EXHIBIT B-2
NON-UTILITY MONEY POOL AGREEMENT
This Non-Utility Money Pool Agreement (the "Agreement"), dated as of
, 2000, is made and entered into by and 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"), CP&L
Services, a subsidiary service company of CP&L Energy (and administrative agent
hereunder), and each of the other non-utility subsidiaries of CP&L Energy whose
names appear on the signature pages hereof (each a "Party" and collectively, the
"Parties").
WITNESSETH:
WHEREAS, the Parties desire to establish a Money Pool (the
"Non-Utility Money Pool") to coordinate and provide for certain of their
short-term cash and working capital requirements; and
WHEREAS, the non-utility subsidiaries that will participate in the
Non-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, the Parties hereto agree
as follows:
ARTICLE I
CONTRIBUTIONS AND BORROWINGS
Section 1.01 Contributions to Non-Utility Money Pool.
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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 Non-Utility Money Pool,
and will contribute such funds to the Non-Utility Money Pool. The determination
of whether a Party at any time has surplus funds to lend to the Non-Utility
Money Pool or shall lend funds to the Non-Utility Money Pool will be made by an
appropriate officer of such Party, 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
CP&L Services, as administrative agent of the Non-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, all
short-term borrowing needs of the Subsidiaries will be met by funds in the
Non-Utility Money Pool to the extent such funds are available. Each Subsidiary
shall have the right to make short-term borrowings from the Non-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
Non-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 or similar governing body, such
Subsidiary's governing corporate documents, and agreements binding upon such
Subsidiary. No loans through the Non-Utility Money Pool will be made to, and no
borrowings through the Non-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 Non-Utility Money Pool from
the following sources for use by the Subsidiaries from time to time: (i) surplus
funds in the treasuries of Subsidiaries, (ii) surplus funds in the treasury of
CP&L Energy, and (iii) proceeds from bank borrowings and/or commercial paper
sales by the Parties ("External Sources"). Funds will be made available from
such sources in such order as CP&L Services, as administrator of the Non-Utility
Money Pool, may determine will result in a lower cost of borrowing to companies
borrowing from the Non-Utility Money Pool, consistent with the individual
borrowing needs and financial standing of the Subsidiaries providing funds to
the Non- 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 Non-Utility Money Pool. On any day
when more than one fund source (e.g., surplus treasury funds of CP&L Energy and
any Subsidiary ("Internal Sources") and funds from External Sources), with
different rates of interest, is used to fund loans through the Non-Utility Money
Pool, each borrowing Subsidiary will borrow pro rata from each such funding
source in the Non-Utility Money Pool 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 Non-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 Non-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 Non-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 Non-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 balances 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 (i) the 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 the Parties to the
Non-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 Non-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 Non-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 Non-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 Non-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 Subsidiaries from the Non-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 grid 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 NON-UTILITY MONEY POOL
Section 2.01 Operation.
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Operation of the Non-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 Non-Utility Money Pool on either an "at cost"
basis or, in its sole discretion, on a different basis. Separate records shall
be kept by CP&L Services for the Non-Utility Money Pool established by this
Agreement and any other money pool administered by CP&L Serices.
Section 2.02 Investment of Surplus Funds in the Non-Utility Money Pool.
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Funds not required for the Non-Utility Money Pool loans (with the
exception of funds required to satisfy the Non-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;
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(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 2.03 Allocation of Investment Earnings.
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The interest income and other investment income earned by the
Non-Utility Money Pool on loans and on investment of surplus funds will be
allocated among the Parties in accordance with the proportion each Party's
contribution of funds in the Non-Utility Money Pool bears to the total amount of
funds in the Non-Utility Money Pool and the cost of any External Sources
provided to the Non-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 Party seeking to adjudicate it
bankrupt or insolvent, then CP&L Services, on behalf of the Non-Utility Money
Pool, may, by notice to the Subsidiary, terminate the Non-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 Non-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 a duly authorized officer of each Party.
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:
CP&L Services
By:
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Dated , 2000
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