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Title: |
Letter of Credit Agreement |
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Entities: |
ALLETE, Inc.; McGraw-Hill Companies Inc.; U.S. Bank, NA; Wells Fargo Bank, NA; Wells Fargo Brokerage Services, LLC; Bank of New York; Faegre & Benson |
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Date: |
2006 |
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Size: |
Preview shows 14KB of 196KB total |
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Price: |
$58 |
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ID: |
#2272405 |
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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
--------------------------------------------------------------------------------
{PAGE}
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
{PAGE}
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
{PAGE}
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.
{PAGE}
"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.
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