securities, or any action on the part of the Trust granting indulgence or extension of any kind;

(d)  The voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the a sets of the Trust;

(e)  Any invalidity of, or defect or deficiency in, the Securities;

(f)  The settlement or compromise of any obligation guaranteed hereby or hereby incurred; or

(g)  Any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances.

There shall be no obligation of the Guarantee Trustee or the Holders to give notice to, or obtain consent of the Guarantor or any other Person with respect to the happening of any of the foregoing.

No setoff, counterclaim, reduction or diminution of any obligation, or any defense of any kind or nature that the Guarantor has or may have against any Holder shall be available hereunder to the Guarantor against such Holder to reduce the payments to it under this Guarantee.

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SECTION 5.4  Rights of Holders.

(a)  The Holders of at least a Majority in Liquidation Amount of the Trust Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under this Guarantee, provided, that, subject to Section 3.1, the Guarantee Trustee shall have the right to decline to follow any such direction if the Guarantee Trustee shall determine that the action so directed would be unjustly prejudicial to the Holders not taking part in such direction or if the Guarantee Trustee being advised by counsel determines that the action or proceeding so directed may not lawfully be taken or if the Guarantee Trustee in good faith by its board of directors or trustees, executive committee, or a trust committee of directors or trustees and/or Responsible Officers of the Guarantee Trustee shall determine that the action or proceedings so directed would involve the Guarantee Trustee in personal liability.

(b)  If the Guarantee Trustee fails to enforce this Guarantee, then any Holder of Securities may, subject to the subordination provisions of Section 6.2, institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee without first instituting a legal proceeding against the Trust, the Guarantee Trustee or any other person or entity. In addition, if the Guarantor has failed to make a Guarantee Payment, a Holder of Securities may, subject to the subordination provisions of Section 6.2, directly institute a proceeding against the Guarantor for enforcement of the Guarantee for such payment to the Holder of the Securities of the principal of or interest on the Junior Subordinated Notes on or after the respective due dates specified in the Junior Subordinated Notes, and the amount of the payment will be based on the Holder’s pro rata share of the amount due and owing on all of the Securities. The Guarantor hereby waives any right or remedy to require that any action on this Guarantee be brought first against the Trust or any other person or entity before proceeding directly against the Guarantor.

SECTION 5.5  Guarantee of Payment.

This Guarantee creates a guarantee of payment and not of collection.

SECTION 5.6  Subrogation.

The Guarantor shall be subrogated to all (if any) rights of the Holders of Trust Preferred Securities against the Trust in respect of any amounts paid to such Holders by the Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee, if at the time of any such payment, any amounts are due and unpaid under this Guarantee. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Guarantee Trustee for the benefit of the Holders.

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SECTION 5.7  Independent Obligations.

The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Trust with respect to the Securities, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the occurrence of any event referred to in subsections 5.3(a) through 5.3(g), inclusive, hereof.

ARTICLE 6

LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1  Limitation of Transactions.

So long as any Securities remain outstanding, if (i) there shall have occurred an event of default under the Indenture with respect to the Junior Subordinated Notes, (ii) there shall be a Guarantee Event of Default or (iii) the Guarantor shall have given notice of its election of an Extension Period as provided in the certificate evidencing the Junior Subordinated Notes and shall not have rescinded such notice, or such Extension Period or any extension thereof shall be continuing, then the Guarantor shall not, and shall not permit any subsidiary of the Guarantor, to (x) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Guarantor’s capital stock or (y) make any payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Guarantor that rank on a parity with or junior in interest to the Junior Subordinated Notes or make any guarantee payments with respect to any guarantee by the Guarantor of the debt securities of any subsidiary of the Guarantor if such guarantee ranks on a parity with or junior in interest to the Junior Subordinated Notes (other than (a) dividends or distributions in common stock of the Guarantor, (b) any declaration of a dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, (c) payments under this Guarantee, and (d) purchases of common stock related to the issuance of common stock or rights under any of the Guarantor’s benefit plans).

SECTION 6.2  Ranking.

This Guarantee will constitute an unsecured obligation of the Guarantor and will rank subordinate and junior in right of payment to all Senior Indebtedness of the Company (as defined in the Indenture with respect to the Junior Subordinated Notes) of the Guarantor in the same manner and to the same extent as set forth in Article Thirteen of the Indenture.

SECTION 6.3  Subordination of Common Securities.

If a Trust Enforcement Event has occurred and is continuing under the Trust Agreement, the rights of the holders of the Common Securities to receive Guarantee

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Payments hereunder shall be subordinated to the rights of the Holders of the Trust Preferred Securities to receive Guarantee Payments under this Guarantee.

ARTICLE 7

TERMINATION

SECTION 7.1  Termination.

This Guarantee shall terminate upon (i) full payment of the Redemption Price of all Securities, (ii) distribution of the Junior Subordinated Notes to the Holders of all the Securities or (iii) full payment of the amounts payable in accordance with the Trust Agreement upon liquidation of the Trust. Notwithstanding the foregoing, this Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any Holder of Securities must restore payment of any sums paid under the Securities or under this Guarantee.

ARTICLE 8

INDEMNIFICATION

SECTION 8.1  Exculpation.

(a)  No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage, liability, expense or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Guarantee and in a manner that such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect to such acts or omissions.

(b)  An Indemnified Person shall be fully protected in relying in good faith upon the records of the Guarantor and upon such information, opinions, reports or statements presented to the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person’s professional or expert competence including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Securities might properly be paid.

SECTION 8.2  Compensation, Expenses and Indemnification.

(a)  The Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and to reimburse the Guarantee Trustee upon request for all reasonable

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expenses, disbursements and advances (including the reasonable fees and expenses of its attorneys and agents) incurred or made by the Guarantee Trustee in accordance with any provision of this Guarantee.

(b)  The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless against any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against, or investigating, any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

(c)  The obligations of the Guarantor under this Section 8.2 shall survive the termination of this Guarantee.

ARTICLE 9

MISCELLANEOUS

SECTION 9.1  Successors and Assigns.

All guarantees and agreements contained in this Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Securities then outstanding. Except in connection with a consolidation, merger, sale or conveyance involving the Guarantor that is permitted by Article Eight of the Indenture and pursuant to which the successor or assignee agrees in writing to perform the Guarantor’s obligations hereunder, the Guarantor shall not assign its obligations hereunder.

SECTION 9.2  Amendments.

Except with respect to any changes that do not materially adversely affect the rights of the Holders (in which case no consent of the Holders will be required), this Guarantee may not be amended without the prior approval of the Holders of at least a Majority in Liquidation Amount of the Trust Preferred Securities. The provisions of Section 11.2 of the Trust Agreement with respect to meetings of, and action by written consent of, the Holders of the Securities apply to the giving of such approval.

SECTION 9.3  Notices.

All notices provided for in this Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered by hand, telecopied or mailed by registered or certified mail, as follows:

(a)  If given to the Guarantee Trustee, at the Guarantee Trustee’s mailing address set forth below (or such other address as the Guarantee Trustee may give notice of to the Guarantor and the Holders of the Securities):

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450 West 33rd Street,

New York, New York 10001,

Attention: Institutional Trust Services,

Facsimile number: (212) 946-8159/60.

(b)  If given to the Guarantor, at the Guarantor’s mailing address set forth below (or such other address as the Guarantor may give notice of to the Guarantee Trustee and the Holders of the Securities):

Virginia Electric and Power Company

One James River Plaza

701 East Cary Street

Richmond, Virginia 23219

Facsimile number: (804) 819-2211

(c)  If given to any Holder of Securities, at the address set forth on the books and records of the Trust.

All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver.

SECTION 9.4  Benefit.

This Guarantee is solely for the benefit of the Holders of the Securities and, subject to Section 3.1(a), is not separately transferable from the Securities.

SECTION 9.5  Governing Law.

THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.

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IN WITNESS WHEREOF, this Guarantee is executed as of the day and year first above written.

VIRGINIA ELECTRIC AND POWER COMPANY,     as Guarantor
By:
	Name: Title:

JPMORGAN CHASE BANK,     as Guarantee Trustee
By:
	Name: Title:

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EX-4.9

Exhibit 4.9

AGREEMENT AS TO EXPENSES AND LIABILITIES

This AGREEMENT, dated as of August 23, 2002, is between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia corporation (“Virginia Power”), and VIRGINIA POWER CAPITAL TRUST II, a Delaware business trust (the “Trust”).

WHEREAS, the Trust intends to issue its 7.375% Common Securities (the “Common Securities”) to, and purchase 7.375% Junior Subordinated Notes (the “Junior Subordinated Notes”) from, Virginia Power, and to issue and sell its 7.375% Trust Preferred Securities (the “Trust Preferred Securities”) with such powers, preferences and special rights and restrictions as are set forth in the Amended and Restated Trust Agreement of the Trust dated as of August 23, 2002, as the same may be amended from time to time (the “Trust Agreement”);

WHEREAS, Virginia Power will directly or indirectly own all of the Common Securities of the Trust and will issue the Junior Subordinated Notes;

NOW, THEREFORE, in consideration of the purchase by each holder of the Trust Preferred Securities, which purchase Virginia Power hereby agrees shall benefit Virginia Power and which purchase Virginia Power acknowledges will be made in reliance upon the execution and delivery of this Agreement, Virginia Power and the Trust hereby agree as follows:

ARTICLE I

GUARANTEE BY VIRGINIA POWER

1.1  Guarantee by Virginia Power.    Subject to the terms and conditions hereof, Virginia Power hereby irrevocably and unconditionally guarantees to each person or entity to whom the Trust is now or hereafter becomes indebted or liable (the “Beneficiaries”) the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein, “Obligations” means any costs, expenses or liabilities of the Trust, other than obligations of the Trust to pay to holders of any Trust Preferred Securities the amounts due such holders pursuant to the terms of the Trust Preferred Securities. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof.

1.2  Term of Agreement.    This Agreement shall terminate and be of no further force and effect upon the later of (a) the date on which full payment has been made of all amounts payable to all holders of all the Trust Preferred Securities (whether upon redemption, liquidation, exchange or otherwise) and (b) the date on which there are no Beneficiaries remaining; provided, however, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any holder of Trust

Preferred Securities or any Beneficiary must restore payment of any sums paid under the Trust Preferred Securities, under any Obligation, under the Trust Preferred Securities Guarantee Agreement dated the date hereof by Virginia Power and The Chase Manhattan Bank, as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute.

1.3  Waiver of Notice.    Virginia Power hereby waives notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and Virginia Power hereby waives presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands.

1.4  No Impairment.    The obligations, covenants, agreements and duties of Virginia Power under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following:

(a)  the extension of time for the payment by the Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with, the Obligations;

(b)  any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or

(c)  the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the assets of the Trust.

There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of, Virginia Power with respect to the happening of any of the foregoing.

1.5  Enforcement.    A Beneficiary may enforce this Agreement directly against Virginia Power, and Virginia Power waives any right or remedy to require that any action be brought against the Trust or any other person or entity before proceeding against Virginia Power.

1.6  Subrogation.    Virginia Power shall be subrogated to all rights (if any) of the Trust in respect of any amounts paid to the Beneficiaries by Virginia Power under this Agreement; provided, however, that Virginia Power shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Agreement.

ARTICLE II

BINDING EFFECT

2.1  Binding Effect.    All guarantees and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of Virginia Power and shall inure to the benefit of the Beneficiaries.

2.2  Amendment.    So long as there remains any Beneficiary or any Trust Preferred Securities outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to the holders of the Trust Preferred Securities.

2.3  Notices.    Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same by personal delivery, by facsimile transmission or by first-class mail, addressed as follows (and if so given, shall be deemed given when so delivered, upon receipt of confirmation if by facsimile, or three days after mailed if by first-class mail):

If to the Trust to:

Virginia Power Capital Trust II

c/o Virginia Electric and Power Company

120 Tredegar Street

Richmond, VA 23219

Attention: Treasurer

Facsimile No.: (804) 819-2211

with a copy to:

Virginia Electric and Power Company

One James River Plaza

701 East Cary Street

Richmond, VA 23219

Attention: Treasurer

Facsimile No.: (804) 819-2211

2.4  Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).

THIS AGREEMENT is executed as of the day and year first above written.

VIRGINIA ELECTRIC AND POWER COMPANY
By:
	Name: Title:

VIRGINIA POWER CAPITAL TRUST II
By:
	as Administrative Trustee

By:
	as Administrative Trustee

EX-8.1

Exhibit 8.1

August 16, 2002

Virginia Electric and Power Company

One James River Plaza

701 East Cary Street

Richmond, Virginia 23219

Virginia Power Capital Trust II

c/o Virginia Electric and Power Company

120 Tredegar Street

Richmond, Virginia 23219

Virginia Power Capital Trust II

7.375% Trust Preferred Securities

(Liquidation Amount $25 per Trust Preferred Security)

Ladies and Gentlemen:

We have been requested, as your special tax counsel, to render federal tax advice in connection with the issuance by Virginia Power Capital Trust II (the “Trust”) and Virginia Electric and Power Company (the “Company”) of 15,400,000 7.375% Trust Preferred Securities (Liquidation Amount $25 per Trust Preferred Security) and $385,000,000 principal amount of 7.375% Junior Subordinated Notes, as defined in the Company’s Prospectus, dated July 31, 2002 (the “Prospectus”), and Prospectus Supplement, dated August 16, 2002 (the “Prospectus Supplement”). Capitalized terms used in this opinion and not otherwise defined shall have the meanings specified in the Prospectus Supplement.

In preparing this opinion, we have examined and relied on, such documents as we have deemed appropriate, including originals or copies, certified or otherwise identified to our satisfaction, of corporate and other records of the Company and the Trust and such other instruments and documents, including certificates of public officials and of officers of the Company as we have deemed appropriate. In addition, we have made such investigation of such matters of law as we deemed appropriate as a basis for the opinions expressed below and have reviewed the discussion set forth in the Prospectus Supplement under the heading “Material United States Federal Income Tax Consequences.”

Based on the foregoing and consideration of such other matters as we have deemed appropriate; we are of the opinion that:

(1)  the Junior Subordinated Notes will be classified as indebtedness of the Company for United States federal income tax purposes;

(2)  the Trust will be classified as a grantor trust for United States federal income tax purposes and not as an association taxable as a corporation; and

(3)  although the discussion in the Prospectus Supplement under the caption “Material United States Federal Income Tax Consequences” does not purport to discuss all possible United States federal income tax consequences of purchase, ownership, and disposition of the Trust Preferred Securities, such discussion constitutes an accurate summary of the matters discussed therein in all material respects.

As indicated in the Prospectus Supplement, our opinion is based on the relevant provisions of the Internal Revenue Code of 1986, as amended (the “Code”), administrative rulings and pronouncements issued by the IRS, judicial decisions rendered by United States federal courts of competent jurisdiction, and Treasury Regulations in effect on the date of this opinion. These authorities are subject to change, possibly on a retroactive basis. This opinion will not be updated for subsequent changes or modifications to the law and regulations or to the judicial and administrative interpretations thereof unless we are specifically engaged to do so. Our opinion neither relates to nor purports to cover the laws, regulations, or other legal authorities of any state, local, or foreign governmental authority, nor any tax or other governmental charge, other than United States federal income tax.

We express no opinions as to the laws of any jurisdiction other than the federal income tax laws of the United States. We hereby consent to the filing of this opinion as an exhibit to the Company’s Current Report on Form 8-K and to references to our firm under the captions “Material United States Federal Income Tax Consequences” and “Legal Matters” in the Prospectus Supplement. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act of 1933.

Very truly yours,

MCGUIREWOODS LLP