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 (either
from surplus funds or from external borrowings) 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.
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.
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:
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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:
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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.
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(Name of Borrower)
By:
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Name:
Title:
LOAN PRINCIPAL AMOUNT
DATE (REPAYMENT) OUTSTANDING RATE INTEREST
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