EXHIBIT J-1
FORM OF
SECOND AMENDED AND RESTATED MONEY POOL AGREEMENT
This Amended and Restated Money Pool Agreement (the "Agreement"),
dated as of April __, 2005, is made and entered into by and among CenterPoint
Energy, Inc. ("CenterPoint"), a Texas corporation and a registered holding
company under the Public Utility Holding Company Act of 1935, as amended (the
"Act"), and certain of its direct or indirect subsidiaries, each of which are
signatories hereto, or which subsequently become signatories hereto, and agree
to abide by the terms herein (CenterPoint and each direct or indirect
subsidiary, individually, a "Party" and collectively, the "Parties").
WITNESSETH:
WHEREAS, the Parties established a primary Money Pool (the "Money
Pool") under the Money Pool Agreement, dated as of August 31, 2002 (the
"Original Money Pool Agreement");
WHEREAS, the Parties amended and restated the Original Money Pool
Agreement in the Amended and Restated Money Pool Agreement dated December 10,
2003;
WHEREAS, the Parties wish to further amend and restate the money
pool agreement in its entirety as set forth below;
WHEREAS, certain of the Parties that will participate in the Money
Pool will from time to time have need to borrow funds on a short-term basis, and
certain of the Parties 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, and intending to be
legally bound hereby, the Parties hereto agree as follows:
ARTICLE I.
CONTRIBUTIONS AND BORROWINGS
Section 1.01 Contributions to the Money Pool.
Each Party will determine each day, the amount of funds each desires
to contribute to the Money Pool, and will contribute such funds to the Money
Pool. The determination of whether a Party has funds to contribute and the
determination whether a Party shall lend such funds to the Money Pool will be
made by such Party's treasurer, or by a designee thereof, in such Party's sole
discretion. Parties other than CenterPoint Energy Resources Corp. and
CenterPoint Energy Houston Electric, LLC (the "Utility Subsidiaries") may
contribute amounts to the Money Pool from either surplus funds or external
borrowings. The Utility Subsidiaries will only contribute surplus funds to the
Money Pool.
Each Party may withdraw any of its funds at any time upon notice to
CenterPoint Energy Service Company, LLC (ServiceCo) as administrative agent of
the Money Pool.
Section 1.02 Rights to Borrow.
(a) No loans through the Money Pool will be made to, and no
borrowings through the Money Pool will be made by, CenterPoint or Houston
Industries Funding Company.
(b) Subject to the provisions of Section 1.02(a) and Section 1.04(c)
of this Agreement, short-term borrowing needs of the Parties will be met by
funds in the Money Pool to the extent the needs of a Party are not satisfied
with external borrowings by such Party and to the extent such funds are
available in the Money Pool. Each Party shall have the right to borrow from the
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 Party may request loans from
the Money Pool from time to time during the period from the date hereof until
this Agreement is terminated by written agreement of the Parties.
Section 1.03 Source of Funds.
(a) Subject to Section 1.01, funds will be available through the
Money Pool from the following sources for use by the Parties from time to time:
(1) surplus funds in the treasuries of the Parties, and (2) proceeds from bank
loans, the sale of notes and/or the sale of commercial paper by the Parties (all
such borrowings by the Parties herein referred to as "External Borrowings"), 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 ServiceCo, as
administrator of the Money Pool, may determine is appropriate.
(b) Each borrowing Party will borrow pro rata from each fund source
in the same proportion that the amount of funds provided from that fund source
bears to the total amount then loaned through the Money Pool. If there are
insufficient funds to meet all borrowing requests, the needs of the Utility
Subsidiaries will be met before loans are made to any Non-Utility Subsidiaries.
The term "Non-Utility Subsidiaries" refers to CenterPoint's subsidiaries, other
than the Utility Subsidiaries and Utility Holding, LLC.
Section 1.04 Authorization.
(a) The determination of whether a Party has funds to lend to the
Money Pool will be made by its Treasurer, or by a designee thereof.
(b) ServiceCo, as administrator of the Money Pool, will provide each
Party with a report for each business day that includes, among other things,
cash activity for the day and the balance of loans outstanding.
(c) All borrowings from the Money Pool shall be authorized by the
borrowing Party's treasurer, or by a designee thereof. No Party shall be
required to effect a borrowing through the Money Pool if such Party determines
that it can (and is authorized to) effect such
borrowing more advantageously directly from banks or through the sale of its own
notes or commercial paper.
Section 1.05 External Investment of Investment Pool Funds.
Funds which are loaned by Parties and are not utilized to satisfy
borrowing needs of other Parties ("Investment Pool") will be invested by
ServiceCo on behalf of the lending Parties in one or more short term instruments
("External Investments"). Funds not utilized for the Money Pool loans will
ordinarily be invested in one or more short-term investments, including (i)
interest-bearing deposits with banks; (ii) obligations issued or guaranteed by
the U.S. government and/or its agencies; (iii) commercial paper rated not less
than A-1 by Standard & Poor's and P-1 by Xxxxx'x Investors Services, Inc.; (iv)
money market funds; (v) bank certificates of deposit; (vi) Eurodollar funds;
(vii) repurchase agreements collateralized by securities issued or guaranteed by
the U.S. government; and (viii) such other investments as are permitted by
Section 9(c) of the Act and Rule 40 thereunder.
Section 1.06 Money Pool Interest.
The interest rate applicable on any day to then outstanding loans
through the Money Pool, whether or not evidenced by a promissory demand note,
will be the composite weighted average daily effective cost incurred by
CenterPoint for External Borrowings outstanding on that date. The daily
effective cost shall be inclusive of interest rate swaps related to such
External Funds. If there are no External Borrowings outstanding on that date,
then the rate will be the certificate of deposit yield equivalent of the 30-day
Federal Reserve "AA" Non-Financial Commercial Paper Composite Rate (the
"Composite"), or if no Composite is established for that day, then the
applicable rate will be the Composite for the next preceding day for which a
composite is established. If the Composite shall cease to exist, then the rate
will be the composite which then most closely resembles the Composite and/or
most closely mirrors the pricing CenterPoint would expect if it had External
Borrowings.
Section 1.07 Investment Pool Interest.
Interest income related to External Investments will be calculated
daily and allocated back to lending Parties on the basis of their relative
contribution to the Investment Pool on that date.
Section 1.08 Repayment.
Each Party receiving a loan from the Money Pool hereunder shall
repay the principal amount of such loan, together with all interest accrued
thereon, on demand by the administrator and in any event not later than the
expiration date of the SEC authorization for the operation of the Money Pool.
All loans made through the Money Pool may be prepaid by the borrower without
premium or penalty.
Section 1.09 Form of Loans to Parties.
Loans to the Parties from the Money Pool shall be made as
open-account advances, pursuant to the terms of this agreement, although any
lending Party is at all times be
entitled to receive, upon demand, a promissory note evidencing the transaction.
Any such note shall: (a) be in substantially the form attached as Exhibit A; (b)
be dated as of the date of the initial borrowing; (c) mature on demand, but in
any event not later than the expiration date of the SEC authorization for the
operation of the Money Pool; and (d) be repayable in whole at any time or in
part from time to time, without premium or penalty.
ARTICLE II.
OPERATION OF THE MONEY POOL
Section 2.01 Operation.
Operation of the Money Pool, including record keeping and
coordination of loans, will be handled by ServiceCo under the authority of its
Treasurer. ServiceCo shall be responsible for the determination of all interest
rates and charges applicable to the Money Pool and all earnings applicable to
the Investment Pool, 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. In the event that ServiceCo
should be in default or otherwise should be unable or unwilling to administer
operation of the Money Pool, CenterPoint, under the authority of its Treasurer,
shall assume responsibility for operations of the Money Pool.
Interest and investment earnings other than interest, will be
computed on a daily basis and settled once per month.
Section 2.02 Certain Costs.
ServiceCo will administer the Money Pool on an "at cost" basis. Fees
and expenses associated with CenterPoint's bank lines, commercial paper program
and note issuance program will be estimated and allocated monthly to the Parties
and CenterPoint using the following formula:
(i) each Party other than CenterPoint will bear such costs
in the ratio of (a) their average daily borrowings from
the Money Pool in the prior month to (b) the average
daily borrowings of CenterPoint in the prior month under
such bank lines, commercial paper program or note
issuance program; and
(ii) in the case of CenterPoint, in the ratio of (a) the
average daily borrowings of CenterPoint under its bank
lines, commercial paper program and note issuance
program in the prior month that were not invested in the
Money Pool to (b) the average daily short-term
borrowings of CenterPoint in the prior month under such
bank lines, commercial paper program or note issuance
program.
Section 2.03 Event of Default.
If any Party 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 Party seeking to adjudicate it bankrupt or
insolvent, then ServiceCo, on behalf of the Money Pool, may, by notice to the
Party, terminate the Money Pool's availability to the Party and/or declare the
principal amount then outstanding of, and the accrued interest on, the loans and
all other amounts payable to the Money Pool by such Party 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 Party.
ARTICLE III.
MISCELLANEOUS
Section 3.01 Amendments.
No amendment to this Agreement shall be effective unless the same be
in writing and signed by Parties thereto.
Section 3.02 Legal Responsibility.
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.
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.
Section 3.04 Termination.
This Agreement may be terminated at any time by agreement of the Parties.
Section 3.05 Governing Law.
This Agreement shall be governed by and construed in accordance
with, the laws of the State of Texas.
IN WITNESS WHEREOF, the undersigned companies have duly caused this
document to be signed on their behalf on the date first written above by the
undersigned thereunto duly authorized.
CENTERPOINT ENERGY, INC.
By: __________________________
Name: Xxxx Xxxxxxxx
Title: Treasurer
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
CENTERPOINT ENERGY RESOURCES CORP.
CENTERPOINT ENERGY PROPERTIES, INC.
CENTERPOINT ENERGY FUNDING COMPANY
CENTERPOINT ENERGY PRODUCTS, INC.
CENTERPOINT ENERGY SERVICE COMPANY, LLC
By: __________________________
Name: Xxxx Xxxxxxxx
Title: Treasurer
EXHIBIT A
FORM OF MONEY POOL NOTE
TO BE EXECUTED BY BORROWING PARTIES
____________________, 20__
FOR VALUE RECEIVED, the undersigned, _______________________ (the
"Borrower"), hereby promises to pay to the order of (the "Lender") at its
principal office in , on demand or on , 20___, or at the option of the Borrower,
whichever first occurs, but in any event not later than the expiration date of
the SEC authorization for the operation of the Money Pool, the principal sum set
forth on the attachment hereto as "Principal Amount Outstanding." This note may
be paid in full at any time or in part from time to time without premium or
penalty. The Principal Amount Outstanding shall bear interest, calculated daily,
at a rate equal to CenterPoint Energy, Inc.'s weighted average daily effective
cost for all External Borrowings outstanding on that date. If there are no
External Borrowings outstanding on that date, then the rate would be the
certificate of deposit yield equivalent of the 30-day Federal Reserve "AA"
Non-Financial Commercial Paper Composite Rate (the "Composite"), or if no
Composite is established for the day, then the applicable rate will be the
Composite for the next preceding day for which a Composite is established.
This Note shall be governed by, and construed and interpreted in
accordance with, the Laws of the State of Texas. For any term not expressly
defined in this note, the definition in the Money Pool Agreement, dated ______,
2002, applies.
IN WITNESS WHEREOF, the undersigned, pursuant to due authorization, has
caused this Note to be executed in its name and on its behalf by its duly
authorized officer.
________________________________________
(Name of Borrower)
By: _________________________________
Name:
Title:
LOAN PRINCIPAL AMOUNT
DATE (REPAYMENT) OUTSTANDING RATE INTEREST
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