1
Exhibit A-9
FORM OF MONEY POOL AGREEMENT
This Agreement is executed this day of , 199 , by and between Conectiv
(hereinafter referred to as the "Parent Company"), a Delaware Corporation and a
holding company registered under the terms of the Public Utility Holding Company
Act of 1935 (the "Act"), Conectiv Resource Partners, Inc. (hereinafter referred
to as the "Service Company"), a Delaware corporation and a mutual service
company formed under the terms of the Act and ______________ , ______________ a
corporation and an associate company of the Conectiv system ("Participating
Company", and collectively with other associate companies that have or may in
the future execute this form of Agreement, the "Participating Companies").
WITNESSETH
WHEREAS, the parties hereto desire A) to make excess funds, when and as
such excess funds exist, available for borrowing by other Participating
Companies and B) when in need to be able to borrow excess funds made available
by other Participating Companies and/or by the Parent Company; and
WHEREAS, the Service Company agrees to act as agent for Participating
Companies and the Parent Company for the purpose of receiving excess funds and
either disbursing or investing said funds in accordance with this Agreement; and
WHEREAS, the Parent Company desires, A) to the extent that it has funds
available, to have an expedient vehicle for providing additional short term
funding to meet the needs of Participating Companies wishing to borrow should
the deposits by Participating Companies with excess funds be insufficient and B)
to guarantee the return of deposits made by Participating Companies, and
WHEREAS, economies and efficiencies benefiting the Participating
Companies will result from the operation of the Money Pool as herein provided
and borrowing from nonaffiliates will be minimized:
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties to this Agreement covenant and agree as
follows:
ARTICLE I - Establishment and Operation of Money Pool
Section 1.1 Money Pool Accounts: The Service Company shall establish one
or more banking accounts in which to hold, as agent, funds deposited by the
Parent Company and funds deposited by Participating Companies having excess
funds and use such account(s) to dispense funds to Participating Companies
needing to borrow funds. The portion of the Money Pool account attributable to
an amount deposited by a Participating Company shall be referred to as the
Participating Company's Deposit Balance.
Section 1.2 Deposits and Sources of Funds. Each Participating Company
shall determine daily based on its current cash position, cash flow projections
and other factors as deemed relevant to the officers of the Participating
Company. The Treasurer of the Participating Company or his
2
designee shall advise the Treasurer of the Service Company or his designee, the
level of funds being deposited or kept on deposit in the Money Pool that day.
The Parent Company may deposit funds needed to meet the requirements of
Participating Companies needing funds. An evidence of deposit in the form
attached hereto as Exhibit A shall be executed by the Service Company to
document its receipt of funds as agent.
Section 1.3. Lending of Funds: The Service Company shall transfer to
Participating Companies needing funds such funds as required. If insufficient
funds are available in the Money Pool to meet the needs of Participating
Companies, the Treasurer of the Service Corporation shall request that the
Parent Company make a deposit equal to the shortfall. Each borrowing company
shall be deemed to have borrowed from each depositing company an amount equal to
the proportion of the depositing company's deposit to the total amount on
deposit in the Money Pool. Nothing in this Agreement restricts the ability of
the Parent Company to lend funds directly to any associate company.
Section 1.4. Loans Repayable Upon Demand. All loans made with Money Pool
deposits shall be repayable upon demand, when and to the extent demand is made
by any Participating Company making a deposit.
Section 1.5. Parent Guarantee of Deposits. Subject to the provisions of
Section 3.1 below, the Parent Company wishes to guarantee the return of deposits
made by any Participating Company by agreeing to make a capital contribution to
any depositing Participating Company if, and only to the extent that, following
demand for repayment, a deposit is not returned to any Participating Company.
Section 1.6. Limitations on Borrowing of Funds. Any Participating
Company may borrow funds deposited in the Money Pool by Participating Companies
with excess funds or by the Parent Company upon execution and delivery to the
Service Company of a Money Pool Note in the form attached hereto as Exhibit B.
Under no circumstances may the Parent Company be a borrower. No funds may be
transferred to the Parent Company in excess of funds previously deposited by,
and not previously returned to, the Parent Company. Borrowing by Delmarva Power
& Light Company and Atlantic City Electric Company shall not exceed the amount
of short-term borrowing authorized by an appropriate state public utility
commission or by the Securities and Exchange Commission ("SEC") under the Act,
if applicable, and borrowing by any other Participating Company shall not exceed
$25 million at any one time outstanding.
Section 1.7. Interest Earned and Interest Paid. All funds deposited in
the Money Pool will earn interest and all funds borrowed from the Money Pool
shall bear interest based on each Participating Company's daily average cash
position. The cost of money for all borrowings from the Money Pool and the
investment rate for all moneys deposited in the Money Pool will be the same.
rate (the "Money Pool Rate"). This rate will be determined by using the interest
expense incurred during the month with respect to external borrowings incurred
by the Parent Company to make deposits in the Money Pool less any interest
income generated by the Money Pool. The total net expense for a month will be
divided by the Money Pool's average net daily investment/borrowing position to
derive the Money Pool Rate for the month. If there are no such external
borrowings nor external investments, then the Money Pool Rate for borrowings
and/or
2
3
investments will be the prior month's average Federal Funds Rate as published in
the Federal Reserve Statistical Release Publication H.15 (519). Interest will be
allocated for payment by each Participating Company which has borrowed based on
the proportion of the borrowing company's Money Pool debt to the total borrowed
from Participating Companies and/or the Parent Company on any day during the
month. The interest payment shall be made monthly by debit to the borrowing
company's Money Pool Deposit Balance and credit to the lending company's Money
Pool Deposit Balance. Interest earned in excess of interest expense will be
allocated among depositing companies on the basis of the proportion of each
Participating Company's Money Pool Deposit Balance to the total Money Pool
funds.
Section 1.8. Use of Excess Funds. Any funds not required by the Money
Pool to make loans to Participating Companies shall be invested in one or more
short-term investments in accordance with the Conectiv System's Investment
Guidelines as approved from time to time by the Board of Directors of the Parent
Company or by officers of the Parent Company, if such authority is delegated to
such officers by the Parent Company Board of Directors.
Section 1.9. Clearing Affiliate Transactions by Book Entry. Amounts owed
by one Participating Company to another Participating Company may be paid and
payment may be received by debiting the Money Pool Deposit Balance of the
Participating Company making the payment and crediting the Money Pool Deposit
Balance of the Participating Company receiving the payment. Settlement sheets
reflecting all such book entry payments shall be sent to all Participating
Companies promptly.
ARTICLE II - COMPENSATION
Section 2.1. Compensation Based on Cost. As compensation for the
services to be rendered hereunder, each Participating Company shall pay to the
Service Company all costs which reasonably can be identified and related to the
operation of the Money Pool, such cost to be determined, allocated and paid in
accordance with the Service Agreement as approved by the SEC under Section 13 of
the Act and executed by the Parent Company, Participating Companies and the
Service Company.
ARTICLE III - TERM
Section 3.1. Term. This Agreement shall become effective as of the day
of above written, and shall continue in force until terminated by either party.
The Parent Company shall have the right, upon just cause determined in the sole
discretion of the Treasurer of the Parent Company, to declare that deposits
loaned to a particular Participating Company will not qualify for the guarantee
set forth in Section 1.5 above. Any Participating Company whose loans are thus
disqualified will thereafter only be permitted to participate as a depositor and
not as a borrower from the Money Pool. This Agreement shall also be subject to
termination or modification at any time, without notice, if and to the extent
performance under this Agreement may conflict with the Act or with any rule,
regulation or order of the SEC adopted before or after the date of this
Agreement or any other regulatory body.
3
4
ARTICLE IV - MISCELLANEOUS
Section 4.1. Accounting. All accounts and records of the Service Company
shall be kept in accordance with the General Rules and Regulations promulgated
by the SEC pursuant to the Act, in particular, the Uniform System of Accounts
for Mutual Service Companies and Subsidiary Service Companies in effect from and
after the date hereof, except as specifically approved by the SEC.
Section 4.2. Addition of New Parties. Other existing wholly-owned
subsidiaries and new direct or indirect wholly-owned subsidiaries of the Parent
Company, which may be established after the effective date of this Agreement,
may become additional Participating Companies (collectively, the "New
Participating Companies") subject to this Agreement by execution of this form of
agreement, as it may be amended at that time. In addition, the parties hereto
shall make such changes in the operation of the Money Pool and the method of
assigning, distributing or allocating interest income and interest expense among
the Participating Companies and the New Participating Companies under this
Agreement as may become necessary.
Section 4.3. Access to Books and Records. The Service Company shall
permit a Participating Company access to its accounts and records, including the
basis and computation of allocations.
Section 4.4. Subject to Regulatory Approvals. This Agreement and any
amendments hereto shall not be effective until any necessary regulatory
approvals have been obtained.
Section 4.5. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
CONECTIV as lender and guarantor
By: _________________________________________
[Title]
CONECTIV, RESOURCE PARTNERS, INC.
As Agent on behalf of Participating Companies
By: _________________________________________
[title]
[PARTICIPATING COMPANY]
By: _________________________________________
[title]
4
