EXHIBIT 99.1
FORM OF
ESCROW DEPOSIT AGREEMENT
BETWEEN
DOMINION RESOURCES, INC.
AND
JPMORGAN CHASE BANK,
AS ESCROW AGENT
DATED AS OF DECEMBER 16, 2002
ESCROW DEPOSIT AGREEMENT
This Escrow Deposit Agreement (the "Escrow Agreement") is made as of
December 16, 2002 between Dominion Resources, Inc., a Virginia corporation (the
"Company"), and JPMorgan Chase Bank, a New York banking corporation, as escrow
agent (the "Agent").
W I T N E S S E T H:
WHEREAS, the Company has issued on the date hereof, pursuant to a
registration statement on Form S-3 under the Securities Act of 1933,
$300,000,000 principal amount of 5.125% Series D Senior Notes due 2009 and
$300,000,000 principal amount of 6.750% Series E Senior Notes due 2032 of the
Company (the "Offering");
WHEREAS, the Company has determined that it is in the best interests of
the Company to provide partially for the repayment at maturity of certain
indebtedness of the Company as listed on Schedule I hereto (including interest
accrued thereon to the date of repayment, and any other required payments
thereunder) (the "Obligations");
WHEREAS, the Company has elected to deposit part of the net proceeds
from the Offering with an escrow agent for the purpose of repaying the
Obligations, in part; and
WHEREAS, the Agent has agreed to act as escrow agent in connection with
the repayment of the Obligations in accordance with the terms and conditions
specified in the instruments and agreements listed on Schedule I hereto (the
"Agreements");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein, the Company and the Agent agree as follows:
SECTION 1. PLEDGE OF PROCEEDS. The Company hereby irrevocably deposits
or causes to be irrevocably deposited, with the Agent, for the benefit of the
holders of the Obligations (the "Holders"), and irrevocably appropriates and
sets aside $500,000,000.00 (the "Deposit"), exclusively for the repayment of the
Obligations, which Deposit (and any interest or other income earned thereon) is
hereby pledged to, and for the sole benefit of, the Holders. The Agent hereby
acknowledges receipt of the Deposit.
SECTION 2. SPECIAL ESCROW FUND. There is hereby established and created
with the Agent a special and irrevocable trust fund designated the "Dominion
Escrow Fund" (the "Escrow Fund") to be held in the custody of the Agent as a
special escrow fund, separate and apart from all other funds of the Company or
the Agent, solely for the benefit of the Holders. The Agent hereby acknowledges
receipt of the Deposit which shall be deposited by the Agent in the Escrow Fund.
All Deposits and Authorized Investments (as defined in Section 3(b) hereof) set
aside and held in the Escrow Fund shall be applied to, and applied solely for,
the repayment of the Obligations and as otherwise provided herein.
SECTION 3. APPLICATION OF MONEYS ON DEPOSIT IN ESCROW FUND(a) . (a)
Deposits in the Escrow Fund shall not be invested at any time in any securities
or other investments other than the Authorized Investments (as defined in
Section 3(b) hereof).
(b) The Agent shall act as custodian of the Escrow Fund and
shall, at the written direction of the Company, invest and reinvest the Escrow
Fund solely in the following investments, which constitute Authorized
Investments hereunder: (i) direct obligations of the United States Government
(or agencies or instrumentalities thereof), provided that such securities are
obligations to which the full faith and credit of the United States of America
has been pledged; (ii) JPMorgan Chase Bank's Escrow Product; (iii) the Agent's
U.S. Treasury fund provided that such fund maintains the highest ratings
established by each of Xxxxx'x and Standard & Poor's; and (iv) a UBS PaineWebber
managed account invested in the securities or funds described on Schedule II
hereto, in each case with a maturity or maturities that would permit the Agent
to make cash payments to repay, in part, the Obligations listed on Schedule I
hereto in accordance with Section 4 hereof. The Company directs that the initial
investment of the Escrow Fund shall be made through a managed account
established by the Company with UBS PaineWebber for the purpose of carrying out
this Agreement (from which account the Agent shall have sole authority to
withdraw funds while this Agreement is in effect). The Agent shall have no
responsibility for the determination of such investments or for determining
whether UBS PaineWebber has properly selected investments for the managed
account and shall have no liability for any investment losses resulting from the
investment, reinvestment, sale or liquidation of the Escrow Fund, except in the
case of its own gross negligence or willful misconduct. All interest and other
income earned on such investments shall be deposited into the Escrow Fund.
(c) Except as otherwise specifically provided herein, the Company
covenants and agrees that the Agent shall have full and complete control and
authority over and with respect to the Escrow Fund and the moneys deposited
therein and that the Company shall not exercise any control or authority over or
with respect to the Escrow Fund or the moneys deposited therein.
SECTION 4. PAYMENT OF OBLIGATIONS. On the Payment Date listed on
Schedule I hereto, the Agent shall apply funds, to the extent available, from
the funds held in the Escrow Fund to the payment, in part, of the Obligations
(as such payment is directed to be made on Schedule I hereto under the heading
Method of Payment); provided, however, that the Company may direct the Agent to
make an earlier payment, in whole or in part, of any particular Obligations (as
such Obligations are defined on Schedule I).
SECTION 5. IRREVOCABLE DEPOSIT; RELINQUISHMENT OF RIGHTS OF THE
COMPANY(a) . (a) The Deposit being made into the Escrow Fund (and the interest
or other income earned thereon) shall constitute an irrevocable deposit solely
for the payment of the Obligations, and solely for the benefit of the Holders
thereof pursuant to the terms of this Escrow Agreement.
(b) The Company hereby agrees that it shall not have any
beneficial interest in, or rights to, the Deposit or proceeds thereof (or
interest or other income earned thereon) on deposit in the Escrow Fund (whether
in the form of cash, Authorized Investments or otherwise)
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or payments made therefrom so long as any of the Obligations or any amounts
owing to the Agent hereunder remain unpaid.
SECTION 6. LIABILITY OF AGENT. The liability of the Agent to make the
payments required by this Escrow Agreement with respect to the Obligations shall
be limited to application of the funds deposited with it hereunder (including
any interest or other income earned on the Deposit). The Agent shall not be
liable for any loss resulting from any investment or reinvestment made in
compliance with the provisions of this Escrow Agreement.
SECTION 7. TERMINATION; INCOME FROM AUTHORIZED INVESTMENTS
(a) This Escrow Agreement shall terminate when all of the Escrow
Fund (to the extent required for the payment of the Obligations) shall have been
paid to the Holders and all fees, expenses and indemnities owed to the Agent
shall have been paid in full.
(b) Upon termination of this Escrow Agreement in accordance with
the provisions of subsection (a) of this Section 7, it is intended that there
shall be no funds in the Escrow Fund since any funds in the Escrow Fund
(including income from all Authorized Investments) shall be applied as provided
in Section 4. However, if for any reason there shall be any funds remaining in
the Escrow Fund upon such a termination, such funds shall be promptly paid to
the Company upon the direction of the Company.
SECTION 8. FEES OF AGENT(a) . (a) The Company shall pay upon request
all compensation and expenses of the Agent, including, without limitation,
reasonable compensation for all services rendered by the Agent in the execution,
exercise and performance of any of the duties to be exercised or performed by it
pursuant to the provisions of this Escrow Agreement (including reasonable
counsel fees and expenses). Attached hereto as Schedule III is the Agent's fee
schedule. The Agent shall be entitled to indemnity from the Company against any
and all losses, claims, liabilities or expenses incurred on the part of the
Agent arising out of or in connection with the acceptance or administration of
its powers and duties under this Escrow Agreement, including the cost and
expense of defending against any such loss, claim or liability, other than
losses, claims, liabilities or expenses arising out of the Agent's gross
negligence or willful misconduct.
(b) The Agent has no right to payment for its fees, compensation
and expenses from the Escrow Fund so long as all of the Obligations shall not
have been paid in full.
(c) All of the rights, entitlements, and protections provided to
the Agent in this Section 8 shall survive its resignation or termination of this
Escrow Agreement, whether by payment of the Obligations or otherwise.
SECTION 9. DUTIES OF AGENT; EVIDENCE UPON WHICH AGENT MAY ACT;
REPLACEMENT OF AGENT(a) . (a) The duties and obligations of the Agent hereunder
shall be determined solely by the express provisions of this Escrow Agreement,
and the Agent shall not be liable except for the performance of its duties and
obligations as specifically set forth herein and to act in good faith in the
performance thereof, and no implied duties, covenants or obligations shall be
incurred by the Agent other than those specified herein, and the Agent shall
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be protected when acting or omitting to act in good faith upon the advice of
counsel, who may be counsel to the Company.
(b) Subject to the requirement under subsection (a) of this
Section 9 to act in good faith, the Agent may conclusively rely, as to the
correctness of statements, conclusions and opinions therein, upon any
certificate, report, opinion or other document furnished to the Agent pursuant
to any provision of this Escrow Agreement. Any request, consent, certificate,
notice, appointment or other direction made or given by the Company to the Agent
shall be deemed to have been sufficiently made or given by the Company if
executed by an authorized officer of the Company on behalf of the Company.
(c) The Agent may resign and be discharged of its duties as agent
hereunder by giving written notice of such intention to resign to an authorized
officer of the Company; provided, however, that such resignation shall not
become effective until the later of (i) ten (10) days after the giving of such
notice and (ii) the time that a successor shall have been appointed and the
funds held by the Agent in the Escrow Fund have been transferred to such
successor agent. Any such successor agent shall be a commercial bank having
total capital and surplus of at least $500,000,000. If no successor shall have
been appointed within ten (10) days after the giving of the aforementioned
notice, the Agent may petition any court of competent jurisdiction for the
appointment of such successor.
(d) The recitals contained herein shall be taken as the
statements of the Company, and the Agent assumes no responsibility for their
correctness. The Agent makes no representation as to the validity or sufficiency
of this Escrow Agreement or of the Deposit in the Escrow Fund.
(e) The Agent may consult with counsel and the advice of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(f) The Agent shall incur no liability hereunder except for loss
sustained by reason of its gross negligence or willful misconduct.
(g) In no event shall the Agent be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Agent has been advised of the likelihood
of such loss or damage and regardless of the form of action.
SECTION 10. AMENDMENTS. This Escrow Agreement shall not be repealed,
revoked, altered or amended or any provisions thereof waived as to any of the
Obligations without the written consent of all Holders of each such Obligation,
the written consent of the Agent and the written consent of the Company;
PROVIDED, HOWEVER, that the Company and the Agent may, without the consent of,
or notice to, the Holders, enter into such agreements supplemental to this
Escrow Agreement as shall not adversely affect the rights of the Holders, for
any one or more of the following purposes:
(a) to cure any ambiguity, defect or omission in this Escrow
Agreement; or
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(b) to grant to, or confer upon the Agent for the benefit of, the
Holders any additional rights, remedies, powers or authority that may lawfully
be granted to, or conferred upon, the Agent.
The Agent may, but shall not be obligated to, enter into any such amendment or
supplement to this Escrow Agreement which affects the Agent's own rights, duties
or immunities under this Escrow Agreement or otherwise. The Company shall
provide the Agent with an opinion of counsel that any such amendment or
supplement does not adversely affect the rights of the Holders.
SECTION 11. SEVERABILITY. If any one or more of the covenants or
agreements provided in this Escrow Agreement on the part of the Company or the
Agent to be performed should be determined by a court of competent jurisdiction
to be contrary to law, such covenant or covenants, or such agreement or
agreements, or such portions thereof, shall be deemed severable from the
remaining covenants and agreements or portions thereof provided in this Escrow
Agreement and the invalidity thereof shall in no way affect the validity of
other provisions of this Escrow Agreement, but the Holders shall retain all the
rights and benefits accorded them hereunder and under applicable provisions of
law.
If any provisions of this Escrow Agreement shall be held or deemed to
be or shall, in fact, be inoperative or unenforceable or invalid as applied in
any particular case in any jurisdiction or jurisdictions or in all
jurisdictions, or in all cases because it conflicts with any constitution or
statute or rule of public policy, or for any other reason, such circumstances
shall not have the effect of rendering the provision in question inoperative or
unenforceable or invalid in any other case or circumstance, or of rendering any
other provision or provisions herein contained inoperative or unenforceable or
invalid to any extent whatever.
SECTION 12. GOVERNING LAW. This Escrow Agreement shall be construed
and interpreted in accordance with the laws of the State of New York, without
regard to its conflict of law principles.
SECTION 13. COUNTERPARTS. This Escrow Agreement may be executed in
several counterparts, all or any of which shall be regarded for all purposes as
one original and shall constitute and be one and the same instrument.
SECTION 14. SECTION HEADINGS. The headings of the several Sections
hereof shall be solely for convenience of reference and shall not affect the
meaning, construction, interpretation or effect of this Escrow Agreement.
SECTION 15. BINDING EFFECT, ETC. This Escrow Agreement shall be
binding upon the parties hereto and their respective successors, legal
representatives and permitted assigns.
SECTION 16. NOTICES. Any notices or other communications to be given
hereunder by any party hereto to the other party shall be in writing and shall
be given by delivery in person, by electronic facsimile transmission or other
standard forms of written telecommunications, by overnight courier or by
registered or certified mail, postage prepaid, as follows:
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if to the Company, to:
Dominion Resources Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopy number: (000) 000-0000
Attention: Assistant Treasurer
with a copy to:
McGuireWoods LLP
Xxx Xxxxx Xxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Telecopy number: (000) 000-0000
Attention: Xxxx Xxxxx Sellers, Esq.
if to the Agent, to:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy number: (000) 000-0000
Attention: Institutional Trust Services
Directions from the Company to the Agent to be given under the terms of this
Escrow Agent shall only be made on behalf of the Company by the following
persons ( or such additional persons as may be appointed by any of the persons
named below or their appointees by written notice to the Agent):
G. Xxxxx Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxx
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the parties have each caused this Escrow
Agreement to be executed by their duly authorized
officers as of the date first above written.
DOMINION RESOURCES, INC.
By
----------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, as Agent
By
----------------------------------------
Name:
Title:
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SCHEDULE I
OBLIGATIONS
Obligation Holder Amount Payment Date Method of Payment
---------- ------ ------ ------------ -----------------
2001 Series A Cede & Co. $1,000,000,000 January 31, 2003 Immediately available
6.0% Senior Notes funds to Paying Agent
under the Indenture
described below
The Senior Notes representing the Obligations were issued under the Indenture
dated as of June 1, 2000 between Dominion Resources, Inc. and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as Trustee, as supplemented
and amended by an Eighth Supplemental Indenture dated as of January 1, 2001.
SCHEDULE II
INITIAL AUTHORIZED INVESTMENTS
SCHEDULE III
AGENT FEE SCHEDULE
