EXHIBIT 10.3
UNILATERAL BORROWING AGREEMENT
This UNILATERAL BORROWING AGREEMENT ("Agreement") made and entered into on
the 30th day of September, 2004, among Ameren Corporation ("Ameren"), a Missouri
corporation and a registered holding company under the Public Utility Holding
Company Act of 1935, as amended, Illinois Power Company, doing business as
AmerenIP ("AmerenIP"), an Illinois corporation and a utility subsidiary of
Ameren and Ameren Services Company, a Missouri corporation and a subsidiary
service company of Ameren ("Ameren Services") (each a "Party" and collectively,
the "Parties").
WHEREAS, AmerenIP is expected to need from time to time to borrow funds on
a short-term basis;
WHEREAS, Ameren and AmerenIP desire to enter into an agreement whereby
AmerenIP will be able to make such short-term borrowings directly from Ameren
from time to time;
WHEREAS, the Parties contemplate that AmerenIP will become a party to the
Ameren Corporation Utility Money Pool Agreement, dated March 25, 1999, as
amended ("Utility Money Pool"); and
WHEREAS, this Agreement is subject to and designed to comply with 83
Illinois Administrative Code Part 340 (the "ICC Money Pool Rules").
NOW THEREFORE, in consideration of the premises, and the mutual promises
set forth herein, the Parties hereto agree as follows:
ARTICLE I: BORROWINGS BY AMERENIP
Section 1.1 Rights to Borrow. Subject to the provisions of Section 1.3(b)
of this Agreement, Ameren agrees to meet any short-term borrowing needs of
AmerenIP up to an aggregate amount outstanding at any time of $500 million (the
"Available Limit"). There shall be deducted from the Available Limit any other
outstanding short-term debt obligations of AmerenIP including, but not limited
to, amounts owing under the Utility Money Pool. AmerenIP shall have the right to
make short-term borrowings under this Agreement, 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") and the Illinois
Commerce Commission ("ICC") and limitations of the ICC Money Pool Rules.
AmerenIP may request loans under this Agreement from time to time during the
period from the date hereof until this Agreement is terminated by written
agreement of the Parties upon not less than 10 days notice; provided, however,
that the aggregate amount of all loans requested by AmerenIP hereunder shall not
exceed the applicable borrowing limits set forth in applicable orders of the
SEC, the ICC, and other relevant regulatory authorities, resolutions of such
Party's shareholders and Board of Directors,
such Party's governing corporate documents, and agreements binding upon such
Party. Ameren may not borrow under this Agreement from AmerenIP.
Section 1.2 Source of Funds. (a) Funds will be made available by Ameren to
AmerenIP through this Agreement from the following sources: (i) surplus funds in
the treasury of Ameren ("Internal Funds") and (ii) proceeds from bank borrowings
and the sale of commercial paper by Ameren ("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 order as the Parties may determine will
result in a lower cost of borrowing to the Parties consistent with AmerenIP's
borrowing needs and financial standing of Ameren.
(b) On any day when more than one fund source (e.g., Internal Funds and
External Funds), with different rates of interest, is used to fund loans under
this Agreement, AmerenIP 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 hereunder.
Section 1.3 Authorization. (a) Each loan shall be authorized by Ameren's
Treasurer, or by a designee thereof.
(b) All borrowings under this Agreement shall be authorized by AmerenIP's
Treasurer, or by a designee thereof. AmerenIP shall not be required to effect a
borrowing under this Agreement if it determines that it can (and is authorized
to) effect such borrowing at lower cost through the Utility Money Pool or
directly from banks or through the sale of its own commercial paper in an
existing commercial paper program.
Section 1.4 Interest. Interest shall accrue monthly on the unpaid principal
amount of loans made under this Agreement from the date of such loan until such
principal amount shall be paid in full.
(a) If only Internal Funds comprise the funds loaned to AmerenIP under this
Agreement, the interest rate applicable to loans of such Internal Funds shall be
the CD yield equivalent of the 30-day Federal Reserve "AA" Non-Financial
commercial paper composite rate (or, if no such rate is established for that
day, then the applicable rate shall be the rate for the next preceding day for
which such rate was established).
(b) If only External Funds comprise the funds loaned to AmerenIP under this
Agreement, the interest rate applicable to loans of such External Funds shall be
equal to Ameren's cost for such External Funds. The rate of interest shall not
exceed the rate permitted by Section 340.30 (c) of the ICC Money Pool Rules.
(c) In cases where both Internal Funds and External Funds comprise the
funds loaned to AmerenIP under this Agreement, the rate applicable to all loans
comprised of such "blended" funds shall be a composite rate, equal to the
weighted average of the (i)
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cost of all Internal Funds (as determined pursuant to Section 1.4(a) above) and
(ii) the cost of all such External Funds (as determined pursuant to Section
1.4(b) above); provided, that in circumstances where Internal Funds and External
Funds are available for loans under this Agreement, 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 1.5 Certain Costs. The cost of compensating balances and/or fees
paid to banks to maintain credit lines shall initially be paid by Ameren. A
portion of such costs shall be retroactively allocated every month to AmerenIP
as a borrower of External Funds under this Agreement in proportion to its
respective daily outstanding borrowings of such External Funds calculated as
required for "issuance costs" under the ICC Money Pool Rules.
Section 1.6 Repayment. AmerenIP shall repay the principal amount of loans
made under this Agreement, together with all interest accrued thereon, on demand
and in any event within one year of the date on which such loan was made. All
loans made by AmerenIP under this Agreement may be prepaid at any time without
premium or penalty.
Section 1.7 Form of Loans to AmerenIP. Loans made by Ameren to AmerenIP
under this Agreement 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 Ameren shall at all times be entitled to receive upon
demand one or more promissory notes evidencing any and all loans made by it. Any
such note shall: (a) be substantially in the form attached as Exhibit A 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 THIS UNILATERAL BORROWING
AGREEMENT
Section 2.1 Operation. Operation of this Agreement, including record
keeping and coordination of loans, will be handled by Ameren Services under the
authority of the appropriate officers of the Parties. Ameren 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. Ameren Services will administer this Agreement on an
"at cost" basis. Separate records shall be kept by Ameren Services for this
Agreement and any other intercompany borrowing arrangements administered by
Ameren Services. Ameren Services will keep necessary records and shall prepare
and file on behalf of AmerenIP the reports and information required to be
submitted to the Illinois Commerce Commission under Section 340.60 of the ICC
Money Pool Rules.
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Section 2.2 Event of Default. If AmerenIP 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 AmerenIP seeking
to adjudicate it a bankrupt or insolvent, then Ameren may declare the unpaid
principal amount of any loans to AmerenIP, 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 adopted
except in a writing executed by the Parties.
Section 3.2 Legal Responsibility. Nothing herein contained shall render any
Party liable for the obligations of any other Party hereunder.
Section 3.3 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Missouri.
IN WITNESS WHEREOF, the undersigned companies have duly caused this
document to be signed on their behalf on the date written above by the
undersigned thereunto duly authorized.
AMEREN CORPORATION
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
ILLINOIS POWER COMPANY
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
AMEREN SERVICES COMPANY
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
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EXHIBIT A
FORM OF UNILATERAL BORROWING AGREEMENT NOTE
$ (See attached schedule for principal amount [Date]
outstanding at any time.)
FOR VALUE RECEIVED, the undersigned, Illinois Power Company d/b/a AmerenIP,
an Illinois corporation (the "Company"), hereby unconditionally promises to pay
to the order of Ameren Corporation (the "Lender"), on demand, or on a date
agreed 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 Ameren
Corporation, 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 under the Unilateral Borrowing Agreement, dated as of ________,
(the "Agreement") between Lender and the Company. Borrowings by the Company
under the Agreement are in accordance with approvals in effect from time to time
of the Securities and Exchange Commission under the Public Utility Holding
Company Act of 1935, as amended and approvals of the Illinois Commerce
Commission.
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 Ameren Services
Company, in its capacity as a administrator of the Agreement, in accordance with
the terms and provisions of the Agreement. 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 State of Missouri.
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.
Illinois Power Company
d/b/a AmerenIP
By: _________________________
Name:
Title:
