EXHIBIT 10(b)2
- --------------------------------------------------------------------------------
LETTER OF CREDIT AGREEMENT
DATED AS OF JULY 5, 2006
AMONG
ALLETE, INC.
(FORMERLY KNOWN AS MINNESOTA POWER, INC.)
THE PARTICIPATING BANKS PARTY HERETO
AND
WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND ISSUING BANK
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................1
Section 1.1 Definitions...............................................1
ARTICLE II LETTER OF CREDIT....................................................9
Section 2.1 Issuance of Letter of Credit..............................9
Section 2.2 Letter of Credit Drawings.................................9
Section 2.3 Company Reimbursement Obligations; Participating Bank
Payments in Respect of the Letter
of Credit; Drawing Loans..................................9
Section 2.4 Agreement of the Company and Each Participating Bank.....11
Section 2.5 Interest Rates and Payment Dates.........................12
Section 2.6 Payments.................................................12
Section 2.7 Security Interest in Pledged Bonds.......................13
Section 2.8 Fees.....................................................14
Section 2.9 Method of Payment........................................14
Section 2.10 Lending Offices and Funding..............................14
Section 2.11 Computation of Interest..................................15
Section 2.12 Payment Due on Non-Business Day to be made on Next
Business Day.............................................15
Section 2.13 Late Payments............................................15
Section 2.14 Source of Funds..........................................15
Section 2.15 Extension of Stated Expiration Date......................15
Section 2.16 Provisions Applicable to LIBOR Drawing Loans.............16
Section 2.17 Rescission of Payments...................................17
ARTICLE III CONDITIONS PRECEDENT..............................................17
Section 3.1 Conditions Precedent to Issuance of Letter of Credit.....17
Section 3.2 Conditions Precedent to Drawing Loans....................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................19
Section 4.1 Company's Representations................................19
ARTICLE V COVENANTS...........................................................22
Section 5.1 Information..............................................23
Section 5.2 Maintenance of Property; Insurance.......................24
Section 5.3 Maintenance of Existence.................................24
Section 5.4 Compliance with Laws.....................................25
Section 5.5 Inspection of Property, Books and Records................25
Section 5.6 Use of Proceeds..........................................25
Section 5.7 Negative Pledge..........................................25
Section 5.8 Prohibition of Fundamental Changes.......................25
Section 5.9 Maximum Ratio of Funded Debt to Total Capital............26
Section 5.10 Bond Documents...........................................26
Section 5.11 Official Statement.......................................26
Section 5.12 Optional Redemptions.....................................26
i
Section 5.13 Conversion...............................................26
Section 5.14 Pari Passu...............................................26
Section 5.15 Patriot Act Compliance...................................27
ARTICLE VI EVENTS OF DEFAULT..................................................27
Section 6.1 Events of Default........................................27
Section 6.2 Remedies.................................................29
Section 6.3 Pledge of Special Deposit Account........................29
ARTICLE VII MISCELLANEOUS.....................................................30
Section 7.1 Taxes....................................................30
Section 7.2 Increased Costs..........................................31
Section 7.3 Right of Setoff; Other Collateral........................33
Section 7.4 Indemnity; Costs and Expenses............................34
Section 7.5 Non-Controlled Persons,..................................36
Section 7.6 Obligations Absolute.....................................36
Section 7.7 Liability of the Issuing Bank............................37
Section 7.8 Participants, Etc........................................37
Section 7.9 Survival of this Agreement...............................38
Section 7.10 Amendments and Waivers...................................39
Section 7.11 Waiver of Rights by the Banks............................39
Section 7.12 Severability.............................................39
Section 7.13 Governing Law; Submission to Jurisdiction................40
Section 7.14 Notices..................................................40
Section 7.15 Survival of Certain Obligations..........................41
Section 7.16 Taxes and Expenses.......................................41
Section 7.17 Pleadings................................................41
Section 7.18 Counterparts.............................................41
Section 7.19 Waiver of Jury Trial.....................................42
Section 7.20 Register.................................................42
Section 7.21 Adjustments; Set-off.....................................42
ARTICLE VIII THE ADMINISTRATIVE AGENT.........................................43
Section 8.1 Appointment and Authorization of Administrative Agent....43
Section 8.2 Administrative Agent and its Affiliates..................43
Section 8.3 Action by Administrative Agent...........................43
Section 8.4 Consultation with Experts................................43
Section 8.5 Liability of Administrative Agent; Credit Decision.......44
Section 8.6 Indemnity................................................44
Section 8.7 Resignation of Administrative Agent and Successor
Administrative Agent.....................................44
Exhibit A............................................Form of Letter of Credit
Exhibit B..................................Participating Bank L/C Commitments
Schedule 5.7...................................................Existing Liens
ii
LETTER OF CREDIT AGREEMENT
This Agreement is entered into as of July 5, 2006 by and among ALLETE, Inc., a
Minnesota corporation (as more fully defined below, the "COMPANY"), Wells Fargo
Bank, National Association, a national banking association, in its capacity as
letter of credit issuer (in such capacity, the "ISSUING BANK") and as
administrative agent for the Participating Banks hereunder (in such capacity,
the "ADMINISTRATIVE AGENT"), and the financial institutions from time to time
party hereto (each a "PARTICIPATING BANK").
At the request of the Company, the Collier County Industrial Authority, a public
body corporate and politic organized and existing under the laws of the State of
Florida (the "ISSUER") is issuing its Industrial Development Variable Rate
Demand Refunding Revenue Bonds (ALLETE, Inc. Project), Series 2006 (the "BONDS")
in the principal amount of $27,800,000 pursuant to an Indenture of Trust dated
as of July 1, 2006 (as amended or supplemented in accordance with the terms
hereof and thereof, the "INDENTURE") between the Issuer and U.S. Bank National
Association, as trustee for the purchasers of the Bonds (the "TRUSTEE").
The Company and the Issuer have executed a Financing Agreement of even date
herewith (as amended or supplemented in accordance with the terms hereof and
thereof, the "FINANCING AGREEMENT"), under which the Issuer has agreed to lend
the proceeds of the Bonds to the Company.
In order to induce purchase of the Bonds, the Company has requested that the
Issuing Bank issue its irrevocable letter of credit for the benefit of the
Trustee in the form of Exhibit A.
The Issuing Bank has agreed to issue the requested letter of credit, and the
Participating Banks have agreed to participate in the risk of such letter of
credit on the terms and subject to the conditions set forth herein.
ACCORDINGLY, in consideration of the mutual covenants contained herein and in
related documents, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Agreement:
"ADMINISTRATIVE AGENT" has the meaning specified in the preamble to this
Agreement.
"AGREEMENT" means this Letter of Credit Agreement, as amended or supplemented
from time to time.
"APPLICABLE MARGIN" means (i) 0.425% per annum for any day Level I Status
exists; (ii) 0.500% per annum for any day Level II Status exists; (iii) 0.650%
per annum for any day Level III Status exists; (iv) 1.025% per annum for any day
Level IV Status exists; (v) 1.400% per annum for any day Level V Status exists;
and (vi) 1.500% per annum for any day Level VI Status exists.
"AUTHORIZING ORDER" means any order of the MPUC or any other regulatory body
having jurisdiction over the Company or any affiliate of the Company authorizing
and/or restricting the indebtedness that may be created from time to time
hereunder.
"AVAILABLE AMOUNT" means, at any time, the amount available for drawing under
the Letter of Credit, after giving effect to any payments thereunder, reductions
thereof, and reinstatements thereof.
"BANKS" means, collectively, the Issuing Bank, the Administrative Agent and the
Participating Banks.
"BASE RATE" means for any day the greater of:
(i) the rate of interest announced by the
Administrative Agent from time to time as its prime commercial
rate for U.S. dollar loans as in effect on such day, with any
change in the Base Rate resulting from a change in said prime
commercial rate to be effective as of the date of the relevant
change in said prime commercial rate; or
(ii) the sum of (x) the rate determined by the
Administrative Agent to be the prevailing rate (rounded
upwards, if necessary, to the next higher 1/100 of 1%) at
approximately 10:00 am. (or as soon thereafter as is
practicable) on such day (or, if such day is not a Business
Day, on the immediately preceding Business Day) for the
purchase at face value of overnight federal funds in an amount
equal or comparable to the principal amount owed to the
Administrative Agent for which such rate is being determined,
PLUS (y) 1/2 of 1% (0.50%),
"BOND DOCUMENTS" means the Indenture, the Financing Agreement and the Bonds.
"BONDS" has the meaning specified in the preamble to this Agreement.
"BUSINESS DAY" shall have the same meaning herein as the term "business day" in
the Letter of Credit and, if the applicable Business Day relates to the
borrowing or payment of a Drawing Loan in the first 180 days, means any day on
which banks are dealing in U.S. dollar deposits in the interbank market in
London, England.
"CAP INTEREST RATE" means a rate per annum of 12% calculated on the basis of a
year of 365 days for the actual days elapsed.
"CODE" means the Internal Revenue Code of 1986, as amended, and the regulations,
rulings and proclamations promulgated and proposed thereunder or under the
predecessor Code.
"COMMISSION" means the Securities and Exchange Commission, or any entity
succeeding to its responsibilities under the Public Utility Holding Company Act
of 1935, as amended.
"COMMITMENT PERCENTAGE" means, as to each Participating Bank, the ratio,
expressed as a percentage, of (a) such Lender's L/C Commitment to (b) the
aggregate L/C Commitments of all of the Participating Banks.
-2-
"COMPANY" means ALLETE, Inc., a Minnesota corporation duly organized and validly
existing under the laws of the State of Minnesota, and its lawful successors and
assigns, to the extent permitted by this Agreement.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other entity the
accounts of which would be consolidated with those of the Company in
consolidated financial statements if such statements were prepared as of such
date.
"CONTROLLED GROUP" means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Company or any Subsidiary, are treated as a single
employer under Section 414 of the Code.
"DATE OF ISSUANCE" means the date on which all conditions precedent under
Article III hereof have been met or waived by the Administrative Agent and on
which the Letter of Credit is issued.
"DRAWING LOAN" has the meaning specified in Section 2.3(b).
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof, in each case as in effect and applicable
to the Company and its Subsidiaries at the time the representation in Section
4.1(m) is made or deemed made or compliance with Section 5.4 is determined.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations issued thereunder, as from time
to time in effect.
"EVENT OF DEFAULT" has the meaning specified in Section 6.1.
"FEDERAL FUNDS RATE" means the fluctuating interest rate per annum described in
part (x) of clause (ii) of the definition of Base Rate.
"FINANCING DOCUMENTS" means this Agreement, the Letter of Credit, and any
agreement or instrument relating thereto.
"FINANCING AGREEMENT" has the meaning specified in the preamble to this
Agreement.
"FIRST MORTGAGE" means the Mortgage and Deed of Trust, dated as of September 1,
1945, from the Company to The Bank of New York and Douglas J. MacInnes
(successors to Irving Trust Company and Richard H. West), as trustees, as
heretofore and hereafter amended and supplemented.
-3-
"FUNDED DEBT" means, with respect to any Person, the sum (without duplication)
of (i) all indebtedness of such Person for borrowed money; (ii) the deferred and
unpaid balance of the purchase price owing by such Person 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 Person, whether or not such indebtedness has been
assumed by such Person or is nonrecourse to such Person; (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 Person, 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 Person with respect to
indebtedness for borrowed money of another Person(s) (including affiliates) in
excess of $25,000,000 in the aggregate; PROVIDED, HOWEVER, that in no event
shall any calculation of Funded Debt with respect to the Company 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 equipment
as provided for under an operating lease extending to 2012, or (e) more than 25%
of the indebtedness associated with Square Butte.
"GOVERNMENTAL BODY" means any government, foreign, or domestic, any court or any
foreign or domestic, federal, state, municipal or other governmental department,
commission, board, bureau, agency, public authority or instrumentality.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"INDENTURE" has the meaning set forth in the preamble to this Agreement.
"INTEREST DRAWING" means a drawing under the Letter of Credit resulting from the
presentation of a certificate in the form of Annex F to the Letter of Credit.
"INTEREST PERIOD" means with respect to the LIBOR applicable to a Drawing Loan,
a period commencing on a Business Day and ending on the day in the next
succeeding month that immediately precedes the date which numerically
corresponds to the first day of such Interest Period, except that (i) if such
final month has no numerically corresponding day, then the Interest Period shall
end on the last Business Day of such month, and (ii) if an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next following Business Day, unless such next following Business Day
is the first Business Day of a month, in which case such Interest Period shall
end on the next preceding Business Day.
-4-
"ISSUER" has the meaning specified in the preamble to this Agreement.
"ISSUING BANK" has the meaning set forth in the preamble to this Agreement.
"L/C COMMITMENT" means, as to any Participating Bank, (i) the amount set forth
opposite such Participating Bank's name on Exhibit B hereto below the heading
"L/C Commitment," or (ii) the obligation of such Participating Bank under
Section 2.1(b) hereof to participate in the Letter of Credit, as the context may
require.
"L/C DISBURSEMENT" means any payment or disbursement made by the Issuing Bank
under the Letter of Credit.
"L/C MARGIN" means (i) 0.375% per annum for any day Level I Status exists; (ii)
0.475% per annum for any day Level II Status exists; (iii) 0.525% per annum for
any day Level III Status exists; (iv) 0.750% per annum for any day Level IV
Status exists; (v) 1.00% per annum for any day Level V Status exists; and (vi)
1.25% per annum for any day Level VI Status exists.
"L/C OBLIGATIONS" means, at any time, an amount equal to the sum of (a) the
Available Amount at such time and (b) the aggregate amount of Reimbursement
Obligations outstanding at such time.
"LETTER OF CREDIT" means the irrevocable transferable letter of credit issued by
the Issuing Bank for the account of the Company in favor of the Trustee for the
benefit of the owners from time to time of the Bonds pursuant to this Agreement
in the form of Exhibit A with appropriate insertions, as amended.
"LETTER OF CREDIT FEE" means the fee payable by the Company under Section
2.8(a).
"LEVEL I STATUS" means the S&P Rating is A- or higher and the Moody's Rating is
A3 or higher.
"LEVEL II STATUS" means Level I Status does not exist, but the S&P Rating is
BBB+ or higher and the Moody's Rating is Baal or higher.
"LEVEL III STATUS" means 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 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 none of Level I Status, Level II Status, Level III Status
nor Level IV Status exists, but the S & P Rating is BB+ - or higher and the
Moody's Rating is Baa1 or higher.
"LEVEL VI STATUS" means none of Level I Status, Level II Status, Level III
Status nor Level IV Status exists.
"LIBO BASE RATE" means the rate per annum for United States dollar deposits
quoted by the Administrative Agent as the Interbank Market Offered Rate, with
the understanding that such rate is quoted by the Administrative Agent for the
purpose of calculating effective rates of
-5-
interest for loans making reference thereto, on the first day of an Interest
Period for delivery of funds on said date for a period of time approximately
equal to the number of days in such Interest Period and in an amount
approximately equal to the principal amount to which such Interest Period
applies. The Company understands and agrees that the Administrative Agent may
base its quotation of the Interbank Market Offered Rate upon such offers or
other market indicators of the London interbank market as the Administrative
Agent in its discretion deems appropriate including, but not limited to, the
rate offered for U.S. dollar deposits on the London interbank market.
"LIBOR" means, with respect to any Interest Period and any principal, an annual
rate equal (a) the applicable LIBO Base Rate (rounded up to the nearest 1/16 of
1%) for funds to be made available on the first day of such Interest Period in
an amount approximately equal to such principal and maturing at the end of such
Interest Period, divided by (b) 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 Administrative Agent's determination
of LIBOR shall be conclusive, absent manifest error.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset; PROVIDED, HOWEVER, Lien shall not mean any Trading
securities or Available-for-sale securities (as defined in the Notes to the
Consolidated Financial Statements contained in the Company's 2005 Annual Report)
pledged to secure or cover any hedging transaction in Trading securities or
Available-for-sale securities. For the purposes of this Agreement, the Company
or any Subsidiary shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sales agreement, capital lease or other title retention agreement
relating to such asset.
"MAJORITY PARTICIPATING BANKS" mean Participating Banks holding at least 66 2/3%
of the sum of (a) the aggregate unpaid principal amount of the Drawing Loans
plus (b) the aggregate amount of all L/C Obligations.
"MATERIAL ADVERSE CHANGE" means any change in the business, organizations,
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.
"MATERIAL SUBSIDIARY" means any Subsidiary of the Company that has assets that
constitute more than 10% of the consolidated assets of the Company and its
Subsidiaries as shown on the most recent financial statements delivered to the
Administrative Agent pursuant to Section 5.1 hereof.
"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 secured 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
Administrative
-6-
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.
"MPUC" means the Minnesota Public Utilities Commission.
"MULTIEMPLOYER PLAN" means a plan described in Section 4001(a)(3) of ERISA to
which the Company or any member of the Controlled Group contributed or has
contributed during the last five years of such plan.
"OBLIGATIONS" means the Drawing Loans, fees relating to the Letter of Credit,
any and all obligations of the Company to reimburse the Participating Banks for
any drawings under the Letter of Credit and all other obligations of the Company
to any Bank arising under or in relation to this Agreement.
"OFFICIAL STATEMENT" means the Official Statement relating to the Bonds, dated
June 30, 2006.
"ORIGINAL STATED AMOUNT" has the meaning specified in Section 2.1.
"OUTSTANDING," "BONDS OUTSTANDING" or "BONDS THEN OUTSTANDING" shall have the
same meaning as the terms "Outstanding Bonds," "Bonds Outstanding" or
"Outstanding" in the Indenture.
"PBGC" means the Pension Benefit Guaranty Corporation or any Governmental Body
succeeding to the functions thereof.
"PERSON" means an individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
"PLAN" means, with respect to the Company and each Subsidiary thereof at any
time, an employee pension benefit plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code and
either (i) is or has been maintained or contributed to by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii) has
at any time within the preceding five years been maintained, or contributed to,
by any Person which was at such time a member of the Controlled Group for
employees of any Person which was at such time a member of the Controlled Group.
"POTENTIAL DEFAULT" means an event which but for the lapse of time or the giving
of notice, or both, would constitute an Event of Default.
"REFERENCE BANK" means Wells Fargo Bank, National Association.
"REGISTER" has the meaning specified in Section 7.20.
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
-7-
"REIMBURSEMENT OBLIGATION" means the Company's obligation to reimburse the
Issuing Bank on account of any L/C Disbursement as provided in Section 2.3.
"RELATED DOCUMENTS" means the Bond Documents, this Agreement, the Letter of
Credit, and any other agreement or instrument relating thereto.
"REMARKETING AGENT" means Wells Fargo Brokerage Services, LLC, as remarketing
agent under the Indenture, and any successor remarketing agent.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b) of
ERISA.
"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 secured 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
Administrative 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.
"SPECIAL DEPOSIT ACCOUNT" has the meaning specified in Section 6.2(a).
"STATE" means the State of Minnesota.
"STATED EXPIRATION DATE" means July 5, 2011, or such later date to which the
Stated Expiration Date may be extended from time to time pursuant to the Letter
of Credit and Section 2.15.
"SUBSIDIARY" means any corporation organized under the laws of one of the States
of the United States of America of which more than 50% of the voting stock
(except directors qualifying shares) is owned or controlled, directly or
indirectly, by the Company and/or one or more of its Subsidiaries.
"TERMINATION DATE" means the Expiration Date, as defined in the Letter of
Credit.
"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
generally accepted accounting principles consistently applied, and Funded Debt.
"UNREIMBURSED DRAWING RATE" has the meaning specified in Section 2.5.
"U.S." means the United States of America.
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms. Any capitalized terms used herein which are
not specifically defined herein shall have the same meaning herein as in the
Indenture. All references in this Agreement to times of
-8-
day shall be references to Minneapolis, Minnesota time unless otherwise
expressly provided herein.
ARTICLE II
LETTER OF CREDIT
SECTION 2.1 ISSUANCE OF LETTER OF CREDIT.
(a) The Issuing Bank agrees to issue on the Date of
Issuance, upon the terms, subject to the conditions and relying upon
the representations and warranties set forth in this Agreement, the
Letter of Credit substantially in the form of Exhibit A. The Letter of
Credit shall be in the Original Stated Amount of $28,211,287.67 (the
"ORIGINAL STATED AMOUNT"), which is the sum of (i) the principal amount
of the Bonds on the Date of Issuance, plus (ii) interest thereon at the
Cap Interest Rate for a period of 45 days.
(b) Effective upon the issuance of the Letter of Credit
and without further action on the part of any Bank, each Participating
Bank shall automatically acquire a participation in the Issuing Bank's
liability under the Letter of Credit in an amount equal to such
Participating Bank's Commitment Percentage of the Original Stated
Amount.
SECTION 2.2 LETTER OF CREDIT DRAWINGS.
The Trustee is authorized to make drawings under the Letter of Credit in
accordance with the terms thereof. The Company hereby directs the Issuing Bank
to make payments under the Letter of Credit in the manner therein provided. The
Company hereby irrevocably approves reductions and reinstatements of the
Available Amount as provided in the Letter of Credit. No further consent of,
notice to or authorization by the Company shall be required in connection with
any such reinstatement occurring from time to time as contemplated hereby.
SECTION 2.3 COMPANY REIMBURSEMENT OBLIGATIONS; PARTICIPATING BANK PAYMENTS
IN RESPECT OF THE LETTER OF CREDIT; DRAWING LOANS.
(a) L/C DISBURSEMENTS TO BE REIMBURSED IMMEDIATELY. On
the day of (i) each L/C Disbursement on account of an Interest Drawing,
and (ii) each other L/C Disbursement made when the conditions precedent
contained in Section 3.2 are not true or have not been satisfied, the
Company will pay to the Administrative Agent, for the account of the
Participating Banks or the Issuing Bank, as the case may be, the full
amount of such L/C Disbursement, without notice or demand of any kind.
If the Company fails to make any such payment when due, the unpaid
amount thereof shall bear interest until paid by the Company at the
rate specified in Section 2.13.
(b) OTHER L/C DISBURSEMENTS. Upon the occurrence of any
L/C Disbursement not described in subsection (a), the Issuing Bank may
request payment in the amount of such L/C Disbursement from the
Participating Banks as provided in subsection (c). The amount so paid
by each Participating Bank shall constitute a loan (a "DRAWING LOAN")
to the Company by such Participating Bank, the proceeds of which
Drawing Loan shall be remitted by the Participating Banks to the
Administrative Agent and applied by the
-9-
Administrative Agent or the Issuing Bank to the payment of the
corresponding Reimbursement Obligation. Each Drawing Loan shall be due
and payable on demand and shall bear interest on the unpaid principal
amount thereof from the date such Drawing Loan is made until it is paid
in full, at a rate per annum equal to the Unreimbursed Drawing Rate.
(c) PAYMENTS BY PARTICIPATING BANKS. Upon any L/C
Disbursement described in subsection (b), the Issuing Bank, directly or
through the Administrative Agent, shall (and, at any time following any
other L/C Disbursement, may) give each Participating Bank prompt notice
(orally or in writing) of such L/C Disbursement, specifying (a) the
amount of such L/C Disbursement, (b) the date such L/C Disbursement was
or is to be made and (c) such Participating Bank's PRO RATA share of
the amount of such L/C Disbursement (determined on the basis of such
Participating Bank's Commitment Percentage). If so requested, each
Participating Bank shall pay to the Administrative Agent, for the
account of the Issuing Bank, an amount equal to such Participating
Bank's Commitment Percentage of such L/C Disbursement, such payment to
be made not later than 3:00 p.m. on the date on which such L/C
Disbursement is made or to be made (if such Participating Bank was
notified at or prior to 1:00 p.m. on such date) or on the next Business
Day (if such Participating Bank was notified after such time). Each
Participating Bank's obligation to make each such payment, and the
right of the Administrative Agent and the Issuing Bank to receive the
same, are absolute and unconditional and shall not be affected by any
circumstance whatsoever, including (without limiting the effect of the
foregoing or of Section 2.4) the occurrence or continuance of a
Potential Default or Event of Default or the failure of any other
Participating Bank to make any payment under this Section, and each
Participating Bank further agrees that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
Each Participating Bank shall indemnify and hold harmless the
Administrative Agent and the Issuing Bank from and against any and all
losses, liabilities (including, without limitation, liabilities for
penalties), actions, suits, judgments, demands, costs and expenses
(including reasonable attorneys' fees) resulting from any failure of
such Participating Bank to provide, or from any delay in providing, the
Administrative Agent with such Participating Bank's Commitment
Percentage of such L/C Disbursement in accordance with the provisions
of this Section, but no Participating Bank shall be so liable for any
such failure on the part of any other Participating Bank.
(d) If any amount required to be paid by any
Participating Bank to the Administrative Agent pursuant to Section
2.3(c) in respect of any unreimbursed portion of any L/C Disbursement
is made after the date such payment is due, such Participating Bank
shall additionally pay to the Administrative Agent, for the account of
the Issuing Bank, on demand, an amount equal to the product of (i) such
amount, times (ii) the Applicable Rate, as defined below, times (iii) a
fraction the numerator of which is the number of days during the period
commencing on such due date and ending on the date on which payment is
made (the "DELINQUENCY PERIOD") and the denominator of which is 360. As
used in this subsection, "Applicable Rate" means (x) if the Delinquency
Period is 3 days or less, the daily average Federal Funds Rate during
the Delinquency Period, and (y) in all other cases, the daily average
Base Rate during the Delinquency Period. A
-10-
certificate of the Administrative Agent submitted to any Participating
Bank with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. For purposes of this
subsection, payment by any Participating Bank to the Administrative
Agent shall not be deemed made until such time as that payment is
available to the Administrative Agent in immediately available funds.
(e) Whenever, at any time after the Issuing Bank has made
an L/C Disbursement and has received from any Participating Bank
(through the Administrative Agent) that Participating Bank's PRO RATA
share of such L/C Disbursement in accordance with section 2.3(c), the
Administrative Agent receives any payment on account of such L/C
Disbursement (whether or not such L/C Disbursement has been treated as
a Drawing Loan under subsection (c), and whether such payment is
received directly from the Company or otherwise, including proceeds of
collateral applied thereto by the Issuing Bank), or any payment of
interest on account thereof, the Administrative Agent will distribute
to such Participating Bank that Participating Bank's L/C Commitment
Percentage of such payment.
SECTION 2.4 AGREEMENT OF THE COMPANY AND EACH PARTICIPATING BANK.
Without limiting the effect of subsection 2.3, the Company and each
Participating Bank agree with the Issuing Bank that:
(a) The Issuing Bank is authorized to make payments under
the Letter of Credit upon the presentation of the documents provided
for therein and without regard to whether the Company has failed to
fulfill any of its obligations with respect to any Related Document or
any other default has occurred thereunder.
(b) The Issuing Bank is authorized to take such action on
its behalf under the provisions of this Agreement and to exercise such
powers and perform such duties as are specifically delegated to or
required of the Issuing Bank by the terms hereof, together with such
powers as are reasonably incidental thereto.
(c) The Issuing Bank shall be entitled to rely upon any
certificate, notice, demand or other communication (whether by cable,
telegram, telecopy, S.W.I.F.T., telex or other written communication)
believed by it to be genuine and to have been signed or sent by the
proper Person or Persons (and no such reliance or failure shall place
the Issuing Bank under any liability to the Company or any
Participating Bank or limit or otherwise affect the Company's or any
Participating Bank's obligations under this Agreement).
(d) Any action, inaction or omission on the part of the
Issuing Bank under or in connection with the Letter of Credit or the
instruments or documents related thereto, if in good faith and in
conformity with such laws, regulations or customs as the Issuing Bank
may reasonably deem to be applicable, shall be binding upon the Company
and each Participating Bank (and shall not place the Issuing Bank under
any liability to the Company or any Participating Bank or limit or
otherwise affect the Company's or any Participating Bank's obligations
under this Agreement).
-11-
(e) Notwithstanding any change or modification, with or
without the consent of the Company, in any instruments or documents
called for in the Letter of Credit, including waiver of noncompliance
of any such instruments or documents with the terms of the Letter of
Credit, this Agreement shall be binding on the Company with regard to
the Letter of Credit and to any action taken by the Issuing Bank
relative thereto.
(f) The Company shall indemnify and hold harmless each
Bank from any loss or expense arising from or in connection with the
Letter of Credit (except to the extent that such loss or expense arises
directly from the gross negligence or willful misconduct of the Issuing
Bank).
SECTION 2.5 INTEREST RATES AND PAYMENT DATES.
Each Drawing Loan shall bear interest determined as follows (the "UNREIMBURSED
DRAWING RATE"):
(a) through the third Business Day following the
corresponding L/C Disbursement, at the Base Rate;
(b) thereafter for the immediately following 6 Interest
Periods, at a rate per annum equal to the LIBOR applicable to such
Interest Periods, plus the Applicable Margin;
(c) thereafter through the day preceding the first
anniversary of such L/C Disbursement Date, at a rate per annum equal to
the Base Rate; and
(d) thereafter, at a rate per annum equal to the Base
Rate plus 2%.
Interest on all Drawing Loans shall be payable on demand or, if demand is not
sooner made, on the last day of each calendar quarter.
SECTION 2.6 PAYMENTS.
(a) To the extent the Administrative Agent actually
receives payment in respect of principal of or interest on any Pledged
Bond, the Drawing Loan made in connection with the purchase of such
Pledged Bond shall be deemed to have been reduced PRO TANTO, with the
Issuing Bank crediting any interest payment on the Pledged Bond
received by it to the payment of interest on the related Drawing Loan
(and, after payment of all interest accrued on the related Drawing
Loan, to the payment of principal of the related Drawing Loan) and
crediting any principal repayment received to the principal thereof
(and, after payment of all principal of the related Drawing Loan, to
the payment of interest accrued on the related Drawing Loan); PROVIDED
that if such interests or principal payments on such Pledged Bonds are
derived from the Letter of Credit, any such payments shall not be
credited against the Drawing Loans unless the Company has fully
reimbursed the Issuing Bank for such amounts derived from the Letter of
Credit. Prior to the occurrence of an Event of Default the Issuing Bank
agrees that any amount actually received by it in respect of principal
of or interest on such Pledged Bonds and not credited to the payment of
principal of or interest on the related Drawing Loan as
-12-
provided in the preceding sentence shall be paid promptly to the
Company unless such funds have been derived from a draw on the Letter
of Credit which has not been fully reimbursed by the Company in which
case only such amounts in excess of the amount necessary to fully
reimburse the Issuing Bank for such payment from the Letter of Credit
shall be returned to the Company. After the occurrence and during the
continuance of an Event of Default any such excess shall be held as
collateral for the Obligations pursuant to the terms of Section 6.2(a)
and 6.3. Any such payment of a Drawing Loan will be subject, in the
case of the first 180 days, to Section 2.16(a) hereof.
(b) Each payment (including each prepayment) by the
Company on account of principal of and interest on the Obligations
payable to the Participating Banks hereunder shall be made PRO RATA
according to the respective outstanding principal amounts of the
Obligations then held by the Participating Banks. The Administrative
Agent shall distribute such payments to the Participating Banks
promptly upon receipt in like funds as received.
(c) The Administrative Agent agrees that upon any payment
of principal by the Company on a Drawing Loan (other than a payment
deemed made pursuant to Section 2.6(a) above) the Administrative Agent
will promptly thereafter direct the Trustee to transfer to the Company
a corresponding amount of Pledged Bonds PROVIDED that the
Administrative Agent shall only be obligated to transfer Pledged Bonds
in an amount equal to Authorized Denominations.
(d) Unless the Administrative Agent shall have received
notice from the Company no later than 12:00 noon on the date on which
any payment is due to the Participating Banks hereunder that the
Company will not make such payment in full, the Administrative Agent
may assume that the Company will make such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each
Participating Bank on such due date an amount equal to the amount then
due such Participating Bank. If and to the extent the Company shall not
have so made such payment in full to the Administrative Agent, each
Participating Bank shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Participating Bank, together
with interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Participating Bank until the
date such Participating Bank repays such amount to the Administrative
Agent. A certificate of the Administrative Agent submitted to any
Participating Bank with respect to any amounts owing by such
Participating Bank under this paragraph (d) shall be conclusive and
binding for all purposes absent manifest error.
SECTION 2.7 SECURITY INTEREST IN PLEDGED BONDS.
The Company hereby grants to the Administrative Agent, for the benefit of each
of the Banks, a first priority security interest in all of its right, title and
interest in and to all Pledged Bonds to secure the repayment of the Obligations.
This Agreement shall constitute a security agreement for purposes of the Uniform
Commercial Code. The Company hereby agrees from time to time, at the request of
the Administrative Agent, to cause any financing statements to be filed,
registered and recorded in such manner and in all places as may be required by
law or reasonably
-13-
requested by the Administrative Agent in order to fully perfect and protect any
lien and security interest created hereby and from time to time will perform or
cause to be performed any other act as provided by law and will execute or cause
to be executed any and all continuation statements and further instruments that
may be reasonably requested or required by the Administrative Agent for such
perfection and protection. The Administrative Agent hereby appoints the Trustee
as its bailee for purposes of perfecting its security interest in the Pledged
Bonds.
SECTION 2.8 FEES.
The Company will pay, or cause to be paid, to the Administrative Agent:
(a) for the account of the Participating Banks in
accordance with their respective Commitment Percentages, a letter of
credit fee on the average daily Available Amount at a rate equal to the
L/C Margin. Such fee shall be payable in arrears on the last day of
each calendar quarter and on the Termination Date, unless the Letter of
Credit is terminated in whole on any earlier date, in which event the
letter of credit fee for the period to the date of such termination
shall be paid on the date of such termination;
(b) for the account of the Issuing Bank, on demand, all
administrative fees charged by the Issuing Bank in the ordinary course
of business in connection with the honoring of drafts under the Letter
of Credit, amendments thereto, transfers thereof and all other activity
with respect to the Letter of Credit at the then current rates
published by the Bank for such services rendered on behalf of customers
of the Issuing Bank generally; and
(c) for the account of the Administrative Agent, on the
date of each transfer of the Letter of Credit to a successor Trustee, a
transfer fee in an amount equal to the Issuing Bank's then standard
out-of-pocket fee for transfers in effect on such date.
SECTION 2.9 METHOD OF PAYMENT.
All payments to be made by the Company and the Participating Banks under this
Agreement shall be made to the Administrative Agent at Wells Fargo Bank,
National Association, ABA No. 121000248, reference: ALLETE, Inc., not later than
3:00 p.m., 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.
SECTION 2.10 LENDING OFFICES AND FUNDING.
Each Participating Bank may fund its Drawing Loans at such branch, office or
affiliate as it may from time to time elect and designate in a written notice to
the Administrative Agent and the Company. Notwithstanding any other provision of
this Agreement, each Participating Bank shall be entitled to fund and maintain
its funding of all or any part of each Drawing Loan in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if in the first 180 days the Issuing
Bank had actually funded and maintained such Drawing Loan through the purchase
of deposits in the eurodollar interbank market having a maturity corresponding
to the Interest Periods applicable to such
-14-
Drawing Loan and bearing an interest rate equal to the applicable LIBOR for such
Interest Periods.
SECTION 2.11 COMPUTATION OF INTEREST.
All computations of interest and fees payable by the Company under this
Agreement shall be made on the basis of a 360-day year and actual days elapsed
except where interest is computed using the Base Rate, in which case a year of
365 or 366 days and actual days elapsed shall be used. Interest shall accrue
during each period during which interest is computed from and including the
first day thereof to but excluding the last day thereof.
SECTION 2.12 PAYMENT DUE ON NON-BUSINESS DAY TO BE MADE ON NEXT BUSINESS
DAY.
If any sum becomes payable pursuant to this Agreement on a day which is not a
Business Day, the date for payment thereof shall be extended, without penalty,
to the next succeeding Business Day, and such extended time shall be included in
the computation of interest and fees. If the date for any payment of principal
is extended by operation of law or otherwise, interest shall be payable for such
extended time.
SECTION 2.13 LATE PAYMENTS.
Except as set forth in Section 2.5, if the principal amount of any Obligation is
not paid when due, such Obligation shall bear interest from the due date thereof
until paid in full at a rate per annum equal to the Base Rate from time to time
in effect plus 2%, payable on demand.
SECTION 2.14 SOURCE OF FUNDS.
All payments made by the Issuing Bank pursuant to the Letter of Credit shall be
made from funds of the Issuing Bank and not from funds obtained from any other
Person.
SECTION 2.15 EXTENSION OF STATED EXPIRATION DATE.
(a) No later than 90 days before each anniversary date of
this Agreement the Company may make a request for a one-year extension
of the Stated Expiration Date in a written notice to the Administrative
Agent. The Administrative Agent will promptly inform the Issuing Bank
and the Participating Banks of any such request. Each of the Issuing
Bank and each Participating Bank may, in its sole and absolute
discretion, determine whether to consent to such request. If each of
the Issuing Bank and each Participating Bank shall give irrevocable
written notice to the Administrative Agent not later than 45 days prior
to such Stated Expiration Date stating that it is so willing to extend
the Stated Expiration Date, then, subject to any conditions precedent
that the Administrative Agent may require in connection with such
extension (e.g., the remaking of representations and warranties, no
Potential Default or Event of Default having occurred or the delivery
of a legal opinion and other appropriate documentation), the Stated
Expiration Date shall be so extended, such extension to be effective as
provided in Section 2.15(b) and the Administrative Agent shall promptly
notify the Issuing Bank, the Participating Banks and the Company of
such circumstance. Failure by the Issuing Bank or any Participating
Bank to deliver such a notice to the Administrative Agent within
-15-
such time frame shall be deemed to be a denial of the Company's request
by the Issuing Bank or such Participating Bank. If the Issuing Bank and
each Participating Bank have not delivered written notices in
accordance with the terms hereof consenting to the extension of the
Stated Expiration Date, the Stated Expiration Date shall not be
extended and the Administrative Agent shall promptly notify the Issuing
Bank, the Participating Banks and the Company of such circumstance. Any
date to which the Stated Expiration Date has been extended in
accordance with this Section 2.15 may be extended in like manner.
(b) If the Stated Expiration Date is extended pursuant to
Section 2.15(a), the Issuing Bank shall deliver to the Trustee an
amendment (an "Extension Amendment") designating the date to which the
Stated Expiration Date is being extended. Such extension of the Stated
Expiration Date shall be effective, after receipt of such notice, on
the Business Day following the date of delivery of such Extension
Amendment, and thereafter all references in this Agreement to the
Stated Expiration Date shall be deemed to be references to the date
designated as such in the most recent Extension Amendment delivered to
the Trustee. No later than 90 days prior to the then current Stated
Expiration Date the Company shall notify the Issuing Bank as to whether
it will provide the Trustee with an Alternate Letter of Credit or no
credit enhancement.
SECTION 2.16 PROVISIONS APPLICABLE TO LIBOR DRAWING LOANS.
(a) FUNDING LOSSES. If the Company makes any payment or
prepayment of principal with respect to any Drawing Loan in the first
180 days on any day other than the last day of an Interest Period
applicable to such Drawing Loan, the Company shall reimburse each
Participating Bank, within 15 days after demand, for any resulting loss
or expense incurred by it (or by any existing or prospective
participant in the related Drawing Loan) including, without limitation,
any loss incurred in obtaining, liquidating or employing deposits from
third parties, but excluding loss of margin for the period after such
payment or failure to borrow or prepay; PROVIDED, HOWEVER, that such
Participating Bank shall have delivered to the Company a certificate as
to the amount of such loss or expense, which certificate shall be
conclusive in the absence of manifest error.
(b) BASIS FOR DETERMINING INTEREST RATE UNAVAILABLE. If
on or prior to the first day of any Interest Period deposits in dollars
(in the applicable amounts) are not being offered to a Participating
Bank in the London interbank market for such Interest Period, such
Participating Bank shall forthwith give notice thereof to the
Administrative Agent and the Company, whereupon the obligation of the
Banks to make a Drawing Loan at LIBOR shall be suspended until that
Participating Bank notifies the Company that the circumstances giving
rise to such suspension no longer exist. Such Participating Bank shall
instead make such Drawing Loan at the Base Rate for the first 365 days.
(c) ILLEGALITY. If after the Date of Issuance the
adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Participating Bank with any request or directive
(whether or not having the force of law)
-16-
of any such authority, central bank or comparable agency shall make it
unlawful or impossible for any Participating Bank to make, maintain or
fund its Drawing Loans at LIBOR, such Participating Bank shall
forthwith so notify the Administrative Agent and the Company, whereupon
such Participating Bank's obligation to fund any Drawing Loans at LIBOR
shall be suspended. If any Participating Bank shall determine that it
may not lawfully continue to maintain and fund any of its outstanding
Drawing Loans bearing interest at LIBOR to maturity and shall so
specify in such notice, the Company shall immediately prepay in full
the then outstanding principal amount of each such Drawing Loan bearing
interest at LIBOR, together with accrued interest thereon. Concurrently
with prepaying each such Drawing Loan, the Company may borrow a Drawing
Loan at the Base Rate in an equal principal amount for a period
coincident with the remaining term of the Interest Period applicable to
such Drawing Loan.
SECTION 2.17 RESCISSION OF PAYMENTS.
If, following the payment of any Reimbursement Obligation or any interest
thereon by the Company to the Administrative Agent pursuant to Section 2.6, any
portion of such Reimbursement Obligation and/or interest shall he rescinded or
must otherwise be restored by the Issuing Bank, then each Participating Bank,
upon notice to it by the Administrative Agent of such rescission or restoration,
shall pay to the Administrative Agent its Commitment Percentage of the amount so
rescinded or restored.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO ISSUANCE OF LETTER OF CREDIT.
As conditions precedent to the obligation of the Issuing Bank to issue the
Letter of Credit:
(a) the Company shall provide to the Administrative Agent
on or before the Date of Issuance, in form and substance satisfactory
to the Administrative Agent and its counsel:
(i) a written opinion of counsel to the Company
dated the Date of Issuance;
(ii) the written opinion of Bond Counsel, dated
the Date of Issuance;
(iii) a certificate of the Company signed by an
authorized officer of the Company, dated the Date of Issuance
and stating that:
(A) the representations and warranties of the
Company contained in Article IV are correct
on and as of the Date of Issuance as though
made on such date;
(B) no Event of Default has occurred and is
continuing, or would result from the
issuance of the Letter of Credit or the
execution and
-17-
delivery of this Agreement, and no event has
occurred and is continuing which would
constitute an Event of Default or a
Potential Default; and
(C) no event of default has occurred or is
continuing on the part of the Company under
any of its existing debt agreements.
(iv) a copy of resolutions of the board of
directors (or a committee thereof) of the Company certified as
of the Date of Issuance by the Secretary or an Assistant
Secretary of the Company, authorizing, among other things, the
execution, delivery and performance by the Company of this
Agreement and authorizing the Company to obtain the issuance
of the Letter of Credit and to borrow Drawing Loans;
(v) certified copies of the Company's by-laws and
articles of incorporation;
(vi) a certificate of the Secretary or any
Assistant Secretary of the Company certifying the name and
true signatures of the officers of the Company authorized to
sign this Agreement;
(vii) evidence of the status of the Company as a
duly organized and validly existing corporation under the laws
of the State of Minnesota;
(viii) evidence that the Remarketing Agent has
acknowledged and accepted in writing its appointment as
Remarketing Agent under the Indenture and its duties and
obligations thereunder;
(ix) true and correct copies of the Related
Documents;
(x) reliance letters with respect to the opinion
delivered in connection with (ii) above; and
(xi) such other documents, certificates and
opinions as the Administrative Agent or its counsel may
reasonably request;
(b) no law, regulation or ruling of the United States or
any political subdivision or authority therein or thereof shall be in
effect or shall have occurred, the effect of which would be to prevent
any Bank from fulfilling its obligations under this Agreement; and
(c) all legal requirements provided herein incident to
the execution, delivery and performance of this Agreement and the
Related Documents and the transaction contemplated hereby and thereby,
shall be reasonably satisfactory to the Administrative Agent and its
counsel.
-18-
SECTION 3.2 CONDITIONS PRECEDENT TO DRAWING LOANS.
Upon payment by the Issuing Bank of any drawing under the Letter of Credit, such
drawing shall constitute a Drawing Loan to the Company only if on the date of
payment of such drawing the following statements shall be true:
(a) the representations and warranties of the Company
contained in Article IV are correct in all material respects on and as
of the date of such payment as though made on and as of such date;
PROVIDED, HOWEVER, with respect to subsection 4.1(e) the references
shall be deemed to refer to the Company's most recent annual report
filed on Form 10-K and 10-Q and with respect to subsection 4.1(h), the
references shall be deemed to be with respect to the consolidated
financial statements of the Company and its consolidated subsidiaries
contained in the Company's most recent annual report filed on Form 10-K
and the most recent quarterly report filed on Form 10-Q, as applicable;
and
(b) no event has occurred and is continuing, or would
result from such payment, which constitutes a Potential Default or
Event of Default.
Unless the Company shall have previously advised the Administrative Agent in
writing that one or both of the above statements is no longer true, the Company
shall be deemed to have represented and warranted on the date of such payment
that both of the above statements are true and correct.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 COMPANY'S REPRESENTATIONS.
In order to induce the Banks to enter into this Agreement, the Company
represents and warrants as of the Date of Issuance that:
(a) The Company is duly incorporated, validly existing
and in good standing under the laws of the State of Minnesota, has all
requisite power and authority to own its property and to carry on its
business as now conducted, and is in good standing and authorized to do
business in each jurisdiction in which the character of the property
owned or leased by it therein or the transaction of its business makes
such qualification necessary and where failure to so qualify could
reasonably (either individually or in the aggregate) result in a
Material Adverse Change.
(b) The Company has full corporate power and authority to
enter into, execute, deliver and carry out its obligations under this
Agreement and the Related Documents to which the Company is a party,
and to incur the obligations provided for herein and therein, all of
which have been duly authorized by all proper and necessary corporate
action and are in full compliance with the Company's articles of
incorporation and by-laws. No consent or approval of, or exemption by,
or notice to or filing with any Person is required in respect of the
Company to authorize the execution, delivery and performance of, or as
a condition to the validity or enforceability of, this Agreement, the
-19-
Related Documents to which the Company is a party or any other
agreement of the Company delivered in connection herewith or therewith,
except those which have been obtained and except those which are
required under the securities or blue sky laws of any jurisdiction.
Without limiting the generality of the foregoing, the MPUC has issued
its Authorizing Order authorizing the issuance of securities of the
Company and the incurrence by the Company of debt so long as (1) the
Company's total capitalization does not exceed $1,690,000,000 (or any
higher amount so long as total capitalization does not exceed
$1,690,000,000 for more than 60 days without prior MPUC approval) and
(2) the Company's equity ratio falls in the range between 49.27 and
66.65 percent (or any higher or lower percentages so long as the equity
ratio does not deviate from this range for more than 60 days without
prior MPUC approval). Such Authorizing Order is in effect through the
earlier of (i) April 30, 2007, or (ii) the date at which a subsequent
Authorizing Order is issued. The L/C Obligations incurred hereunder
will constitute debt for purposes of such Authorizing Order. As of the
date hereof, the Company's total capitalization (including Obligations
hereunder in an aggregate amount equal to the aggregate L/C
Commitments) does not exceed $1,690,000,000 and Company's equity ratio
is within the range of 49.27 to 66.65 percent.
(c) The officers of the Company who have executed this
Agreement, who have requested the issuance of the Letter of Credit and
who have executed or will execute the Related Documents to which the
Company is a party and all other documents, instruments and agreements
required to be delivered or contemplated hereunder or thereunder was
and are properly in office and was and are duly authorized to execute
the same.
(d) This Agreement and the Related Documents to which the
Company is a party each constitutes the valid and legally binding
obligations of the Company enforceable in accordance with their terms
except that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, or other laws affecting the enforcement of
creditors' rights generally and by equitable principles.
(e) Except as disclosed in the Company's Annual Report on
Form 10-K for the year ended December 31, 2005 and the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2006,
there are no actions, suits or arbitration proceedings pending or, to
the knowledge of the Company, threatened against the Company, at law or
in equity, before any Governmental Body which individually or in the
aggregate, if adversely determined, would materially and adversely
affect the financial condition of the Company or materially impair the
ability of the Company to perform its obligations under this Agreement,
the Related Documents to which the Company is a party, or any other
document, instrument or agreement required to be delivered or
contemplated hereunder or thereunder. There are no proceedings pending
or, to the knowledge of the Company, threatened against the Company
which call into question the validity or enforceability of this
Agreement, the Related Documents to which the Company is a party or any
agreement of the Company delivered in connection herewith or therewith.
-20-
(f) The execution, delivery and performance by the
Company of this Agreement and the Related Documents to which the
Company is a party (i) do not violate any provision of the articles of
incorporation or by-laws of the Company, (ii) do not violate any order,
decree or judgment, or any provision of any statute, rule or regulation
applicable to or binding on the Company or affecting any of its
property, (iii) do not violate or conflict with, result in a breach of
or constitute (with notice or lapse of time, or both) a default under
any shareholder agreement or stock preference agreement or under any
material mortgage, indenture, contract or other agreement to which the
Company is a party or by which any of its property is bound and (iv) do
not result in the creation or imposition of any lien upon any material
property of the Company.
(g) The Company has filed all United States tax returns
and all other tax returns, if any, which are required to be filed by
the Company, and has paid all taxes due, if any, as shown on said
returns, or pursuant to any assessment received by the Company, except
such taxes, if any, as are being contested in good faith and by
appropriate proceedings.
(h) The consolidated financial statements of the Company
and its consolidated subsidiaries as of December 31, 2004 and December
31, 2005 contained in the Company's Annual Report on Form 10-K for the
years ended on those dates, copies of which have been furnished to the
Banks, present fairly the consolidated financial position of the
Company and its Consolidated Subsidiaries as of those dates and the
results of their operations for the two years ended December 31, 2005,
in conformity with generally accepted accounting principles
consistently applied. The consolidated financial statements contained
in the Company's Quarterly Reports on Form 10-Q for the quarter ended
March 31, 2006, copies of which have been furnished to the Bank,
present fairly the consolidated financial position of the Company and
its Consolidated Subsidiaries as of the dates thereof and have been
prepared in conformity with generally accepted accounting principles
applied on the basis consistent with that used in the audited
consolidated financial statements for the year ended December 31, 2005
(subject to normal year-end and audit adjustments). The Company has no
contingent liabilities which are required by generally accepted
accounting principles to be shown on the financial statements of the
Company other than as indicated on said financial statements and since
December 31, 2005, there has been no Material Adverse Change.
(i) To the best knowledge of the Company, the Company is
not in default with respect to any judgment, order, writ, injunction,
decree or decision of any Governmental Body which default could
reasonably constitute, cause or result in a Material Adverse Change.
(j) The Company is not engaged principally, or as one of
its important activities, in the business of extending credit for the
purpose of purchasing or carrying any margin stock within the meaning
of Regulation U. No part of the proceeds of the Bonds or any Drawing
Loan will be used, directly or indirectly, by the Company for a purpose
which violates any law, rule, or regulation of any Governmental Body,
including, without limitation, the provisions of Regulation U or X of
the Board of Governors of the Federal Reserve System, as amended.
-21-
(k) No Potential Default or Event of Default has occurred
and is continuing or would result from the obligations incurred by the
Company hereunder or by the actions contemplated hereby.
(l) The representations and warranties of the Company in
the Related Documents to which it is a party are true and correct in
every material respect, and the Company has furnished the
Administrative Agent a true and correct copy of all the Related
Documents as in effect on the date hereof.
(m) In the ordinary course of its business, the Company
conducts an ongoing review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
Subsidiaries, in the course of which it identifies and evaluates
liabilities and costs arising under or imposed by Environmental Laws
(including, without limitation, any capital or operating expenditures
required for clean-up or closure of properties presently or previously
owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by
Environmental Law, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or
reduction in the level of or change in the nature of operations
conducted in such place, any costs or liabilities in connection with
off-site disposal of wastes or Hazardous Substances, and any actual or
potential liabilities to third parties, including employees). On the
basis of this review, the Company has no reason to conclude that such
liabilities and costs arising under, including the costs of compliance
with, Environmental Laws, could reasonably constitute, cause or result
in a Material Adverse Change.
(n) No Plan has been terminated nor have any proceedings
been instituted to terminate any Plan; the Company has not withdrawn
from any Multiemployer Plan in a complete or partial withdrawal nor has
a condition occurred which if continued would result in a complete or
partial withdrawal; the Company has not incurred any withdrawal
liability under Section 4201 or 4204 of ERISA with respect to any
Multiemployer Plan; the Company has not incurred any liability to PBGC
other than for required insurance premiums which have been paid when
due; no Reportable Event with respect to any Plan has occurred; and no
Plan has an accumulated funding deficiency under Section 302 of ERISA
or Section 412 of the Code. Each employee benefit plan (as defined in
Section 3(3) of ERISA) maintained by the Company is in compliance with
ERISA, except where the failure so to comply could not reasonably
constitute, cause or result in a Material Adverse Change.
ARTICLE V
COVENANTS
The Company covenants and agrees with the Banks that it will do the following so
long as any amounts may be drawn under the Letter of Credit, and thereafter, so
long as any amounts remain outstanding or Obligations remain unfulfilled under
this Agreement, unless the Majority Participating Banks shall otherwise consent
in writing:
-22-
SECTION 5.1 INFORMATION.
The Company will deliver to each Bank:
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Company, the annual report of
the Company and its Subsidiaries filed with the Commission on Form 10-K
for such year, together with a certificate of the treasurer, chief
financial officer or controller of the Company showing the Company's
compliance with Section 5.9 hereof;
(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of the Company, the quarterly report of the Company and its
Subsidiaries filed with the Commission on Form 10-Q for such quarter,
together with a certificate of the treasurer, chief financial officer
or controller of the Company showing the Company's compliance with
Section 5.9 hereof;
(c) within five days after any officer of the Company
obtains knowledge of any Potential Default or Event of Default, if such
Potential Default or Event of Default is then continuing, a certificate
of the treasurer or the controller of the Company setting forth the
details thereof and the action which the Company is taking or proposes
to take with respect thereto;
(d) promptly upon the mailing thereof to the shareholders
of the Company, copies of all financial statements, reports and proxy
statements so mailed;
(e) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Form 8-K (or its equivalent) which the Company shall have filed with
the Commission;
(f) if and when any member of the Controlled Group (i)
gives notice to the PBGC of any "REPORTABLE EVENT" with respect to any
Plan which might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of any
Plan has given notice of any such Reportable Event, a copy of the
notice of such Reportable Event given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Section 4201 or 4204
of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated under Section 4241, 4245 or 4041A of
ERISA, a copy of such notice; (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of or appoint
a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the
Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or makes any amendment to any Plan which has
resulted or which may reasonably be expected to result in the
-23-
imposition of a lien or the posting of a bond or other security under
Section 401(a)(29) or 412(n) of the Code, or Section 302(f) or 307 of
ERISA, a certificate of the chief financial officer or the chief
accounting officer of the Company setting forth details as to such
occurrence and action, if any, which the Company or applicable member
of the Controlled Group is required or proposes to take;
(g) from time to time such additional information
regarding the financial position or business of the Company and its
Subsidiaries as the any Bank may reasonably request;
(h) (i) copies of each of the notices, reports and
certificates which are required to be given to the Trustee by the
Company under any of the Bond Documents and (ii) upon request of any
Bank, copies of each of the notices, reports and certificates which are
required to be given to the holders of the Bonds by the Trustee under
the Indenture to the extent (A) received by the Company and (B) not
delivered to the Banks by the Trustee; and
(i) as promptly as possible and in any event within ten
Business Days after the Company has knowledge thereof, notice of any
downgrade in the S&P Rating or the Moody's Rating.
SECTION 5.2 MAINTENANCE OF PROPERTY; INSURANCE.
(a) The Company will keep, and will cause each of its
Subsidiaries to keep, all property useful and necessary in its business
in good working order and condition, ordinary wear and tear excepted.
(b) The Company will, and will cause each of its
Subsidiaries to, maintain (either in the name of the Company or in such
Subsidiary's own name) with financially sound and responsible insurance
companies, insurance on all their properties in at least such amounts,
against at least such risks and with no greater than such risk
retention as are customarily maintained, insured against or retained,
as the case may be, in the same general area by companies of
established repute engaged in the same or a similar business; and will
furnish to the Administrative Agent, upon reasonable request from the
Administrative Agent, information presented in reasonable detail as to
the insurance so carried.
SECTION 5.3 MAINTENANCE OF EXISTENCE.
The Company will preserve, renew and keep in full force and effect, and will
cause each Material Subsidiary to preserve, renew and keep in full force and
effect their corporate existence and their rights, privileges and franchises
necessary or desirable in the normal conduct of business; PROVIDED that neither
the Company nor any Material Subsidiary shall be required to preserve any such
right, privilege or franchise if the Company's or such Subsidiary's Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company or such Subsidiary; and PROVIDED
FURTHER that nothing in this Section 5.3 shall prohibit (i) any transaction
expressly permitted under Section 5.8, (ii) the merger of a Subsidiary into the
Company or the merger or consolidation of a Subsidiary with or into another
-24-
Person if the corporation surviving such consolidation or merger is a Subsidiary
and if, in each case, after giving effect thereto, no Event of Default shall
have occurred and be continuing, (iii) the transfer of assets, rights,
privileges, licenses, franchises or businesses from one Subsidiary to another
Subsidiary or (iv) the termination of the corporate existence of any Subsidiary
if the Company in good faith determines that such termination is in the best
interest of the Company and is not materially disadvantageous to the Issuing
Bank or the Participating Banks.
SECTION 5.4 COMPLIANCE WITH LAWS.
The Company will comply, and cause each Subsidiary to comply, in all material
respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder) except
where the necessity or fact of compliance therewith is contested in good faith
by appropriate proceedings.
SECTION 5.5 INSPECTION OF PROPERTY, BOOKS AND RECORDS.
The Company will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives of the
Administrative Agent at the Administrative Agent's expense to visit and inspect
any of their properties, to examine and make abstracts from any of their books
and records and to discuss their affairs, finances and accounts with their
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be desired.
SECTION 5.6 USE OF PROCEEDS.
None of the proceeds of any drawing under the Letter of Credit will be used,
directly or indirectly, by the Company for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any "margin stock" within the
meaning of Regulation U.
SECTION 5.7 NEGATIVE PLEDGE.
The Company will not create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except (a) liens in existence on the date
hereof and set forth on SCHEDULE 5.7, (b) Liens created pursuant to the First
Mortgage and (c) other liens so long as the amount secured by such other liens
does not exceed, in the aggregate, five percent (5%) of Funded Debt.
SECTION 5.8 PROHIBITION OF FUNDAMENTAL CHANGES.
The Company shall not:
(a) enter into any transaction of merger or consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution); or
-25-
(b) 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 Majority Participating Banks, which consent
shall not be unreasonably withheld.
Notwithstanding the foregoing provisions of this Section 5.8, 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.
SECTION 5.9 MAXIMUM RATIO OF FUNDED DEBT TO TOTAL CAPITAL.
The Company shall maintain a maximum ratio of Funded Debt to Total Capital of
..65 to 1.0.
SECTION 5.10 BOND DOCUMENTS.
The Company will perform and comply in all material respects with all terms,
covenants and conditions of each of the Bond Documents to which it is a party.
SECTION 5.11 OFFICIAL STATEMENT.
The Company will not refer to the Issuing Bank in any representation, official
statement or offering memorandum, except for the Official Statement, or make any
changes in reference to the Issuing Bank in any revision of the Official
Statement or other remarketing materials for the Bonds, except for updated
descriptions provided by the Issuing Bank. The Administrative Agent shall use
reasonable efforts to provide the Company information necessary to update the
description of the Issuing Bank in the Official Statement or such marketing
materials.
SECTION 5.12 OPTIONAL REDEMPTIONS.
The Company will not permit an optional redemption or purchase for purposes of
cancellation of the Bonds, without the prior written consent of the Majority
Participating Banks; PROVIDED, HOWEVER, that if the Company has deposited with
the Issuing Bank or the Trustee an amount equal to the principal amount of the
Bonds to be redeemed or purchased, the Participating Banks shall consent to such
optional redemption or purchase to the extent of such amounts.
SECTION 5.13 CONVERSION.
The Company shall not (i) convert the Bonds to a Fixed Rate without giving the
Issuing Bank at least 30 days' prior written notice, or (ii) cause the Bonds to
bear interest at the Commercial Paper Rate or Long-Term Rate without a letter of
credit securing the Bonds without giving the Issuing Bank at least 30 days'
prior written notice.
SECTION 5.14 PARI PASSU.
The Obligations hereunder shall rank PARI PASSU with all of the Company's other
senior unsecured indebtedness.
-26-
SECTION 5.15 PATRIOT ACT COMPLIANCE
The Company will ensure that no person who owns a controlling interest in or
otherwise controls the Company or any Subsidiary is or shall be (i) listed on
the Specially Designated Nationals and Blocked Person List maintained by the
Office of Foreign Assets Control ("OFAC"), Department of the Treasury, and/or
any other similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (ii) a person designated under Section 1(b),
(c) or (d) of Executive Order No. 13224 (September 23, 2001), any related
enabling legislation or any other similar Executive Orders, (c) without limiting
clause (a) above, comply, and cause the Company and each Subsidiary to comply,
with all applicable Bank Secrecy Act ("BSA") and anti-money laundering laws and
regulations.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT.
"EVENT OF DEFAULT", wherever used herein, means any one of the following events:
(a) any material representation or warranty made by the
Company in this Agreement or the Bond Documents or in any certificate,
agreement, instrument or statement contemplated by or made or delivered
pursuant to or in connection herewith or therewith, shall prove to have
been false or misleading in any material respect when made;
(b) an Event of Default (as defined in any Related
Document)shall have occurred;
(c) default in payment by the Company of (i) any
Obligations (other than interest or any Letter of Credit Fee) required
to be paid or reimbursed under this Agreement to any Bank when and as
the same shall become due and payable as herein provided (or, to the
extent that such Obligations are payable on demand, on demand)or (ii)
any interest or Letter of Credit Fee within five days after the same is
due (or, to the extent that such interest is payable on demand, on
demand);
(d) default in any respect in the due observance or
performance by the Company of any covenant set forth in Section 5.7,
5.8, 5.9, 5.12 or 5.13;
(e) default in any material respect in the due observance
or performance by the Company of any other term, covenant or agreement
set forth in this Agreement and such default has not been remedied
within 30 days after receiving notice from the Administrative Agent;
(f) any material provision of this Agreement, or any of
the Bond Documents shall cease to be valid and binding, or the Company
or any governmental authority shall contest the validity or binding
effect of any such provision, or the Company, or any agent
-27-
or trustee on behalf of the Company, shall deny that the Company has
any or further liability under this Agreement or any of the Bond
Documents;
(g) (i) the Company makes an assignment for the benefit
of creditors, files a petition in bankruptcy, is unable generally to
pay its debts as they come due, is adjudicated insolvent or bankrupt or
there is entered any order or decree granting relief in any involuntary
case commenced against the Company under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or (ii) the
Company petitions or applies to any tribunal for any receiver, trustee,
liquidator, assignee or custodian or other similar official of the
Company, or commences any proceeding in a court of law for a
reorganization, arrangement, dissolution, liquidation or other similar
procedure under any bankruptcy law or laws for the relief of debtors,
whether now or hereafter in effect, or (iii) there is commenced against
the Company any such proceeding in a court of law which remains
undismissed or shall not be discharged, vacated or stayed, or such
jurisdiction shall not be relinquished, within 60 days after
commencement, or the Company by any act, indicates its consent to,
approval of, or acquiescence in any such proceeding in a court of law,
or to an order for relief in an involuntary case commenced against the
Company under any such law, or the appointment of any receiver,
trustee, liquidator, assignee, custodian or other similar official for
the Company, or (iv) the Company suffers any such receivership,
trusteeship, liquidation, assignment or custodianship or other similar
procedure to continue undischarged for a period of 60 days after
commencement or if the Company takes any action for the purposes of
effecting the foregoing;
(h) the maturity of any indebtedness of the Company under
any agreement or obligation in an aggregate principal amount exceeding
$20,000,000 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;
(i) judgments or orders for the payment of money in
excess of $20,000,000 shall be rendered against the Company and such
judgments or orders shall continue unsatisfied and unstayed for a
period of 30 days;
(j) the Trustee shall fail to have a valid and
enforceable pledge and assignment of the Trust Estate; or
(k) the institution by the Company of steps to terminate
any Plan if in order to effectuate such termination, the Company would
have to make a contribution to such Plan, or would incur a liability or
obligation to such Plan in excess of $1,000,000 or the institution by
the PBGC of steps to terminate any Plan.
-28-
SECTION 6.2 REMEDIES.
Upon the occurrence of any Event of Default, the Administrative Agent may and,
at the written request of the Majority Participating Banks, shall, exercise any
one or more of the following rights and remedies in addition to any other
remedies herein or by law provided:
(a) by notice to the Company, require that the Company
immediately pay to the Administrative Agent, in immediately available
funds, for deposit in one or more accounts to be maintained by the
Administrative Agent (collectively, the "SPECIAL DEPOSIT ACCOUNT"), an
amount equal to the Available Amount (such amount to be held by the
Administrative Agent in accordance with Section 6.3); PROVIDED,
HOWEVER, that in the case of an Event of Default described in Section
6.1(g), the Company shall pay such amount to the Administrative Agent
immediately, without any notice;
(b) without limiting the right of the Administrative
Agent to demand payment of certain Obligations at any time, declare the
principal of and interest on the Obligations owing hereunder
immediately due and payable, and such amounts shall thereupon become
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Company; PROVIDED, HOWEVER, that upon the occurrence of an Event of
Default under Section 6.1(g) such acceleration shall automatically
occur;
(c) give notice of the occurrence of an Event of Default
to the Trustee and instruct the Trustee to accelerate the Bonds;
(d) pursue any rights and remedies it may have under the
Related Documents; or
(e) pursue any other remedy available at law or in
equity.
SECTION 6.3 PLEDGE OF SPECIAL DEPOSIT ACCOUNT.
The Company hereby pledges, and grants the Administrative Agent, as agent for
the Issuing Bank and the Participating Banks, a security interest in, all sums
held in the Special Deposit Account from time to time and all proceeds thereof
as security for the payment of the Obligations. The Administrative Agent may, at
any time and from time to time, apply funds then held in the Special Deposit
Account to the payment of such Obligations (in such order as the Administrative
Agent may elect) as shall have become or shall become due and payable by the
Company to the Banks under this Agreement. Following expiration of the Letter of
Credit in accordance with its terms, and the payment of all amounts payable by
the Company to the Banks under this Agreement, any funds remaining in the
Special Deposit Account shall be returned by the Administrative Agent to the
Company or paid to whomever may be legally entitled thereto. The Administrative
Agent shall have full ownership and control of the Special Deposit Account, and,
except as set forth in the preceding sentence, the Company shall have no right
to withdraw the funds maintained in the Special Deposit Account.
-29-
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 TAXES.
(a) For the purposes of this Section 7.1, the following
terms have the following meanings:
"TAXES" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with
respect to any payment by the Company pursuant to this
Agreement and all penalties and interest with respect thereto,
excluding (i) taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the laws
of which any Bank is organized or in which its principal
executive office is located, in which its applicable lending
office is located or in which it would be subject to tax due
to some connection other than that created by this Agreement
and (ii) any United States withholding tax imposed on such
payments but only to the extent that such Bank is subject to
United States withholding tax on the Date of Issuance.
"OTHER TAXES" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar
charges or levies and all penalties and interest with respect
thereto, which arise from the making of any payment pursuant
to this Agreement or from the execution or delivery of this
Agreement or the Letter of Credit.
(b) Any and all payments by the Company to or for the
account of any Bank hereunder shall be made without deduction for any
Taxes or Other Taxes; PROVIDED that, if the Company shall be required
by law to deduct any Taxes or Other Taxes from any such payments, (i)
the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional
sums payable under this Section) the applicable Bank receives an amount
equal to the sum it would have received had no such deductions been
made, (ii) the Company shall make such deductions, (iii) the Company
shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the
Company shall furnish to the Banks, the original or a certified copy of
a receipt evidencing payment thereof.
(c) The Company agrees to indemnify each Bank for the
full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes on amounts payable under this Section) paid by
such Bank. This indemnification shall be paid within 15 days after any
Bank makes appropriate demand therefor.
(d) On or prior to the date of its execution and delivery
of this Agreement, and from time to time thereafter if requested in
writing by the Company (but only so long as each Bank remains lawfully
able to do so), each Bank shall provide the Company with Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to
-30-
benefits under an income tax treaty to which the United States is a
party which exempts such Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the
account of such Bank or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct of a trade
or business in the United States.
(e) For any period with respect to which any Bank has
failed to provide the Company with the appropriate form pursuant to
Section 7.1(d) (unless such failure is due to a change in treaty, law
or regulation occurring subsequent to the date on which such form
originally was required to be provided), such Bank shall not be
entitled to indemnification under Section 7.1(b) or (c) with respect to
Taxes imposed by the United States; PROVIDED that, if such Bank, which
is otherwise exempt from or subject to a reduced rate of withholding
tax, becomes subject to Taxes because of its failure to deliver a form
required hereunder, the Company shall take such steps (at the expense
of such Bank) as such Bank shall reasonably request to assist such Bank
to recover such Taxes.
(f) If the Company is required to pay additional amounts
to or for the account of any Bank pursuant to this Section, then such
Bank will change the jurisdiction of its applicable lending office if,
in the judgment of such Bank, such change (i) will eliminate or reduce
any such additional payment which may thereafter accrue and (ii) is not
otherwise disadvantageous to such Bank in its sole judgment.
SECTION 7.2 INCREASED COSTS.
(a) If after the Date of Issuance any change in any
applicable law, treaty, regulation, guideline or directive (including,
without limitation, regulations and guidelines with respect to capital
adequacy and Regulation D promulgated by the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in
effect) or any new law, treaty, regulation, guideline or directive, or
any interpretation of any of the foregoing by any authority charged
with the administration or interpretation thereof or any central bank
of other fiscal, monetary or other authority having jurisdiction over
any Bank or the transactions contemplated by this Agreement (whether or
not having the force of law) (all of the foregoing being referred to as
a "REGULATORY CHANGE") shall:
(i) subject such Bank to any tax, deduction or
withholding with respect to the Bonds, the Letter of Credit or
this Agreement, or any amount paid or to be paid by such Bank
as the issuer of the Letter of Credit (other than any tax
measured by or based upon the overall net income of such Bank
imposed by any jurisdiction having control over such Bank);
(ii) impose, modify, require, make or deem
applicable to any Bank, any reserve requirement (other than
reserves against "EUROCURRENCY LIABILITIES" under paragraph
(b) below), capital requirement, special deposit requirement,
insurance assessment or similar requirement against any assets
held by, deposits with or for the account of, or loans,
letters of credit or commitments by, an office of such Bank;
-31-
(iii) change the basis of taxation of payments due
any Bank under this Agreement or the Bonds (other than by a
change in taxation of the overall net income of such Bank);
(iv) cause or deem letters of credit to be assets
held by such Bank and/or as deposits on its books; or
(v) impose upon such Bank any other condition
with respect to such amount paid or payable to or by such Bank
or with respect to this Agreement, the Letter of Credit or the
Bonds;
and the result of any of the foregoing is to increase the cost to any
Bank of making any payment or maintaining the Letter of Credit, or to
reduce the amount of any payment (whether of principal, interest or
otherwise) receivable by such Bank, or to reduce the rate of return on
the capital of such Bank (taking into consideration such Bank's
policies with respect to capital adequacy) or to require such Bank to
make any payment on or calculated by reference to the gross amount of
any sum received by it, or to increase the cost to such Bank of making
or maintaining any Drawing Loan at LIBOR, or to reduce the amount of
any sum received or receivable by such Bank under this Agreement with
respect thereto, in each case by an amount which such Bank in its
reasonable judgment deems material, then:
(A) such Bank shall promptly notify the Company
in writing of the happening of such event
and will designate a different lending
office if such designation will avoid the
need for, or reduce the amount of such
compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous
to such Bank;
(B) such Bank shall promptly deliver to the
Company a certificate stating the change
which has occurred or the reserve
requirements or other costs or conditions
which have been imposed on such Bank or the
request, direction or requirement with which
it has complied, together with the date
thereof, the amount of such increased cost,
reduction or payment and a reasonably
detailed description of the way in which
such amount has been calculated, and such
Bank's determination of such amounts, absent
fraud or manifest error, shall be conclusive
(in determining such amount, such Bank may
use any reasonable averaging and attribution
methods); and
(C) the Company shall pay to each Bank, from
time to time as specified by such Bank, such
amount as will compensate such Banks, for
such additional cost, reduction or payment.
The protection of this paragraph shall be available to each Bank
regardless of any possible contention of invalidity or inapplicability
of the law, regulation or condition which has been imposed; PROVIDED,
HOWEVER, that if it shall later be determined by such
-32-
Bank that any amount so paid by the Company pursuant to this Section
7.2 is in excess of the amount payable under the provisions hereof,
such Bank shall refund such excess amount to the Company.
(b) Without limiting the effect of the foregoing, the
Company shall pay to the Issuing Bank and each Participating Bank on
the last day of each Interest Period so long as such Bank is
maintaining reserves against "EUROCURRENCY LIABILITIES" under
Regulation D (or so long as such Bank is, by reason of any Regulatory
Change, maintaining reserves against any other category of liabilities
that includes deposits by reference to which the interest rate on
Drawing Loans bearing interest at LIBOR is determined as provided in
this Agreement or against any category of extensions of credit or other
assets of such Bank that includes any Drawing Loans bearing interest at
LIBOR) an additional amount (determined by such Bank and notified to
the Company) equal to the product of the following for each such
Drawing Loan for each day during such Interest Period:
(i) the principal amount of such Drawing Loan
outstanding on such day;
(ii) the remainder of (x) a fraction the numerator
of which is the rate (expressed as a decimal) at which interest accrues
on such Drawing Loan for such Interest Period as provided in this
Agreement and the denominator of which is one minus the effective rate
(expressed as a decimal) at which such reserve requirements are imposed
on such Bank on such day minus (y) such numerator; and
(iii) 1/360.
SECTION 7.3 RIGHT OF SETOFF; OTHER COLLATERAL.
(a) In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Bank is hereby
authorized by the Company at any time or from time to time, without
notice to the Company or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or
unmatured, and in whatever currency denominated) and any other
indebtedness at any time held or owing by such Bank or that subsequent
holder to or for the credit or the account of the Company, whether or
not matured, against and on account of the obligations and liabilities
of the Company to such Bank or that subsequent holder hereunder,
including, but not limited to, all claims of any nature or description
arising out of or connected with this Agreement and the Related
Documents, irrespective of whether or not (a) the Administrative Agent
shall have made any demand hereunder or (b) the principal or the
interest on the Drawing Loans and other amounts due hereunder shall
have become due and payable and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
-33-
(b) Each of the Issuing Bank and each Participating Bank
agrees with each other party hereto that if such Bank shall receive and
retain any payment, whether by set-off or application of deposit
balances or otherwise, hereunder in excess of its ratable share of
payments on all such obligations then outstanding to the Banks, then
such Bank shall purchase for cash at face value, but without recourse,
ratably from each of the other Banks such amount of the Obligations, or
participations therein, held by each such other Banks (or interest
therein) as shall be necessary to cause such Bank to share such excess
payment ratably with all the other Banks; PROVIDED, HOWEVER, that if
any such purchase is made by any Bank, and if such excess payment or
part thereof is thereafter recovered from such purchasing Bank, the
related purchases from the other Banks shall be rescinded ratably and
the purchase price restored as to the portion of such excess payment so
recovered, but without interest.
(c) The rights of any Bank under this Section 7.3 are in
addition to, in augmentation of, and, except as specifically provided
in this Section 7.3, do not derogate from or impair other rights and
remedies (including, without limitation, other rights of setoff) which
such Bank may have.
SECTION 7.4 INDEMNITY; COSTS AND EXPENSES.
(a) The Company hereby agrees to indemnify each Bank, its
affiliates and the respective directors, officers, agents and employees
of the foregoing (each an "INDEMNITEE") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by
such Indemnitee in connection with any investigative, administrative or
judicial proceeding (whether or not such Indemnitee shall be designated
a party thereto) brought or threatened relating to this Agreement, the
Letter of Credit, the Drawing Loans, any drawing under the Letter of
Credit or any actual or proposed use of proceeds of the drawings under
the Letter of Credit; except, only if, and to the extent that any such
claim, damage, loss, liability, cost or expense shall be caused by the
willful misconduct or gross negligence of such Indemnitee in performing
or failing to perform its obligations under this Agreement or in making
payment against a drawing presented under the Letter of Credit which
does not comply with the terms thereof (it being understood and agreed
by the parties hereto that in making such payment the Issuing Bank's
exclusive reliance on the documents presented to the Issuing Bank in
accordance with the terms of the Letter of Credit as to any and all
matters set forth therein, whether or not any statement or any document
presented pursuant to the Letter of Credit proves to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein proves to be untrue or inaccurate in any respect whatsoever
shall not be deemed willful misconduct or gross negligence of the
Issuing Bank).
(b) The Company shall pay (i) all reasonable costs and
out-of-pocket expenses of the Issuing Bank and the Administrative
Agent, including, without limitation, costs in connection with the
negotiation, documentation and execution of this Agreement and any and
all documents, agreements and instruments related thereto, reasonable
fees and disbursements of special counsel for the Issuing Bank and the
Administrative Agent, in
-34-
connection with any waiver or consent hereunder or any amendment hereof
or any Potential Default or Event of Default hereunder and (ii) if an
Event of Default occurs, all reasonable out-of-pocket expenses incurred
by the Issuing Bank and the Administrative Agent, including (without
duplication) the reasonable fees and disbursements of outside counsel
and the allocated cost of inside counsel, in connection with such Event
of Default and investigation, collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom.
(c) The Company hereby agrees to indemnify, defend and
hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may
be incurred by such Indemnitee including reasonable expenses of
investigating a claim, arising out of or in any way connected with, or
as a result of the following:
(i) the issuance, offering and sale of the Bonds;
(ii) any acquisition or attempted acquisition of
stock or assets of another Person or entity by the Company, or
the use of any of the proceeds of any transaction contemplated
hereunder by the Company for the making or furtherance of any
such acquisition or attempted acquisition;
(iii) any breach or alleged breach by the Company
of, or any liability or alleged liability of the Company
under, any Environmental Laws, or any liability or alleged
liability incurred by any Indemnitee under any Environmental
Laws in connection with this Agreement, any Related Documents
or the transactions contemplated hereunder or thereunder;
(iv) the negotiation, preparation, execution,
delivery, administration, and enforcement of this Agreement,
the Related Documents and any other document required
hereunder or thereunder, including, without limitation, any
amendment, supplement, modification or waiver of or to any of
the foregoing or the consummation or failure to consummate the
transactions contemplated hereby or thereby, or the
performance by the parties of their obligations hereunder or
thereunder, and the transfer of or payment or failure to pay
under this Agreement or any of the Related Documents; or
(v) any claim, litigation, investigation or
proceedings related to any of the foregoing, whether or not
the Indemnitee is a party thereto;
PROVIDED, HOWEVER, that such indemnity shall not apply to any such losses,
claims, damages, liabilities or related expenses arising from (A) any unexcused
breach by the Administrative Agent of its obligations under this Agreement or
(B) any commitment made by the Administrative Agent to a person other than the
Company which would be breached by the performance of the obligations under this
Agreement. Nothing in this subsection is intended to limit the payment and
reimbursement obligations of the Company contained in this Agreement.
-35-
(d) The Company agrees to indemnify the Indemnitees and
each person, if any, who controls the Administrative Agent within the
meaning of the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, against all losses, claims, damages,
liabilities and expenses (including, without limitation, reasonable
attorneys' fees and expenses, including the fees and expenses of
in-house counsel, and including reasonable expenses of investigating a
claim) incurred by an indemnified party arising out of in any way
connected with, or as a result of:
(i) the assertion that any materials used in
connection with the offering and sale of the Bonds (except for
the materials provided by the Administrative Agent for such
use) contain an alleged untrue statement of a material fact or
an alleged omission to state any material fact necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading; or
(ii) the failure to register the Bonds under the
Securities Act of 1933, as amended, or to qualify the
Financing Agreement or the Indenture under the Trust Indenture
Act of 1939, as amended.
(e) The foregoing agreements and indemnities shall remain
operative and in full force and effect regardless of termination of
this Agreement, the consummation of or failure to consummate either the
transactions contemplated by this Agreement or any amendment,
supplement, modification or waiver, the drawing of any draft and
reimbursement of the Issuing Bank therefor, the invalidity or
unenforceability of any term or provision of this Agreement, any
Related Documents, or any other document required hereunder or
thereunder, any investigation made by or on behalf of the
Administrative Agent, or the Company or the content or accuracy of any
representation or warranty made under this Agreement, any Related
Documents or any other document required hereunder or thereunder.
SECTION 7.5 NON-CONTROLLED PERSONS,
The Issuing Bank does not control, either directly or indirectly through one or
more intermediaries, the Company. Nor does the Company control, either directly
or indirectly through one or more intermediaries, the Issuing Bank. The Issuing
Bank and the Company shall provide written notice to the Trustee, Remarketing
Agent and the Owners at least 30 days prior to the consummation of any
transaction that would result in the Company controlling or being controlled by
the Issuing Bank.
SECTION 7.6 OBLIGATIONS ABSOLUTE.
The obligations of the Company under this Agreement including, without
limitation, all fees to be paid hereunder, shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances whatsoever.
-36-
SECTION 7.7 LIABILITY OF THE ISSUING BANK.
The Company assumes all risks of the acts or omissions of the Trustee, the
Remarketing Agent, any Paying Agent or any agent of the Trustee, the Remarketing
Agent or any Paying Agent and any transferee of the Letter of Credit with
respect to their use of the Letter of Credit. Neither the Issuing Bank nor any
of its officers or directors shall be liable or responsible for (a) the use of
the Letter of Credit or for any acts or omissions of the Trustee and any
transferee in connection therewith, (b) the validity or genuineness of
documents, or of any endorsement thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, (c) payment by
the Issuing Bank against presentation of documents which do not comply with the
terms of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit, or (d) any other
circumstances whatsoever in making or failing to make payment under the Letter
of Credit; PROVIDED, HOWEVER, that the Company shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to the Company, to the extent
of any direct, as opposed to consequential, damages suffered by the Company
which the Company proves were caused by (i) the Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
the Letter of Credit comply with the terms of the Letter of Credit or (ii) the
Issuing Bank's wrongful failure to make lawful payment under the Letter of
Credit after the presentation to the Issuing Bank by the Trustee or a successor
trustee under the Indenture of a draft and certificate strictly complying with
the terms and conditions of the Letter of Credit (it being understood that in
making such payment the Issuing Bank's exclusive reliance on the documents
presented to the Issuing Bank in accordance with the terms of the Letter of
Credit as to any and all matters set forth therein, whether or not any statement
or any document presented pursuant to the Letter of Credit proves to forged,
fraudulent, invalid or insufficient in any respect or any statement whatsoever,
shall not be deemed willful misconduct or gross negligence of the Issuing Bank).
The Issuing Bank is hereby expressly authorized and directed to honor any demand
for payment which is made under the Letter of Credit without regard to, and
without any duty on its part to inquire into the existence of, any disputes or
controversies between the Issuer, the Company, the Remarketing Agent, the
Trustee, any Paying Agent, or any other person or the respective rights, duties
or liabilities of any of them, or whether any facts or occurrences represented
in any of the documents presented under the Letter of Credit are true and
correct.
SECTION 7.8 PARTICIPANTS, ETC.
(a) Each Participating Bank shall have the right at any
time, with the written consent of the Company (which consent shall not
be unreasonably withheld) and the Issuing Bank (which consent shall be
granted in the sole discretion of the Issuing Bank), to assign all or
any part of its L/C Commitment (including the corresponding portion of
its Commitment Percentage) to one or more other Persons; PROVIDED that
such assignment is in an amount of at least $5,000,000 or the entire
L/C Commitment of such Participating Bank, and if such assignment is
not for such Participating Bank's entire L/C Commitment then such
Participating Bank's L/C Commitment after giving effect to such
assignment shall not be less than $5,000,000. Each such assignment
shall set forth the assignees address for notices to be given
hereunder. Upon any such assignment, delivery to the Administrative
Agent of an executed copy of such assignment agreement and the forms
referred to in Section 7.1 hereof, if applicable, and the payment of a
$3,500 recordation
-37-
fee to the Administrative Agent, the assignee shall become a
Participating Bank hereunder, and the Participating Bank granting such
assignment shall have its L/C Commitment (including the corresponding
portion of its Commitment Percentage), and its obligations and rights
in connection therewith, reduced by the amount
of such assignment.
(b) Each Participating Bank shall have the right at its
own cost to grant participations (to be evidenced by one or more
agreements or certificates of participation) in the L/C Commitments,
and its corresponding participation obligation in the Letter of Credit,
held by such Participating Bank at any time; PROVIDED that (i) no such
participation shall relieve any Participating Bank of any of its
obligations under this Agreement, (ii) no such participant shall have
any rights under this Agreement except as provided in this Section
7.8(b), and (iii) neither the Issuing Bank nor the Administrative Agent
shall have any obligation or responsibility to such participant. Any
party to which such a participation has been granted shall have the
benefits of Sections 7.1, 7.2, 7.3, 7.4 and 7.15, but shall not be
entitled to receive any greater payment under such Sections than the
Participating Bank granting such participation would have been entitled
to receive in connection with the rights transferred. Any agreement
pursuant to which any Participating Bank may grant such a participating
interest shall provide that such Participating 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;
PROVIDED that such participation agreement may provide that such
Participating Bank will not agree to any modification, amendment or
waiver of this Agreement that would (A) increase or extend any L/C
Commitment of such Participating Bank if such increase or extension
would also increase or extend the participant's obligations, (B)
forgive any amount of or postpone the date for payment of any principal
of or interest on any Obligation payable hereunder in which such
participant has an interest or (C) reduce the stated rate at which
interest or fees in which such participant has an interest accrue
hereunder.
SECTION 7.9 SURVIVAL OF THIS AGREEMENT.
All covenants, agreements, representations and warranties made in this Agreement
shall survive the issuance by the Issuing Bank of the Letter of Credit and shall
continue in full force and effect so long as the Letter of Credit shall be
unexpired or any sums drawn or due hereunder shall be outstanding and unpaid,
regardless of any investigation made by any person. Wherever in this Agreement
the Issuing Bank is referred to, such reference shall be deemed to include the
successors and assigns of the Issuing Bank and all covenants, promises and
agreements by or on behalf of the Company which are contained in this Agreement
shall inure to the benefit of the successors and assigns of the Issuing Bank.
The rights and duties of the Company, however, may not he assigned or
transferred, except as specifically provided in this Agreement or with the prior
written consent of the Administrative Agent, and all obligations of the Company
hereunder shall continue in full force and effect notwithstanding any assignment
by the Company of any of its rights or obligations under any of the Bond
Documents or any entering into, or consent by the Company, to any supplement or
amendment to any of the Bond Documents.
-38-
SECTION 7.10 AMENDMENTS AND WAIVERS.
Neither this Agreement nor any other Financing Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this subsection. The Majority Participating Banks may, or, with,
but only with, the written consent of the Majority Participating Banks, the
Administrative Agent or the Issuing Bank, as applicable, may, from time to time,
(a) enter into with the Company written amendments, supplements or modifications
hereto and to the other Financing Documents for the purpose of adding any
provisions to this Agreement or the other Financing Documents or changing in any
manner the rights of the Participating Banks or of the Company hereunder or
thereunder or (b) waive, on such terms and conditions as the Majority
Participating Banks or the Administrative Agent, as the case may be, may specify
in such instrument, any of the requirements of an Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall, without the consent of each Participating
Bank, (i) reduce the amount or extend the scheduled date of maturity of any
Obligation or any installment thereof, or reduce the stated rate of any interest
or fee payable hereunder or extend the scheduled date of any payment thereof or
increase the amount or extend the Stated Expiration Date, in each case without
the consent of each Participating Bank affected thereby, or (ii) amend, modify
or waive any provision of this subsection or reduce the percentage specified in
the definition of Majority Participating Banks, or consent to the assignment or
transfer by the Company of any of its rights and obligations under this
Agreement and the other Financing Documents, in each case without the written
consent of all the Participating Banks, or (iii) amend, modify or waive any
provision of Article VIII or any provision hereunder affecting the rights or
obligations of the Issuing Bank without the written consent of the
Administrative Agent or the Issuing Bank, respectively. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Participating Banks and shall be binding upon the Company, the Participating
Banks, the Issuing Bank and the Administrative Agent. In the case of any waiver,
the Company, the Participating Banks, the Issuing Bank and the Administrative
Agent shall be restored to their former positions and rights hereunder and under
the other Financing Documents, and any Potential Default or Event of Default
waived shall be deemed to be cured and not continuing; no such waiver shall
extend to any subsequent or other Potential Default or Event of Default or
impair any right consequent thereon.
SECTION 7.11 WAIVER OF RIGHTS BY THE BANKS.
No course of dealing or failure or delay on the part of any Bank in exercising
any right, power or privilege hereunder or under the Letter of Credit shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise, or the exercise of any other right or
privilege. The rights of the Banks under this Agreement and the Letter of Credit
are cumulative and not exclusive of any rights or remedies which the Banks would
otherwise have.
SECTION 7.12 SEVERABILITY.
In case any one or more of the provisions contained in this Agreement shall be
held or deemed to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The
-39-
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 7.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Minnesota. The Company hereby submits to the nonexclusive
jurisdiction of the United States District Court for the District of Minnesota
and of any State court sitting in Hennepin County, Minnesota for purposes of all
legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
SECTION 7.14 NOTICES.
(a) Except as otherwise specified herein, all notices
hereunder shall be given by United States certified or registered mail,
by telegram or by other telecommunication device capable of creating
written record of such notice and its receipt. Notices hereunder shall
be effective when received and shall be addressed:
If to the Issuing Bank and/or the Administrative Agent, to
Wells Fargo Bank, National Association
MAC N9305-031
6th and Marquette Avenue
Minneapolis, MN 55479
Attention: Patrick McCue
Telephone: 612-667-0700
Facsimile: 612-667-2276
and to:
Faegre & Benson LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
Attention: James M. Pfau
Telephone: 612-766-7000
Facsimile: 612-766-1600
If to the Company, to ALLETE, Inc.
30 West Superior Street
Duluth, Minnesota 55802
Attention: Treasurer
Telephone: 218-723-3942
Facsimile: 218-723-3912
-40-
If to the Remarketing Agent, to Wells Fargo Brokerage Services, LLC
MAC N9303 105
608 Second Avenue South
Minneapolis, Minnesota 55402
Attention: Remarketing Desk
Telephone: 612-667-9435
Facsimile: 612-667-1593
If to the Trustee, to U.S. Bank National Association
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Corporate Trust Department
Telephone: 651-495-3915
Facsimile: 651-495-8097
Any party may change its address for purposes hereof by notice to the
other parties.
(b) The Issuing Bank agrees to give immediate notice,
promptly confirmed in writing, to the Remarketing Agent of any notice
of an Event of Default given to the Trustee by the Issuing Bank.
SECTION 7.15 SURVIVAL OF CERTAIN OBLIGATIONS.
The obligation of the Company to reimburse the Banks pursuant to Sections 7.1,
7.2 and 7.4 shall survive the payment of the Bonds and the termination of this
Agreement.
SECTION 7.16 TAXES AND EXPENSES.
Any transfer, stamp, documentary or other similar taxes payable or ruled payable
by any Governmental Body in respect of this Agreement, the Letter of Credit or
the Bonds shall be paid by the Company, together with interest and penalties, if
any; PROVIDED, HOWEVER, that the Company may reasonably contest any such taxes
with the prior written consent of the Administrative Agent, which consent shall
not be unreasonably withheld.
SECTION 7.17 PLEADINGS.
The table of contents and captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
SECTION 7.18 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which shall
constitute an original but both or all of which, when taken together, shall
constitute one instrument, and shall become effective when copies hereof bearing
the signatures of each of the parties hereto shall be delivered to the Company
and the Administrative Agent.
-41-
SECTION 7.19 WAIVER OF JURY TRIAL.
Each of the Company and each Bank hereby irrevocably waives any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
SECTION 7.20 REGISTER.
The Administrative Agent, on behalf of the Company, shall maintain at the
address of the Administrative Agent referred to in subsection 7.14 a register
(the "REGISTER") for the recordation of the names and addresses of the
Participating Banks and the Commitment Percentages of, and principal amount of
the Obligations owing to, each Participating Bank from time to time. The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Company, the Administrative Agent and the Participating Banks may treat each
Person whose name is recorded in the Register as the owner of an Obligation
hereunder and the other Financing Documents, notwithstanding any notice to the
contrary. The Register shall be available for inspection by the Company or any
Participating Bank at any reasonable time and from time to time upon reasonable
prior notice.
SECTION 7.21 ADJUSTMENTS; SET-OFF.
If any Participating Bank (a "BENEFITED PARTICIPATING BANK") shall at any time
receive any payment of all or part of the Obligations owing to it, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set off, or otherwise), in a greater proportion than any such
payment to or collateral received by any other Participating Bank, if any, in
respect of such other Participating Bank's Obligations owing to it, or interest
thereon, such benefited Participating Bank shall purchase for cash from the
other Participating Banks a participating interest in such portion of each such
other Participating Bank's Commitment Percentage or the Obligations owing to it,
or shall provide such other Participating Banks with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Participating Bank to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Participating Banks; PROVIDED,
HOWEVER, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Participating Bank, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest.
SECTION 7.22 PATRIOT ACT NOTICE
As required by the USA Patriot Act (Title III of Pub. L. 107-56, signed into law
October 26, 2001) (the "Act"), the Banks hereby notify the Company that pursuant
to the requirements of the Act, and the Banks' policies and practices, the Banks
are required to obtain, verify and record certain information and documentation
that identifies the Company, which information includes the name and address of
the Company and such other information that will allow the Banks to identify the
Company in accordance with the Act.
-42-
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.1 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
Each Participating Bank hereby appoints Wells Fargo Bank, National Association,
as the Administrative Agent under this Agreement and hereby authorizes the
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The relationship between the Administrative Agent
and the Participating Bank is and shall be that of agent and principal only, and
nothing contained in this Agreement or the Letter of Credit shall be construed
to constitute the Administrative Agent as a trustee or fiduciary for any
Participating Bank or the Company.
SECTION 8.2 ADMINISTRATIVE AGENT AND ITS AFFILIATES.
The Administrative Agent shall have the same rights and powers under this
Agreement as any other Participating Bank and may exercise or refrain from
exercising the same as though it were not the Administrative Agent, and the
Administrative Agent and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Company or any affiliate
of the Company as if it were not the Administrative Agent hereunder. The term
"PARTICIPATING BANK" as used herein, unless the context otherwise clearly
requires, includes the Administrative Agent in its individual capacity as a
Participating Bank.
SECTION 8.3 ACTION BY ADMINISTRATIVE AGENT.
If the Administrative Agent delivers to the Company a written notice of an Event
of Default hereunder, the Administrative Agent shall promptly give each of the
Participating Banks written notice thereof. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action hereunder with respect to any Potential
Default or Event of Default. In no event, however, shall the Administrative
Agent be required to take any action in violation of applicable law or of this
Agreement, and the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder or under the Letter of Credit unless it
shall be first indemnified to its reasonable satisfaction by the Participating
Banks against any and all costs, expense, and liability which may be incurred by
it by reason of taking or continuing to take any such action. The Administrative
Agent shall be entitled to assume that no Potential Default or Event of Default
exists unless notified to the contrary by a Participating Bank or the Company.
In all cases in which this Agreement and the Letter of Credit do not require the
Administrative Agent to take certain actions, the Administrative Agent shall be
fully justified in using its discretion in failing to take or in taking any
action hereunder and thereunder.
SECTION 8.4 CONSULTATION WITH EXPERTS.
The Administrative Agent may consult with legal counsel, 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.
-43-
SECTION 8.5 LIABILITY OF ADMINISTRATIVE AGENT; CREDIT DECISION.
Neither the Administrative Agent nor any of its directors, officers, agents, or
employees shall be liable for any action taken or not taken by it in connection
transactions contemplated by this Agreement (i) with the consent or at the
request of the Majority Participating Banks or (ii) in the absence of its own
gross negligence or willful misconduct. Neither the Administrative Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or the Letter of Credit;
(ii) the performance or observance of any of the covenants or agreements of the
Company or any other party contained herein or in the Letter of Credit; (iii)
the satisfaction of any condition specified in Section 3.1 or 3.2 hereof, except
receipt of items required to be delivered to the Administrative Agent; or (iv)
the validity, effectiveness, genuineness, enforceability, perfection, value,
worth or collectibility hereof or of any other documents or writing furnished in
connection herewith; and the Administrative Agent makes no representation of any
kind or character with respect to any such matter mentioned in this sentence.
The Administrative Agent may execute any of its duties under this Agreement or
the Letter of Credit by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Participating Banks, the Company, or any other
Person for the default or misconduct of any such agents or attorneys-in-fact
selected with reasonable care. The Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate, other
document or statement (whether written or oral) believed by it to he genuine or
to be sent by the proper party or parties. Each Participating Bank acknowledges
that it has independently and without reliance on the Administrative Agent or
any other Participating Bank, and based upon such information, investigations
and inquiries as it deems appropriate, made its own credit analysis and decision
to extend credit to the Company in the manner set forth herein. It shall be the
responsibility of each Participating Bank to keep itself informed as to the
creditworthiness of the Company and any other relevant Person, and the
Administrative Agent shall have no liability to any Participating Bank with
respect thereto.
SECTION 8.6 INDEMNITY.
The Participating Banks shall ratably, in accordance with their respective
Commitment Percentage, indemnify and hold the Administrative Agent, and its
directors, officers, employees, agents and representatives harmless from and
against any liabilities, losses, costs or expenses suffered or incurred by it
hereunder or in connection with the transactions contemplated hereby, regardless
of when asserted or arising, except to the extent they are promptly reimbursed
for the same by the Company and except to the extent that any event giving rise
to a claim was caused by the gross negligence or willful misconduct of the party
seeking to be indemnified. The obligations of the Participating Banks under this
Section 8.6 shall survive termination of this Agreement.
SECTION 8.7 RESIGNATION OF ADMINISTRATIVE AGENT AND SUCCESSOR
ADMINISTRATIVE AGENT.
The Administrative Agent may resign at any time by giving written notice thereof
to the Participating Banks and the Company. Upon any such resignation of the
Administrative Agent, the Majority Participating Banks shall have the right to
appoint a successor Administrative Agent with the consent of the Company. If no
successor Administrative Agent shall have been so
-44-
appointed by the Majority Participating Banks, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Participating Banks, appoint a successor Administrative Agent, which shall
be any Participating Bank hereunder or any commercial bank organized under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $200,000,000. Upon the acceptance of
its appointment as the Administrative Agent hereunder, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring or removed Administrative Agent hereunder, and
the retiring Administrative Agent shall be discharged from its duties and
obligations thereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 8.7 and all
protective provisions hereof shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent.
SIGNATURE PAGES FOLLOW.
-45-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above-written.
ALLETE, INC.
By /s/ Mark A. Schober
-----------------------------------
Its Senior Vice President and
Chief Financial Officer
By /s/ Donald W. Stellmaker
-----------------------------------
Its Treasurer
SIGNATURE PAGE FOR LETTER OF CREDIT AGREEMENT
WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT, AS ISSUING
BANK AND AS A PARTICIPATING BANK
By /s/ Patrick McCue
-----------------------------------
Patrick McCue
Its Vice President
SIGNATURE PAGE FOR LETTER OF CREDIT AGREEMENT
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
CHICAGO BRANCH, AS A PARTICIPATING
BANK
By /s/ Mathew A. Ross
-----------------------------------
Its Vice President & Manager
------------------------------
SIGNATURE PAGE FOR LETTER OF CREDIT AGREEMENT
EXHIBIT A
---------
IRREVOCABLE LETTER OF CREDIT
July 5, 2006
Letter of Credit No. NZS569069
U.S. Bank National Association
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Corporate Trust Department
Ladies and Gentlemen:
At the request and for the account of ALLETE, Inc., we hereby establish
in your favor as Trustee under the Indenture (as defined below), our irrevocable
letter of credit in the amount of U.S. $28,211,287.67 (Twenty Eight Million Two
Hundred Eleven Thousand Two Hundred Eighty Seven and 67/100 Dollars) in
connection with the Bonds (as defined below) available with ourselves by sight
payment against presentation of one or more signed and dated demands addressed
by you to Wells Fargo Bank, N.A., Letter of Credit Operations Office, San
Francisco, California, each in the form of Annex A (an "A Drawing"), Annex B (a
"B Drawing"), Annex C (a "C Drawing"), Annex D (a "D Drawing"), Annex E (an "E
Drawing"), or Annex F (an "F Drawing") hereto, with all instructions in brackets
therein being complied with. Each such demand must be presented to us in its
original form or by facsimile transmission of such original form.
Each such presentation must be made at or before 5:00 p.m. San
Francisco time on a Business Day (as hereinafter defined) to our Letter of
Credit Operations Office in San Francisco, California (presently located at One
Front Street, 21st Floor, San Francisco, California 94111)
This Letter of Credit expires at our Letter of Credit Operations Office
in San Francisco, California on July 5, 2011 or, if such date is not a Business
Day, then on the first (1st) succeeding Business Day thereafter (the "Expiration
Date").
As used herein the term "Business Day" shall mean a day on which our
San Francisco Letter of Credit Operations Office is open for business.
The amount of any demand presented hereunder will be the amount
inserted in numbered Paragraph 4 of said demand. By honoring any such demand we
make no representation as to the correctness of the amount demanded.
We hereby agree with you that each demand presented hereunder in full
compliance with the terms hereof will be duly honored by our payment to you of
the amount of such demand, in immediately available funds of Wells Fargo Bank,
National Association:
(i) not later than 10:00 a.m., San Francisco time, on the Business
Day following the Business Day on which such demand is
presented to us as aforesaid if such presentation is made to
us at or before noon, San Francisco time.
OR
(ii) not later than 10:00 a.m., San Francisco time, on the second
Business Day following the Business Day on which such demand
is presented to us as aforesaid, if such presentation is made
to us after noon, San Francisco time.
Notwithstanding the foregoing, any demand presented hereunder, in full
compliance with the terms hereof, for a C Drawing or D Drawing will be duly
honored (i) not later than 12:00 noon, San Francisco time, on the Business Day
on which such demand is presented to us as aforesaid if such presentation is
made to us at or before 9:00 a.m., San Francisco time, and (ii) not later than
12:00 noon, San Francisco time, on the Business Day following the Business Day
on which such demand is presented to us as aforesaid if such presentation is
made to us after 9:00 a.m., San Francisco time.
If the remittance instructions included with any demand presented under
this Letter of Credit require that payment is to be made by transfer to an
account with us or with another bank, we and/or such other bank may rely solely
on the account number specified in such instructions even if the account is in
the name of a person or entity different from the intended payee.
With respect to any demand that is honored hereunder, the total amount
of this Letter of Credit shall be reduced as follows:
(A) With respect to any A Drawing or B Drawing, the total amount
of this Letter of Credit shall be reduced, as to all demands
subsequent to the applicable demand, by the amount of the
applicable demand as of the time of presentation of such
demand and shall not be reinstated;
(B) With respect to any C Drawing or D Drawing, the total amount
of this Letter of Credit shall be reduced, as to all demands
subsequent to the applicable demand, by the amount of the
applicable demand as of the time of presentation of such
demand; provided, however, that such amount shall be
reinstated in full or in part, if and to the extent, prior to
the Expiration Date, we are reimbursed from remarketing
proceeds for all or a portion of such demand, at which time we
shall advise you in writing of such reinstatement and the
amount reinstated; and
(C) With respect to any F Drawing, the total amount of this Letter
of Credit shall be reduced, as to all demands subsequent to
the applicable demand, by the amount of the applicable demand
as of the time of presentation of such demand; PROVIDED,
HOWEVER, that such amount shall be automatically reinstated on
the eighth (8th) Business Day following the date such demand
is honored by us, unless (i) you shall have received notice
from us by express courier, authenticated SWIFT message,
facsimile transmission, or registered mail no later than seven
(7) Business Days after such demand is honored by us that
there shall be no such reinstatement, or (ii) such eighth
(8th) Business Day falls after the Expiration Date.
Upon presentation to us of an E Drawing in compliance with the terms of
this Letter of Credit, no further demand whatsoever may be presented hereunder.
-2-
An F Drawing shall not be presented to us (i) more than once during any
twenty-seven (27) calendar day period, or (ii) with respect to any single F
Drawing, for an amount more than U.S. $411,287.67.
Except as otherwise provided herein, this Letter of Credit shall be
governed by and construed in accordance with the Uniform Customs and Practice
for Documentary Credits (1993 Revision), Publication No. 500 of the
International Chamber of Commerce (the "UCP"); provided, however, that Article
41, paragraphs d, e, f, g, h, i and j of Article 48 and the second sentence of
Article 17 shall not apply to this Letter of Credit. Furthermore, as provided in
the first sentence of Article 17 of the UCP, we assume no liability or
responsibility for consequences arising out of the interruption of our business
by Acts of God, riots, civil commotions, insurrections, wars or any other causes
beyond our control, or strikes or lockouts. With respect to matters related to
this Letter of Credit which are not covered by the UCP such matters shall be
governed by the laws of the State of California, including, without limitation,
the Uniform Commercial Code as in effect in the State of California, except to
the extent such laws are inconsistent with the UCP or made inapplicable by this
Letter of Credit.
This Letter of Credit is transferable and may be transferred more than
once, but in each case only in the amount of the full unutilized balance hereof
to any single transferee who you shall have advised us pursuant to Annex G has
succeeded U.S. Bank National Association or a successor trustee as Trustee under
the Indenture dated as of July 1, 2006 as supplemented from time to time (the
"Indenture") between Collier County Industrial Development Authority (the
"Issuer") and U.S. Bank National Association, as Trustee, pursuant to which
$27,800,000 in aggregate principal amount of the Issuer's Variable Rate Demand
Refunding Bonds (ALLETE, Inc. Project), Series 2006 (the "Bonds") were issued.
Transfers may be effected without charge to the transferor and only through
ourselves and only upon presentation to us of a duly executed instrument of
transfer in the form attached hereto as Annex G. Any transfer of this Letter of
Credit as aforesaid must be endorsed by us on the reverse hereof and may not
change the place of presentation of demands from our Letter of Credit Operations
Office in San Francisco, California.
All payments hereunder shall be made from our own funds.
-3-
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds and the Indenture), except the UCP to
the extent the UCP is not inconsistent with or made inapplicable by this Letter
of Credit; and any such reference shall not be deemed to incorporate herein by
reference any document, instrument or agreement except the UCP.
WELLS FARGO BANK, NATIONAL ASSOCIATION
By -----------------------------------
Authorized Signature
Letter of Credit Operations Office
Telephone No.: 1-800-798-2815 (Option 1)
Facsimile No.: (415) 296-8905
-4-
ANNEX A TO WELLS FARGO BANK, N.A.
IRREVOCABLE LETTER OF CREDIT
NO. NZS569069
Wells Fargo Bank, N.A.
Letter of Credit Operations Office
One Front Street, 21st Floor
San Francisco, California 94111
For the Urgent Attention of Letter of Credit Manager.
[INSERT NAME OF BENEFICIARY] (the "Trustee") hereby certifies to Wells
Fargo Bank, N.A. (the "Bank") with reference to Irrevocable Letter of Credit No.
NZS569069 (the "Letter of Credit"; the terms the "Bonds", "Business Day" and the
"Indenture" used herein shall have their respective meanings set forth in the
Letter of Credit) that:
(1) The Trustee is the trustee or a successor trustee under the
Indenture.
(2) The Trustee is making a demand for payment under the Letter of
Credit with respect to the payment of principal upon an
optional and/or mandatory redemption of less than all of the
Bonds currently outstanding.
(3) The amount of this demand for payment was computed in
accordance with the terms and conditions of the Bonds and the
Indenture and is demanded in accordance with the Indenture,
which amount please remit to the undersigned as follows:
[INSERT REMITTANCE INSTRUCTIONS].
(4) The amount hereby demanded under the Letter of Credit is U.S.
$[INSERT AMOUNT].
(5) The Trustee has contacted or attempted to contact by telephone
an officer of the Bank's letter of credit office in San
Francisco, California regarding the amount of this demand and
the date and time by which payment is demanded.
(6) If this demand is received by you at or before noon, San
Francisco time on a Business Day, you must make payment on
this demand at or before 10.00 a.m., San Francisco time, on
the next Business Day. If this demand is received by you after
noon, San Francisco time, on a Business Day, you must make
payment on this demand at or before 10:00 a.m., San Francisco
time, on the second Business Day following such Business Day.
[INSERT NAME OF BENEFICIARY]
[INSERT SIGNATURE AND DATE]
ANNEX B TO WELLS FARGO BANK, N.A.
IRREVOCABLE LETTER OF CREDIT
NO. NZS569069
Wells Fargo Bank, N.A.
Letter of Credit Operations Office
One Front Street, 21st Floor
San Francisco, California 94111
For the Urgent Attention of Letter of Credit Manager.
[INSERT NAME OF BENEFICIARY] (the "Trustee") hereby certifies to Wells
Fargo Bank, N.A. (the "Bank") with reference to Irrevocable Letter of Credit No.
NZS569069 (the "Letter of Credit"; the terms the "Bonds", "Business Day" and the
"Indenture" used herein shall have their respective meanings set forth in the
letter of credit) that:
(1) The Trustee is the trustee or a successor trustee under the
Indenture.
(2) The Trustee is making a demand for payment under the Letter of
Credit with respect to the payment of unpaid interest upon an
optional and/or mandatory redemption of less than all of the
Bonds currently outstanding.
(3) The amount of this demand for payment was computed in
accordance with the terms and conditions of the Bonds and the
Indenture and is demanded in accordance with the Indenture,
which amount please remit to the undersigned as follows:
[INSERT REMITTANCE INSTRUCTIONS].
(4) The amount hereby demanded under the Letter of Credit is U.S.
$[INSERT AMOUNT].
(5) The Trustee has contacted or attempted to contact by telephone
an officer of the Bank's letter of credit office in San
Francisco, California regarding the amount of this demand and
the date and time by which payment is demanded.
(6) If this demand is received by you at or before noon, San
Francisco time on a Business Day, you must make payment on
this demand at or before 10:00 a.m., San Francisco time, on
the next Business Day. If this demand is received by you after
noon, San Francisco time, on a Business Day, you must make
payment on this demand at or before 10:00 a.m., San Francisco
time, on the second Business Day following such Business Day.
[INSERT NAME OF BENEFICIARY]
[INSERT SIGNATURE AND DATE]
ANNEX C TO WELLS FARGO BANK, N.A.
IRREVOCABLE LETTER OF CREDIT
NO. NZS569069
Wells Fargo Bank, N.A.
Letter of Credit Operations Office
One Front Street, 21st Floor
San Francisco, California 94111
For the Urgent Attention of Letter of Credit Manager.
[INSERT NAME OF BENEFICIARY] (the "Trustee") hereby certifies to Wells
Fargo Bank, N.A. (the "Bank") with reference to Irrevocable Letter of Credit No.
NZS569069 (the "Letter of Credit"; the terms the "Bonds", "Business Day" and the
"Indenture" used herein shall have their respective meanings set forth in the
Letter of Credit) that:
(1) The Trustee is the trustee or a successor trustee under the
Indenture.
(2) The Trustee is making a demand for payment under the Letter of
Credit with respect to the payment of the principal amount of
those Bonds which the remarketing agent (as defined in the
Indenture) has been unable to remarket within the time limits
established in the Indenture.
(3) The amount of this demand for payment was computed in
accordance with the terms and conditions of the Bonds and the
Indenture and is demanded in accordance with the Indenture,
which amount please remit to the undersigned as follows:
[INSERT REMITTANCE INSTRUCTIONS].
(4) The amount hereby demanded under the Letter of Credit is U.S.
$[INSERT AMOUNT].
(5) The Trustee has contacted or attempted to contact by telephone
and telefacsimile an officer of the Bank's letter of credit
office in San Francisco, California regarding the amount of
this demand and the date and time by which payment is
demanded.
(6) If this demand is received by you at or before 9:00 a.m., San
Francisco time on a Business Day, you must make payment on
this demand at or before 12:00 noon, San Francisco time, on
said Business Day. If this demand is received by you after
9:00 a.m., San Francisco time, on a Business Day, you must
make payment on this demand at or before 12:00 noon, San
Francisco time, on the Business Day following said Business
Day.
[INSERT NAME OF BENEFICIARY]
[INSERT SIGNATURE AND DATE]
ANNEX D TO WELLS FARGO BANK, N.A.
IRREVOCABLE LETTER OF CREDIT
NO. NZS569069
Wells Fargo Bank, N.A.
Letter of Credit Operations Office
One Front Street, 21st Floor
San Francisco, California 94111
For the Urgent Attention of Letter of Credit Manager.
[INSERT NAME OF BENEFICIARY] (the "Trustee") hereby certifies to Wells
Fargo Bank, N.A. (the "Bank") with reference to Irrevocable Letter of Credit No.
NZS569069 (the "Letter of Credit"; the terms the "Bonds", "Business Day" and the
"Indenture" used herein shall have their respective meanings set forth in the
Letter of Credit) that:
(1) The Trustee is the trustee or a successor trustee under the
Indenture.
(2) The Trustee is making a demand for payment under the Letter of
Credit with respect to the payment of the unpaid interest on
those Bonds which the remarketing agent (as defined in the
Indenture) has been unable to remarket within the time limits
established in the Indenture.
(3) The amount of this demand for payment was computed in
accordance with the terms and conditions of the Bonds and the
Indenture and is demanded in accordance with the Indenture,
which amount please remit to the undersigned as follows:
[INSERT REMITTANCE INSTRUCTIONS].
(4) The amount hereby demanded under the Letter of Credit is U.S.
$[INSERT AMOUNT].
(5) The Trustee has contacted or attempted to contact by telephone
and telefacsimile an officer of the bank's letter of credit
office in San Francisco, California regarding the amount of
this demand and the date and time by which payment is
demanded.
(6) If this demand is received by you at or before 9:00 a.m., San
Francisco time on a Business Day, you must make payment on
this demand at or before 12:00 noon, San Francisco time, on
said Business Day. If this demand is received by you after
9:00 a.m., San Francisco time, on a Business Day, you must
make payment on this demand at or before 12:00 noon, San
Francisco time, on the Business Day following said Business
Day.
[INSERT NAME OF BENEFICIARY]
[INSERT SIGNATURE AND DATE]
ANNEX E TO WELLS FARGO BANK, N.A.
IRREVOCABLE LETTER OF CREDIT
NO. NZS569069
Wells Fargo Bank, N.A.
Letter of Credit Operations Office
One Front Street, 21st. Floor
San Francisco, California 94111
For the Urgent Attention of Letter of Credit Manager.
[INSERT NAME OF BENEFICIARY] (the "Trustee") hereby certifies to Wells
Fargo Bank, N.A. (the "Bank") with reference to Irrevocable Letter of Credit No.
NZS569069 (the "Letter of Credit"; the terms the "Bonds", "Business Day" and the
"Indenture" used herein shall have their respective meanings set forth in the
Letter of Credit) that:
(1) The Trustee is the trustee or a successor trustee under the
Indenture.
(2) The Trustee is making a demand for payment under the Letter of
Credit with respect to the payment, at stated maturity, upon
acceleration following an event of default, or upon redemption
as a whole, of the total unpaid principal of, and unpaid
interest on, all of the Bonds which are presently outstanding.
(3) The amount of this demand for payment was computed in
accordance with the terms and conditions of the Bonds and the
Indenture and is demanded in accordance with the Indenture,
which amount please remit to the undersigned as follows:
[INSERT REMITTANCE INSTRUCTIONS].
(4) The amount hereby demanded under the Letter of Credit is U.S.
$[INSERT AMOUNT WHICH IS THE SUM OF THE TWO AMOUNTS SET FORTH
IN PARAGRAPH 5, BELOW].
(5) The amount of this demand is equal to the sum of (a) U.S.
$[insert amount] being drawn in respect of the payment of
unpaid principal of the Bonds and (b) U.S. $[INSERT AMOUNT]
being drawn in respect of the payment of unpaid interest on
the Bonds.
(6) The Trustee has contacted or attempted to contact by telephone
an officer of the Bank's letter of credit office in San
Francisco, California regarding the amount of this demand and
the date and time by which payment is demanded.
(7) If this demand is received by you at or before noon, San
Francisco time on a Business Day, you must make payment on
this demand at or before 10:00 a.m., San Francisco time, on
the next Business Day. If this demand is received by you after
noon, San Francisco time, on a Business Day, you must make
payment on this demand at or before 10:00 a.m., San Francisco
time, on the second Business Day following such Business Day.
[INSERT NAME OF BENEFICIARY]
[INSERT SIGNATURE AND DATE]
ANNEX F TO WELLS FARGO BANK, N.A.
IRREVOCABLE LETTER OF CREDIT
NO. NZS569069
Wells Fargo Bank, N.A.
Letter of Credit Operations Office
One Front Street, 21st Floor
San Francisco, California 94111
For the Urgent Attention of Letter of Credit Manager.
[INSERT NAME OF BENEFICIARY] (the "Trustee") hereby certifies to Wells
Fargo Bank, N.A. (the "Bank") with reference to Irrevocable Letter of Credit No.
NZS569069 (the "Letter of Credit"; the terms the "Bonds", "Business Day" and the
"Indenture" used herein shall have their respective meanings set forth in the
Letter of Credit) that:
(1) The Trustee is the trustee or a successor trustee under the
Indenture.
(2) The Trustee is making a demand for payment under the Letter of
Credit with respect to the payment, on an Interest Payment
Date (as defined in the Indenture), of unpaid interest with
respect to the Bonds.
(3) The amount of this demand for payment was computed in
accordance with the terms and conditions of the Bonds and the
Indenture and is demanded in accordance with the Indenture,
which amount please remit to the undersigned as follows:
[INSERT REMITTANCE INSTRUCTIONS].
(4) The amount hereby demanded under the Letter of Credit is U.S.
$[INSERT AMOUNT].
(5) The Trustee has contacted or attempted to contact by telephone
an officer of the Bank's letter of credit office in San
Francisco, California regarding the amount of this demand and
the date and time by which payment is demanded.
(6) If this demand is received by you at or before noon, San
Francisco time on a Business Day, you must make payment on
this demand at or before 10:00 a.m., San Francisco time, on
the next Business Day. If this demand is received by you after
noon, San Francisco time, on a Business Day, you must make
payment on this demand at or before 10:00 a.m., San Francisco
time, on the second Business Day following such Business Day.
[INSERT NAME OF BENEFICIARY]
[INSERT SIGNATURE AND DATE]
ANNEX G TO WELLS FARGO BANK, N.A.
IRREVOCABLE LETTER OF CREDIT
NO. NZS569069
Wells Fargo Bank, N.A.
Letter of Credit Operations Office
One Front Street, 21st Floor
San Francisco, California 94111
[INSERT DATE]
Subject: Your Letter of Credit No. NZS569069
Ladies and Gentlemen:
For value received, we hereby irrevocably assign and transfer all of
our rights under the above-captioned Letter of Credit, as heretofore and
hereafter amended, extended, increased or reduced to:
------------------------------
[Name of Transferee]
------------------------------
------------------------------
------------------------------
[Address of Transferee]
By this transfer, all of our rights in the Letter of Credit are
transferred to the transferee, and the transferee shall have sole rights as
beneficiary under the Letter of Credit, including sole rights relating to any
amendments, whether increases or extensions or other amendments, and whether now
existing or hereafter made. You are hereby irrevocably instructed to advise
future amendment(s) of the Letter of Credit to the transferee without our
consent or notice to us.
The original Letter of Credit is returned with all amendments to this
date. Please notify the transferee in such form as you deem advisable of this
transfer and of the terms and conditions to this Letter of Credit, including
amendments as transferred.
You are hereby advised that the transferee named above has succeeded
U.S. Bank National Association or a successor trustee, as Trustee under the
Indenture dated as of July 1, 2006 as supplemented from time to time (the
"Indenture") between Collier County Industrial Development Authority (the
"Issuer") and U.S. Bank National Association, as Trustee, pursuant to which
$27,800,000 in aggregate principal amount of Issuer's Variable Rate Demand
Refunding Bonds (ALLETE, Inc. Project), Series 2006 were issued.
Very truly yours,
[INSERT NAME OF TRANSFEROR]
By:
-----------------------------
[INSERT NAME AND TITLE]
TRANSFEROR'S SIGNATURE GUARANTEED
By:
----------------------------
[Bank Name]
By:
----------------------------
[INSERT NAME AND TITLE]
By its signature below, the undersigned transferee acknowledges that it
has duly succeeded U.S. Bank National Association or a successor trustee as
Trustee under the Indenture.
[INSERT NAME OF TRANSFEREE]
By:
-----------------------------
[INSERT NAME AND TITLE]
EXHIBIT B
---------
L/C COMMITMENTS
================================================================================
PARTICIPATING BANK L/C COMMITMENT
- --------------------------------------------- ----------------------------------
Wells Fargo Bank, National Association $16,211,287.67
- --------------------------------------------- ----------------------------------
The Bank of Tokyo-Mitsubishi UFJ, Ltd. $12,000,000.00
================================================================================