EXHIBIT B-4 (REVISED)
WGL HOLDINGS, INC.
SYSTEM MONEY POOL AGREEMENT
This SYSTEM MONEY POOL AGREEMENT is made and entered into this
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day of , 2000 by and among WGL Holdings, Inc., ("WGL Holdings"), a
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Virginia Corporation and a registered holding company under the Public Utility
Holding Company Act of 1935, as amended (the "Act"); and the subsidiaries of WGL
Holdings, Inc. listed on Exhibit A to this Agreement (each a "Party" and
collectively, the "Parties").
RECITALS
The Parties from time to time have need to borrow funds on a
short-term basis. Some of the Parties from time to time are expected to have
funds available to loan on a short-term basis. The Parties desire to establish a
pool (the "System Money Pool") to coordinate and provide for certain of their
short-term cash and working capital requirements.
NOW THEREFORE, in consideration of the premises, and the mutual
promises set forth herein, the Parties hereto agree as follows:
ARTICLE I
CONTRIBUTIONS AND BORROWINGS
Section 1.1. Contributions to System Money Pool. Each Party will
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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 System Money Pool, and will contribute such funds to the
System Money Pool. The determination of whether a Party at any time has surplus
funds to lend to the System Money Pool, or shall lend such funds to the System
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 WGL Holdings as administrative agent of
the System Money Pool.
Section 1.2 Rights to Borrow. Subject to the provisions of Section
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1.4(b) of this Agreement, all short-term borrowing needs of the Parties, with
the exception of WGL Holdings, may be met by funds in the System Money Pool to
the extent such funds are available. Each Party (other than WGL Holdings) shall
have the right to make short-term borrowings from the System 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 WGL Holdings) may request
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loans from the System 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 shareholders and Board of Directors, such Party's governing
corporate documents, and agreements binding upon such Party. No Party shall be
obligated to borrow from the System Money Pool if lower cost funds can be
obtained from external borrowing. No loans through the System Money Pool will be
made to, and no borrowings through the System Money Pool will be made by, WGL
Holdings.
Section 1.3. Source of Funds.
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(a) Funds will be available through the System Money Pool
from the following sources for use by the Parties from time to time:
(i) surplus funds in the treasuries of the Parties other than WGL
Holdings, (ii) surplus funds in the treasury of WGL Holdings, and
(iii) proceeds from bank borrowings and the sale of commercial paper
by the 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 other order as WGL Holdings, as
administrator of the System Money Pool, may determine will result in a
lower cost of borrowing to Parties borrowing from the System Money
Pool, consistent with the individual borrowing needs and financial
standing of the Parties providing funds to the System 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 System Money
Pool. On any day when more than one fund source (e.g., surplus
treasury funds of WGL Holdings and other System Money Pool
participants ("Internal Funds") and External Funds), with different
rates of interest, is used to fund loans through the System 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
System Money Pool.
Section 1.4. 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) All borrowings from the System 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
System Money Pool if such Party determines that it can (and is
authorized to) effect such borrowing at lower cost directly from banks
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or through the sale of its own commercial paper in an existing
commercial paper program.
Section 1.5. Interest. Each Party receiving a loan shall accrue
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interest daily on the unpaid principal amount of such loan to the System Money
Pool from the date of such loan until such principal amount shall be paid in
full. Interest shall be payable monthly in arrears and upon payment (including
prepayment) in full of the unpaid principal amount thereof.
(a) If only Internal Funds comprise the funds available in
the System Money Pool, the interest rate applicable and payable to or
by subsidiaries for all loans of such Internal Funds will be the rates
for high-grade unsecured 30-day commercial paper sold through dealers
by major corporations as quoted in The Wall Street Journal. The
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interest payable on such loans shall be adjusted on the first business
day of each month that the loan is outstanding.
(b) If only External Funds comprise the funds available in
the System Money Pool, the interest rate applicable to loans of such
External Funds shall be equal to the lending Party's cost for such
External Funds (or, if more than one Party had made available External
Funds on such day, the applicable interest rate shall be a composite
rate, equal to the weighted average of the cost incurred by the
respective Parties for such External Funds).
(c) In cases where both Internal Funds and External Funds
are concurrently borrowed through the System Money Pool, the rate
applicable to all loans comprising such "blended" funds shall be a
composite rate, equal to the weighted average of the (i) cost of all
Internal Funds contributed by Parties (as determined pursuant to
Section 1.5(a) above) and (ii) the cost of all such External Funds (as
determined pursuant to Section 1.5(b) above); provided, that in
circumstances where Internal Funds and External Funds are available
for loans through the System Money Pool, loans may be made exclusively
from Internal Funds or External Funds, rather than from a "blend" of
such funds, to the extent it is expected that such loans would result
in a lower cost of borrowing.
Section 1.6. Certain Costs. The cost of compensating balances and/or
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fees paid to banks to maintain credit lines by Parties lending External Funds to
the System Money Pool shall initially be paid by the Party maintaining such
line. Commitment fees shall be allocated by usage of proceeds. A portion of such
costs shall be retroactively allocated every month to the Parties borrowing such
External Funds through the System Money Pool in proportion to their respective
daily outstanding borrowings of such External Funds.
Section 1.7. Repayment. Each Party receiving a loan hereunder shall
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repay the principal amount of such loan, together with all interest accrued
thereon, on demand and in any event within one year of the date on which such
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loan was made. All loans made through the System Money Pool may be prepaid by
the borrower without premium or penalty.
Section 1.8. Form of Loans to Parties. Loans to the Parties through
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the System Money Pool will be made pursuant to open-account advances, repayable
upon demand and in any event not later than one year after the date of the
advance; provided, that each lending Party shall at all times be entitled to
receive upon demand one or more promissory notes evidencing any and all loans by
such lender. Any such note shall: (a) be substantially in the form filed as
Exhibit A to this agreement, (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 SYSTEM MONEY POOL
Section 2.1. Operation. Operation of the System Money Pool, including
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record keeping and coordination of loans, will be handled by WGL Holdings under
the authority of the appropriate officers of the Parties. WGL Holdings 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. WGL Holdings will administer the System Money Pool.
Separate records shall be kept by WGL Holdings for the System Money Pool
established by this agreement and any other money pool administered by WGL
Holdings.
Section 2.2. Investment of Surplus Funds in the System Money Pool.
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Funds not required to meet System Money Pool loans (with the exception of funds
required to satisfy the System Money Pool's liquidity requirements) will
ordinarily be invested in one or more short-term investments, including: (i)
obligations issued or guaranteed by the U.S. government and/or its agencies and
instrumentalities; (ii) commercial paper, (iii) certificates of deposit, (vi)
bankers' acceptances, (v) repurchase agreements, (vi) tax exempt notes, (vii)
tax exempt bonds, (viii) tax exempt preferred stock, and (ix) such other
investments as are permitted by Section 9(c) of the Act and Rule 40 thereunder.
Section 2.3. Allocation of Interest Income and Investment Earnings.
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The interest income and other investment income earned by the System 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 System
Money Pool bears to the total amount of funds in the System Money Pool and the
cost of any External Funds provided to the System Money Pool by such Party.
Interest and other investment earnings will be computed on a daily basis and
settled once per month.
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Section 2.4. Event of Default. If any Party shall generally not pay
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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 a bankrupt or insolvent, then the other Parties may declare the
unpaid principal amount of any loans to such Party, and all interest thereon, to
be forthwith due and payable and all such amounts shall forthwith become due and
payable.
ARTICLE III
MISCELLANEOUS
Section 3.1. Amendments. No amendment to this Agreement shall be
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adopted except in a writing executed by the Parties.
Section 3.2. Legal Responsibility. Nothing herein contained shall
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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 3.3. Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the Commonwealth of Virginia.
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.
WGL HOLDINGS, INC.
By:
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Name:
Title:
WASHINGTON GAS LIGHT COMPANY
By:
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Name:
Title:
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CRAB RUN GAS COMPANY
By:
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Name:
Title:
HAMPSHIRE GAS COMPANY
By:
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Name:
Title:
WASHINGTON GAS RESOURCES CORP.
By:
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Name:
Title:
WASHINGTON GAS CONSUMER SERVICES, INC.
By:
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Name:
Title:
WASHINGTON GAS ENERGY SERVICES, INC.
By:
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Name:
Title:
WASHINGTON GAS ENERGY SYSTEMS, INC.
By:
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Name:
Title:
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AMERICAN COMBUSTION INDUSTRIES, INC.
By:
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Name:
Title:
BRANDYWOOD ESTATES, INC.
By:
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Name:
Title:
WG MARITIME PLAZA I, INC.
By:
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Name:
Title:
EXHIBIT A
COMPANIES PARTICIPATING IN WGL HOLDINGS, INC. SYSTEM MONEY POOL
Washington Gas Light Company
Crab Run Gas Company
Hamsphire Gas Company
Washington Gas Resources Corp.
Washington Gas Consumer Services, Inc.
Washington Gas Energy Services, Inc.
Washington Gas Energy Systems, Inc.
American Combustion Industries, Inc.
Brandywood Estates, Inc.
WG Maritime Plaza I, Inc.
EXHIBIT B
(TO SYSTEM MONEY POOL AGREEMENT)
FORM OF SYSTEM MONEY POOL NOTE
$ (See attached schedule for principal amount [Date] outstanding at
any time.)
FOR VALUE RECEIVED, the undersigned, , a
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Corporation (the "Company"), hereby unconditionally promises to pay to the
order of (the "Lender"), on demand, or on a date agreed
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to by the Company and the Lender (but in any case not later than one year after
the date of the applicable borrowing), at the offices of ,
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in lawful money of the United States of America and in immediately available
funds, the aggregate unpaid principal amount of all loans (that are posted on
the schedule annexed hereto and made a Part hereof) made by the Lender to the
Company through the WGL Holdings, Inc. ,System Money Pool (the "System Money
Pool") pursuant to the authorization in effect from time to time of the
Securities and Exchange Commission under the Public System Holding Company Act
of 1935, as amended.
The Company further agrees to pay in like money at such office accrued
interest on the unpaid principal amount hereof from time to time from the date
of the applicable borrowing at the rate as determined by WGL Holdings, Inc., in
its capacity as a administrator of the System Money Pool, in accordance with the
terms and provisions of the System Money Pool Agreement, dated as of ,
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2000, among the Company, the Lender and the other parties thereto. Interest
shall be payable monthly in arrears and upon payment (including prepayment) in
full of the unpaid principal amount hereof.
This Note shall be governed by, and construed and interpreted in
accordance with, the Laws of the Commonwealth of Virginia.
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.
[Company]
By:
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Name:
Title:
