REVOLVING NOTE
Exhibit
10.1
| $7,500,000.00 |
Milwaukee,
Wisconsin
|
|
November
16, 2006
|
On
or
before November 16, 2007 (herein called the “Maturity
Date”),
FOR
VALUE RECEIVED, the undersigned, SEMCO ENERGY, INC., a Michigan corporation
(herein called the “Borrower”),
promises to pay to the order of U.S. BANK NATIONAL ASSOCIATION (herein called
“Bank”),
at
the office of Bank at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000,
or
at such other office as Bank notifies Borrower in writing from time to time,
in
lawful currency of the United States of America, the principal sum of SEVEN
MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000.00), or so much of said sum
as
has been advanced and is then outstanding hereunder, together with interest
thereon as hereinafter set forth.
This
Note
is a note under which Advances (as hereafter defined), repayments and new
Advances may be made from time to time, provided that Bank shall not be
obligated to make any Advance hereunder (notwithstanding anything expressed
or
implied herein or elsewhere to the contrary), and Bank, at any time and from
time to time, without notice, and in its sole and absolute discretion, may
refuse to make Advances to Borrower hereunder without incurring any liability
whatsoever and without in any way affecting Xxxxxxxx’s liability hereunder for
all amounts advanced. Advances hereunder may be requested in Xxxxxxxx’s
discretion by telephonic notice to Bank or by submission to Bank of a written
request for an advance, in form acceptable to Bank, which request shall specify
(i) the date and aggregate amount of the proposed Advance (which shall be at
least Five Hundred Thousand Dollars ($500,000)), (ii) the maturity date (each
a
“Repayment
Date”)
for
repayment of such Advance (which Repayment Date may be overnight or shall be
agreed to by Bank and the Borrower, but in no event later than the Maturity
Date), and (iii) any other terms to be applicable to such Advance. Any Advance
requested by telephonic notice shall be confirmed by Borrower that same day
by
submission to Bank, either by first class mail or telefax, of a written request
for such Advance. Borrower acknowledges that if Bank makes an Advance based
on a
telephonic request, it shall be for Borrower’s convenience and all risks
involved in the use of such procedure shall be borne by Borrower, and Borrower
expressly agrees to indemnify and hold Bank harmless therefor. Bank shall have
no duty to confirm the authority of anyone requesting an Advance by telephone
who Bank reasonably believes to be authorized to request advances.
Interest
on each Advance hereunder shall accrue at an annual rate equal to the Bid Margin
(as hereafter defined) plus
the
Quoted Rate in effect as of the day such Advance is made. The term “Quoted
Rate”
means
the one-month LIBOR rate quoted by Bank from Telerate Page 3750 or any successor
thereto, which is that one-month LIBOR rate in effect and reset each New York
Banking Day, adjusted for any reserve requirement and any subsequent costs
arising from a change in governmental regulations. The term “New
York Banking Day”
means
any day (other than a Saturday or Sunday) on which commercial banks are open
for
business in New York, New York. Bank’s internal records of applicable interest
rates shall be determinative in the absence of manifest error.
Interest
will be computed for the actual number of days principal is unpaid, using a
daily factor obtained by dividing the stated interest rate by three hundred
sixty (360). Principal and interest not paid when due shall bear interest from
and after maturity until paid computed at a rate equal to two percent (2.0%)
per
annum plus
the
prime rate announced by Bank as in effect from time to time (“Default
Interest”).
Default Interest shall be payable as provided herein or otherwise upon demand.
Unless
sooner accelerated in accordance with the terms of this Note, interest is
payable beginning December 1, 2006, and on the first day of each consecutive
month thereafter, plus a final interest payment on the Maturity
Date.
Each
Advance hereunder shall be payable upon the respective Repayment Date therefor
(unless sooner accelerated in accordance with the terms of this Note). In the
event that any Repayment Date occurs on any day which is not a Business Day,
such Repayment Date shall be extended to the next succeeding Business Day,
except that if the next succeeding Business Day falls in another calendar month,
the Repayment Date applicable thereto shall occur on the next preceding Business
Day, and, to the extent applicable, interest shall continue to accrue and be
payable during any such extensions of any Repayment Date.
The
amount, applicable interest rate, and Repayment Date of each Advance shall
be
noted on Bank’s books and records, which books and records will be conclusive
evidence thereof; provided,
however,
any
failure on the part of Bank to make any such notation shall not relieve Borrower
of its obligations to repay Bank all amounts owing under this Note when due
in
accordance with the terms hereof.
If:
(a)
Borrower fails to pay the principal amount of this Note, or any part thereof,
when due, by maturity, acceleration or otherwise, or fails to pay any interest,
fees or other amounts (other than principal) owing under this Note when due
or
upon demand, as applicable, and continuance thereof for more than three (3)
Business Days; or (b) Borrower fails to comply with any of the terms or
provisions of any agreement between Borrower and Bank (taking into account
applicable periods of notice and cure, if any); or (c) Borrower becomes
insolvent or the subject of a voluntary or involuntary proceeding in bankruptcy,
or a reorganization, arrangement or creditor composition proceeding and, in
the
event of an involuntary proceeding only, such proceeding is not dismissed within
sixty (60) days, ceases doing business as a going concern, or is the subject
of
a dissolution; or (d) any warranty or representation made by Borrower in
connection with this Note shall be discovered to be materially untrue or
incomplete when made or when deemed made; or (e) there is a default or event
of
default under (i) that certain Second Amendment and Restated Credit Agreement,
dated September 15, 2005, among Borrower, various financial institutions parties
thereto as lenders, LaSalle Bank Midwest National Association, a national
banking association, as administrative agent and arranger, National City Bank
(fka National City Bank of the Midwest), a national banking association, as
syndication agent, and U.S. Bank, N.A., as documentation agent, as the same
may
be amended, restated, supplemented or replaced from time to time, or (ii) that
certain Indenture dated as of May 21, 2003, among Borrower and Fifth Third
Bank,
as trustee, relating to Borrower’s 7-1/8 % Senior Notes due 2008; or (f) there
is any failure by Borrower to pay when due any of its other indebtedness in
excess of Ten Million Dollars ($10,000,000.00) in the aggregate or in the
observance or performance of any term, covenant or condition in any document
evidencing, securing or relating to such indebtedness; or (g) there is filed
or
issued a levy or writ of attachment or garnishment or other like judicial
process upon Borrower, including, without limit, any accounts of Borrower with
Bank, for an amount in excess of One Million Dollars ($1,000,000.00); then
Bank,
upon the occurrence or existence of any of these conditions or events (each
a
“Default”),
may
at its option and without prior notice to Borrower, declare any or all of the
indebtedness outstanding under this Note (the “Indebtedness”)
to be
immediately due and payable (notwithstanding any provisions contained in the
evidence of it to the contrary), exercise any one or more of the rights and
remedies granted to Bank by any agreement with Borrower or given to it under
applicable law, or otherwise.
2
All
payments under this Note shall be in immediately available United States funds,
without setoff or counterclaim.
Borrower
waives presentment, demand, protest, notice of dishonor, notice of demand or
intent to demand, notice of acceleration or intent to accelerate, and all other
notices, and agrees that no extension or indulgence to Borrower, or release,
substitution or nonenforcement of any security, or release or substitution
of
any of Borrower, or any other party, whether with or without notice, shall
affect the obligations of Borrower. Xxxxxxxx agrees that Bank has the right
to
sell, assign, or grant participations, or any interest, in any or all of the
Indebtedness, and that, in connection with such right, but without limiting
its
ability to make other disclosures to the full extent allowable, Bank may
disclose all documents and information which Bank now or later has relating
to
Borrower and the Indebtedness, provided that Bank shall not disclose any
confidential information of Borrower unless the recipient of such disclosure
has
agreed to keep the information confidential.
Borrower
agrees to reimburse Bank, or any other holder or owner of this Note, for any
and
all reasonable costs and expenses (including, without limit, court costs, legal
expenses and reasonable attorneys’ fees, whether inside or outside counsel is
used (but excluding fees of in-house counsel for matters for which Bank has
engaged outside counsel), whether or not suit is instituted, and, if suit is
instituted, whether at the trial court level, appellate level, in a bankruptcy,
probate or administrative proceeding or otherwise) incurred in collecting or
attempting to collect this Note or the Indebtedness or incurred in any other
matter or proceeding relating to this Note or the Indebtedness.
Borrower
acknowledges and agrees that there are no contrary agreements, oral or written,
establishing a term of this Note and agree that the terms and conditions of
this
Note may not be amended, waived or modified except in a writing signed by a
duly
authorized officer of Bank expressly stating that the writing constitutes an
amendment, waiver or modification of the terms of this Note. If any provision
of
this Note is unenforceable in whole or part for any reason, the remaining
provisions shall continue to be effective. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WISCONSIN.
This
Note
shall bind Borrower and Xxxxxxxx’s successors and assigns.
For
purposes of this Note, the following terms will have the following
meanings:
“Advance”
means
a
borrowing requested by Xxxxxxxx and made by Bank under this Note in accordance
with the terms hereof, including, without limitation, the continuation of an
outstanding Advance.
3
“Bid
Margin”
means
the per annum percentage rate quoted by Bank and accepted by Borrower with
regard to an Advance requested hereunder.
“Business
Day”
means
any day, other than a Saturday, Sunday or holiday, on which Bank is open for
all
or substantially all of its commercial banking business in Milwaukee,
Wisconsin.
Xxxxxxxx
agrees that Bank may, at any time after demand for payment or maturity of this
Note, without notice or demand, set off against any credit balance or other
money now or hereafter owed to Borrower by Bank any unpaid
Indebtedness.
XXXXXXXX
AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE,
BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY,
AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT
OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED
TO, THIS NOTE OR THE INDEBTEDNESS.
Nothing
herein shall limit any right granted Bank by other instrument or by
law.
| SEMCO ENERGY, INC. | ||
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| By: | /s/ Xxxxxxx X. Xxxxxxx | |
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| Its: | SVP and CFO | |
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