Exhibit 10(t)
SECOND AMENDED AND RESTATED COMMITTED FACILITY LETTER
December 24, 2002
ALLETE, Inc.
30 West Superior Street
Duluth, Minnesota 55802
Attn: Corporate Treasurer
Ladies and Gentlemen:
Reference is hereby made to that certain Amended and Restated
Committed Facility Letter among the banks party thereto, ABN AMRO Bank N.V., as
agent for such banks and yourselves dated as of December 28, 2000, as amended by
that certain First Amendment to Committed Facility Letter dated as of December
27, 2001, and that certain Second Amendment to Committed Facility Letter dated
as of February 7, 2002 (together with all exhibits, schedules, attachments,
appendices and amendments thereof, the "EXISTING COMMITTED FACILITY LETTER").
The parties to the Existing Committed Facility Letter desire that the Existing
Committed Facility Letter be amended and restated in its entirety, without
constituting a novation, all on the terms and conditions contained herein.
Accordingly, in consideration of the premises and the agreements, provisions and
covenants contained herein, the Existing Committed Facility Letter is hereby
amended and restated in its entirety to be and to read as follows:
LaSalle Bank National Association (the "Agent" and, in its individual
capacity, a "Bank") and the other Banks (as defined below) are pleased to advise
ALLETE, Inc. (the "Company") that the Banks (defined below) have severally
approved, subject to the conditions outlined in this letter, a committed credit
facility (the "Facility"). The amount available under the Facility shall not
exceed at any time the aggregate sum of the Commitments (defined below). This
Facility shall terminate on December 23, 2003 (the "TERMINATION DATE"). The
Facility shall be available under the following terms and conditions (certain
capitalized terms being used and not otherwise defined as set forth in SECTION
8):
1. LOANS.
The Company may from time to time before the Termination Date borrow
Eurodollar Loans, or if one or more conditions exist as set forth in Section
3(b) or Section 3(c) hereof, Prime Rate Loans. The aggregate outstanding amount
of the Loans shall not at any time exceed the aggregate sum of the Commitments.
The Company may borrow, repay and reborrow in accordance with the terms hereof.
a. BORROWING PROCEDURES
i. PRIME RATE LOANS. Each Prime Rate Loan shall be on
prior telephonic notice (promptly confirmed in writing) from any
Authorized Officer received by the Agent not later than 11:00 a.m.
(Chicago, Illinois time), on the
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day such Loan is to be made. Each such Notice of Borrowing shall
specify (i) the borrowing date, which shall be a Banking Day, and (ii)
the amount of the Loan. Each Prime Rate Loan shall be in the amount of
$5,000,000 or a higher integral multiple of $1,000,000. A Prime Rate
Loan shall only be available if the Agent has given written notice to
the Company that one or more conditions exist as set forth in Section
3(b) or Section 3(c) hereof.
ii. EURODOLLAR LOANS. Each Eurodollar Loan shall be made
upon at least three Banking Days' prior written or telephonic notice
from any Authorized Officer received by the Agent not later than 3:00
p.m. (Chicago, Illinois time). Each such Notice of Borrowing shall
specify (i) the borrowing date, which shall be a Banking Day, (ii) the
amount of such Loan, and (iii) the Interest Period for such Loan. Each
Eurodollar Loan shall be in the amount of $5,000,000 or a higher
integral multiple of $1,000,000.
iii. The Agent shall give prompt telephonic or telecopy
notice to each Bank of the contents of each Notice of Borrowing and of
such Bank's share of such Loan.
iv. Not later than 11:00 a.m. (Chicago time) (or 1:00 p.m.
(Chicago time) in the case of any Prime Rate Loan) on the date of each
borrowing, each Bank participating therein shall (except as provided
in subsection (v) of this Section) make available its share of such
Loan, in Federal or other funds immediately available in Chicago, to
the Agent at its address set forth next to its signature below. Unless
the Agent is notified by a Bank that any applicable condition
specified in Section 4 has not been satisfied, the Agent will make the
funds so received from the Banks available to the Company by
depositing such funds in the manner specified in the related Notice of
Borrowing.
v. Unless the Agent shall have received notice from a Bank
prior to the date of any borrowing that such Bank will not make
available to the Agent such Bank's share of such Loan, the Agent may
assume that such Bank has made such share available to the Agent on
the date of such borrowing in accordance with subsection (iv) of this
Section 1(a), and the Agent may, in reliance upon such assumption (but
shall not be obligated to), make available to the Company on such date
a corresponding amount. If and to the extent that such Bank shall not
have so made such share available to the Agent, such Bank and the
Company severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Company until the date
such amount is repaid to the Agent, at (i) in the case of the Company,
a rate per annum equal to the higher of (x) the Prime Rate and (y) the
interest rate applicable thereto pursuant to Section 1(b)(ii), and
(ii) in the case of such Bank, the Prime Rate. If such Bank shall
repay to the
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December 24, 2002
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Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Loan for purposes of this
Agreement.
b. INTEREST
i. PRIME RATE LOANS. The unpaid principal of each Prime
Rate Loan shall bear interest prior to maturity at a rate per annum
equal to the Prime Rate in effect from time to time plus the
Applicable Margin. Accrued interest on Prime Rate Loans shall be
payable quarterly on the 30th day of each December, March, June and
September and at maturity.
ii. EURODOLLAR LOANS. The unpaid principal amount of each
Eurodollar Loan shall bear interest prior to maturity at a rate per
annum equal to LIBOR in effect for the Interest Period with respect to
such Eurodollar Loan plus the Applicable Margin. Accrued interest on
each Eurodollar Loan shall be payable on the last day of the Interest
Period applicable to such Loan and, if such Interest Period shall
exceed three months, at three month intervals after the date of the
Eurodollar Loan.
iii. INTEREST AFTER MATURITY. Any principal of any Loan
which is not paid when due, whether at the stated maturity, upon
acceleration or otherwise, shall bear interest from and including the
date such principal shall have become due to (but not including) the
date of payment thereof in full at a rate per annum equal to the Prime
Rate from time to time in effect plus the Applicable Margin plus 2%
per annum (but until the end of any Interest Period for a Eurodollar
Rate Loan, not less than 2 % in excess of the rate otherwise
applicable for such Loan). After maturity, accrued interest shall be
payable on demand.
iv. MAXIMUM RATE. In no event shall the interest rate
applicable to any amount outstanding hereunder exceed the maximum rate
of interest allowed by applicable law, as amended from time to time.
Any payment of interest or in the nature of interest in excess of such
limitation shall be credited as a payment of principal unless the
Company shall request the return of such amount.
v. METHOD OF CALCULATING INTEREST AND FEES. Interest on
each Loan shall be computed on the basis of a year consisting of (i)
365 days for Prime Rate Loans, and (ii) 360 days for Eurodollar Loans,
and paid for actual days elapsed. Fees shall be computed on the basis
of a year consisting of 360 days and paid for actual days elapsed.
c. DISBURSEMENTS AND PAYMENTS
The Agent shall transfer the proceeds of each Loan as directed by an
Authorized Officer. Each Eurodollar Loan shall be payable on the earlier of the
last day of the Interest Period
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December 24, 2002
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applicable thereto or the Termination Date. Each Prime Rate Loan shall be
payable on the Termination Date. All payments to the Banks shall be made to the
Agent at LaSalle Bank National Association ABA No. 071 000 505, Account No.
1378018, reference ALLETE not later than 2:00 p.m., Chicago, Illinois time, on
the date when due and shall be made in lawful money of the United States of
America (in freely transferable U.S. dollars) and in immediately available
funds. Any payment that shall be due on a day, which is not a Banking Day, shall
be payable on the next Banking Day, subject to the definition of "Interest
Period".
d. PREPAYMENT; COMMITMENT REDUCTIONS
The Company may prepay any Loan in whole or in part from time to time
(but, if in part, in an amount not less than $1,000,000 and integral multiples
of $1,000,000 in excess thereof) without premium or penalty (subject to the
following paragraph) upon (i) 3 Business Days prior written notice to the Agent
with respect to any Eurodollar Loan and (ii) prior written notice delivered to
the Agent prior to 10:00 a.m. (Chicago, Illinois time) on the date of such
prepayment with respect to any Prime Rate Loan.
If the Company shall prepay any Loan, it shall pay to the Agent at
the time of each prepayment, or at such later time designated by the Agent, any
and all costs described in Section 3(g) hereof.
The Company may reduce the amount of Commitments from time to time in
amounts not less than $1,000,000 and integral multiples of $1,000,000 in excess
thereof without premium or penalty upon (i) 3 Business Days prior written notice
to the Agent, provided that the aggregate amount of Commitments shall not exceed
the aggregate principal amount of Loans then outstanding. Any such reduction
shall be applied ratably to the Commitments of the Banks and may not be
reinstated.
e. NOTE
The Company's obligations with respect to the Loans shall be evidenced
by a note for each Bank in the form attached as EXHIBIT A (each, a "Note" and,
collectively, the "Notes"). The amount, the rate of interest for each Loan and
the Interest Period (if applicable) shall be endorsed by the respective Bank on
the schedule attached to its Note, or at any Bank's option, in its records,
which schedule or records shall be conclusive, absent manifest error, PROVIDED,
HOWEVER, that the failure of any Bank to record any of the foregoing or any
error in any such record shall not limit or otherwise affect the obligation of
the Company to repay all Loans made to it hereunder together with accrued
interest thereon.
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December 24, 2002
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2. FEES.
a. CERTAIN FEES
The Company shall pay, or cause to be paid, to the Agent certain fees
set forth in the Fee Letter at the time specified in the Fee Letter for payment
of such amounts.
b. FACILITY FEE
The Company agrees to pay to the Banks a facility fee at the Fee Rate
on the amount of the Facility (whether or not used). Such facility fee shall be
payable by the Company quarterly on the 30th day of each December, March, June
and September after the date hereof and on the Termination Date as set forth in
Section 1(c) hereof.
c. UTILIZATION FEE
For each day the aggregate amount of Loans outstanding exceeds 33% of
the Commitments as in effect on such day, the Company agrees to pay to the
Banks, in addition to any other amounts payable hereunder, a utilization fee on
the aggregate outstanding amount of Loans on such date at a rate per annum equal
to the Utilization Fee Rate. Such utilization fee shall be payable by the
Company on the date when the next interest payment on such Loans is due in
accordance with Section 1(b) hereof and on the Termination Date as set forth in
Section 1(c) hereof.
3. ADDITIONAL PROVISIONS RELATING TO LOANS.
a. INCREASED COST
The Company agrees to reimburse each Bank for any increase in the cost
to such Bank of, or any reduction in the amount of any sum receivable by such
Bank in respect of, making or maintaining any Eurodollar Loans (including the
imposition, modification or deemed applicability of any reserves, deposits or
similar requirements). The additional amount required to compensate any Bank for
such increased cost or reduced amount shall be payable by the Company to such
Bank within five days of the Company's receipt of written notice from such Bank
specifying such increased cost or reduced amount and the amount required to
compensate such Bank therefor, which notice shall, in the absence of manifest
error, be conclusive and binding on the Company. In determining such additional
amount, a Bank may use reasonable averaging, attribution and allocation methods.
b. DEPOSITS UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE;
IMPRACTICABILITY
If the Company has notified the Agent of its intention to borrow a
Eurodollar Loan for an Interest Period and the Agent or any Bank determines
(which determination shall be conclusive and binding on the Company) that:
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December 24, 2002
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(1) deposits of the necessary amount for such Interest
Period are not available to such Bank in the London interbank
market or, by reason of circumstances affecting such market,
adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for such Interest Period; or
(2) LIBOR will not adequately and fairly reflect the
cost to the Bank of making or funding a Eurodollar Loan for
such Interest Period; or
(3) the making or funding of Eurodollar Loans has
become impracticable as a result of any event occurring after
the date of this Agreement which, in the opinion of the Bank,
materially and adversely affects such Loans or the interbank
eurodollar market;
then any notice of a Eurodollar Loan previously given by the Company and not yet
borrowed shall be deemed to be a notice to make a Prime Rate Loan.
c. CHANGES IN LAW RENDERING EURODOLLAR LOANS UNLAWFUL
If at any time due to the adoption of, or change in, any law, rule,
regulation, treaty or directive or in the interpretation or administration
thereof by any court, central bank, governmental authority or governmental
agency charged with the interpretation or administration thereof, or for any
other reason arising subsequent to the date hereof, it shall become (or, in the
good faith judgment of any Bank, raise a substantial question as to whether it
is) unlawful for such Bank to make or fund any Eurodollar Loan, Eurodollar Loans
shall not be made hereunder for the duration of such illegality. If any such
event shall make it unlawful for any Bank to continue any Eurodollar Loans
previously made by it hereunder, the Company shall, after being notified by such
Bank of the occurrence of such event, on such date as shall be specified in such
notice, either convert such Eurodollar Loan to a Prime Rate Loan or prepay in
full such Eurodollar Loan, together with accrued interest thereon, without any
premium or penalty (except as provided in Section 3(g)).
d. DISCRETION OF THE BANKS AS TO MANNER OF FUNDING
Each Bank shall be entitled to fund and maintain its funding of all or
any part of the Loans in any manner it sees fit; it being understood, however,
that for purposes of this Note, all determinations hereunder shall be made as if
such Bank had actually funded and maintained each Eurodollar Loan during the
Interest Period for such Eurodollar Loan through the purchase of deposits having
a term corresponding to such Interest Period and bearing an interest rate equal
to LIBOR for such Interest Period.
e. TAXES
All payments by the Company of principal of, and interest on, the
Loans and all other amounts payable hereunder shall be made free and clear of
and without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties,
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withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or measured by
each respective Bank's net income or receipts (such non-excluded items being
called "Taxes"). If any withholding or deduction from any payment to be made by
the Company hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Company will
i. pay directly to the relevant authority the full amount
required to be so withheld or deducted;
ii. promptly forward to each Bank an official receipt or
other documentation satisfactory to such Bank evidencing such payment
to such authority; and
iii. pay to each Bank such additional amount or amounts as
is necessary to ensure that the net amount actually received by such
Bank will equal the full amount such Bank would have received had no
such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any Bank or on any payment
received by such Bank hereunder, such Bank may pay such Taxes and the Company
will promptly pay such additional amount (including any penalty, interest or
expense) as is necessary in order that the net amount received by such Bank
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Bank would have received had no such Taxes been
asserted.
If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to any Bank the required receipts or other
required documentary evidence, the Company shall indemnify such Bank for any
incremental Tax, interest, penalty or expense that may become payable by such
Bank as a result of any such failure.
f. INCREASED CAPITAL COSTS
If any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other governmental authority
affects or would affect the amount of capital required or expected to be
maintained by any Bank or any entity controlling any Bank, and such Bank
determines (in its sole and absolute discretion) that the rate of return on its
or such controlling entity's capital as a consequence of the Loans made by such
Bank or the commitment hereunder is reduced to a level below that which such
Bank or such controlling entity could have achieved but for the occurrence of
any such circumstance, then, in any such case, upon notice from time to time by
any Bank to the Company, the Company shall immediately pay directly to such Bank
additional amounts sufficient to compensate such Bank or such controlling entity
for such reduction in rate
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December 24, 2002
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of return. A statement of any Bank as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Company. In determining such
amount, each Bank may use reasonable averaging, attribution and allocation
methods.
g. FUNDING LOSSES
The Company will indemnify the Banks upon demand against any loss or
expense which any Bank may sustain or incur (including, without limitation, any
loss or expense sustained or incurred in obtaining, liquidating or employing
deposits or other funds acquired to effect, fund or maintain any Loan) as a
consequence of (i) any failure of the Company to make any payment when due of
any amount due hereunder, (ii) any failure of the Company to borrow a Loan on a
date specified therefor in a notice thereof, or (iii) any payment (including any
payment upon any Bank's acceleration of the Loans) or prepayment of any
Eurodollar Loan on a date other than the last day of the Interest Period for
such Loan.
4. CONDITIONS PRECEDENT.
a. INITIAL LOAN
The obligation of each Bank to make the initial Loan shall be subject
to the prior or concurrent satisfaction of each of the following conditions
precedent:
i. The Company shall have delivered to the Agent a
certificate dated the date of the initial Loan of its Secretary or
Assistant Secretary as to (i) resolutions of its Board of Directors
then in full force and effect authorizing the execution, delivery and
performance of this Agreement, the Notes, and each of the other Loan
Documents; and (ii) the incumbency and signatures of those of its
officers authorized to act with respect to this Agreement, the Note
and each of the Loan Documents executed by it, upon which certificate
the Banks may conclusively rely until it shall have received a further
certificate of the Secretary or Assistant Secretary of the Company
canceling or amending such prior certificate.
ii. Each Bank shall have received its respective Note duly
executed and delivered by the Company.
iii. The Agent shall have received an opinion dated the date
of the initial Loan from counsel to the Company in form satisfactory
to the Agent.
iv. The Company shall have paid to the Agent, for the
account of the Banks, a renewal fee equal to 0.20% of the Commitments
in effect on the date hereof, such fee to be distributed to the Banks
based upon their share of the Commitments on the date hereof.
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December 24, 2002
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b. EACH LOAN
The obligation of each Bank to make any Loan (including the initial
Loan) shall be subject to the following statements being true and correct before
and after giving effect to such Loan: (i) the representations and warranties set
forth in Section 5 shall be true and correct with the same effect as if then
made (unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date); and (ii) no Event of Default or Unmatured Event of Default shall have
occurred and be continuing.
Each request for a Loan shall be deemed a representation by the
Company, as to the matters set forth in this Section.
5. REPRESENTATIONS.
The Company represents and warrants to the Banks that:
a. ORGANIZATION
It is a corporation duly organized and in good standing under the laws
of its state of organization and duly qualified to do business in each
jurisdiction where such qualification is necessary.
b. AUTHORIZATION
The execution and delivery of this Agreement, the Note and the other
Loan Documents and the performance by the Company of its obligations hereunder
and thereunder are within the Company's powers and have been duly authorized by
all necessary action on the Company's part, and do not and will not contravene
or conflict with the Company's organizational documents or violate or constitute
a default under any law, rule or regulation any presently existing requirement
or restriction imposed by judicial, arbitral or other governmental
instrumentality or any agreement, instrument or indenture by which the Company
is bound.
c. ENFORCEABILITY
This Agreement is the Company's legal, valid and binding obligation,
enforceable in accordance with its terms.
d. FINANCIAL STATEMENTS
The audited financial statements of the Company as at December 31,
2001 and the interim financial statements of the Company as at September 30,
2002, copies of which have been furnished to the Agent, have been prepared in
accordance with generally accepted accounting principles consistently applied,
and present fairly the financial condition of the
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December 24, 2002
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Company at the date thereof and the results of its operations for the period
then ended. Since the date of such interim financial statements, there has been
no Material Adverse Change.
e. USE OF PROCEEDS
The Company agrees that proceeds of any Loan shall be used solely for
the purpose of providing liquidity support with respect to commercial paper
borrowings of the Company or for other valid general corporate purposes.
6. COVENANTS.
From the date of this Agreement and thereafter until the termination
of the Facility and until the Obligations are paid in full, the Company agrees
that it will:
a. FINANCIAL INFORMATION. Furnish to the Agent:
i. As soon as available and in any event within 60 days
after the end of each of the first three fiscal quarters of each
fiscal year of the Company, consolidated balance sheets of the
Company, and internally prepared unaudited consolidating balance
sheets of the Company and its subsidiaries, each as at the end of such
fiscal quarter, and statements of earnings and cash flow of the
Company, and internally prepared unaudited consolidating statements of
earnings of the Company and its subsidiaries, each for such quarter
and for the period commencing at the beginning of such fiscal year and
ending with the end of such quarter, certified by the chief financial
officer of the Company;
ii. as soon as available and in any event within 120 days
after the end of each fiscal year of the Company, a copy of the annual
audit report for such fiscal year for the Company, including balance
sheets of the Company as of the end of such fiscal year and statements
of earnings and cash flow for such fiscal year, in each case certified
in a manner acceptable to the Agent by independent public accountants
acceptable to the Agent together with the internally prepared
unaudited (a) consolidating balance sheets as of the end of such
fiscal year, and (b) statements of earnings for the period commencing
at the beginning of such fiscal year and ending with the end of such
fiscal year, of the Company and its subsidiaries;
iii. upon the occurrence of a Unmatured Event of Default or
Event of Default, notice of such Unmatured Event of Default or Event
of Default; and
iv. such other information with respect to the condition or
operations, financial or otherwise, of the Company as any Bank may
from time to time reasonably request.
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b. FURTHER RESTRICTIONS ON USE OF PROCEEDS
Not, and not permit any Subsidiary or affiliate of the Company to, use
the proceeds of any Loan, directly or indirectly, for the purpose of (i)
purchasing any securities underwritten or privately placed by ABN AMRO
Incorporated ("AAI"), an affiliate of the Agent, (ii) purchasing from AAI any
securities in which AAI makes a market or (iii) refinancing or making payments
of principal, interest or dividends on any securities issued by the Company, or
any Subsidiary or affiliate of the Company, and underwritten, privately placed
or dealt in by AAI.
c. PROHIBITION OF FUNDAMENTAL CHANGES. The Company shall not:
i. Enter into any transaction of merger of consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution); or
ii. Convey, sell, lease, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or a substantial
portion of its business or property without the prior written consent
of the Required Banks, which consent shall not be unreasonably
withheld.
Notwithstanding the foregoing provisions of this subsection (c), the Company may
merge or consolidate with any other Person if the Company is the surviving
corporation or the surviving corporation assumes the liabilities of the Company
by operation of law or otherwise.
d. MAXIMUM RATIO OF FUNDED DEBT TO TOTAL CAPITAL
The Company shall at all times, measured as of the end of each
fiscal quarter of the Company, maintain a maximum ratio of Funded Debt to Total
Capital of .60 to 1.0.
e. INTEREST COVERAGE RATIO
The Company shall maintain at all times an Interest Coverage Ratio of
not less than 3.00 to 1.00, as determined at the end of each fiscal quarter of
the Company.
7. EVENTS OF DEFAULT.
a. EVENTS. Each of the following shall constitute an Event of
Default:
i. The Company fails to pay when due any principal of, or
interest on, any Loan or any other amount payable hereunder or under
any Note;
ii. Any material representation or warranty of the Company
made or deemed made hereunder or under any other writing or
certificate furnished by or
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December 24, 2002
Page 12
on behalf of the Company to the Agent for the purposes of or in
connection with this Agreement shall prove to have been false or
misleading in any material respect when made or deemed made;
iii. The Company defaults in the due performance or
observance of Section 6(b) hereof or the Company defaults in any
material respect in the due performance or observance of any other
agreement contained herein or in any other Loan Document and such
default shall continue for 30 days after notice thereof shall have
been given to the Company from the Agent;
iv. The maturity of any indebtedness of the Company under
any agreement or obligation in an aggregate principal amount exceeding
$5,000,000 shall be accelerated, or any default shall occur under one
or more agreements or instruments under which such indebtedness may be
issued or created and such default shall continue for a period of time
sufficient to permit the holder or beneficiary of such indebtedness or
a trustee therefor to cause the acceleration of the maturity of such
indebtedness or any mandatory unscheduled prepayment, purchase or
funding thereof;
v. Judgments or orders for the payment of money in excess
of $5,000,000 shall be rendered against the Company and such judgments
or orders shall continue unsatisfied and unstayed for a period of 30
days:
vi. The Company or any Subsidiary shall
(1) become insolvent or generally fail to pay, or admit
in writing its inability or unwillingness to pay, debts as
they become due;
(2) apply for, consent to or acquiesce in the
appointment of a trustee, receiver, sequestrator or other
custodian for the Company or any Subsidiary or any property
thereof, or make a general assignment for the benefit of
creditors;
(3) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for the
Company or any Subsidiary or for a substantial part of the
property thereof, and such trustee, receiver, sequestrator or
other custodian shall not be discharged within 30 days;
(4) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect
of the Company or any Subsidiary and, if any such case or
proceeding is not commenced by the Company or such Subsidiary,
such case or proceeding shall be consented to or acquiesced in
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December 24, 2002
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by the Company or such Subsidiary or shall result in the entry
of an order for relief or shall remain for 60 days
undismissed; or
(5) take any action authorizing, or in furtherance of,
any of the foregoing; or
vii. any Material Adverse Change shall have occurred.
b. REMEDIES
Upon the occurrence of an Event of Default under Section 7(a)(vi), the
commitment of the Banks to make Loans shall be terminated and the Notes and all
other obligations hereunder shall become immediately due and payable in full;
and upon the occurrence of any other Event of Default, the commitment of the
Banks to make Loans may be terminated by the Banks and the Agent tray declare
the Notes and the principal of and accrued interest on each Loan, and all other
amounts payable hereunder, to be forthwith due and payable in full.
8. DEFINITIONS.
As used in this Agreement:
"AGENT" means LaSalle Bank National Association, in its capacity as
Agent for the Banks hereunder, and its successors in such capacity.
"APPLICABLE MARGIN" means (i) with respect to Eurodollar Loans, (a)
0.525% per annum for any day Level I Status exists; (b) 0.750% per annum for any
day Level II Status exists; (c) 0.850% per annum for any day Level III Status
exists; (d) 1.300% per annum for any day Level IV Status exists; and (e) 2.000%
per annum for any day Level V Status exists; and (ii) with respect to Prime Rate
Loans, (a) 0.000% per annum for any day Level I Status exists; (b) 0.000% per
annum for any day Level II Status exists; (c) 0.000% per annum for any day Level
III Status exists; (d) 0.500% per annum for any day Level IV Status exists; and
(e) 1.500% per annum for any day Level V Status exists.
"AUTHORIZED OFFICER" means each officer or employee of the Company who
is authorized to request Loans, to confirm in writing any such request and to
agree to rates of interest, as set forth on the schedule of Authorized Officers
most recently delivered by the Company to the Agent.
"BANK" means each bank listed on the signature page hereof, or which
subsequently becomes a party hereto by execution of a Joinder Agreement, and its
successors and assigns.
ALLETE
December 24, 2002
Page 14
"BANKING DAY" means any day other than a Saturday, Sunday or other day
on which the Banks are required or permitted to close in Chicago and, with
respect to Eurodollar Loans on which dealings in Dollars are carried on in the
London interbank market.
"COMMITMENT" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, or on a Joinder
Agreement, as applicable.
"CONSOLIDATED EBITDA" means, for any period, for the Company and its
subsidiaries (which for purposes of this definition shall include any subsidiary
consolidated into the financial statements of the Company other than ALLETE
Water Services, Inc. and any other subsidiary of the Company as to which the
Company has announced on or prior to December 15, 2002 that it will discontinue
the operations of such subsidiary) on a consolidated basis, (A) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) to the extent
deducted in arriving at Consolidated Net Income, net federal, state and local
income taxes in respect of such period, (iii) to the extent deducted in arriving
at Consolidated Net Income, Consolidated Interest Expense, (iv) to the extent
deducted in arriving at Consolidated Net Income, the amount charged for the
amortization of intangible assets, (v) to the extent deducted in arriving at
Consolidated Net Income, the amount charged for the depreciation of assets, and
(vi) to the extent deducted in arriving at Consolidated Net Income,
extraordinary losses, less (B) the amount for such period of, to the extent
added in arriving at Consolidated Net Income, extraordinary gains, all as
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with reference to any period of
the Company and its subsidiaries (which for purposes of this definition shall
include any subsidiary consolidated into the financial statements of the Company
other than ALLETE Water Services, Inc. and any other subsidiary of the Company
as to which the Company has announced on or prior to December 15, 2002 that it
will discontinue the operations of such subsidiary), the sum of (i) all interest
charges (including capitalized interest, imputed interest charges with respect
to capitalized leases and all amortization of debt discount and expense and
other deferred financing charges) of the Company and its subsidiaries on a
consolidated basis, and (ii) all commitment or other fees payable in respect of
the issuance of standby letters of credit or other credit facilities for the
account of the Company or its subsidiaries, all as determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period of the Company and its
subsidiaries (which for purposes of this definition shall include any subsidiary
consolidated into the financial statements of the Company other than ALLETE
Water Services, Inc. and any other subsidiary of the Company as to which the
Company has announced on or prior to December 15, 2002 that it will discontinue
the operations of such subsidiary), the amount for such period of consolidated
net income (or net loss) of the Company and its subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
ALLETE
December 24, 2002
Page 15
"EURODOLLAR LOAN" means any Loan which bears interest at a rate
determined with reference to LIBOR (plus the Applicable Margin).
"EVENT OF DEFAULT" means an event described in Section 7(a).
"FACILITY" has the meaning set forth in the initial paragraph of this
Agreement.
"FEDERAL FUNDS RATE" means, the per annum rate at which overnight
federal funds are from time to time offered to the Agent by any bank in the
interbank market, as stated by the Agent.
"FEE LETTER" means that certain letter between the Borrower and
LaSalle Bank National Association and its affiliates relating to certain fees to
be paid by the Borrower to, and solely for the account of, LaSalle Bank National
Association and its affiliates, as such letter may from time to time be amended.
"FEE RATE" means a rate per annum equal to (i) 0.100% per annum for
any day Level I Status exists; (ii) 0.125% per annum for any day Level II Status
exists; (iii) 0.150% per annum for any day Level III Status exists; (iv) 0.200%
per annum for any day Level IV Status exists; and (v) 0.500% per annum for any
day Level V Status exists.
"FUNDED DEBT" means, for any entity on a consolidated basis (without
duplication): (i) all indebtedness of such entity for borrowed money; (ii) the
deferred and unpaid balance of the purchase price owing by such entity on
account of any assets or services purchased (other than trade payables and other
accrued liabilities incurred in the ordinary course of business that are not
overdue by more than 180 days unless being contested in good faith) if such
purchase price is (A) due more than nine months from the date of incurrence of
the obligation in respect thereof or (B) evidenced by a note or a similar
written instrument; (iii) all capitalized lease obligations; (iv) all
indebtedness secured by a Lien on any property owned by such entity, whether or
not such indebtedness has been assumed by such entity or is nonrecourse to such
entity; (v) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money (other than such
notes or drafts from the deferred purchase price of assets or services to the
extent such purchase price is excluded from clause (ii) above); (vi)
indebtedness evidenced by bonds, notes or similar written instrument; (vii) the
face amount of all letters of credit and bankers' acceptances issued for the
account of such entity, and without duplication, all drafts drawn thereunder
(other than such letters of credit, bankers' acceptances and drafts for the
deferred purchase price of assets or services to the extent such purchase price
is under interest rate agreements or currency agreements); (viii) guaranty
obligations of such entity with respect to indebtedness for borrowed money of
another entity (including affiliates) in excess of $25,000,000 in the aggregate;
provided, however, that in no event shall any calculation of Funded Debt include
(a) deferred taxes, (b) securitized trade receivables, (c) deferred credits
including regulatory assets and contributions in aid of construction, (d) the
lease obligations for Lake Superior Paper, Inc. relating to paper mill
ALLETE
December 24, 2002
Page 16
equipment as provided for under an operating lease extending to 2012 or (e) 75%
of the indebtedness associated with Square Butte.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time, applied by the Company and any subsidiary
on a basis consistent with the preparation of the Company's financial statements
furnished to the Agent.
"INTEREST COVERAGE RATIO" means, for any period of four consecutive
fiscal quarters of the Company ending with the most recently completed such
fiscal quarter, the ratio of (A) Consolidated EBITDA to (B) Consolidated
Interest Expense for such period.
"INTEREST PERIOD" means for any Eurodollar Loan, a period of one, two,
three or six months, as designated by the Company, in each case commencing on
the date of such Loan. Each Interest Period that would otherwise end on a day
which is not a Banking Day shall end on the next succeeding Banking Day unless
such next Banking Day would be the first Banking Day in the next calendar month,
in which case such Interest Period shall end on the preceding Banking Day. Any
Interest Period for a Eurodollar Loan which begins on the last Banking Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Banking Day of the calendar month at the end of such Interest Period. No
Interest Period shall extend beyond the Termination Date, and in such case, the
Termination Date shall be deemed the end of the Interest Period.
"JOINDER AGREEMENT" means a joinder agreement in the form attached
hereto as Exhibit "B."
"LEVEL I STATUS" means, subject to Section 9(r) hereof, the S&P Rating
is A- or higher and the Moody's Rating is A3 or higher.
"LEVEL II STATUS" means, subject to Section 9(r) hereof, Level I
Status does not exist, but the S&P Rating is BBB+ or higher and the Moody's
Rating is Baa1 or higher.
"LEVEL III STATUS" means, subject to Section 9(r) hereof, neither
Level I Status nor Level II Status exists, but the S&P Rating is BBB or higher
and the Moody's rating is Baa2 or higher.
"LEVEL IV STATUS" means, subject to Section 9(r) hereof, none of Level
I Status, Level II Status nor Level III Status exists, but the S&P Rating is
BBB- or higher and the Moody's Rating is Baa3 or higher.
"LEVEL V STATUS" means, subject to Section 9(r) hereof, none of Level
I Status, Level II Status, Level III Status nor Level IV Status exists.
ALLETE
December 24, 2002
Page 17
"LIBOR" means a rate of interest equal to the per annum rate of
interest at which United States dollar deposits in an amount comparable to the
principal balance of the Eurodollar Loan to be made by the Agent in its capacity
as a Bank and for a period equal to the relevant Interest Period are offered in
the London Interbank Eurodollar market at 11:00 a.m. (London time) two Business
Days prior to the commencement of each Interest Period, as displayed in the
Bloomberg Financial Markets system, or other authoritative source selected by
the Agent in its reasonable discretion, divided by a number determined by
subtracting from 1.00 the maximum reserve percentage for determining reserves to
be maintained by member banks of the Federal Reserve System for Eurocurrency
liabilities, such rate to remain fixed for such Interest Period. The Agent's
determination of LIBOR shall be conclusive, absent manifest error.
"LOAN" means a loan made pursuant to Section 1.
"LOAN DOCUMENTS" means this Agreement, the Notes and each other
agreement, document or instrument delivered in connection with this Agreement.
"MATERIAL ADVERSE CHANGE" means any change in the business,
organization, assets, properties or condition (financial or other) of the
Company which could materially and adversely affect the Company's ability to
perform hereunder including, without limitation, representations, warranties,
covenants and payment of Obligations.
"MOODY'S RATING" means the rating assigned by Moody's Investors
Service, Inc. and any successor thereto that is a nationally recognized rating
agency to the outstanding senior unsecured non-credit enhanced long-term
indebtedness of the Company (or if neither Moody's Investors Service, Inc. nor
any such successor shall be in the business of rating long-term indebtedness, a
nationally recognized rating agency in the U.S. as mutually agreed between the
Agent and the Company). Any reference in this Agreement to any specific rating
is a reference to such rating as currently defined by Moody's Investors Service,
Inc. (or such a successor) and shall be deemed to refer to the equivalent rating
if such rating system changes.
"NOTE" has the meaning set forth in SECTION 1.5.
"NOTICE OF BORROWING" means a notice from the Company to the Agent
requesting the making of a Loan and which is delivered pursuant to Section
1(a)(i) or Section 1(a)(ii) hereof.
"OBLIGATIONS" means all obligations (monetary or otherwise) of the
Company arising under or in connection with this Agreement, the Notes and each
of the other Loan Documents.
"PRIME RATE" means a floating rate of interest equal to the higher
(redetermined daily) of (i) the per annum rate of interest announced by the
Agent from time to time at its principal office in Chicago as its prime rate for
Dollar loans or (ii) the Federal Funds Rate plus 0.5%. (The "prime rate" is set
by the Agent based upon various factors and is used as a reference
ALLETE
December 24, 2002
Page 18
point for pricing some loans. It is not necessarily the best rate available to
the Agent's customers at any point in time.)
"PRIME RATE LOAN" means any Loan which bears interest at a rate
determined by reference to the Prime Rate.
"REQUIRED BANKS" means, at any time, Banks having at least 66-2/3% of
the aggregate amount of the Commitments.
"S&P RATING" means the rating assigned by Standard & Poor's Ratings
Group, a division of The McGraw-Hill Companies, Inc. and any successor thereto
that is a nationally recognized rating agency to the outstanding senior
unsecured non-credit enhanced long-term indebtedness of the Company (or, if
neither such division nor any successor shall be in the business of rating
long-term indebtedness, a nationally recognized rating agency in the U.S. as
mutually agreed between the Agent and the Company). Any reference in this
Agreement to any specific rating is a reference to such rating as currently
defined by Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies, Inc. (or such a successor) and shall be deemed to refer to the
equivalent rating if such rating system changes.
"SUBSIDIARY" means ALLETE Automotive Services, Inc.
"TAXES" has the meaning set forth in Section 3(e).
"TOTAL CAPITAL" means the sum of retained earnings, stockholders'
equity (including preferred stock and QUIPs), all determined with respect to the
Company and its subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, and Funded Debt.
"UNMATURED EVENT OF DEFAULT" means an event which with notice, the
lapse of time or both would constitute an Event of Default.
"UTILIZATION FEE RATE" means a rate equal to (i) 0.125% per annum for
any day Level I Status exists; (ii) 0.125% per annum for any day Level II Status
exists; (iii) 0.125% per annum for any day Level III Status exists; (iv) 0.250%
per annum for any day Level IV Status exists; and (v) 0.500% per annum for any
day Level V Status exists.
9. GENERAL.
a. INSTRUCTIONS
The Company hereby authorizes the Agent and each Bank to rely upon
telephonic, written or facsimile instructions of any person identifying himself
or herself as an Authorized Officer and upon any signature which the Agent or
such Bank believes to be genuine, and the Company shall be bound thereby in the
same manner as if such person were authorized
ALLETE
December 24, 2002
Page 19
or such signature were genuine. The Company agrees to indemnify the Agent and
each Bank from and against all losses and expenses arising out of the Agent's or
such Bank's reliance on said instructions or signatures.
b. PAYMENTS
Payments hereunder and under the Note shall be made in immediately
available funds in Dollars without off-set, counter-claim or other deduction.
c. COSTS
The Company shall pay all costs of the Agent with respect to the
negotiation, preparation, execution and delivery of this Agreement and the other
Loan Documents, any amendments, waivers, consents or modifications with respect
thereto and all costs of the Agent and each Bank in connection with the of
enforcement or collection of every kind, including but not limited to all
reasonable attorneys' fees, court costs and expenses incurred by the Agent or
any Bank in connection with collection or protection or enforcement of any
rights hereunder whether or not any lawsuit is ever filed.
d. INDEMNIFICATION
In consideration of the execution and delivery of this Agreement by
the Agent and each Bank and the extension of credit hereunder, the Company
hereby indemnifies, exonerates and holds the Agent and each Bank and each of its
respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether such Indemnified Party
is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
any Loan or any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the release by the Company of any hazardous
material, except for any such Indemnified Liabilities arising for the account of
a particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment in satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
e. NOTICES
All notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing or by
facsimile and addressed, delivered or transmitted to such party at its address
or facsimile number set forth below its
ALLETE
December 24, 2002
Page 20
signature hereto or at such other address or facsimile number as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid shall be deemed given five days
after mailed. Any notice sent by courier service shall be deemed given when
received. Any notice, if transmitted by facsimile, shall be deemed given when
transmitted.
f. SURVIVAL
The Obligations of the Company under Sections 2(b), 3(a), 3(e), 3(f),
3(g), 9(c), 9(d) and 10(g) hereof shall survive any payment of the principal of
and interest on the Loans and the termination of this Agreement.
g. COUNTERPARTS
This Agreement may be executed in any number of separate counterparts,
each of which when so executed and delivered shall be an original, and all such
counterparts shall together constitute one and the same instrument. Delivery of
an executed counterpart via facsimile or other method shall be as effective as
delivery of an original executed counterpart.
h. AMENDMENT AND WAIVER
Any provision of this Agreement or any other Loan Document may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Company and the Required Banks (and, if the rights or duties of
the Agent are affected thereby, by the Agent); PROVIDED that no such amendment,
waiver or modification shall, unless signed by all the Banks, (i) change the
Commitment of any Bank (except for a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder or (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement. Any waiver by the Agent or any
Bank of any rights hereunder or under any other Loan Document shall not
constitute a waiver of any other rights of the Agent and the Banks from time to
time.
i. JURISDICTION
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR THE NOTE OR ANY OTHER LOAN DOCUMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE AGENT, ANY BANK OR THE COMPANY SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT
ANY
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December 24, 2002
Page 21
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE COMPANY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY
CONSENTS TO PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, THE NOTE AND EACH OTHER LOAN DOCUMENT.
j. WAIVER OF JURY TRIAL
THE COMPANY, THE AGENT AND THE BANKS WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT, AND THE COMPANY, THE AGENT AND
THE BANKS AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT A JURY.
k. CONFIDENTIALITY
The Company, the Agent and the Banks hereby agree and acknowledge that
all information relating to the Company or any subsidiary, which is (i)
furnished by the Company to the Agent and the Banks pursuant hereto and (ii)
non-public, confidential or proprietary in nature, shall be kept confidential by
the Agent and the Banks in accordance with applicable law, PROVIDED that such
information and other information relating to the Company and its subsidiaries
may be distributed by the Agent and each Bank to the Agent and such Bank's
respective directors, officers, employees, attorneys, affiliates, auditors and
regulators (and, upon the order of any court or other governmental agency having
jurisdiction over the Agent or any Bank, to any other person or entity). The
provisions of this Section 9(k) shall survive the termination of this Agreement.
ALLETE
December 24, 2002
Page 22
l. APPLICABLE LAW
This Agreement, the Notes and each other Loan Document shall be
governed by the internal laws of the State of Illinois applicable to contracts
made and to be performed entirely within such State.
m. SHARING OF SET-OFFS
Each Bank agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it which
is greater than the proportion received by any other Bank in respect of the
aggregate amount of principal and interest due with respect to any Note held by
such other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other Banks, and such
other adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata; PROVIDED that nothing in this Section shall impair
the right of any Bank to exercise any right of set-off or counterclaim it may
have and to apply the amount subject to such exercise to the payment of
indebtedness of the Company other than its indebtedness under the Notes. The
Company agrees, to the fullest extent it may effectively do so under applicable
law, that each Bank and any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights under applicable law, and with respect to such
holder of such a participation as fully as if such holder of a participation
were a direct creditor of the Company in the amount of such participation.
n. PARTICIPATIONS
Any Bank may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Company and the Agent, such Bank shall remain solely responsible for the
performance of its obligations hereunder, and the Company and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Company hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement. The
Company agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Section 3 with respect
to its participating interest.
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December 24, 2002
Page 23
o. ASSIGNMENTS
Any Bank may at any time assign to one or more banks or other
financial institutions (each an "ASSIGNEE") all, or a proportionate part of all,
of its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to a Joinder
Agreement in substantially the form of Exhibit B hereto executed by such
Assignee and such transferor Bank, with (and subject to) the subscribed consent
of the Company, which shall not be unreasonably withheld, and the Agent, which
shall not be unreasonably withheld; PROVIDED that if an Assignee is an affiliate
of such transferor Bank or was a Bank immediately prior to such assignment, no
such consent of the Company shall be required; and PROVIDED FURTHER that, if
such assignment is in respect of a proportionate part of the transferor Bank's
rights and obligations hereunder and under the Notes, the amount of such Bank's
Commitment (together with the Commitment of any affiliate of such Bank), after
taking into account such assignment, is at least an amount equal to $5,000,000.
Upon execution and delivery of such instrument and payment by such Assignee to
such transferor Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, such Assignee shall be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this Subsection 9(o), the transferor
Bank, the Agent and the Company shall make appropriate arrangements so that, if
required, a new Note is issued to the Assignee. In connection with any such
assignment, the transferor Bank shall pay to the Agent an administrative fee for
processing such assignment in the amount of $3,500.
p. FEDERAL RESERVE BANKS
Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to one or more of the Federal Reserve Banks which
comprise the Federal Reserve System. No such assignment shall release the
transferor Bank from its obligations hereunder.
q. IDENTITY OF HOLDERS
The Agent and the Company may, for all purposes of this Agreement,
treat any Bank as the holder of any Note drawn to its order (and owner of the
Loans evidenced thereby) until written notice of assignment, participation or
other transfer shall have been received by them.
r. SPLIT-RATINGS
In the event the Company's S&P Rating and Moody's Rating do not fall
within the same Level Status, then (1) if the S&P Rating's Level Status and the
Moody's Rating's Level
ALLETE
December 24, 2002
Page 24
Status are in consecutive Level Status categories, the lower Level Status shall
be deemed to apply for purposes of this Agreement or (2) if the S&P Rating's
Level Status and the Moody's Rating's Level Status are not in consecutive Level
Status categories, then the Level Status immediately above the lower of the S&P
Rating's Level Status and the Moody's Rating's Level Status shall be deemed to
apply for purposes of this Agreement. For purposes of this Agreement, Level I
Status shall be deemed the highest and Level V Status shall be deemed the
lowest.
s. CONTINUED EFFECT; NO NOVATION
Notwithstanding anything contained herein, this Agreement is not
intended to and does not serve to effect a novation of the Obligations. Instead,
it is the express intention of the parties hereto to reaffirm the indebtedness
which is outstanding as of the date hereof created under the Existing Committed
Facility Letter which is evidenced by the notes provided for therein.
t. ADDITIONAL LENDERS
The Company may, upon the approval of the Agent, add additional
lenders as Banks hereto (each a "NEW BANK"), PROVIDED that if as a result of the
addition of any New Bank the aggregate amount of Commitments then in effect
would exceed $200,000,000, the approval of the Required Banks shall also be
required prior to adding any such New Bank. Costs incurred by the Agent in
connection with adding any New Bank shall be paid by the Company, and the legal
documentation pursuant to which any New Bank is added shall be in form and
substance reasonably satisfactory to the Agent.
u. RESIGNATION OF ABN AMRO
The parties acknowledge that effective as of the date hereof ABN AMRO
Bank N.V. is no longer the Agent under the Facility and its Commitment has
terminated.
10. THE AGENT.
a. APPOINTMENT AND AUTHORIZATION
Each Bank irrevocably appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the Notes as are delegated to the Agent by the terms hereof or thereof,
together with all such powers as are reasonably incidental thereto.
b. AGENTS FEE
The Company shall pay to the Agent for its own account fees in the
amounts and at the times previously agreed upon between the Company and the
Agent.
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December 24, 2002
Page 25
c. AGENT AND AFFILIATES
LaSalle Bank National Association shall have the same rights and
powers under this Agreement as any other Bank and may exercise or refrain from
exercising the same as though it were not the Agent, and LaSalle Bank National
Association and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Company or affiliate of the
Company as if it were not the Agent hereunder.
d. ACTION BY AGENT
The obligations of the Agent hereunder are only those expressly set
forth herein. Without limiting the generality of the foregoing, the Agent shall
not be required to take any action with respect to any Event of Default, except
as expressly provided in Section 7(b). The Agent's duties hereunder and under
the other Loan Documents are only those expressly set forth herein and therein
and nothing herein or therein shall be deemed to impose on the Agent any
fiduciary obligation to any Bank or the Company.
e. CONSULTATION WITH EXPERTS
The Agent may consult with legal counsel (who may be counsel for the
Company), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
f. LIABILITY OF AGENT
Neither the Agent nor any of its directors, officers, agents, or
employees shall be liable to any Bank for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or willful misconduct.
Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible to any Bank for or have any duty to any Bank to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Company; (iii) the
satisfaction of any condition specified in Article III, except receipt of items
required to be delivered to the Agent; (iv) the existence or continuance of an
Event of Default; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes, the other Loan Documents or any other instrument or
writing furnished in connection herewith. The Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
believed by it in good faith to be genuine or to be signed by the proper party
or parties.
ALLETE
December 24, 2002
Page 26
g. INDEMNIFICATION
Each Bank shall, ratably in accordance with its Commitment, indemnify
the Agent (to the extent not reimbursed by the Company) against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from the Agent's gross negligence or willful
misconduct) that the Agent may suffer or incur in connection with this Agreement
or any action taken or omitted by the Agent hereunder.
h. CREDIT DECISION
Each Bank acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under this Agreement.
i. SUCCESSOR AGENT
The Agent may resign at any time by giving written notice thereof to
the Banks and the Company. Upon any such resignation, the Required Banks shall
have the right to appoint a successor Agent, which successor Agent shall be
satisfactory to the Company. If no successor Agent shall have been so appointed
by the Required Banks, and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $100,000,000 and shall otherwise be subject to the consent of the Company,
which consent shall not be unreasonably withheld. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
Agreed to this 24th day of December, 2002
ALLETE, INC.
By: James Vizanko
------------------------------
Title: Vice President, Chief Financial
------------------------------
Officer, and Treasurer
Address: 30 West Superior Street
Duluth, Minnesota 55802
Attention: Corporate Treasurer
Facsimile No.: (218) 723-3912
Signature Page to Committed Facility Letter
Please acknowledge your agreement to the foregoing by signing
and returning a copy of this letter.
Commitment: $40,000,000 LASALLE BANK NATIONAL ASSOCIATION, individually
as a Bank and as Agent.
By: /s/ Denis J. Campbell IV
-----------------------------------------
Title: Senior Vice President
---------------------------------------
Address: LaSalle Bank National Association
Syndications Unit
135 South LaSalle Street, Suite 1425
Chicago, Illinois 60603
Attention: Damatria Gilbert
Facsimile: (312) 904-4448
Telephone: (312) 904-8277
With copies to:
LaSalle Bank National Association
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Chip Campbell
Facsimile: (312) 904-1994
Telephone: (312) 904-4497
Commitment: $40,000,000 BANK ONE
By: /s/ Sharon K. Webb
---------------------------------------------
Name: Sharon K. Webb
-------------------------------------------
Title: Associate Director
------------------------------------------
Commitment: $40,000,000 SUNTRUST BANK
By: /s/ Paul M. Sunerall
---------------------------------------------
Name: PAUL M. SUNERALL
-------------------------------------------
Title: VICE PRESIDENT
Commitment: $30,000,000 WELLS FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ Mark Halldorson
---------------------------------------------
Name: Mark H. Halldorson
-------------------------------------------
Title: Assistant Vice President
------------------------------------------
By: /s/ James D. Heinz
---------------------------------------------
Name: James D. Heinz
-------------------------------------------
Title: Senior Vice President
------------------------------------------
Wells Fargo Bank, National Association
Commitment: $25,000,000 U.S. BANK NATIONAL ASSOCIATION
By: /s/ Robert E. Grover
---------------------------------------------
Name: Robert E. Grover
-------------------------------------------
Title: Senior Vice President
------------------------------------------