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EXHIBIT A
NON-UTILITY MONEY POOL AGREEMENT
This Non-Utility Money Pool Agreement (the "Agreement"), dated
as of ________________, 199__, is made and entered into by and among Alliant
Industries, Inc. ("Alliant"), a Wisconsin corporation, Alliant Services Company
("Services") (solely in the role as administrator of the money pool), an Iowa
corporation and a non-utility subsidiary of Interstate Energy Corporation
("IEC"), a Wisconsin corporation and a registered holding company under the
Public Utility Holding Company Act of 1935, as amended (the "Act"), and each of
the non-utility subsidiaries of IEC 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
"Non-Utility Money Pool") to coordinate and provide for certain of their
short-term cash and working capital requirements; and
WHEREAS, the non-utility subsidiaries that will participate in
the Non-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 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 Non-Utility Money Pool.
(a) Alliant will make short-term funds available from time to
time to the Non-Utility Money Pool. To the extent necessary, Alliant will use
the proceeds of external borrowings to accommodate the short-term borrowing
needs of the Subsidiaries consistent with Section 1.03(a) of this Agreement.
(b) Services shall establish on behalf of each Subsidiary one
or more zero-balance bank accounts ("Zero-Balance Accounts") that are linked to
the Non-Utility Money Pool. Each Subsidiary shall use these accounts to take
loans from and make repayments to the Non-Utility Money Pool. A Subsidiary may
have, from time to time, excess funds that it wants to lend to the Non-Utility
Money Pool. The Subsidiary may loan these funds to the Non-Utility Money Pool by
depositing them into one of its Zero-Balance Accounts. Services shall transfer
the loaned funds from the Zero-Balance Account to the Non-Utility Money Pool
and, only to the extent that the Subsidiary has no outstanding loans from
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the Non-Utility Money Pool, the funds shall be loaned from the Subsidiary to the
Non-Utility Money Pool (the "Loans"). Each Subsidiary may withdraw any of its
Loans at any time upon notice to Services as administrative agent of the
Non-Utility Money Pool.
Section 1.02 Rights to Borrow.
Subject to the provisions of Section 1.04(a) of this
Agreement, all short-term borrowing needs of the Subsidiaries will be met by
funds in the Non-Utility Money Pool to the extent such funds are available. The
Non-Utility Money Pool shall automatically provide funds to cover any net debit
balance that exists at the end of each day in each Subsidiary's Zero-Balance
Accounts subject to the limitations and conditions set forth herein and in the
applicable orders of the Securities and Exchange Commission (the "Commission")
and other regulatory authorities, resolutions of such Subsidiary's shareholders
and board of directors, such Subsidiary's governing corporate documents and any
agreements binding upon such Subsidiary.
Section 1.03 Source of Funds.
(a) Funds will be available through the Non-Utility Money Pool
from the following sources for use by the Subsidiaries from time to time: (i)
surplus funds in the treasuries of the Subsidiaries ("Internal Funds"), (ii)
Alliant bank borrowings and (iii) the sale of commercial paper by Alliant (the
funds referred to in clauses (ii) and (iii), the "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 Services, as
administrator of the Non-Utility Money Pool, determines will result in a lower
cost of borrowing to the Subsidiaries borrowing from the Non-Utility Money
Pool, consistent with the individual borrowing needs and financial standing of
the Subsidiaries lending funds to the Non-Utility Money Pool.
(b) Each borrowing Subsidiary will borrow pro rata from each
lending Subsidiary in the proportion that the amount loaned by each Subsidiary
bears to the total amount then contributed to the Non-Utility Money Pool by all
lending Subsidiaries. On any day when more than one fund source (Internal Funds
and External Funds), with different rates of interest, are used to fund loans
through the Non-Utility Money Pool, each borrowing Subsidiary will borrow pro
rata from each fund source in the same proportion that the amount of funds
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provided by that fund source bears to the total amount of short-term funds
available to the Non-Utility Money Pool.
Section 1.04 Authorization.
(a) All borrowings from the Non-Utility Money Pool shall be
authorized by the borrowing subsidiary's chief financial officer or treasurer,
or by a designee thereof, pursuant to a reasonable method to be determined by
that subsidiary.
(b) Services, as administrator of the Non-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) No Subsidiary shall be required to effect a borrowing
through the Non-Utility Money Pool if such Subsidiary determines that it can
effect such borrowing at lower cost directly from banks.
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 outstanding balances shall be the average for the
month of the CD yield equivalent of the 30-day Federal Reserve "AA" Industrial
Commercial Paper Composite Rate (the daily rate, the "Composite," the monthly
average of the Composite, the "Average Composite") or, if no such Composite is
established for that day, then the applicable rate shall be the Composite for
the next preceding day for which such Composite was established.
(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 balances 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.
(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 (i) the cost of all
Internal Funds contributed by Parties, as
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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.
(d) The interest rate applicable to Loans made by a Subsidiary
to the Non-Utility Money Pool under Section 1.01(b) 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 by Parties lending External Funds to the Non-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 Non-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 Non-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. A Subsidiary shall make a repayment to the
Non-Utility Money Pool by depositing the repayment funds into its Zero-Balance
Account; Services shall transfer such funds from the Zero-Balance Account to the
Non-Utility Money Pool.
Section 1.08 Form of Loans to Subsidiaries.
Loans to the Subsidiaries from the Non-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 grid note evidencing the terms of the
transactions shall be signed by the parties to the transaction. Any such note
shall: (a) be in substantially the form filed as Exhibits F and G to the Form
U-1 Application-Declaration in File No. 70-9317 of the Commission; (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.
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ARTICLE II
OPERATION OF NON-UTILITY MONEY POOL
Section 2.01 Operation.
Operation of the Non-Utility Money Pool, including record
keeping and coordination of loans, will be handled by Services under the
authority of the appropriate officers of the Parties. 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. Services will administer the Non-Utility Money Pool on
either an "at cost" basis or, in its sole discretion, on a different basis.
Separate records shall be kept by Services for the Non-Utility Money Pool
established by this Agreement and any other money pool administered by Services.
Section 2.02 Investment of Surplus Funds in the Non-
Utility Money Pool.
Funds not required to meet Non-Utility Money Pool loans (with
the exception of funds required to satisfy the Non-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 Investment Earnings.
Any income earned by the Non-Utility Money Pool shall be
allocated among the Parties at the end of each calendar month in accordance
with the proportion that each Party's average contribution of funds in the
Non-Utility Money Pool for the month bears to the average total amount of funds
in the Non-Utility Money Pool for the month.
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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 Services, on behalf of the Non-Utility Money
Pool, may, by notice to the Subsidiary, terminate the Non-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 Non-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.
No amendment to this Agreement shall be adopted except in a
writing executed by the Parties.
(a) Prior to filing any amendment to this Agreement with the
Commission, the Parties will file for approval of the amendment, if required,
with the Public Service Commission of Wisconsin, the Iowa Utilities Board, the
Illinois Commerce Commission and the Minnesota Public Utilities Commission
(together, the "Regulatory Commissions").
(b) In the event that an amendment is finally rejected or
disapproved or found to be unreasonable by one or more of the Regulatory
Commissions prior to filing with the Commission, the amendment will not become
effective and the Parties will not request Commission approval of the amendment.
(c) In the event that an amendment is rejected or disapproved
or found to be unreasonable by one or more of the Regulatory Commissions after
it has been filed with the Commission but before it has been approved by the
Commission, the amendment will be terminated and the Parties agree to request
withdrawal of the filing.
(d) Notwithstanding paragraphs (b) and (c) above, in the event
that an amendment is rejected, disapproved or found to be unreasonable by one or
more of the Regulatory Commissions before it has been approved by the
Commission, the Parties shall have the right to request further revisions of the
amendment in order to cure or remove the cause of the Commission's rejection,
disapproval or finding of unreasonableness. Upon request by a
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Party, the other Parties agree promptly to negotiate in good faith to revise the
amendment, and thereafter to file for any necessary regulatory authorization of
the renegotiated amendment. If the Parties are unable to reach agreement
satisfactory to each of them and to each affected Regulatory Commission after
good faith negotiations, then paragraphs (b) and (c) above, as applicable, will
apply.
(e) In the event that each Regulatory Commission has
previously approved an amendment prior to Commission approval, paragraph (f)
below shall not apply.
(f) In the event that an amendment has become effective and is
subsequently rejected, disapproved or found to be unreasonable by one or more of
the Regulatory Commissions, the Parties will make a good faith effort to
terminate, amend or modify the amendment in a manner which remedies the
Regulatory Commission's adverse findings without adverse impact on any of the
Parties. The Parties will request to meet with representatives of the Regulatory
Commissions and make a good faith attempt to resolve any differences in the
affected states regarding the subject amendment. If agreement can be reached to
terminate, amend or modify the amendment in a manner satisfactory to the Parties
and to the representatives of each Regulatory Commission, the Parties shall file
such amended contract with the appropriate state and federal regulatory
agencies, seeking all necessary regulatory authorizations. If the Parties are
unable to reach agreement satisfactory to each of them and to each affected
Regulatory Commission, after good faith negotiations, then they shall be under
no obligation to further amend the amendment.
(g) Nothing in this Section 3.01, is intended to amend, modify
or alter the authority of the Commission under the Act.
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.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each company hereto as of the date
first above written.
INTERSTATE ENERGY CORPORATION
By
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Name:
Title:
ALLIANT SERVICES COMPANY
By
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Name:
Title:
ALLIANT INDUSTRIES, INC.
By
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Name:
Title:
Date: __________, 199__
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