EXHIBIT B-1
UTILITY MONEY POOL AGREEMENT
This Utility Money Pool Agreement (the "Agreement"), dated as of
, 2000, is made and entered into by and among CP&L Energy, Inc. ("CP&L
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Energy"), a North Carolina corporation and a registered holding company under
the Public Utility Holding Company Act of 1935, as amended (the "Act"), Carolina
Power & Light Company, a North Carolina corporation, North Carolina Natural Gas
Corporation, a Delaware corporation, Florida Power Corporation, a Florida
corporation, and CP&L Services (solely in its capacity as administrator of the
money pool) (each a "Party" and collectively, the "Parties").
WITNESSETH:
WHEREAS, the Parties desire to establish a Money Pool (the "Utility
Money Pool") to coordinate and provide for certain of their short-term cash and
working capital requirements; and
WHEREAS, the utility subsidiaries that will participate in the Utility
Money Pool (each a "Subsidiary" and collectively, the "Subsidiaries") will from
time to time have need to borrow funds on a short-term basis, and certain of the
Subsidiaries will from time to time have funds available to loan on a short-term
basis;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants and provisions contained herein, the Parties hereto agree
as follows:
ARTICLE I
CONTRIBUTIONS AND BORROWINGS
Section 1.01 Contributions to Utility Money Pool.
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Each Subsidiary will determine each day, on the basis of cash flow
projections and other relevant factors, in such Subsidiary's sole discretion,
the amount of funds it has available for contribution to the Utility Money Pool,
and will contribute such funds to the Utility Money Pool. The determination of
whether a Subsidiary at any time has surplus funds to lend to the Utility Money
Pool or shall lend funds to the Utility Money Pool will be made by such
Subsidiary's chief financial officer or treasurer, or by a designee thereof, on
the basis of cash flow projections and other relevant factors, in such
Subsidiary's sole discretion. Each Subsidiary may withdraw any of its funds at
any time upon notice to CP&L Services, as administrative agent of the Utility
Money Pool.
Section 1.02 Rights to Borrow.
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Subject to the provisions of Section 1.04(c) of this Agreement, the
short-term borrowing needs of the Subsidiaries will be met by funds in the
Utility Money Pool to the extent such funds are available. Each Subsidiary shall
have the right to make short-term borrowings from the Utility Money Pool from
time to time, subject to the availability of funds and the limitations and
conditions set forth herein and in the applicable orders of the Securities and
Exchange Commission ("SEC"). Each Subsidiary may request loans from the Utility
Money Pool from time to time during the period from the date hereof until this
Agreement is terminated by written agreement of the Parties; provided, however,
that the aggregate amount of all loans requested by any Subsidiary hereunder
shall not exceed the applicable borrowing limits set forth in applicable orders
of the SEC and other regulatory authorities, resolutions of such Subsidiary's
Board of Directors, such Subsidiary's governing corporate documents, and
agreements binding upon such Subsidiary. No loans through the Utility Money Pool
will be made to, and no borrowings through the Utility Money Pool will be made
by, CP&L Energy.
Section 1.03 Source of Funds.
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(a) Funds will be available through the Utility Money Pool from the
following sources for use by the Subsidiaries from time to time: (1) surplus
funds in the treasuries of Subsidiaries, (2) surplus funds in the treasury of
CP&L Energy, and (3) proceeds from bank borrowings and/or commercial paper sales
by Parties ("External Funds"), in each case to the extent permitted by
applicable laws and regulatory orders. Funds will be made available from such
sources in such order as CP&L Services, as administrator of the Utility Money
Pool, may determine will result in a lower cost of borrowing to Subsidiaries
borrowing from the Utility Money Pool, consistent with the individual borrowing
needs and financial standing of the Subsidiaries providing funds to the Utility
Money Pool.
(b) Borrowing Subsidiaries will borrow pro rata from each lending
Party in the proportion that the total amount loaned by such lending Party bears
to the total amount then loaned through the Utility Money Pool. On any day when
more than one funding source (e.g., surplus treasury funds of CP&L Energy and
any Subsidiary ("Internal Funds") and External Funds), with different rates of
interest, is used to fund loans through the Utility Money Pool, each borrowing
Subsidiary will borrow pro rata from each funding source in the same proportion
that the amount of funds provided by that funding source bears to the total
amount of short-term funds available to the Utility Money Pool.
Section 1.04 Authorization.
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(a) Each loan shall be authorized by the lending Party's chief
financial officer or treasurer, or by a designee thereof.
(b) CP&L Services, as administrator of the Utility Money Pool, will
provide each Party with periodic activity and cash accounting reports that
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include, among other things, reports of cash activity, the daily balance of
loans outstanding and the calculation of interest charged.
(c) All borrowings from the Utility Money Pool shall be authorized by
the borrowing Subsidiary's chief financial officer or treasurer, or by a
designee thereof. No Subsidiary shall be required to effect a borrowing through
the Utility Money Pool if such Subsidiary determines that it can (and is
authorized to) effect such borrowing at lower cost directly from banks or
through the sale of its own commercial paper.
Section 1.05 Interest.
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The daily outstanding balance of all loans to any Subsidiary shall
accrue interest as follows:
(a) If only Internal Funds comprise the daily outstanding balance of
all loans outstanding during a calendar month, the interest rate applicable to
such daily balances shall be the rates for high-grade unsecured 30-day
commercial paper of major corporations sold through dealers as quoted in The
Wall Street Journal (the "Average Composite").
(b) If only External Funds comprise the daily outstanding balance of
all loans outstanding during a calendar month, the interest rate applicable to
such daily outstanding balance shall be the lending Party's cost for such
External Funds or, if more than one Party had made available External Funds at
any time during the month, the applicable interest rate shall be a composite
rate, equal to the weighted average of the costs incurred by the respective
Parties for such External Funds.
(c) In cases where the daily outstanding balances of all loans
outstanding at any time during the month include both Internal Funds and
External Funds, the interest rate applicable to the daily outstanding balances
for the month shall be equal to the weighted average of the (i) cost of all
Internal Funds contributed by Parties, as determined pursuant to Section 1.05(a)
of this Agreement, and (ii) the cost of all such External Funds, as determined
pursuant to Section 1.05(b) of this Agreement.
The interest rate applicable to Loans made by Parties to the Utility
Money Pool under Section 1.03(a) of this Agreement shall be equal to the rate
determined pursuant to subsection (a), (b) or (c), above, as applicable.
Section 1.06 Certain Costs.
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The cost of compensating balances and fees paid to banks to maintain
credit lines by Parties lending External Funds to the Utility Money Pool shall
initially be paid by the Party maintaining such line. A portion of such costs
shall be retroactively allocated every month to the Subsidiaries borrowing such
External Funds through the Utility Money Pool in proportion to their respective
daily outstanding borrowings of such External Funds.
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Section 1.07 Repayment.
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Each Subsidiary receiving a loan from the Utility Money Pool hereunder
shall repay the principal amount of such loan, together with all interest
accrued thereon, on demand and in any event within 365 days of the date on which
such loan was made. All loans made through the Utility Money Pool may be prepaid
by the borrower without premium or penalty.
Section 1.08 Form of Loans to Subsidiaries.
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Loans to the Subsidiaries from the Utility Money Pool shall be made as
open-account advances, pursuant to the terms of this agreement. A separate
promissory note will not be required for each individual transaction. Instead, a
promissory note evidencing the terms of the transactions shall be signed by the
Parties to the transaction. Any such note shall: (a) be in substantially the
form of the note attached hereto; (b) be dated as of the date of the initial
borrowing; (c) mature on demand or on a date agreed by the Parties to the
transaction, but in any event not later than one year after the date of the
applicable borrowing; and (d) be repayable in whole at any time or in part from
time to time, without premium or penalty.
ARTICLE II
OPERATION OF UTILITY MONEY POOL
Section 2.01 Operation.
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Operation of the Utility Money Pool, including record keeping and
coordination of loans, will be handled by CP&L Services under the authority of
the appropriate officers of the Parties. CP&L Services shall be responsible for
the determination of all applicable interest rates and charges to be applied to
advances outstanding at any time hereunder, shall maintain records of all
advances, interest charges and accruals and interest and principal payments for
purposes hereof, and shall prepare periodic reports thereof for the Parties.
CP&L Services will administer the Utility Money Pool on an "at cost" basis.
Separate records shall be kept by CP&L Services for the Utility Money Pool
established by this Agreement and any other money pool administered by CP&L
Services.
Section 2.02 Investment of Surplus Funds in the Utility Money Pool.
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Funds not required for the Utility Money Pool loans (with the
exception of funds required to satisfy the Utility Money Pool's liquidity
requirements) will ordinarily be invested in one or more short-term investments,
including (i) interest-bearing accounts with banks; (ii) obligations issued or
guaranteed by the U.S. government and/or its agencies and instrumentalities,
including obligations under repurchase agreements; (iii) obligations issued or
guaranteed by any state or political subdivision thereof, provided that such
obligations are rated not less than A by a nationally recognized rating agency;
(iv) commercial paper rated not less than A-1 by S&P or P-1 by Moody's, or their
equivalent by a nationally recognized rating agency; (v) money market funds;
(vi) bank certificates of deposit; (vii) Eurodollar funds; and (viii) such other
investments as are permitted by Section 9(c) of the Act and Rule 40 thereunder.
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Section 2.03 Allocation of Interest Income and Investment Earnings.
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The interest income and other investment income earned by the Utility
Money Pool on loans and investment of surplus funds will be allocated among the
Parties in accordance with the proportion each Party's contribution of funds in
the Utility Money Pool bears to the total amount of funds in the Utility Money
Pool and the cost of any External Funds provided to the Utility Money Pool by
such Party. Interest and other investment earnings will be computed on a daily
basis and settled once per month.
Section 2.04 Event of Default.
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If any Subsidiary shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against any Subsidiary seeking to
adjudicate it bankrupt or insolvent, then CP&L Services, on behalf of the
Utility Money Pool, may, by notice to the Subsidiary, terminate the Utility
Money Pool's commitment to the Subsidiary and/or declare the principal amount
then outstanding of, and the accrued interest on, the loans and all other
amounts payable to the Utility Money Pool by the Subsidiary hereunder to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by each Subsidiary.
ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments.
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No amendment to this Agreement shall be adopted except in a writing
executed by the Parties and subject to all applicable approvals by the SEC and
the applicable state utility regulatory commission.
Section 3.02 Legal Responsibility.
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Nothing herein contained shall render any Party liable for the
obligations of any other Party hereunder and the rights, obligations and
liabilities of the Parties are several in accordance with their respective
obligations, and not joint.
Section 3.03 Rules for Implementation.
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The Parties may develop a set of guidelines for implementing the
provisions of this Agreement, provided that the guidelines are consistent with
all of the provisions of this Agreement.
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Section 3.04 Governing Law.
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This Agreement shall be governed by and construed in accordance with,
the laws of the State of North Carolina, without regard to the conflicts of laws
provisions thereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each Party hereto as of the date
first above written.
CP&L ENERGY, INC.
By:
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Name:
Title:
CAROLINA POWER & LIGHT COMPANY
By:
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Name:
Title:
NORTH CAROLINA NATURAL GAS CORPORATION
By:
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Name:
Title:
FLORIDA POWER CORPORATION
By:
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Name:
Title:
CP&L SERVICES (solely in its capacity as administrator)
By:
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Name:
Title:
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