MASTER REVOLVING NOTE
Exhibit
10.1
TAX
I.D.
No. ▇▇-▇▇▇▇▇▇▇
| $15,000,000.00 |
Detroit,
Michigan
|
|
October
1, 2006
|
On
or
before October 1, 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 COMERICA BANK, a Michigan banking
corporation (herein called "Bank"), at the principal office of Bank at Comerica
Tower at Detroit Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 FIFTEEN
MILLION DOLLARS ($15,000,000.00), 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, 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 the 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 ▇▇▇▇▇▇▇▇'s liability hereunder for all amounts advanced. Advances
hereunder may be requested in ▇▇▇▇▇▇▇▇'s discretion by telephonic notice to
Bank
or by submission to Bank of a Request for Advance in form annexed hereto as
Exhibit "A". Any Advance requested by telephon-ic notice shall be confirmed
by
Borrower that same day by submission to Bank, either by first class mail or
telefax, of the written Request for Advance aforementioned. 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.
Each
Quoted Rate Advance hereunder shall be in a minimum principal amount of Five
Hundred Thousand Dollars ($500,000.00).
1
Each
Prime-based Advance outstanding under this Note shall bear interest at the
Prime-based Rate, and each Quoted Rate Advance outstanding under this Note
shall
bear interest at the applicable Quoted Rate. Each Advance hereunder shall be
payable upon the respective Repayment Date therefor (unless sooner accelerated
in accordance with the terms of this Note), unless Bank, in its sole and
absolute discretion, and subject to all other terms and conditions of this
Note,
agrees to allow the continuation of an outstanding Advance as the same type
of
Advance or the conversion of an outstanding Advance to another type of Advance,
in which case, that portion of such Advance which is not so continued or
converted, as the case may be, shall be repaid on such Repayment Date. Interest
shall be computed on a daily basis using a year of 360 days and shall be
assessed for the actual number of days elapsed, and in such computations, effect
shall be given to any change in the interest rate as a result of any change
in
the Prime-based Rate on the date of each such change in the Prime-based Rate.
Unless sooner accelerated in accordance with the terms of this Note, accrued
and
unpaid interest on each Prime-based Advance shall be payable monthly, in
arrears, on the first Business Day of each month and on the Maturity Date,
and,
in the case of Quoted Rate Advances, on the respective Repayment Date
therefor.
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
Borrower makes any payment of principal with respect to any Quoted Rate Advance
on any day other than the applicable Repayment Date therefor (whether
voluntarily, by acceleration, or otherwise), or if Borrower fails to borrow
a
Quoted Rate Advance after notice has been given by Borrower to Bank in
accordance with the terms of this Note requesting such Advance and Bank has
agreed to make such Quoted Rate Advance, or if Borrower fails to make any
payment of principal or interest in respect of any Quoted Rate Advance when
due,
Borrower shall reimburse Bank, on demand, for any resulting loss, cost or
expense incurred by Bank as a result thereof, including, without limitation,
any
such loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, but excluding any portion of such
loss
attributable to the Bank’s margin, as determined by the Bank which determination
shall be conclusive absent manifest error. Calculation of any amounts payable
to
Bank under this paragraph shall be made as though Bank shall have actually
funded or committed to fund the relevant Quoted Rate Advance through the
purchase of an underlying deposit in an amount equal to the amount of such
Advance and having a maturity date comparable to the applicable repayment date
of such Quoted Rate Advance; provided,
however,
Bank
may fund any Quoted Rate Advance in any manner it deems fit and the foregoing
assumption shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Prime-based Advances may be prepaid at any time
without penalty or premium.
2
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 the 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 syndicated agent, and U.S. Bank, N.A., as documentation agent
as
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 there
is any failure by Borrower to pay when due any of its other indebtedness in
excess of $10,000,000 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 (f) 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 $1,000,000, 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 to be
immediately due and payable (notwithstanding any provisions contained in the
evidence of it to the contrary), set off against the indebtedness outstanding
under this Note any amounts owing by Bank to Borrower, and 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.
Upon
the
occurrence and during the continuance of any Default hereunder, (a) interest
on
all outstanding Prime-based Advances shall be payable at a per annum rate of
two
percent (2%) above the Prime-based Rate, and (b) interest on any outstanding
Quoted Rate Advances shall be payable until the respective Repayment Date for
each such Advance at a per annum rate equal to the applicable Quoted Rate,
and
after such Repayment Date, at a per annum rate equal to two percent (2%) above
the Prime-based Rate, which interest, in any case, shall be payable upon demand.
All
payments under this Note shall be in immediately available United States funds,
without setoff or counterclaim.
3
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. Borrower waives all defenses or right to
discharge available under Section 3-605 of the Uniform Commercial Code and
waives all other suretyship defenses or right to discharge. ▇▇▇▇▇▇▇▇ 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 the Bank
shall not disclose any confidential information of the 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 the 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 MICHIGAN.
This
Note
shall bind Borrower and ▇▇▇▇▇▇▇▇'s respective successors and
assigns.
For
purposes of this Note, the following terms will have the following
meanings:
"Advance"
means a borrowing requested by ▇▇▇▇▇▇▇▇ and made by Bank under this Note in
accordance with the terms hereof, including, without limitation, the
continuation of an outstanding Advance as the same type of Advance or the
conversion of an outstanding Advance to another type of Advance, and shall
include a Prime-based Advance and a Quoted Rate Advance.
"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 Detroit,
Michigan.
4
"Prime-based
Advance" means an Advance which bears interest at the Prime-based
Rate.
"Prime-based
Rate" means a per annum interest rate which is equal to the greater of (a)
the
Prime Rate, or (b) the rate of interest equal to the sum of one half of one
percent (0.5%) plus the rate of interest equal to the average of the rates
on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers (the "Overnight Rates"), as published by
the
Federal Reserve Bank of New York, or, if the Overnight Rates are not so
published for any day, the average of the quotations for the Overnight Rates
received by Bank from three (3) Federal funds brokers of recognized standing
selected by Bank, as the same may be changed from time to time.
"Prime
Rate" means the per annum rate of interest established by Bank from time to
time
as its prime rate, which rate may not necessarily be Bank's lowest rate for
loans.
"Quoted
Rate" means a per annum rate of interest, other than the Prime-based Rate,
which
is quoted by Bank and accepted by Borrower as the applicable interest rate
with
respect to a Quoted Rate Advance hereunder.
"Quoted
Rate Advance" means an Advance which bears interest at a Quoted
Rate.
“Repayment
Date” means, (a) in respect of an outstanding Prime-based Advance, the Maturity
Date (unless sooner accelerated in accordance with the terms of this Note),
and
(b) in respect of an outstanding Quoted Rate Advance, a date which is acceptable
to and offered by Bank, in its sole and absolute discretion, as the Repayment
Date for such Quoted Rate Advance and which is accepted by Borrower as the
Repayment Date for such Advance, subject to and in accordance with the terms
and
conditions of this Note; provided,
however,
in the
case of Quoted Rate Advances, in no event shall the Repayment Date in respect
thereof be more than one month after the date of the respective Advance, and
in
no event shall any Repayment Date extend beyond the Maturity Date, and 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, as to any outstanding Quoted Rate Advances, 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 extend
applicable, interest shall continue to accrue and be payable during any such
extensions of any Repayment Date.
5
▇▇▇▇▇▇▇▇
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.
6
Nothing
herein shall limit any right granted Bank by other instrument or by
law.
| SEMCO ENERGY, INC. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
|
|
||
| Its: | Senior Vice President and Chief Financial Officer | |
|
|
||
| By: | Oct. 13, 2006 | |
|
|
||
| Its: | ||
|
|
||
7