FORM OF UTILITY MONEY POOL AGREEMENT
EXHIBIT J-1
FORM OF
UTILITY MONEY POOL AGREEMENT
This Utility Money Pool Agreement (the "Agreement"), dated as of
______, 2000, is made and entered into by and among Exelon Corporation
("Exelon"), a Pennsylvania corporation and a registered holding company under
the Public Utility Holding Company Act of 1935, as amended (the "Act"), Exelon
Service Company ("Exelon Service"), a Pennsylvania corporation and a non-utility
subsidiary of Exelon (in its role as administrator of the money pool and as a
participant in the money pool), and PECO Energy Company, Commonwealth Edison
Company and [Genco] (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 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 II.
CONTRIBUTIONS AND BORROWINGS
Section 2.01 Contributions to Utility Money Pool.
Each Party will determine each day, on the basis of cash flow
projections and other relevant factors, in such Party'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 Party 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 Party's chief
financial officer or treasurer, or by a designee thereof, on the basis of cash
flow projections and other relevant factors, in such Party's sole discretion.
Each Party may withdraw any of its funds at any time upon notice to Exelon
Service as administrative agent of the Utility Money Pool.
Section 2.02 Rights to Borrow.
Subject to the provisions of Section 1.04(c) of this Agreement,
short-term borrowing needs of the Parties, with the exception of Exelon, will be
met by funds in the Utility
Money Pool to the extent such funds are available. Each Party (other than
Exelon) 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 Party (other than Exelon) 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 Party hereunder shall not exceed the applicable borrowing limits set
forth in applicable orders of the SEC and other regulatory authorities,
resolutions of such Party's Board of Directors, such Party's governing corporate
documents, and agreements binding upon such Party. No loans through the Utility
Money Pool will be made to, and no borrowings through the Utility Money Pool
will be made by, Exelon.
Section 2.03 Source of Funds.
(a) Funds will be available through the Utility Money Pool from
the following sources for use by the Parties from time to time: (1) surplus
funds in the treasuries of Parties other than Exelon, (2) surplus funds in the
treasury of Exelon, and (3) proceeds from bank borrowings by Parties and the
sale of commercial paper by Exelon and each other Party ("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 other order as Exelon
Service, as administrator of the Utility Money Pool, may determine will result
in a lower cost of borrowing to companies borrowing from the Utility Money Pool,
consistent with the individual borrowing needs and financial standing of the
Parties providing funds to the Utility Money Pool.
(b) Borrowing Parties 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 fund source (e.g., surplus treasury funds of Exelon and other
Utility Money Pool participants ("Internal Funds") and External Funds), with
different rates of interest, is used to fund loans through the Utility Money
Pool, each borrowing Party will borrow pro rata from each fund source in the
same proportion that the amount of funds provided by that fund source bears to
the total amount of short-term funds available to the Utility Money Pool.
Section 2.04 Authorization.
(a) Each loan shall be authorized by the lending Party's chief
financial officer or treasurer, or by a designee thereof.
(b) Exelon Service, as administrator of the Utility Money Pool,
will provide each Party with periodic activity and cash accounting reports that
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 Party's chief financial officer or treasurer, or by
a designee thereof. No Party shall be required to effect a borrowing through the
Utility Money Pool if such Party determines that it can
EXHIBIT J-1 Page 2
(and is authorized to) effect such borrowing at lower cost directly from banks
or through the sale of its own commercial paper.
Section 2.05 Interest.
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 lender'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.
(d) The interest rate applicable to Loans made by a Subsidiary
to the Utility Money Pool under Section 1.01 of this Agreement shall be the
Average Composite as determined pursuant to Section 1.05(a) of this Agreement.
Section 2.06 Certain Costs.
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.
Section 2.07 Repayment.
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 2.08 Form of Loans to Subsidiaries.
EXHIBIT J-1 Page 3
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 filed as Exhibit J-3 to the Form U-1 Application-
Declaration in File No. ________ of the Commission; (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 III.
OPERATION OF UTILITY MONEY POOL
Section 3.01 Operation.
Operation of the Utility Money Pool, including record keeping and
coordination of loans, will be handled by Exelon Service under the authority of
the appropriate officers of the Parties. Exelon Service 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.
Exelon Service will administer the Utility Money Pool on an "at cost" basis.
Separate records shall be kept by Exelon Service for the Utility Money Pool
established by this Agreement and any other money pool administered by Exelon
Service.
Section 3.02 Investment of Surplus Funds in the Utility Money
Pool.
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.
Section 3.03 Allocation of Interest Income and Investment
Earnings.
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 3.04 Event of Default.
EXHIBIT J-1 Page 4
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 Party seeking to adjudicate it
bankrupt or insolvent, then Exelon Service, 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 IV.
MISCELLANEOUS
Section 4.01 Amendments.
Any such amendment to this Agreement shall be adopted except in a
writing executed by Parties and subject to all applicable approvals by the SEC
and the applicable state utility regulatory commission.
Section 4.02 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 4.03 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 4.04 Governing Law.
This Agreement shall be governed by and construed in accordance
with, the laws of the Commonwealth of Pennsylvania.
EXHIBIT J-1 Page 5
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.
Exelon Corporation
By:________________________________________
Name:
Title:
Exelon Services, Inc.
By:________________________________________
Name:
Title:
PECO Energy Company
By:________________________________________
Name:
Title:
Commonwealth Edison Company
By:________________________________________
Name:
Title:
Exelon Generation Company
By:________________________________________
Name:
Title:
Date: _________, 2000
EXHIBIT J-1 Page 6
