Document:

Exhibit
4.10

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

This First Amendment to Credit Agreement
(this “First Amendment”) is made as of this 21st day of May, 2003 by
and among SEMCO ENERGY, INC., a Michigan corporation (the “Company”), STANDARD
FEDERAL BANK N.A.  (“Standard Federal”)
and the other banks signatory hereto and Standard Federal, as agent for the
Banks (in such capacity, “Agent”).

 

RECITALS

 

A.            Company, Agent and the Banks entered into
that certain Credit Agreement dated as of June 25, 2002 (the “Credit
Agreement”) under which the Banks extended (or committed to extend) credit to
the Company, as set forth therein.

 

B.            Company has requested that Agent and the
Banks extend the term of the Line of Credit, increase the amounts of the Line
of Credit and the Revolving Loan Facility, and make certain other amendments to
the Credit Agreement, and Agent and the Banks are willing to do so, but only on
the terms and conditions set forth in this First Amendment.

 

NOW, THEREFORE,
Company, Agent and Banks agree:

 

1.             Section 1 of the Credit Agreement is
hereby amended as follows:

 

(a)           the following definitions are deleted in
their entireties, and the following definitions are inserted in their place:

 

““Line of
Credit Commitment Amount” means $69,482,759 as reduced from time to time
pursuant to Section 5.1 and as increased from time to time pursuant to Section
2.1.2.”

 

““Line of
Credit Commitment Optional Increase” means an amount up to $8,965,517 minus
the portions thereof applied from time to time pursuant to Section 2.1.2
to increase the Line of Credit Commitment Amount.”

 

““Line of
Credit Termination Date” shall mean the earlier to occur of (a) May 20,
2004, as such date may be extended from time to time pursuant to Section
2.1.1 or (b) the date on which the Commitment to make the Line of Credit
Loans shall be terminated pursuant to Section 5 or 1 l.”

 

““Revolving
Commitment Amount” means $85,517,241, as reduced from time to time pursuant
to Section 5.1 and as increased from time to time pursuant to Section
2.2.2.”

 

““Revolving
Commitment Optional Increase” means an amount up to $11,034,483, minus the
portions thereof applied from time to time under Section 2.2.2 to
increase the Revolving Commitment Amount.

 

1

 

(b)           the following definitions are inserted in
Section 1 of the Credit Agreement in their appropriate alphabetical order:

 

““APC Sale”
shall mean the disposition by the Company of all or substantially all of the
assets or stock of the Alaska Pipeline Company.”

 

““FASB”
shall mean the Financial Accounting Standards Board or any successor.”

 

““Reclassification
Event” shall mean the reclassification of Company’s Junior Capital as Debt
pursuant to rules promulgated by FASB in accordance with FASB’s Exposure Draft
entitled “Accounting for Financial Instruments with Characteristics of
Liabilities, Equities or Both.”

 

““Refinancing”
shall mean (i) the ROARS Refinancing, and (ii) the use of the proceeds of the
Refinancing Bonds (less up to $37,000,000 of such proceeds, which may be
retained by Company as working capital) to exchange or otherwise refinance
certain other senior Debt of the Company and to pay the Refinancing Premium in
accordance with the Refinancing Bond Documents.”

 

““Refinancing
Bonds” shall mean the Company’s senior notes issued in accordance with the
Refinancing Bond Documents.”

 

““Refinancing
Bond Documents” shall mean all agreements, documents or other instruments
executed and delivered in connection with the issuance of the Refinancing Bonds
the terms of which are acceptable to the Agent and conform in all material
respects to the Confidential Offering Circular dated May 14, 2003, as amended
(subject to the terms hereof) from time to time.”

 

““Refinancing
Premium” shall mean any and all remarketing premiums, make-whole premiums
or financing costs incurred in connection with the Refinancing.”

 

““ROARS”
shall mean the Company’s 8.95% Remarketable or Redeemable Securities.”

 

““ROARS
Refinancing” shall mean the use of a portion of the proceeds of the Refinancing
Bonds to exchange or otherwise refinance the ROARS, in accordance with the
ROARS Refinancing Documents.”

 

““ROARS
Refinancing Documents” shall mean all agreements, documents or other
instruments executed and delivered in connection with the ROARS Refinancing the
terms of which are acceptable to the Agent and conform in all material respect
to the Confidential Offering Circular dated

 

2

 

May 14, 2003,
as amended (subject to the terms hereof) from time to time.”

 

2.             New Section 1.3 is added, in its entirety
(immediately following Section 1.2), as follows:

 

1.3.   Financial Covenants.   Upon the occurrence of the Reclassification
Event, Junior Capital shall not be classified as Debt, Funded Debt or Indebtedness
and shall continue to be classified as equity solely for the purpose of
calculating the financial covenants contained in Subsections  10.6.1,
10.6.2 and 10.6.3.

 

3.             The date of May 15 in Section 2.1.1 (a) is
hereby deleted and a date of April I is inserted in its place, and the date of
March 31 in Section 2.1.1 (a) is hereby deleted and a date of February 15 is
inserted in its place.

 

4.             The following sentence is inserted at the
end of Section 2.1.3:

 

“Following the
conversion of the Line of Credit Outstandings into the Term Loan, no further
Line of Credit Loans may be made.”

 

5.             Section 10.6.1 is deleted in its entirety,
and the following is :inserted in its place:

 

“10.6.1 Minimum
Fixed Charge Coverage Ratio.  
Maintain a Fixed Charge Coverage Ratio for any period of four
consecutive Fiscal Quarters ending on the last day of a Fiscal Quarter as
follows:

 

	
  Fiscal
  Quarter Ended:

  	
   

  	
  Fixed Charge Coverage Ratio

  Greater Than or Equal To:

  
	
  June 30, 2003

  	
   

  	
  1.20

  
	
  September 30, 2003

  	
   

  	
  1.20

  
	
  December 31, 2003

  	
   

  	
  1.33

  
	
  March 31, 2004

  	
   

  	
  1.33

  
	
  Each Fiscal Quarter thereafter

  	
   

  	
  1.50

  

 

For purposes
of calculating the Fixed Charge Coverage Ratio as of June 30, 2003, September
30, 2003, December 31, 2003 and March 31, 2004, an amount equal to 65% of the
Refinancing Premium shall be added back to Net Income Available for Fixed
Charges to the extent deducted from Consolidated Net Income.”

 

3

 

6.             Section 10.6.2 is deleted in its entirety,
and the following is inserted in its place:

 

“10.6.2
Maximum Leverage Ratio.  Maintain on the
last day of each Fiscal Quarter a ratio of (i) Consolidated Adjusted Funded
Debt to (ii) Consolidated Adjusted Total Capitalization (x) for the Fiscal
Quarters ending June 30, 2003, September 30, 2003, December 31, 2003 and March
31, 2004, so long as the APC Sale has not been consummated, 70% or less, and
for each Fiscal Quarter end thereafter, 65% or less, and (y) for each Fiscal
Quarter after the consummation of the APC Sale, 65% or less.”

 

7.             Section 10.7 is hereby amended by deleting
subsection (i) and inserting the following in its place:

 

“(i)          Debt consisting of the
Refinancing Bonds; and

 

(j)            other Debt, in
addition to the Debt listed above, in an aggregate amount not at any time
exceeding Three Million Dollars ($3,000,000).”

 

8.             Section 10.8 is amended to add, at the
beginning of clause (g) (preceding the words “Other Liens”) the words “any
escrow, cash collateral account or other trust arrangement established for the
purpose of holding a sufficient portion of proceeds of the Refinancing Bonds
for the Refinancing until the application of such proceeds in accordance with
the terms of the Refinancing Bond Documents and this Agreement, to the extent
constituting a Lien, and”.

 

9.             Section 10.10 is deleted in its entirety,
and the following is inserted in its place:

 

“10.10
Restricted Payments.  Not, and not
permit any Subsidiary to, (a) make any distribution to any of its shareholders,
(b) purchase or redeem any of its capital stock or other equity interests or any
warrants, options or other rights in respect thereof, (c) issue any
Disqualified Stock, or (d) set aside funds for any of the foregoing.  Notwithstanding the foregoing, (i) any
Subsidiary may pay dividends or make other distributions to the Company or to a
Wholly-Owned Subsidiary; and (ii) so long as no Event of Default or Unmatured
Event of Default exists or would result therefrom, the Company may make, pay,
declare or authorize any dividend, payment or other distribution in respect of
any class of its capital stock or any dividend, payment or distribution in
connection with the redemption, purchase, retirement or other acquisition,
directly or indirectly, of any shares of its capital stock other than such
dividends, payments or other distributions to the extent payable solely in
shares of capital stock of the Company, provided, however, that the Company may
make, pay, declare or authorize any of the foregoing such dividends, payments
and other distributions subject to the satisfaction of each of the following
conditions: (y) the aggregate amount of such dividend, payment or other
distribution made during the period from and after March 31, 2002 to and
including the date of the making of the dividend payments or

 

4

 

other
distribution in question, shall not exceed the sum of $17,693,000 plus 100% of
Consolidated Net Income for such period, such Consolidated Net Income to be
calculated for this purpose by adding back an amount equal to 65% of the
Refinancing Premium to the extent deducted from the Consolidated Net Income and
to be computed on a cumulative basis for said entire period (or if such
Consolidated Net Income is a.  deficit
figure, then minus 100% of such deficit), (z) immediately before and after giving
effect to such dividend, payment or other distribution, no Event of Default or
Unmatured Event of Default shall exist or shall have occurred and be continuing
and the representations and warranties contained in Section 9 and in the other
Loan Documents shall be true and correct on and as of the date thereof (both
before and after giving effect to such dividend, payment or other distribution)
as if made on the date of such dividend, payment or other distribution.  Upon the occurrence of the Reclassification
Event, dividend payments on the Junior Capital shall remain subject to the
provisions of this Section 10.10.”

 

10.           Section 10.11 is amended by inserting,
immediately following subsection 10.11(c)(5), new subsection 10.11(c)(6) as
follows:

 

“; and (6) no
Acquisition shall be permitted under this Subsection 10.11(c) until the earlier
of (y) the consummation of the APC Sale, or (z) April 1, 2004.”

 

11.           Section 10.27 is amended to add after the
words “Schedule 10.7,” (in the sixth line thereof), the words “and Debt arising
pursuant to the Refinancing Bonds,”.

 

12.           New Section 10.30 is added, in its entirety,
as follows:

 

“10.30 Special
Covenants Relating to Refinancing. 
Within forty-five days following the First Amendment Effective Date,
apply a sufficient portion of the proceeds of the Refinancing Bonds (including
without limitation all proceeds in any escrow, cash collateral account or other
trust arrangement established in connection with the ROARS Refinancing) to
consummate the ROARS Refinancing.”

 

13.           New Section 10.31 is added, in its entirety,
as follows:

 

“10.31 More
Favorable Terms.  Not enter into any
amendment or modification of the Refinancing Bonds if such amendment or
modification shall include, or be issued pursuant to any amendment or other agreement
which includes financial or other covenants or default provisions which are not
substantially identical to the covenants and default provisions set forth in
this Agreement unless, prior to entering into any such amendment, the Company
notifies the Agent and the Banks of its intent to enter into any such amendment
and, if the Required Banks determine that some or all of the covenants or
default provisions set forth in such amendment are

 

5

 

more favorable
to the lender thereunder than the covenants or default provisions set forth in
this Agreement (“More Favorable Terms”), and that the Required Banks desire
that this Agreement be further amended to incorporate the More Favorable Terms,
the Company shall, within thirty days following receipt from Agent of notice
that the Required Banks have made the foregoing determination, enter into an
amendment to this Agreement incorporating, on terms and conditions acceptable
to the Required Banks, the More Favorable Terms.”

 

14.           Existing Schedule 1.1 to the Credit
Agreement is deleted in its entirety and a replacement Schedule 1.1 in the form
of Attachment I to this First Amendment is inserted in its place.

 

15.           Existing Schedule 2.1/2.2 to the Credit
Agreement is deleted in its entirety and a replacement Schedule 2.1/2.2 in the
form of Attachment II to this First Amendment is inserted in its place.

 

16.           The Banks hereby consent to the APC Sale,
subject to the following conditions: (a) consummation of the APC Sale shall
result in net proceeds, net of reasonable and customary commissions, transfer
and income taxes and other expenses of sale (the “APC Proceeds”) of at least
$75,000,000, (b) no Unmatured Event of Default or Event of Default shall have
existed at the time of the execution of the definitive purchase agreement
relating to the APC Sale, (c) so long as no Unmatured Event of Default or Event
of Default shall have occurred and be continuing on the date of the
consummation of the APC Sale (the “APC Closing”), a portion of the APC Proceeds
equal to fifty percent (50%) of the amount by which the APC Proceeds exceed
Thirty Million Dollars ($30,000,000) (the “Excess Proceeds”) shall be paid by
the Company to the Agent for application on a pro-rata basis to the Line of Credit
and the Revolving Loan Facility (collectively, the “Facilities”) and the
Facilities shall be permanently reduced (pro rata, as aforesaid) by the amount
of the Excess Proceeds, provided, however, if an Unmatured Event of Default or
Event of Default shall have occurred and be continuing on the date of the APC
Closing, the entirety of the APC Proceeds shall be paid by the Company to the
Agent for application on a pro-rata basis to the Facilities, and the Facilities
shall be permanently reduced (pro rata, as aforesaid) by the amount of the APC
Proceeds, provided, further, in each case, such reduction shall take effect on
the date of the APC Closing, and (d) the remainder of the APC Proceeds, if any,
shall be used to repay Funded Debt.  Any
failure by the Company to comply with such requirements shall constitute an
additional Event of Default under Section 11.1.1 of the Credit Agreement.

 

17.           This First Amendment shall become effective
according to the terms hereof and as of such date (the “First Amendment Effective
Date”) that the Company shall have satisfied the following conditions:

 

(a)           Agent shall have received:

 

(i)            counterpart originals of this First
Amendment, in each case duly executed and delivered by Company and the
requisite Banks, in form satisfactory to Agent and the Banks;

 

6

 

(ii)           renewal and replacement Revolving Credit
Notes and Line of Credit Notes (the “New Notes”) substantially in the form of Exhibit
C-2 and C-1, respectively, to the Credit Agreement, payable to the
order of each of the Banks previously having requested Revolving Credit Notes
and Line of Credit Notes in the face amount of each such Bank’s Pro Rata Share
of the Facilities as set forth in replacement Schedule 2.1/2.2 attached as
Attachment II hereto;

 

(iii)          certified copies of resolutions of the Board
of Directors of the Company authorizing, as applicable, the execution and
delivery of this First Amendment and the New Notes required under this clause
(a) and the performance by the Company of its obligations under the Credit
Agreement, as amended by this First Amendment and the New Notes;

 

(iv)          copies of the (x) audited consolidated
financial statements for the Company for the fiscal years ending in 2000, 2001
and 2002, and (y) unaudited interim consolidated financial statements for the
Company for each fiscal month and quarterly period ended after the latest
fiscal year referred to in clause (x) above, and such financial statements
shall evidence that there has been no change in the condition, business or
affairs of the Company and its Subsidiaries which had or could reasonably be
expected to have a Material Adverse Effect;

 

(v)           projected income statements, balanced sheet
and cash flow statements prepared by the Company and giving effect to the
increase in the Facilities evidenced by this First Amendment and the
Refinancing, in form and substance satisfactory to Banks;

 

(vi)          evidence satisfactory to Agent that (a) the
Refinancing (exclusive of the ROARS Refinancing) has been consummated and the
Refinancing Bonds have been issued in accordance with the terms of the
Refinancing Bond Documents, (b) none of the parties to the Refinancing Bond
Documents shall have failed to perform any material obligation or covenant
required by any Refinancing Bond Document to be performed or complied with on
or before the issuance of the Refinancing Bonds or the consummation of the
Refinancing, and (c) the issuance of the Refinancing Bonds shall have resulted
in net proceeds to Company, net of reasonable and customary costs and expenses
of issuance, of at least $125,000,000;

 

(vii)         evidence satisfactory to Agent that (a) the
escrow, cash collateral account or trust arrangement referred to in paragraph 8
of this First Amendment has been established, and sufficient proceeds of the
Refinancing Bonds for consummation of the ROARS Refinancing have been deposited
thereto, and (b) within 45 days of the issuance of the Refinancing Bonds (x)
the ROARS Refinancing will be consummated, in accordance with the terms of the
ROARS Refinancing Documents, such documents to be in form and substance
satisfactory to the Required Banks,

 

7

 

and all of the Refinancing Premium applicable
to the ROARS will be paid, and (y) none of the parties to the ROARS Refinancing
Documents shall have failed to perform any material obligation or covenant
required by any ROARS Refinancing Document to be performed or complied with on
or before the consummation of the ROARS Refinancing;

 

(viii)        an opinion of counsel to the Company regarding
this First Amendment and the New Notes; and

 

(x)            such other documents as Agent may
reasonably request.

 

(b)           Company shall have paid to Agent, for
distribution to the Banks as applicable, (i) all interest, Fees and other
amounts, if any, owed to the Agent and the Banks and accrued to the First
Amendment Effective Date, (ii) for each Bank, 37.5 basis points of such Bank’s
Pro Rata Share of the Line of Credit calculated based on Line of Credit
Commitment Amount (and Pro Rata Share) prior to its increase pursuant to the
terms of this First Amendment, and (iii) for each Bank whose stated dollar
commitment amount is increasing under Section 1 of this First Amendment, a
commitment increase fee of 37.5 basis points on such Bank’s portion of the
increase in the: Facilities.

 

(c)           No Unmatured Event of Default or Event of
Default shall have occurred and be continuing or shall result from the issuance
of the Refinancing Bonds.

 

(d)           If the First Amendment Effective Date shall
not have occurred on or before June 24, 2003, this First Amendment shall not
become effective and the offer by the Agent and the Banks to amend the Credit
Agreement on the terms set forth herein shall be deemed withdrawn.

 

18.           Company hereby covenants and agrees to
deliver to Agent, for distribution to the Banks, copies of the Refinancing Bond
Documents.

 

19.           Concurrently with the First Amendment
Effective Date pursuant to Section 11 hereof, each Bank shall have (i) a Pro
Rata Share equal to the percentage set forth in replacement Schedule 2.1/2.2
attached as Attachment II hereto, and (ii) Revolving Loans and Line of
Credit Loans (and participations in Letters of Credit) in its Pro Rata Share of
all Revolving Loans and Line of Credit Loans (and undrawn Letters of Credit)
outstanding on the First Amendment Effective Date.  To facilitate the foregoing, each Bank which as a result of the
adjustments to the Pro Rata Shares evidenced by replacement Schedule 2.1/2.2
attached as Attachment II is to have a greater principal amount of
Revolving Loans and Line of Credit Loans outstanding than such Bank had
outstanding under the Credit Agreement immediately prior to the First Amendment
Effective Date shall deliver to the Agent immediately available funds to cover
such Revolving Loans and Line of Credit Loans (and the Agent shall, to the
extent of the funds so received, disburse funds to each Bank which, as a result
of the adjustment of the Pro Rata Shares, is to have a lesser principal amount
of Revolving Loans and Line of Credit Loans outstanding than such Bank had
under the Credit Agreement immediately prior to the First Amendment Effective
Date).  Each Bank, upon receipt of its
New Note(s) (which Notes are to be in exchange for and not in payment of the
predecessor Revolving Credit Notes and Line of Credit Notes) issued by

 

8

 

the Company to such Bank, shall return its
predecessor Revolving Credit Notes and Line of Credit Notes, to the Agent which
shall stamp such Notes “exchanged” and deliver said Notes to the Company.

 

20.           The Company for itself and each of the
Subsidiaries hereby represents and warrants that, after giving effect to the
amendments contained herein, (a) execution and delivery of this First Amendment
and the New Notes required to be delivered hereunder, and the performance by
the Company of its obligations under the Credit Agreement as amended hereby are
within such undersigned’s corporate powers, have been duly authorized, are not
in contravention of law or the terms of its articles of incorporation, bylaws
or any other organizational documents of the parties thereto, as applicable,
and except as have been previously obtained, do not require the consent or
approval, material to the amendment contemplated in this First Amendment or
Credit Agreement, as amended hereby, of any governmental body, agency or
authority, and this First Amendment, the Credit Agreement, as amended hereby,
and the New Notes required to be delivered hereunder, will constitute the valid
and binding obligations of such undersigned parties, enforceable in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium, ERISA or similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity (whether enforcement is sought in a proceeding in equity
or at law), (b) the representations and warranties contained in Section 9 of
the Credit Agreement, as amended hereby are true and correct on and as of the
date hereof, except to the extent such representations and warranties speak
only as of certain date, and (c) no Unmatured Event of Default or Event of
Default shall result from the consummation of the Refinancing.

 

21.           Except as specifically set forth herein,
this First Amendment shall not be deemed to amend or alter in any respect the
terms and conditions of the Credit Agreement, any of the Notes issued
thereunder or any of the Loan Documents, or to constitute a waiver by the Banks
or Agent of any right or remedy under or a consent to any transaction not
meeting the terms and conditions of the Credit Agreement, any of the Notes
issued thereunder or any of the other Loan Documents.

 

22.           Notwithstanding anything to the contrary
contained in this First Amendment or the Credit Agreement or any other loan
document, the Agent and any Bank may disclose any information with respect to
the “tax treatment” and “tax structure” (in each case, within the meaning of
I.R.C.  Regulation Section 1.6011-4) of
the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to Agent or such Bank
relating to such tax treatment and tax structure to the extent required by such
regulation; provided that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the transactions contemplated hereby, and any
related loans, advances or letters of credit hereunder.

 

23.           Unless otherwise defined to the contrary
herein, all capitalized terms used in this First Amendment shall have the
meaning set forth in the Credit Agreement, as amended.

 

9

 

24.           This First Amendment shall be construed in
accordance with and governed by the laws of the State of Michigan.

 

25.           Any references in the Loan Documents to the
Credit Agreement shall be deemed a reference to the Credit Agreement as amended
by this First Amendment.

 

10

 

WITNESS
the due execution hereof as of the day and year first above written.

 

	
   

  	
  SEMCO ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John E. Schneider

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Senior Vice President & CFO

  

 

11

 

	
   

  	
  STANDARD FEDERAL BANK N.A.,
  a national

  banking association, as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis J. Harder

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: First Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STANDARD FEDERAL BANK N.A., a national

  banking association, as Issuing Bank, as Swing

  Line Bank and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis J. Harder

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: First Vice President

  

 

12

 

	
   

  	
  KEYBANK NATIONAL ASSOCIATION,
  as

  Syndication Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sherrie I. Manson

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Vice President

  

 

13

 

	
   

  	
  U.S. BANK, N.A.,
  as Documentation Agent and as

  a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas V. Richtman

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Vice Preident

  

 

14

 

	
   

  	
  NATIONAL CITY BANK OF MICHIGAN /

  ILLINOIS, as Documentation Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ken Ehrhardt

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Senior Vice President

  

 

15

 

	
   

  	
  THE HUNTINGTON NATIONAL BANK,
  as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin D. Szachta

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Vice President

  

 

16

 

	
   

  	
  FIFTH THIRD BANK, EASTERN MICHIGAN,

  as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andre Nazareth

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Vice President

  

 

17

 

Attachment I

 

Schedule 1.1

PRICING SCHEDULE (1)

(basis points per annum)

 

 

	
  Tier

  	
   

  	
  S&P/

  Moody’s

  Rating (2)

  	
   

  	
  Line of

  Credit

  Facility Fee

  	
   

  	
  Line of Credit

  Eurodollar

  Margin

  	
   

  	
  Revolving

  Loan Facility

  Fee

  	
   

  	
  Revolving Loan

  Eurodollar

  Margin

  	
   

  	
  Utilization

  Fee

  	
   

  	
  Term Loan

  Eurodollar

  Margin

  	
   

  
	
  I

  	
   

  	
  >BBB+/Baa1

  	
   

  	
  10.0

  	
   

  	
  90.0

  	
   

  	
  12.5

  	
   

  	
  87.5

  	
   

  	
  12.5

  	
   

  	
  150

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  >BBB/Baa2

  	
   

  	
  12.5

  	
   

  	
  100.0

  	
   

  	
  15.0

  	
   

  	
  97.5

  	
   

  	
  12.5

  	
   

  	
  162.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  >BBB-/Baa3

  	
   

  	
  20.0

  	
   

  	
  130.0

  	
   

  	
  25.0

  	
   

  	
  125.0

  	
   

  	
  12.5

  	
   

  	
  200

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  >BB+/Ba1

  	
   

  	
  25.0

  	
   

  	
  175.0

  	
   

  	
  37.5

  	
   

  	
  162.5

  	
   

  	
  12.5

  	
   

  	
  250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V(3)

  	
   

  	
  >BBBa2

  	
   

  	
  50.0

  	
   

  	
  200.0

  	
   

  	
  50.0

  	
   

  	
  200.0

  	
   

  	
  12.5

  	
   

  	
  300

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI(3)

  	
   

  	
  >BB-/Ba3

  	
   

  	
  50.0

  	
   

  	
  225.0

  	
   

  	
  50.0

  	
   

  	
  225.0

  	
   

  	
  25.0

  	
   

  	
  325

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII

  	
   

  	
  <BB-/Ba3

  	
   

  	
  50.0

  	
   

  	
  250.0

  	
   

  	
  50.0

  	
   

  	
  250.0

  	
   

  	
  50.0

  	
   

  	
  350

  	
   

  

 

(1)           For purposes of this
Schedule, all capitalized terms shall be defined as in the Credit Agreement,
and the applicable pricing shall be determined by reference to the appropriate
columns above, in accordance with Section 4.9 of the Credit Agreement.

 

(2)           In case of a split
rating the lower rating shall apply

 

(3)           Pricing of the Line of
Credit Eurodollar Margin, the Term Loan Eurodollar Margin and the Revolving
Loan Eurodollar Margin for such tiers will be reduced by 25 basis points
beginning the month immediately following the consummation of the APC Sale.

 

 

Attachment II

 

Schedule 2.1/2.2

 

BANKS AND PRO RATA SHARES

 

	
  BANKS

  	
   

  	
  PRO RATA
  SHARE

  COMMITMENTS

  	
   

  	
  PRO RATA
  SHARES

  
	
  Standard
  Federal Bank N.A.

  	
   

  	
  $

  	
  45,000,000

  	
   

  	
  29.032258065%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KeyBank
  National Association

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  19.354838710%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S.  Bank, N.A.

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  12.903225806%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  National
  City Bank of Michigan/Illinois

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  16.129032258%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The
  Huntington National Bank

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  9.677419355%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fifth Third
  Bank, Eastern Michigan

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  12.903225806%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTALS

  	
   

  	
  $

  	
  155,000,000

  	
   

  	
  100%Exhibit 4.11

 

SECOND
AMENDMENT TO CREDIT AGREEMENT

 

This Second Amendment to Credit Agreement
(this “Second Amendment”) is made as of this 30th day of September, 2003 by and
among SEMCO ENERGY, INC., a Michigan corporation (the “Company”), STANDARD
FEDERAL BANK N.A. (“Standard Federal”) and the other banks signatory hereto and
Standard Federal, as agent for the Banks (in such capacity, “Agent”).

 

RECITALS

 

A.            Company, Agent and the Banks entered into
that certain Credit Agreement dated as of June 25, 2002 under which the Banks
extended (or committed to extend) credit to the Company, as set forth therein,
as amended by that certain First Amendment to Credit Agreement dated May 21,
2003 (as so amended, the “Credit Agreement”).

 

B.            Company has requested that Agent and the
Banks amend certain terms and provisions of the Credit Agreement and Agent and
the Banks are willing to do so, but only on the terms and conditions set forth
in this Second Amendment.

 

NOW, THEREFORE,
Company, Agent and Banks agree:

 

1.                                       The
post-amble to Section 10.6.1 is deleted in its entirety, and the following is
inserted in its place:

 

“For purposes of calculating the Fixed Charge
Coverage Ratio as of September 30, 2003, December 31, 2003 and March 31, 2004,
an amount equal to the Refinancing Premium shall be added back to Net Income
Available for Fixed Charges to the extent deducted from Consolidated Net
Income.”

 

2.                                       This
Second Amendment shall become effective according to the terms hereof and as of
such date (the “Second Amendment Effective Date”) that the Company shall have
satisfied the following conditions:

 

(a)                                  Agent shall have
received:

 

(i)            counterpart
originals of this Second Amendment, in each case duly executed and delivered by
Company and the requisite Banks, in form satisfactory to Agent and the Banks;
and

 

(ii)           such
other documents as Agent may reasonably request.

 

(b)           No
Unmatured Event of Default or Event of Default shall have occurred and be
continuing or shall result from the execution and delivery of this Second
Amendment.

 

1

 

(c)           If
the Second Amendment Effective Date shall not have occurred on or before
September 30, 2003, this Second Amendment shall not become effective and the
offer by the Agent and the Banks to amend the Credit Agreement on the terms set
forth herein shall be deemed withdrawn.

 

3.                                       The
Company for itself and each of the Subsidiaries hereby represents and warrants
that, after giving effect to the amendments contained herein, (a) execution and
delivery of this Second Amendment, and the performance by the Company of its
obligations under the Credit Agreement as amended hereby are within such
undersigned’s corporate powers, have been duly authorized, are not in
contravention of law or the terms of its articles of incorporation, bylaws or
any other organizational documents of the parties thereto, as applicable, and
except as have been previously obtained, do not require the consent or
approval, material to the amendments contemplated in this Second Amendment or
Credit Agreement, as amended hereby, of any governmental body, agency or
authority, and this Second Amendment and the Credit Agreement, as amended
hereby, will constitute the valid and binding obligations of such undersigned
parties, enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium, ERISA or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity (whether
enforcement is sought in a proceeding in equity or at law), and (b) the
representations and warranties contained in Section 9 of the Credit Agreement
are true and correct on and as of the date hereof, except to the extent such
representations and warranties speak only as of another date certain.

 

4.                                       Except
as specifically set forth herein, this Second Amendment shall not be deemed to
amend or alter in any respect the terms and conditions of the Credit Agreement,
any of the Notes issued thereunder or any of the Loan Documents, or to
constitute a waiver by the Banks or Agent of any right or remedy under or a
consent to any transaction not meeting the terms and conditions of the Credit
Agreement, any of the Notes issued thereunder or any of the other Loan
Documents.

 

5.                                       Unless
otherwise defined to the contrary herein, all capitalized terms used in this
Second Amendment shall have the meaning set forth in the Credit Agreement, as
amended.

 

6.                                       This
Second Amendment shall be construed in accordance with and governed by the laws
of the State of Michigan.

 

7.                                       Any
references in the Loan Documents to the Credit Agreement shall be deemed a
reference to the Credit Agreement as amended by the First Amendment and this
Second Amendment.

 

[SIGNATURES FOLLOW ON SUCCEEDING PAGES]

 

2

 

WITNESS
the due execution hereof as of the day and year first above written.

 

	
   

  	
  SEMCO ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John E. Schneider

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: Senior Vice President & CFO

  

 

3

 

	
   

  	
  STANDARD FEDERAL BANK N.A.,
  a national

  banking association, as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis J. Harder

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: First Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STANDARD FEDERAL BANK N.A., a national

  banking association, as Issuing Bank, as Swing

  Line Bank and as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis J. Harder

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: First Vice President

  

 

4

 

	
   

  	
  KEYBANK NATIONAL ASSOCIATION,
  as

  Syndication Agent and as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sherrie I. Manson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: Vice President

  

 

5

 

	
   

  	
  U.S. BANK, N.A.,
  as Documentation Agent and as

  a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas V. Richtman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: Vice Preident

  

 

6

 

	
   

  	
  NATIONAL CITY BANK OF MICHIGAN / 

  ILLINOIS, as Documentation Agent and as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ken Ehrhardt

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: Senior Vice President

  

 

7

 

	
   

  	
  THE HUNTINGTON NATIONAL BANK,
  as a

  Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin D. Szachta

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: Vice President

  

 

8

 

	
   

  	
  FIFTH THIRD BANK, EASTERN MICHIGAN,

  as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andre Nazareth

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: Vice President

  

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]