EXHIBIT
10.7
Line
of Credit Note
$20,000,000.00
Due: March 31,
2006
Date:
November 28, 2005
Promise to
Pay. On or
before March 31, 2006, for value received, Madison Gas and Electric
Company (the "Borrower") promises to pay to JPMorgan Chase Bank,
N.A., whose address is 111 E. Wisconsin Ave, Milwaukee, WI 53202
(the "Bank") or order, in lawful money of the United States of
America, the sum of Twenty Million and 00/100 Dollars
($20,000,000.00) or such lesser sum as is indicated on Bank
records, plus interest computed on the basis of the actual number
of days elapsed in a year of 360 days at "the Adjusted LIBOR Rate"
(the "Note Rate") and at the rate of 3.00% per annum above the Note
Rate, at the Bank's option, upon the occurrence of any default
under this Note, whether or not the Bank elects to accelerate the
maturity of this Note, from the date such increased rate is imposed
by the Bank.
“Adjusted LIBOR
Rate” means, with respect to the relevant Interest
Period, the sum of (i) the Applicable Margin plus (ii) the quotient
of (a) the LIBOR Rate applicable to such Interest Period, divided
by (b) one minus the Reserve Requirement (expressed as a decimal)
applicable to such Interest Period.
"Applicable Margin" means
0.40% per annum.
“Business
Day” means a day (other than a Saturday or Sunday) on which
banks generally are open in Wisconsin and/or New York for the
conduct of substantially all of their commercial lending activities
and on which dealings in United States dollars are carried on in
the London interbank market.
"Interest Period" means
each consecutive one month period, the first of which shall
commence on the date of this Note, ending on the day which
corresponds numerically to such date one (1) month thereafter,
provided, however, that if there is no such numerically
corresponding day in such first succeeding month, such Interest
Period shall end on the last Eurodollar Day of such first
succeeding month. If an Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end on
the next succeeding Business Day, provided, however, that if said
next succeeding Business Day falls in a new calendar month, such
Interest Period shall end on the immediately preceding Business
Day.
"LIBOR Rate" means, with
respect to any LIBOR advance for any Interest Period, the interest
rate determined by the Bank by reference to Page 3756 of the
Moneyline Telerate Service (“MTS”) (or on any successor
or substitute page of the MTS, or any successor to or substitute
for the MTS, providing rate quotations comparable to those
currently provided on Page 3756 of the MTS, as determined by the
Bank from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London
interbank market) to be the rate at approximately 11:00 a.m.
London time, two Business Days prior to the commencement of the
Interest Period for the offering by the Bank’s London office,
of dollar deposits in an amount comparable to such LIBOR advance
with a maturity equal to such Interest Period. If no LIBOR
Rate is available to the Bank, the applicable LIBOR Rate for the
relevant interest period shall instead be the rate determined by
the Bank to be the rate at which the Bank offers to place deposits
in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, in the approximate
amount of the principal amount outstanding on such date and having
a maturity equal to such Interest Period.
"Reserve Requirement"
means, with respect to an Interest Period, the maximum aggregate
reserve requirement (including all basic, supplemental, marginal
and other reserves), which is imposed under Regulation
D.
"Regulation D" means
Regulation D of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor thereto or
other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.
If any applicable
domestic or foreign law, treaty, rule or regulation now or later in
effect (whether or not it now applies to the Bank) or the
interpretation or administration thereof by a governmental
authority charged with such interpretation or administration, or
compliance by the Bank with any guideline, request or directive of
such an authority (whether or not having the force of law), shall
make it unlawful or impossible for the Bank to maintain or fund the
advances evidenced by this Note, then, upon notice to the Borrower
by the Bank, the outstanding principal amount, together with
accrued interest and any other amounts payable to the Bank under
this Note or the Related Documents shall be repaid (a) immediately
upon the Bank's demand if such change or compliance with such
requests, in the Bank's judgment, requires immediate repayment, or
(b) at the expiration of the last Interest Period to expire before
the effective date of any such change or request.
If the Bank determines
that quotations of interest rates for the relevant deposits
referred to in the definition of Adjusted LIBOR Rate are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining the interest rate as provided in this Note,
then the Bank shall forthwith give notice of such circumstances to
the Borrower, whereupon (i) the obligation of the Bank to make
advances evidenced by this Note shall be suspended until the Bank
notifies the Borrower that the circumstances giving rise to the
suspension no longer exists, and (ii) the Borrower shall repay in
full the then outstanding principal amount of each advance
evidenced by this Note, together with accrued interest, on the last
day of the then current Interest Period.
In no event shall the
interest rate exceed the maximum rate allowed by law. Any interest
payment that would for any reason be unlawful under applicable law
shall be applied to principal.
Interest will be computed
on unpaid principal balance from the date of each
borrowing.
Until maturity, the
Borrower will pay consecutive monthly installments of interest only
commencing December 30, 2005.
Notwithstanding any other
provision in this Note, the maximum principal amount available
under this Note shall reduce to the following amount(s) on and
after the following date(s): Ten Million and 00/100 Dollars
($10,000,000.00) on December 31, 2005. The Borrower shall, on
or before each such date, make such principal payments as are
needed to reduce the outstanding principal balance under this Note,
plus, if applicable, (i) the aggregate amount available to be drawn
under all outstanding letters of credit issued under any letter of
credit sub-limit provided for in any of the Related Documents and
(ii) the aggregate amount drawn and unreimbursed under letters of
credit issued under any such sub-limit, to an amount not exceeding
the applicable maximum principal amount.
The Borrower will pay,
without setoff, deduction, or counterclaim, the Bank at the Bank's
address above or at such other place as the Bank may designate in
writing. If any payment of principal or interest on this Note shall
become due on a day that is not a Business Day, the payment will be
made on the next succeeding Business Day. The term "Business Day"
in this Note means a day other than a Saturday, Sunday or any other
day on which national banking associations are authorized to be
closed. Payments shall be allocated among principal, interest
and fees at the discretion of the Bank unless otherwise agreed or
required by applicable law. Acceptance by the Bank of any payment
that is less than the payment due at that time shall not constitute
a waiver of the Bank's right to receive payment in full at that
time or any other time.
Authorization for
Direct Payments (ACH Debits). To effectuate any payment due under
this Note, the Borrower hereby authorizes the Bank to initiate
debit entries to Account Number ///////// at the Bank and to debit
the same to such account. This authorization to initiate debit
entries shall remain in full force and effect until the Bank has
received written notification of its termination in such time and
in such manner as to afford the Bank a reasonable opportunity to
act on it. The Borrower represents that the Borrower is and will be
the owner of all funds in such account. The Borrower acknowledges
(1) that such debit entries may cause an overdraft of such account
which may result in the Bank’s refusal to honor items drawn
on such account until adequate deposits are made to such account;
(2) that the Bank is under no duty or obligation to initiate any
debit entry for any purpose; and (3) that if a debit is not made
because the above-referenced account does not have a sufficient
available balance, or otherwise, the payment may be late or past
due.
Business
Loan. The
Borrower acknowledges and agrees that this Note evidences a loan
for a business, commercial, agricultural or similar commercial
enterprise purpose, and that all advances made under this Note
shall not be used for any personal, family or household
purpose.
Credit
Facility. The
Bank has approved a credit facility to the Borrower in a principal
amount not to exceed the face amount of this Note. The credit
facility is in the form of advances made from time to time by the
Bank to the Borrower. This Note evidences the Borrower's obligation
to repay those advances. The aggregate principal amount of debt
evidenced by this Note is the amount reflected from time to time in
the records of the Bank. Until the earliest of maturity, the
occurrence of any default, or the occurrence of any event that
would constitute a default but for the giving of notice or the
lapse of time or both until the end of any grace or cure period,
the Borrower may borrow, pay down and reborrow under this Note
subject to the terms of the Related Documents.
Non Usage
Fee. The
Borrower shall pay to the Bank a non-usage fee on the average daily
unused portion of this Note at a rate of 0.075% per annum, payable
in arrears within fifteen (15) days of the end of each calendar
quarter for which the fee is owing.
Liabilities. The term "Liabilities" in this Note
means all debts, obligations, and liabilities of every kind and
character of the Borrower whether individual, joint and several,
contingent or otherwise, now or hereafter existing in favor of the
Bank, including without limitation, all liabilities, interests,
costs and fees, arising unde or from any note, open account,
overdraft, credit card, lease, letter of credit application,
endorsement, surety agreement, guaranty, Rate Management
Transaction, acceptance, foreign exchange contract or depository
service contract, whether payable to the Bank or to a third party
and subsequently acquired by the Bank, any monetary obligations
(including interest) incurred or accrued during the pendency of any
bankruptcy, insolvency, receivership or other similar
proceedsings,
regardless of whether allowed or allowable in such proceeding, and
all renewals, extensions, modifications, proceedings,
consolidations, rearrangements, restatements, replacements or
substitutions of any of the foregoing. The term
“Rate
Management
Transaction” in this Note means any transaction (including an
agreement with respect thereto) that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity
or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option, derivative transaction or any other
similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to
one or more interest rates, foreign currencies, commodity prices,
equity prices or other financial measures.
Related
Documents. The
term "Related Documents" in this Note means this Note, all loan
agreements, credit agreements, reimbursement agreements, security
agreements, mortgages, deeds of trust, pledge agreements,
assignments, guaranties, and any other instrument or document
executed in connection with this Note or in connection with any of
the Liabilities.
Security.
The term "Collateral" in
this Note means all real or personal property described in all
security agreements, pledge agreements, mortgages, deeds of trust,
assignments, or other instruments now or hereafter executed in
connection with this Note or in connection with any of the
Liabilities. If applicable, the Collateral secures the payment of
this Note and the Liabilities.
Bank's Right of
Setoff. In
addition to the Collateral, if any, the Borrower grants to the Bank
a security interest in, and the Bank is authorized to setoff and
apply, all Accounts, Securities and Other Property, and Bank Debt
against any and all Liabilities of the Borrower. This right of
setoff may be exercised at any time and from time to time, and
without prior notice to the Borrower. This security interest in the
Accounts and right of setoff may be enforced or exercised by
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