EXHIBIT 4.7
UTILITY MONEY POOL AGREEMENT
This Utility Money Pool Agreement (the "Agreement"), dated as of
______, 2000, is made and entered into by and among KeySpan Corporation
("KeySpan"), a New York corporation and a registered holding company under
the Public Utility Holding Company Act of 1935, as amended (the "Act"), KeySpan
Corporate Services LLC ("KCS"), a New York limited liability corporation
and a nonutility subsidiary of KeySpan (in its role as administrator of the
money pool and as a participant in the money pool), and each of the utility
subsidiaries whose name appears on the signature pages hereof (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, the Parties hereto agree
as follows:
ARTICLE I
CONTRIBUTIONS AND BORROWINGS
Section 1.01 - Contributions to Utility Money Pool.
Subject to applicable regulatory restrictions, if any, 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
KCS as administrative agent of the Utility Money Pool.
Section 1.02 - 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 KeySpan, will be
met by funds in the Utility Money Pool to the extent such funds are
available. Each Party (other than KeySpan) shall have the right to make
short-term borrowing 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 KeySpan) 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, KeySpan.
Section 1.03 - 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 KeySpan, (2) surplus funds in the
treasury of KeySpan, and (3) proceeds from bank borrowings by Parties or
the sale of commercial paper by KeySpan 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 KCS, 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 KeySpan 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.
(c) Borrowings will be made by Boston Gas, Colonial Gas, Essex
Gas and EnergyNorth Natural Gas to finance their fuel purchases through the
Utility Money Pool utilizing External Funds as permitted by their
respective state regulatory orders. Borrowings will be for a calendar
month at the actual applicable interest rate attributable to such External
Funds and will be repaid monthly upon which time a new borrowing amount
will be determined as required.
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Section 1.04 - Authorization.
(a) Each loan shall be authorized by the lending Party's chief
financial officer or treasurer, or by a designee thereof.
(b) KCS, 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 (and is authorized
to) effect such borrowing at lower cost directly from banks, through the sale
of its own commercial paper, or otherwise.
Section 1.05 - 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. The interest rate applicable to External
Funds borrowed by a Subsidiary for fuel purchases shall be the actual
applicable interest rate attributable to such External Funds for a calendar
month.
(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.
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(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 1.06 - Certain Costs.
The cost of compensating balances and fees paid to banks to maintain
credit lines and accounts 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 1.07 - 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 1.08 - Form of Loans to Subsidiaries.
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 dated as
of the date of the initial borrowing; (b) 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 (c) 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.
Operation of the Utility Money Pool, including record keeping and
coordination of loans, will be handled by KCS under the authority of the
appropriate officers of the Parties. KCS 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.
KCS will administer the Utility Money Pool on an "at cost" basis. Separate
records shall be kept by KCS for the Utility Money Pool established by this
Agreement and any other money pool administered by KCS.
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Section 2.02 - 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 2.03 - 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 2.04 - Event of Default.
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 KCS, 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.
This Agreement may be amended by the parties hereto at any
time by execution of an instrument in writing signed on behalf of each of
the parties hereto, subject to all applicable approvals by the SEC and any
applicable state utility regulatory commission.
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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 - Governing Law.
This Agreement shall be governed by and construed in accordance with,
the laws of the State of New York.
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.
KeySpan Corporation
By: ____________________________
Name:
Title:
KeySpan Corporate Service, LLC
By: ____________________________
Name:
Title:
The Brooklyn Union Gas Company d/b/a KeySpan
Energy Delivery New York
By: ____________________________
Name:
Title:
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KeySpan Gas East Corporation d/b/a KeySpan Energy
Delivery Long Island
By: ____________________________
Name:
Title:
KeySpan Generation, LLC
By: ____________________________
Name:
Title:
Boston Gas Company
By: ____________________________
Name:
Title:
Essex Gas Company
By: ____________________________
Name:
Title:
Colonial Gas Company
By: ____________________________
Name:
Title:
EnergyNorth Natural Gas, Inc.
By: ____________________________
Name:
Title:
Date: _________________, 2000
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